PED guidebook main sxn rev6. FINAL.pdf - LGRC DILG 10

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Strengthening Provincial/LocalPlanning and Expenditure ManagementProject Evaluationand DevelopmentSummarizing the AnalysisWe reiterate the series of questions that need to be answered in conducting the projectevaluation.5.1 Each project needs to be subjected to the first two sets of questions.5.1.1 What is the rationale for the project?Before proceeding, we need to determine if the project is a Stand-alone project,Required project for other projects to achieve output, or Needs another project toachieve output.If the rationale for the project cannot be traced back to the developmental goalsof the province, as spelled out in the PDP, we need not proceed.5.1.2 What is the market situation like for the project’s output?If there is no clear excess demand for the project, we need not proceed.5.2 If there is excess demand (supply gap is another way of putting it), we subject theproject to the next set of questions:5.2.1 Is the project technically feasible?5.2.2 How much will the project cost? Can we sustain project operations?5.3 If the project cannot be expected to “pay for itself”, is the province willing tosubsidize the operations and maintenance? By how much? What are we giving upin exchange?5.3.1 How much is the true cost of the project to society?5.3.2 How much is the benefit of the project worth to society?5.3.3 What is the net impact of the project to society?5.3.4 Nothing is certain. Is the project worth pursuing despite the uncertainties?RGEdillon January 200658
Strengthening Provincial/LocalPlanning and Expenditure ManagementProject Evaluationand DevelopmentG. THE PED TEAMHaving discussed what Project Evaluation and Development entails, we now identify theideal composition of the PED Team. In the following table, we summarize the outputs to begenerated for each broad procedure of the PED and the corresponding PED Team. Therequired skills of the PED Team are implied from the required outputs. The Team, asidentified in the table below, does not include the person/s or office/s responsible for thereview and approval of the outputs of the PED Team.Table 11Procedure Required Outputs Composition of PEDTeamKNOW the project 1. Identification of the good or service that • Economist/Statisticianthe project will provide2. Characterization of good service• Project proponent• Whether private, public or mixedpublic-private good• Whether tradeable, nontradeable,or partly tradeable• If tradeable, whether importable orexportableUNDERSTANDthe projectANALYZE itthoroughlyJUDGE it fairly1. Logical framework analysis of theproject2. Forecast excess demand for the outputof the project1. Technical feasibility analysis2. Estimate of cost of investment,operations and maintenance3. Estimate of potential revenue4. Discounted cash flow analysis1. Estimate of economic cost2. Estimate of economic benefits3. Benefit-cost analysis4. Risk analysis5. Sensitivity analysis• Economist/Statistician• Project proponent• Planning Officer• Economist• Project proponent• Engineer• Accountant• Economist/Statistician• Project proponent• Environmentalspecialist/EngineerRGEdillon January 200659
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PED guidebook main sxn rev6. FINAL.pdf - LGRC DILG 10

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