Second Rural Water Supply and Sanitation Sector Project

Cost overrun can potentially result in a decrease of intended benefits and lower achievement of project outcome. Appropriate estimation of project costs, including contingencies, at appraisal helps in reducing the cost overrun during implementation that could have serious implications on project implementation, given limited funding resources. For instance, a more rigorous consideration of design, including alternative designs and least-cost options, are important to help improve a project’s financial planning and accuracy of cost estimates. Moreover, this facilitates smoother implementation, fewer changes in project scope, and better project results