Tuan Minh Le

1. Framework for Analyzing Public
Investment Management
Tuan Minh Le
Presented at ICGFM Winter Conference
Washington D.C.
December 6, 2011
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2. Performance benchmarking
Source: CoST (2011b:3) 2

3. Pinpointing PIM problems
Well Executed Poorly Executed
Good Projects A C
Poor Projects B D
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4. 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
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5. The eight “must-have” core PIM features
Project Detailed project
development design
1 2 3 4 5 6 7 8
-
Guidance Formal Appraisal Project Implement Project Service Project
& Project Review Selection ation Changes Delivery Evaluation
Screening Appraisal &
Budgeting
Basic completion
review
Pre-feasibility
Evaluation
Feasibility
CE
CBA
Regulatory
requirements
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6. 1. Investment guidance & preliminary screening
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• 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?

7. 2. Formal Project Appraisal
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• 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?

8. 3. Independent Review of Appraisal
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• 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

9. 4. Project Selection and Budgeting
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• 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?

10. 5. Project Implementation
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• 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?

11. 6. Project Adjustment
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• 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?

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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?

13. Selected References
Rajaram, Anand, Tuan Minh Le, Nataliya Biletska, and James
Brumby. 2010, A Diagnostic Framework for Assessing Public
Investment Management, World Bank Working Paper 5397,
August 2010.
Construction Sector Transparency Initiative. 2011. Report
on baseline studies: International comparison. January
2011.
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