Background
It is essential that in assessing the necessity of a potential capital works
project, analysts consider the project's development in terms of a set of criteria
such that a comparison between potential capital works programs can be made.
In terms of capital works projects, the key criteria which all projects should
be assessed against are the importance of the projects; the benefits that will
accrue; and, the achievability of the project.
A standard set of guidelines has been established to assist analysts in determining
the different levels of importance, benefits, and achievability. The use of
these guidelines is essential to maintain a consistent rating approach amongst
all analysts. Whilst all criteria maintain an equal weighting and projects should
be rated against each, the criteria themselves will be prioritised, with consideration
given in the order Importance, Benefits and then Achievability.
Importance
The 'importance' aspect has been included in order to provide an indication
to Treasury of the criticality and/or urgency of the project to the Government
and the achievement of its goals. When assessing a project against this criterion,
issues that should be considered include:
1). Election / Government Commitment Considerations:
a) Public awareness
b) Timing constraints
c) Significance2) Consequences of not proceeding with the program/project:
a) Economic implications
b) Environmental implications
c) Political implications
d) Statutory requirements
e) Criticality
f) Urgency
Allocation
of a Rating
When allocating a rating a program/project against the above criteria the following
Rules should be followed:
High: - A program/project only rates high in this criteria if:
a) There is a published Election or Government/Premier commitment
b) There is Community Safety/Security issue
c) It must be done
Medium: - A program/project should be rated medium for this criteria
if:
a) There is a Ministerial released statement
b) There is only some impact if it is not done
c) The program/project can be delayed
d) If it is being done due to a Statutory Requirement alone
Low: - A program/project should be given a low rating for this criteria
if:
a) There is only a verbal Ministerial announcement
b) The program/project may have been announced but has previously been rejected
c) It is a delayable program/project
d) There is nil or minimal impact if not done.
Benefits
In attempting to measure these benefits, the key issue to ask is, 'what contribution
do the outcomes of this project make to the achievement of the Government's
objectives?'
In accordance with the Department of Premier and Cabinet's paper 'Future Directions
- A Strategic Planning Framework for the Western Australian Public Sector',
the Government's key objectives are: people and the communities, the economy,
the environment, the regions and governance.
1) Outcomes for People and Communities:
a) To improve the education and learning system available to all children.
b) To improve the standard of our current public health system.
c) To improve the security, safety and order of Western Australian communities, with particular emphasis on those individuals that are more vulnerable within the community.
d) To minimise any social or economic disadvantages present in the community, and where they exist, protect and improve the life of those affected by it.
2) Outcomes for the Economy:
a) To develop an economic environment which will encourage all forms of economic growth including increased investment, exports, and job growth.
b) To improve the efficiency of all markets.
c) To improve the provision, maintenance and quality of private and public infrastructure.
d) To increase the quality and quantity of the level of science and innovation through greater research and development.
e) To increase the availability and ease of employment to indigenous peoples.
3) Outcomes for the Environment:
a) To maintain healthy river systems and encouraging meeting the State's water requirements through sustainable and equitable management.
b) To ensure the protection of Western Australia's old growth forests, biological diversity and urban air quality.
c) To maintain effective environmental management practices
4) Outcomes for the Regions:
a) To improve Government planning and decision making towards regional development.
b) To improve the management of the regional environment and its natural resources, and conserving and restoring natural and built heritage.
c) To provide effective government service delivery to regions that is responsive to the needs of diverse communities.
d) Build a stronger economic region through greater skilled communities, improved infrastructure, diversification and greater regional investment.
e) To develop fairer pricing for regional residents and businesses.
f) To improve the health and education systems available to regional areas.
g) To develop safer and more cohesive regional communities.
5) Outcomes for Governance:
a) An efficient Government sector that provides coordinated, integrated, high quality, value for money and competitively priced goods and services to the community.
b) To reduce the level of 'red tape', compliance costs and corruption.
c) To crease the level of effective partnerships with Federal and Local Governments, the private sector and the wider community.
d) Better opportunity for the community and greater confidence from the community
Allocation of a Rating
Benefits can be considered together as one criterion. A program/project need
not contribute to all objectives. A single rating should be allocated that captures
the major benefit that the program/project contributes to.
When allocating a rating a program/project against the above criteria the following
Rules should be followed:
High: - A program/project only rates high in this criteria if:
a) It will prevent a negative or reduction in Benefit
b) Demonstrates an immediate benefit on implementation
c) Tangible financial benefits (eg NPV or similar)
d) It achieves a certain size of impact on Benefits in terms of: -
· People and Communities - eg over half the target population
· The Economy - eg has returns greater than expected State growth
· The Environment - eg sustainable irreversible benefits
· The Regions - eg impact across many regions
· Governance - eg far reaching across the public sector
Medium: - A program/project should be rated medium for this criteria if:
a) Benefits unlikely to be demonstrated until 2-5 years after implementation
b) It has a limited size of impact on Benefits (as above)
Low: - A program/project should be given a low rating for this criteria if:
a) Benefits unlikely until 5+ years after implementation
b) The Benefits are very limited, zero or negative
Achievability
This criterion has been included in order to provide Treasury with an indication
of the agency's ability to deliver the desired project. It should encapsulate
the complexity of the project, the implied risks and the potential for cost/scope
creep.
Issues to consider when assessing a program/project include:
a) Reliability of the estimates.
b) Potential for 'cost and scope creep'.
c) Capacity to deliver the project:
d) Finance
e) Expertise
f) Materials
g) Equipment
h) Time
i) Complexity
j) Community support / opposition
k) Track record of agency for delivery
l) Native Title and planning issues
m) Approval processes
n) Land issues
o) Disruption to public and commerce
p) Inter-jurisdictional issues
q) Governmental support / opposition
r) Coordination - other projects / other agencies
Allocation of a Rating
When allocating a rating a program/project against the above criteria the following
Rules should be followed:
High: - A program/project only rates high in this criteria if:
a) Agency has a proven track record
b) Program/project has a fully defined scope
c) There is capacity to deliver
d) Alternative financing options are being presented
Medium: - A program/project should be rated medium for this criteria if:
a) There is only reasonable confidence in the program/project
b) There are multiple stakeholders involved
Low: - A program/project should be given a low rating for this criteria if:
a) Issues unresolved
b) No expertise
c) Poor governance arrangements
d) Pioneering technology
e) Unknown externalities
Updated 19 June 2013