Thursday 9 December 2021

What to include in project proposal?

The project proposal (also known as the project project application or project application report) shall be prepared by the project preparation unit or the project legal person according to the development of the national economy, national and local medium- and long-term planning, industrial policy, productivity layout the proposed project document on a specific new construction and expansion project is a framework and general idea of the proposed project under the internal and external conditions of the domestic and foreign markets and locations. 

It should discuss the necessity and possibility of project establishment from a macro perspective, and turn the idea of project investment into a general investment proposal.

The project proposal is a document reported by the project investment direction to its competent department and is widely used in the national project approval work of the project. 


It should discuss the necessity and possibility of project establishment from a macro perspective, and turn the idea of project investment into a general investment proposal. the submission of the project proposal may be used by the project approval authority to make preliminary decisions. it reduces the blindness of project selection and lays the foundation for the next feasibility study

Project proposals are often in the early stages of the project, because the project conditions are not mature enough, only planning proposals, the specific construction of the project is not clear, municipal, environmental protection, transportation and other professional advice has not yet been processed. the project proposal mainly demonstrates the necessity of project construction, construction plan and investment estimate is also relatively coarse, the investment error is about 20% (10% feasibility study report).

In addition, for large and medium-sized projects and some projects with complex technology, wide coverage and high coordination, and projects involving the use of foreign capital, external work can only be carried out after the approval of the project proposal. project proposals are generally after the investment opportunity study and before the feasibility study report.

Therefore, we can say that the initial stage of the project development cycle of the basic situation summary, is the basis for the selection and approval of the project, but also the basis for the production of feasibility study reports.

Research content

Project proposal [1]  the research includes market research, research on the necessity and feasibility of project construction, analysis of the market of project products, project construction content, production technology and equipment and important technical and economic indicators, and preliminary estimates of the demand for major raw materials, investment estimates, investment methods, sources of funds, economic benefits, etc.
position writing

By the project is located in the sub-sector, capital scale, construction area, investment mode and other different impact, the project proposal has different emphasis. in order to ensure the smooth passage of the project through the regional or national development and reform commission approved the completion of the project filing, the preparation of project proposals must be assisted by professional and experienced advisory bodies, some large-scale project proposals and feasibility studies must be accompanied by the corresponding level of advisory body's official seal, the highest level of which is national a-level.

production basis: accurate data, senior research team, experienced analysis team.

How to distinguish between preparation

The question of distinguishing between the preparation of project proposals can be seen from the following three points:

(1) within the scope of an overall design, consisting of one or several units of engineering, administratively implementing unified management, economic unified accounting of the main project, supporting works and ancillary facilities, the preparation of a unified project proposal;
(2) in a general design scope, economically independent accounting of each project, respectively, the preparation of project proposals;
(3) within the scope of an overall design, it belongs to the phased construction project, and the project proposal is prepared separately.

The difference from the feasibility study report

First, the meaning is different. the project proposal, also known as the project application, is the written application submitted by the project unit to the project management department of the national development and reform commission on the new construction and expansion. the main role of the project proposal is that the decision maker can make a decision on whether or not to approve the project after a comprehensive assessment of the contents of the project proposal.

The feasibility study report is also a scientific demonstration of the comprehensive technical and economic analysis of the proposed project before the investment decision, and it is a written material to provide a scientific basis for the investment decision-making by conducting research, analysis and comparison of the natural, social, economic and technical aspects of the proposed project and predicting the social and economic benefits after completion.

Second, the content of the study is different. the project proposal is a preliminary selection of the project, its decision whether it needs to carry out the next step, the main consideration of the necessity and feasibility of the proposal. 


Feasibility study needs to carry out a comprehensive and in-depth technical and economic analysis and demonstration, make multi-scheme comparison, recommend the best solution, or deny the project and put forward sufficient reasons to provide a reliable basis for the final decision-making.

Third, the basis of the basic information is different. the project proposal is based on the country's long-term planning and industry, regional planning and industrial policy, the proposed project related natural resource conditions and production layout status, as well as the project authorities related approval. in addition to the approved project proposals as the basis for the study, the feasibility study report also needs to use detailed design and other data as the basis for the preparation of documents.

Fourth, the content is simple and deep. the basic contents of the two phases are broadly similar, but the project proposal requirements are somewhat simple and qualitative in nature. 


The feasibility study report is being enriched on this basis to make it more perfect and have more quantitative argumentation.

Fifth, the accuracy requirements of investment estimates are different. the investment estimates of the project proposal are generally calculated or compared according to similar construction projects at home and abroad, the error is allowed to be controlled at more than 20%, the feasibility study report must be more detailed and accurate calculation of the project costs, the error requirements should not exceed 10%.
core values

The project proposal is a proposal document for a specific project put forward by a state-owned enterprise or government investment project unit to promote the project, and is a framework general vision specifically for the proposed project, the core values of which are:

  • As the basis for the project proposal subject to report to the approval department for approval decision-making;
  • The basis for the preparation of the project feasibility study report after the approval of the project;
  • As the basis for investment proposals on which the investment idea of the project becomes a reality;
  • As the basis for the summary of the basic situation in the initial stage of the project development cycle.


Decision makers can make a decision on whether to approve a project after a comprehensive assessment of the contents of the project proposal.

Prepare the information

  1. The project's initial scenario: total investment, product and introduction, output, estimated sales price, direct cost and list (including main material specifications, sources and prices).
  2. Technology and sources, design patent standards, process description, process flow chart, the production environment has special requirements for the please explain (e.g. dust, shock absorption, radiation, noise reduction, pollution, etc.).
  3. The project plant situation: plant location, building square meters, plant floor plan, purchase price, local land price.
  4. The enterprise in the last three years audit report (including financial indicators, accounts receivable advances and other turnover times, in the product, finished products, raw materials, power, cash and other turnover times).
  5. Project proposed to add the size of the number of people, the department and wage level to be set up, estimated total project wages (including welfare costs).
  6. To provide the company's operating expenses, management expenses, such as after deducting wages and the proportion of income.
  7. The company enjoys the value-added tax, income tax rate, other subsidies and preferential matters.
  8. The project product price and raw material prices are calculated according to the price excluding tax, if the price can be clearly included in the tax, please itemize the feed rate of various raw materials and the sales tax rate of various types of products.
  9. Project equipment selection table (equipment name and model, source, price, import to be noted, the record project power consumption indicators can not do a separate calculation, process links need external assistance please indicate).
  10. Other information and information according to the progress of the work needs to communicate at any time.

Depth requirements

1. The necessity and basis of investment and construction

1) clarify the background and proposed site of the proposed project, and propose or issue long-term planning or industry or regional planning information related to the project, indicating the necessity of the project construction;
2) to explain the situation of existing enterprises for the renovation and expansion project;
3) for the introduction of technology and equipment projects, but also to explain the gap between domestic and foreign technology and overview, as well as the reasons for import, process and production conditions summary.

2. The product program, the scale of the proposed project and the construction site of the preliminary idea.

1) market forecast of products, including domestic and foreign production capacity of similar products, sales analysis and forecasting, product sales direction and sales price of the preliminary analysis.
2) explain (preliminary determination) the annual output value of the product, the idea of a completed scale and phased construction (the original production conditions of the expansion project also need to be explained), as well as the evaluation of the economic rationality of the proposed project scale;
3) product scenarios, including the size of major products and by-products, quality standards, etc.
4) construction site demonstration, analysis of the natural and social conditions of the proposed site of the project, demonstration of whether the construction site meets the requirements of regional layout;

3. On resources, transportation and other construction conditions and collaborative relations of the preliminary analysis

1) the feasibility and reliability of the supply of resources to be utilized;
2) analysis of the main collaborative conditions, the supply of water, electricity and other utilities and local materials at the proposed site of the project;
3) for technology introduction and equipment import projects should explain the main raw materials, electricity, fuel, transportation, cooperation and other requirements, as well as the conditions and resources already in place;

4. On the main process technology program ideas.

1) the main production technology and technology. if the introduction of foreign technology, should explain the introduction of countries and domestic technology compared with the gap, technology sources, technical identification and transfer;
2) the main source of special equipment. if foreign equipment is to be adopted, the reasons for the introduction and the general situation of foreign manufacturers of the equipment to be introduced should be explained.

5. Ideas for investment estimation and financing.

Investment estimates can be based on the availability of data, either in detail or by unit production capacity or similar enterprises. 


Investment estimates should include interest on the construction period, investment direction adjustment tax and consideration of the impact factors of price increases over a certain period of time (i.e., reserve price increases), working capital can refer to the conditions of similar enterprises and interest rates, indicating the repayment method. 


The ability to measure repayment. for technology introduction and equipment import projects, the total foreign exchange amount of the project and its use, the source and repayment method of foreign exchange, and the estimate and source of domestic costs should be estimated.

6. About the progress of the project construction arrangements

1) the arrangement of per-construction work shall include inquiry, inspection, negotiation, design, etc. for foreign-related projects.
2) the time required for project construction and production and operation time.

7. Preliminary estimates of economic and social benefits (which, if possible, should contain preliminary financial and national economic analysis)

1) Calculate the internal rate of return, loan repayment period and other necessary indicators of the total investment of the project, and carry out a preliminary analysis of profitability and repayment capacity
2) A preliminary analysis of the social benefits and social impact of the project.

8. Relevant preliminary conclusions and recommendations

For project proposals for technology introduction and equipment import, there should also be annexes such as plans to invite foreign manufacturers to china for technical exchanges, plans to study abroad, and plans for feasibility analysis (e.g. plans to hire foreign experts to guide or commission consultation).

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