Though preinvestment it is a term that is not part of the dictionary of the Royal Spanish Academy (RAE ), it is easy to understand its meaning. You just have to pay attention to its components: the prefix pre- and the noun investment .
Pre- refers to a temporary or local prior while one investment supposed the use of a resource or flow to obtain some benefit in the future . Preinvestment, therefore, is a stage that precedes the action of investing .
The preinvestment phase implies the preparation and the evaluation of a draft . The objective is to analyze the feasibility of the investment and determine how it can provide the greatest possible profit in the most extended term.
Pre-investment covers the development of various studies and research. These tasks seek to reduce the costs and the risks and increase the benefits of the investment.
It is usual for the State count on agencies dedicated to preinvestment tasks. In this way it is intended to assess the convenience , or not, to realize a particular public investment.
Preinvestment, in this framework, determines whether a public investment is profitable from a social point of view, if it is sustainable and if it is in tune with the policies established by the government . This defines the viability of the investment in question.
In Argentina , by example , There is National Directorate of Preinvestment (DNPRI ), which works under the orbit of the Ministry of Territorial Planning and Public Works Coordination , which in turn is part of the Ministry of Interior, Public Works and Housing . The DNPRI carries out preinvestment studies according to the priorities established by the national government.