Saturday 17 June 2023

Importance of Project Evaluation


Importance of Project Evaluation

"According to statistics, from January to July, a total of 1 state-owned assets appraisal approval and filing projects were handled, including 7 approved projects and 34 filing projects. The total book assets of the enterprises involved were 2.32 billion yuan, the total liabilities were 41.63 billion yuan, the net assets were 17.61 billion yuan, the net assets after assessment were 24.02 billion yuan, and the net assets corresponding to the non-book value asset appraisal items were 56.80 billion yuan, and the appreciation rate reached 13.23%. 

The evaluation of the project by the enterprise can ensure the effective implementation of the project. In general, the specific functions of project evaluation are as follows:

First, it is the certificate and basis for obtaining project financing

Any project requires investment and cost, and in many cases a certain proportion of project investment is obtained through financing, and the logarithm of the party providing project financing uses the project evaluation results as evidence and basis for project financing, especially in the case of project financing with limited recourse. At one time, most financial institutions further evaluate the project when financing the project. At present, various domestic and foreign financial organizations and institutions provide corresponding project evaluation services. Most financial organizations and institutions even stipulate that project financing without assessment is not permitted.

Second, it is the premise and guarantee of project decision-making

In the process of project decision-making, people must first carry out project evaluation, and any project decision cannot be separated from the support of various information and data given by the project evaluation. The quality of project decisions and optimization procedures depends on the quality of the project evaluation work. To be precise, the analysis and comparison data of project alternatives given by the project evaluation, as well as the results of the various project evaluations, are the pre-approval and guarantee of project decision-making. These not only provide assurance that project decision-making errors are reduced or avoided, but also greatly optimize the outcome of project decisions.

Third, it is the means and methods to promote and provide project management

The information and data provided by the project evaluator are those provided by the project owner. The starting point for project management by investors, implementers, suppliers, etc. People can foresee the possible situations and changes of the project through the pre-project assessment, discover the problems and changes in the implementation of the project through the project tracking and evaluation, and find out the problems in the project decision-making and guide the future project management practice through the post-project evaluation. 


Therefore, project evaluation is the basic means and method to promote project management and improve project efficiency.

Especially in the process of project implementation, through project tracking and evaluation, people can timely identify problems in project design, implementation, cost and resource supply, and then take measures to correct deviations so that the project can be successfully completed. Therefore, it can be said that project evaluation is a means and method to promote and improve project management.

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