Pinpointing PIM problems Well Executed Poorly ExecutedGood Projects A CPoor Projects B D 3
A Framework for assessing PIM• Two pillars of the approach – Desirable features of well-functioning system in 8 cycles – Diagnostic Indicators to assess actual system• Focus on how to inform reform design to enhance efficiency by Gap-Analysis Desirable Institutional Gap Actual Functioning Features Analysis Diagnostic Indicators 4
1. Investment guidance & preliminary screening6 • Existence of credible strategic guidance to PI – National Plan, PRSP, Long-term Vision document – Supplemented by a sector or sub-sector level strategy Realism of strategy relative to available resources? • Established process of first-level screening – Basic consistency with government policy and strategic guidance – Centralized or delegated approval justification What portion of projects screened are rejected?
2. Formal Project Appraisal7 • Existence of well publicized and transparent appraisal guideline – Larger projects requiring more rigorous tests of financial and economic feasibility and sustainability Quality of guidance? Rate of rejection? • Capacity of staff with project evaluation skills – An established process for training staff in project evaluation technique Number of staff with evaluation skills?
3. Independent Review of Appraisal8 • Independent peer review might be necessary to check any subjective, self-serving bias • Clarity of specific responsibilities – A multiplicity of players with unclear accountabilities can overburden the appraisal system A formal delegation allowing central appraisal system to review appraisal of relatively important projects
4. Project Selection and Budgeting9 • Transparent criteria for selecting projects • Appraisal process is linked to the budget cycle – Maintaining an inventory of appraised projects – Clear requirements for consideration of O&M • Ensuring adequate financing for selected projects – Multi-year budget allocation system Evidence of under-funding, large stock of uncompleted projects? • Effective gate-keeping – Only appraised and approved projects are selected for budget financing, except for emergency reason Percentage of projects evaded established process?
5. Project Implementation10 • Published guideline for project implementation • Clear organizational arrangements and a realistic timetable to ensure the capacity to implement Sample of project delays in implementation? • Cost-effective procurement and contracting Portion of competitive project tendering? • A system to prevent imprudent cost-increase in implementation Estimates of cost overruns on major projects by specific sector? Percentage of cost overrun on major projects?
6. Project Adjustment11 • Flexibility to allow changes in disbursement plan according to changed circumstances • Active monitoring and periodic progress reporting – Updated cost and benefit Requirement for updating project documents during construction? • Mechanisms to stop projects with negative marginal benefits Example of projects cancelled or closed on the account of changed net benefits?
12 7,8. Facility Operation & Ex-post Evaluation • Asset registers need to be maintained, and asset values recorded Evidence that complete asset registers maintained? • Ex-post Evaluation of completed projects – Focus on the comparison of the outputs and outcomes with the established objectives in project design – Feedback to improve future project design and implementation Evidence of response to the evaluation findings?
Selected ReferencesRajaram, Anand, Tuan Minh Le, Nataliya Biletska, and JamesBrumby. 2010, A Diagnostic Framework for Assessing PublicInvestment Management, World Bank Working Paper 5397,August 2010.Construction Sector Transparency Initiative. 2011. Reporton baseline studies: International comparison. January2011. 13