Unit 8. The investment project

Exercise 1. Expand on the statements:

1. Credit is a system whereby a person who can’t pay gets another person who can’t pay to guarantee that he can pay. Charles Dickens.

2. Never underestimate the value of cold cash. Gregory Nunn.

Exercise 2. Read the following international words and try to guess their meaning:

project

scheme

period

phase

resources

plan

cycle

detail

analysis

document

cement

personnel

identification

design

agency

Exercise 3. Choose from the text the words with the following suffixes, place them in the alphabetical order and translate them.

- ment – суффикс существительного

- tion – суффикс существительного

- al – суффикс прилагательного

Exercise 4. Read the following words and word combinations. Use them in sentences of your own.

to achieve particular results – достигать определенных результатов

to facilitate the development management – содействовать менеджменту развития

developmental phase – фаза развития

operational phase – операционная фаза

to provide a flow of goods and services – обеспечивать поток товаров и услуг

investible resources – инвестируемые ресурсы

identification – идентификация, установление, определение

preparation – подготовка

appraisal – оценка

implementation – выполнение, осуществление

monitoring and evaluation – мониторинг и оценка (определение качества)

the designing of the identified project – разработка установленного проекта

the physical putting into effect of the project – физическое внедрение проекта

the tracking of the progress made – отслеживание достигнутого прогресса

feasibility - осуществимость, выполнимость, вероятность, возможность

to justify spending resources – оправдать затрачиваемые ресурсы

Exercise 5. Read the title of the text and predict the main ideas of the text.

Exercise 6. Read the text and find out:

1. How can you define “the project”?

2. What is the main feature of the project?

3. What is “the investment project”?

4. What is the project cycle?

5. What are the five basic stages of the project cycle and what do they include?

6. What are the documents which are corresponding to the stages of the project cycle?

7. What are the most important financial decisions made by international agencies during the project cycle?

The Investment Project “Cycle”

A project may be generally defined as a scheme for organizing the use of a given amount of identified resources in a specific way in order to achieve particular results within a defined period. It is a useful conceptual unit for planning and budgeting and facilitates development management. The main feature of the project is that it has a developmental phase, during which the new activities are started, followed by an operational phase which is reached when these activities are functioning at their planned level or as near to this as possible.

An investment project is a plan of action for creating a capital asset i.e. a stock of productive material and human resources which will provide a flow of goods and services. Within the broad targets for investment, there are many different ways of using investible resources. The process of choosing which one to follow, drawing up the necessary plans and then making the actual investment is commonly referred to as the project “cycle”.

Many international assistance institutions distinguish five basic stages in the project cycle:

1. identification – the initial process of deciding what kind of project is most needed, given development requirements at a particular time and place;

2. preparation – the designing of the identified project in detail so that all the necessary inputs it requires are properly specified;

3. appraisal – close analysis of the prepared project to ensure that it meets relevant planning and investment criteria and that adequate arrangements for its implementation have been made;

4. implementation – the physical putting into effect of the project plan as appraised. It is during the implementation stage the most of the capital notionally committed to the project during earlier stages is actually invested through the physical transfer of material resources (cement, iron bars, machinery, skilled personnel) into the project;

5. monitoring and evaluation – the tracking of the progress made with the project implementation and the assessment of the impact of the project.

Corresponding to these stages is a series of project documents. They are prepared by international agencies and are as follows: identification reports or pre-feasibility studies as the outcome of stage 1; project preparation reports or feasibility studies – stage 2; appraisal reports – stage 3; implementation plans or detailed engineering studies – stage 4; and project progress reports, project completion reports, post evaluation studies or impact assessment studies – stage 5.

Two important financial decisions are made by these international agencies during the project cycle:

1. following completion of the project identification, when the authorities need to be convinced that the project proposal as outlined is sufficiently attractive to justify spending further planning resources, which may be considerable, on the detailed design work of the preparation stage;

2. following completion of the project appraisal, when the authorities need to be convinced that the detailed project plans confirm the desirability of the project and the feasibility of implementing it before they can approve it for financing.

Exercise 7. Read the text once again and find key words in every passage.

Exercise 8. Read every passage once again and express its contents in one sentence.

Exercise 9. Translate the sentences into English. Review grammar in §1, §2, §3 of grammar supplementary:

1. Фаза развития – это период, когда начинаются новые действия.

2. Проект можно определить как схему для организации использования данного объема денег, для достижения определенных результатов в данный период времени.

3. Мы планируем инвестиционный проект в течение трех месяцев.

4. Какие стадии вы можете выделить в проектном цикле?

5. В данный момент мы разрабатываем и определяем проект в деталях.

6. Этот проект не соответствует инвестиционным критериям.

7. Во время стадии осуществления был инвестирован основной капитал.

8. Мы уже произвели оценку достигнутого прогресса.

9. Доклад по подготовке проекта был написан менеджером и прочитан руководством компании.

10. Два важных решения были приняты во время подготовки проекта.

Exercise 10. Look through the scheme of the project cycle and make the presentation “If I wanted to develop an investment project I would …”