REAL Project Feasibility Analysis

Has your engineer ever told you that a project was not feasible?

The standard industry approach to feasibility analysis has all the wrong incentives.

Since the bulk of revenue for engineering firms comes from doing projects, there is a strong incentive built into each feasibility study to ensure that a viable project emerges. This financial pressure makes it difficult for even the most forthright of professionals to recommend against their own self-interest.

Most engineering studies avoid the issue of financial feasibility, in favor of focusing on technical feasibility. We advocate a more REAL approach. For a country that can land a man on the moon, technical feasibility is really not the issue; we can build anything if there is enough money. Instead, we ask some simple questions that are more important yet rarely considered:

• What is the long-term revenue generated from the project?
• Is this revenue stream enough to maintain the investment over the long term?
• What additional private-sector investment, in terms of new growth and development, is necessary to make the project viable?
• Is the level of private sector development reasonable and supported by the local land use approach?
• If grants are being sought or debt being assumed, can the system be maintained if those funding sources are not available in the future?

Our small towns are being crushed by the financial burden of infrastructure maintenance. This is not from a lack of money but from a lack of prioritization. When the critical questions above are not addressed, the result is that we continue to build more than we can afford to maintain.

Worse, we are incrementally getting less and less return from each investment.

Are you ready to get REAL with project feasibility analysis?