Q3. Organizing and presenting the cost data. (Adapted from Belli et al., 2001)

You may organize cost data in various ways depending on the type of analysis performed. Suppose we are interested not only in project costs, but also in their distribution among stakeholders. Analysts would use project costs to assess overall project viability, and cost distribution to look at the projects attractiveness to various groups.

The table below presents a hypothetical project involving the establishment of a training program for 100 trainees. Column one identifies the various categories of project inputs; column two shows the total value of each input from the countrys point of view; and columns three through six show the various stakeholders and their contribution a Private Firm, Students and their Families and a sponsoring NGO.

a. Interpret the figures in the following rows carefully to a lay person:

1. Row (2): Rental of Equipment;
2. Row (9): Staff Training;
3. Row (10) Client time (forgone income);
4. Row (13): Other cash Transfers

[2 marks each]

b.

1. Complete Row (11) Compute Total recurrent cost for each stakeholder;
2. What proportion of recurrent costs are the various stakeholder bearing?
3. What are the total economic costs of this project in the first year?
4. What proportion of Net Costs is borne by the stakeholder who is bearing the least cost?

[2 marks each]

NB. Make clear any assumptions that you make

Table 1: Estimated costs for an Educational Project

Row	Category	Total cost	Cost to sponsoring NGO	Cost to other government agencies	Contributed by private firm	Cost to student and family
Recurrent Costs
1	Rental of buildings	100,000	80,000	0	0	20,000
2	Rental of equipment	20,000	15,000	0	5000	0
3	Personnel	210,000	205,000	0	0	5,000
4	Materials and supplies	25,200	8,200	0	17,000
5	Other
6	Utilities	12,000	12,000
7	Maintenance	15,000	15,000
8	Insurance	20,000	20,000
9	Staff Training	10,000	10.000
10	Client time (forgone income)	200,000	0	0	0	200,000
11	Total recurrent cost
12	User fees	0	-50,000	0	0	+50,000
13	Other one time cash Transfers	0	-26,000	+20,000	+6,000	0
14	Net Costs	*****	*****	******	*****	*****

Q3c.

1. Describe briefly your favourite [risky] project (not more than two sentences). List 10 sources of risk that this project faces. Classify these risks as systematic or unsystematic. [5]

2. Describe the four steps of a risk management programme. Which steps are referred to as risk analysis steps? Which ones are referred to as constituting risk management steps? [4]