Feasibility Study Does Not Mean Feasible

Delivering Smarter Solutions

ISSUE NO. 57 — August 2004

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Feasibility Study Does Not Mean Feasible
There appears to be a misconception by some in the industry about what a feasibility study is and the steps required to generate one. Yes, when someone says feasibility we all know what people are talking about, but as companies try to expedite the process of bringing projects on-line these steps are being skipped. Unfortunately, skipping these steps can end up delaying the project and costing more money. In some cases it also means projects that should have been eliminated from consideration at an early phase are evaluated in too much detail costing companies time and money. This article is meant to provide a simple reminder of what a feasibility study is, the recommended steps to get to the feasibility stage, and the pitfalls of not following all the steps. What is a Feasibility Study? Let us start at the very beginning with the definition of a feasibility study. A feasibility study is an engineering study based on test work and engineering analysis, which presents enough information to determine whether or not the project should be advanced to the final engineering and construction stage. This is a “go/no-go” decision point … thereby implying that sometimes the answer is NO. Unfortunately, once a project is advanced to the feasibility study stage, companies often have committed considerable capital and professional reputation and therefore assume the answer will be that the project is feasible. The possibility that the answer could be that the project is not feasible is often forgotten. Often the term “bankable” proceeds the term feasibility study. Adding this term simply means that the level of effort that has been incorporated into the study is sufficient for outside financing, provided the project is feasible....