Developing a Hybrid Model that Combines PERT (Program Evaluation and Review Technique) and Net Present Value (NPV) to Evaluate and Manage the Mosul Railway Station Project

Abstract

This research aims to conduct a comprehensive study and provide an integrated analysis of the project for the Mosul railway station. It utilizes quantitative tools that combine financial, temporal, and risk aspects that the project might face. The Net Present Value (NPV) method was used to prove the economic feasibility and financial planning of the project. The results indicated that the net present value was IQD 76,691,409,817 from the transportation of oil, wheat, and passengers over a period of 5 years. The profitability index showed a value greater than one, at 9.71, indicating that every dinar invested will generate a profit of approximately 10 dinars, even with a discount rate of 20%. The payback period was very short, reaching 0.515 years, which is about half a year, demonstrating the project's ability to recover its cost quickly. These positive findings reduce the project's financial risks.

Additionally, the Program Evaluation and Review Technique (PERT) method was used for scheduling, planning, execution, and estimating the project's duration by identifying critical activities. By inputting the three-point estimates (optimistic, normal, and pessimistic times) for each activity into the Win Q.S.B software, the application showed that the project's completion time is 1240.33 days with a 50% probability. One critical path consisting of 16 critical activities was identified, and any delay in these activities will lead to a delay in the entire project. There are also non-critical activities with time margins (slack) that can be utilized if needed. The study's results demonstrated that combining the NPV method for economic feasibility and financial planning with the PERT method for planning, scheduling, and estimating the expected completion time provides strong support for investment decisions, such as establishing an integrated railway station project