5. PHASE 4: PROJECT REGISTRATION AND EVALUATION
5.3. Project assessment and evaluation
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59 The project evaluation structure is indicated in Diagram 7.
All of the inputs (projects received) will be evaluated and analysed in terms of the above structure. This process is further described in the diagram below.
60 Evaluation criteria should already be captured in the project registration template. Examples of evaluation criteria that can be used include:
• Service delivery
• Basic Service Delivery
A question needs to be answered that ascertains whether the project addresses a basic service delivery need from the Municipality’s perspective e.g. with regard to water or sanitation, providing access, providing electricity, providing housing, providing basic health services or addressing waste collection.
• Community Development
This category measures the extent to which community development is addressed by the project. The effect of Community Needs is measured through a transport related question and a community - facility type question. Both of these questions lead the person responsible for the project to consider a number of possible elements related to transport or related to community facilities.
• Emergency Services
Emergency Services was considered an important element to achieve the vision of becoming a world-class municipality. It is also a very visible element to the residents of the Municipality and failure to address this sufficiently can have a very detrimental and negative effect on the Municipality’s governance and overall image. Hence, a question was included that specifically tested the proposed project’s direct involvement with improving the Municipality’s emergency services.
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• Size of community benefiting
The inclusion of this element under the service delivery heading was a cause of extensive debate. The question asked tests the quantum of people who will derive a benefit from the implementation of the project. The challenge was to avail meaningful answering options to the person completing this particular question. The spirit of the question is to test the number of people who will directly benefit from the implementation of the projects. So, even though people outside the boundaries of the Municipality on a provincial or national level may probably benefit from the project, the answer must rather reflect the size of the community that will benefit and not the location of those people – be it outside the municipality’s boundaries. The reason for inclusion under this category is to make sure that if service delivery reaches the maximum number of people, the project’s priority benefits as a result.
• Economic development
• Extension of the municipality’s rates base
A question is asked to test whether the project will directly lead towards the extension of the Municipality’s rates base. E.g. a new road may open up new area for possible development, thus ensuring the expansion of the existing rates-base.
• Impact of the Services rendered on BEEs and SMMEs
Specific attention should be given in terms of economic development to the elevation and support of Black Economic Empowerment Companies and Small Medium and Micro Enterprises.
• Good Governance
It is considered to testify of good governance if the municipality funds projects that:
o Protects the utility or use of an existing asset e.g. it may be cheaper to repair an existing power line than to replace it once it collapses;
o Enhances the use of an existing asset e.g. it may be cheaper to construct an additional lane at a traffic signal than to build a whole new road whilst achieving similar outcomes;
o Ensures that the Municipality honours or complies with any legal or contractual agreements affecting it;
o Results in visual or visible service delivery (easily identifiable, very visible improvements).
• Job Creation
The issue of creating jobs is considered by many to be a very ambiguous parameter to consider because it lends itself to different interpretations and to abuse. This element can, however not be ignored and was split up into:
o The creation of informal or temporary jobs o The creation of permanent jobs.
The answer is required in terms of man-months. The answer should be unambiguous and conservative. Man-months should be calculated as the number of jobs created multiplied by the number of months (estimated) these jobs would be maintained. E.g. 4 people
62 employed for the duration of one month each = 4x1 = 4 man months. 10 people for one year = 10 x 12 =120 man-months.
• Financial considerations
• Impact on Operating Costs
A project’s impact on operating cost is often not considered by planners and officials applying for funding for their various projects. Should the projects that are implemented by the Municipality consistently have a high operating expenditure burden at a later stage; the Municipality will end up with an ever-decreasing budget portion for capital expenditure. Through discussions with the Corporate Finance Division of the Municipality, suitable parameters were determined to test whether from an Opex point of view, the project should not be penalised.
• Return on Investment Period
Numerous complaints are often received when asked to evaluate a project’s financial feasibility. The methodology to determine a project’s feasibility is also not always apparent and often requires specialist knowledge. It is however, a fundamental consideration in the evaluation of a project’s importance and cannot be omitted on the basis of it being difficult to establish. To make the estimation of this figure as easy as possible, it was decided in consultation with the Corporate Finance Division that only the estimated number of years should be given for a return on investment.
• Co-funding
A project is once again allowed to be favoured slightly if it has another source of funding external from the Municipality’s coffers.
• Increase in Municipality income
Some projects may lead to an increase in Municipality income e.g. the expansion of some element at the Fresh Produce Market may enable the market to increase its turn-over, thus increasing income to the Municipality.
• Spending of the budget
There are numerous examples on an annual basis of budgets being applied for, for the implementation of certain projects and when budgets are allocated to those projects, the money cannot be spent because of one of a variety of possible reasons e.g. the design of the project was not ready or the Environmental Issues were not sorted out in time, etc. Being ready to spend the allocated budget in time should elevate a project’s status as a result.
• Lifespan of the asset
The implementation of any project, and especially those implemented by the public sector, should seek to provide a sustainable solution to the problem that it attempts to address.
Other issues that need to be taken into account include:
• Committed projects
It is very important to verify in detail the respective projects indicated as “contractually bound” on the system. It is known that there are various pieces of legislation contained in various aspects of
63 service delivery and infrastructure implementation that may expose the municipality to possible liability or other litigation.
• Crowding
It is important to assess the influence of excessively large project budgets on the model’s outcomes.
• Finances
The most fundamental influence on any system is the municipality’s financial situation and its influence on the level of service delivery.
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