Management & Development of Complex ProjectsCourse Code - 706

MS Project Management

Public Sector Development Projects Management

Lecture # 5

In previous Lecture, we have discussed about

Project management & operations management Project management & organization & organizational

strategy Project life cycle Project management process groups

Summary of Previous Lecture

The Project Management Body of KnowledgeGovernment Extension

While the PMBOK Guide provides a generic foundation for managing projects, this extension addresses the specific practices found in public sector projects.

This extension to the PMBOK describes the generally accepted principles for public projects that are not common to all project types.

The number of Knowledge areas are 9 in this guide however number of processes in each knowldge area varies from the PMBOK standard.

The basic job of the Government is to formulate policies, legislation, provision of safety, security, infrastructure and community services for general public and to boost the overall economic conditions of the state so that prosperity prevails.

Objectives of PSDP are to carry out such obligatory projects, which provide essential services for welfare of public but need huge capital investment, and have long gestation periods with low rate of financial returns

Why Government need Projects?

Main instrument for providing budgetary resources for development projects and programs.

Gives quantitative picture of total annual spending on the ongoing and new development projects being taken up or to be taken up by the Federal Government during a particular year.

All sectors of economy are reflected in the PSDP along with their costs, allocations and expenditures.

Public Sector Development Programme (PSDP)

Helps achieve the

objectives and targets set by the government, to bring about a structural change towards sustainable and higher growth.

Government’s socio-economic objectives envisaged for development of the common people

Importance of PSDP

Key Indicators of PSDP2006-07 2008-09 2010-11

Number of Schemes 1796 1770 1779

Average Cost per Scheme (Million Rs) 952 1257 1638

Throwforward as % of Cost of Cost of On-going Schemes

63.6 65.9 62.7

Foreign Loans/Grants as % of Total Cost 17.5 18.1 22.7

New Schemes Cost as % of Total Portfolio 43.1 22.3 29.7

Share in PSDP of New Schemes (%) 30.0 24.7 21.0

Throwforward Allocation for on-going Schemes (%)

4.4 4.4 10.8**

Cost of New Schemes/Allocation for New Schemes (%)

7.7 3.9 17.1**

* Excluding Power sector

** as per the revised allocation following cutback

Source: PC

Approval Process of Public Sector Projects in Pakistan

In Pakistan project identification, formulation, appraisal, approval, implementation, monitoring and evaluation of development projects is carried out by various line ministries, autonomous bodies and departments at Federal as well as provincial level.

Various forums have been set up by the Government for approval of projects at provincial and Federal levels and financial powers for such approval have been delegated to ECNEC, CDWP, DDWP and PDWP

Generic Project Cycle

Identification

Implementation

Ex-post Evaluation

Preparation

Appraisal & approval Financing

PC-III

PC-IV

PC-I/

PC-II

Mon

itorin

g &

Eva

luat

ion

PC-V

Key Stakeholders • PIP and PIA Section• Technical Sections• Ministries/Organizations/ Provincial

Governments • Ministry of Finance• Economic Affairs Division

Methodology of Processing Project Development

PC

Composition FunctionsChaired by the Chief Executive of the Country (President/P.M)

Members:Federal Ministers (in-charge of Economic Ministries) Deputy Chairman Planning CommissionGovernors/Chief Ministers of Provinces

Secretariat: Cabinet Division

Supreme policy making body in the economic field.

Approves all plans and policies relating to Development.

Overall control of Planning machinery.

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1. National Economic Council

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Composition Functions

Chaired by the Prime Minister

MembersAll Federal Ministers of Economic Ministries.

Secretariat: Cabinet Division

Attends all urgent day to day economic matters.

Coordinates the Economic Policies of the Government

Keep vigilance on monetary and credit situation.

Regulate credit in order to maximize production and exports and to prevent inflation.

Approve the projects in private sector

2. Economic Coordinate Committee of the Cabinet (ECC)

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3. ECNEC

Composition Functions

Chaired by the Minister for Finance.MembersFederal Ministers of Economic Ministries.

Provincial Governors/ Chief Ministers or their nominees, and

Provincial Planning and Finance Ministers.

Sanction development projects in the public and private sector.

Approve moderate changes in the plan and plan allocations.

Supervise the implementation of Economic Policies laid down by the NEC/Government.

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4. CDWPComposition Functions

Chaired by Deputy Chairman Planning Commission.Members:Secretaries of the Federal Ministries Concerned with Development

Heads of the Planning Departments of the provincial Governments

Secretariat: Planning Division

Approve/scrutinize projects exceeding a

certain financial limit of the Federal Ministries, Provincial Governments, Autonomous Bodies.

Submit/ recommend such projects to the ECNEC for final approval.

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5. DDWP

Composition Functions

Headed by the respective Secretary of the Division/ Head of the Deportment.

Members:Representative of the Finance Division

Concerned Technical Section of the P&D Division

Approve Development Projects of Federal Ministries/ Division/Departments according to their financial limits.

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6. PDWP

Composition FunctionsHeaded by the Additional Chief Secretary Development/ Chairman P&D Board.

Members:Secretaries of the Provincial Departments concerned with Development.

Representative of Federal Ministry of Planning & Development

Approve Development Projects according to its financial limits.

Scrutinize projects for inclusion in the provincial ADP and

Recommend projects to CDWP above certain financial limits.

In December of every year Public Investment Programme (PIP) Section of the PC seeks from the Federal Ministries/Organizations/ Provincial Governments the details and priorities of the projects (whether ongoing or new) to be funded from PSDP.

Working paper is prepared by the PIP section in consultation with concerned technical sections for the “Priorities Committee” meeting to be held in the Finance Division, under the chairmanship of Additional Secretary (Budget)

Phase-I ---Kick-off

Issues a schedule of consultative meetings (Feb. to May) with the concerned stakeholders to determine the priorities of the projects.

In consultation with the PIP section of the Planning Commission and Ministries/ Organizations/Provincial Governments a working paper for Annual Plan Coordination Committee (APCC) reflecting prioritized allocations in light of the available size of the development envelope is prepared

Phase-II: Priorities Committee

It is headed by the Deputy Chairman Planning Commission.

Projects and their allocations are finalized in consultation with the same Ministries represented at the level of Ministers/Secretaries/Chief Secretaries.

Phase-III: Annual Plan Coordination Committee

Headed by the Prime Minister and attended by Senior Federal & Provincial Ministers and Secretaries of the concerned Ministries.

The final set of project allocations is prepared and presented for the approval of National Economic Council (NEC) and published/ printed in shape of a book for circulation to all concerned

NEC meeting is held in the last week of May or first week of June.

Phase-IV: National Economic Council

Core Forums

WP Priorities

Com

WP APCC

This Form envisages details with regard to survey and pre-feasibility & feasibility study before approving the project.

PC-II- Survey/Feasibility Study

This Form or document envisages complete project details such as

Project description Purpose Objectives Cost Design Completion time, annual recurring expenditure,

management structure, environmental impacts, technical/financial/ economic feasibility/ rate of return, benefits, justifications etc.

PC-I: Complete Project Detail

Production◦ Agriculture Production◦ Agriculture Extension◦ Industries, Commerce And

Minerals Infrastructure◦ Transport & Communication◦ Telecommunication ◦ Information Technology◦ Energy (Fuel & Power)◦ Housing, Government

Buildings & Town Planning◦ Irrigation, Drainage & Flood

Control

Social Sector◦ Education, Training and ◦ Manpower ◦ Health, Nutrition, Family

Planning & ◦ Social Welfare◦ Science & Technology◦ Water Supply & Sewerage◦ Culture, Sports, Tourism

& ◦ Youth◦ Mass Media◦ Governance◦ Research

Categories of PC-I

The sponsors send 45 copies of the PC-I/II to the PC. The document is first appraised by the PIA Section which is the secretariat for the above forums and if cleared by them it is circulated to all Members of the DDWP/ CDWP/ ECNEC and the concerned technical section of the PC dealing with the subject.

Technical section carries out the technical appraisal while the Economic Appraisal Section conducts the financial/economic viability of the project including Internal Financial Rate of Return (IFRR), Net Present Value (NPV) and sensitivity analysis etc.

Appraisal

Forums for Approval of PC-I/IIApproval

ForumApproval

Power (Million)

Composition

DDWP Rs. 60 Headed by Secretary of Concerned Ministry with Reps. of Planning Commission and Finance Divisions as Members

CDWP Rs. 1000 Headed by DCPC with Secretary P&DD, Members of the Planning Commission, ACS (Dev) of Provinces, Reps of Finance, EAD and concerned ministries as members

ECNEC Above Rs. 1000

Headed by Prime Minister with representatives from Provinces an concerned ministries as Members

Corporate DWP

ECNEC Powers

Headed by Chairman of the Public Sector corporation with reps of Planning & Finance as Members

Source: PC

Technical sections prepares a working paper for CDWP

PIA Section circulates the working paper to all the members of the CDWP who while attending the meeting comment, appraise and support the project.

After detailed deliberations projects may or may not be approved keeping in view the national/public interest.

If it is agreed to approve a project which is beyond Rs. 1000 million, the CDWP recommends it to the ECNEC for final approval.

Central Development Working Party

• A summary for ECNEC is prepared by the concerned technical section of the PC and sent to the Cabinet Division who circulate the summaries to all the members of the ECNEC.

• ECNEC normally holds its meetings on quarterly basis

• Anticipatory Approval: – In case a project has to be started in urgency and the

CDWP has already recommended it for approval but the meeting of ECNEC is not scheduled in near future.

– The sponsors through Planning Commission move a request of anticipatory approval of Chairman ECNEC stating the justification, importance and urgency of the project

Executive Committee of the National Economic Council

Once the project is approved from the relevant forum, after receipt of minutes and other necessary documents the PIA Section issues administrative approval of the project to the sponsors for taking up the case of financial releases with the Finance Division who make quarterly releases only if an allocation of that project is available in the PSDP.

The sponsors are also required to prepare annual cash/work plan of the project for getting the releases.

Approval

The Projects Wing of the Planning Commission is responsible for undertaking the quarterly monitoring of the projects which have been started by their sponsors and have attained 30% progress.

The PC-III contains a questionnaire seeking information on the progress of the project such as physical and financial targets of the next quarter and achievements of previous quarter.

Monitoring: PC-III

• PC-III (A) form for Physical Targets based on PSDP Allocations– To be furnished by 1st July of each year

• Activity Chart or Work Plan/ Cash Plan

• PC-III(B) Monthly Progress Reporting– To be furnished by 5th day of each month

Types of PC-III

Performa filled by the Sponsoring/Executing Agency at the time of completion of a project and sent to the Planning Commission for approval and onward transmission to the Finance Division for shifting the project from implementation stage/development budget to the operational stage/non-development/recurring budget.

PC-IV: Project Completion Report

Once the project gets into the operational stage after completion its performance is judged in light of the given financial/economic feasibility, benefits and objectives of the project as were set out in the PC-I. This proforma has a questionnaire seeking information on annual performance of the project.

Report to be furnished by 31st July of each years for 5 years after completion of Project indicating Projects operational results during the last financial year.

PC-V: Annual Performance Report After Completion of Project

No Performa Purpose

1 PC-I FormDetailed project document

2 PC-II Form For preparation of pre-feasibility, feasibility study,

conducting survey 3

PC-III FormFor submission of quarterly monitoring/progress

report of project 4

PC-IV Form For submission of completion report of project

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PC-V Form

For submission of evaluation /implementation

report on annual basis for five years (helps in

policy formulation for future) 6

Low cost PC-I FormFor preparation of small projects costing less

than Rs. 1.0 million

PC Performa: Summary

For the project cycle following six (6) proforma have been designed by the Planning Commission.

In this Lecture, we have discussed about

Public Sector Project Life Cycle Approving Authorities PC Performas

Summary of This Lecture

End Note

Well Started is Half Done

THANK YOU!