2 Project Appraisal Project Concept Pre-Feasibility Detailed Investigation Business Plan Implementa- tion Exit Project Preparation: Three Step Process Project Verification Step Status Quo Step Pre-Appraisal / Business Case Step Pre-Appraisal / Business Case Step Business Plan Step THE NDPG PROJECT STAGES Implementa- tion Step Immediate Interventions Exit Step
3 STAGE 0: PROJECT APPRAISAL PRE AWARD STAGE Introduce Municipalities to NDPG MUNICIPALITY AND TREASURY SIGN FUNDING AGREEMENT (FA) AND PRELIMINARY SCHEDULES NDP Unit makes call for projects Municipality prepare project application (may be assisted by consultants) Submit application to NDP Unit NDP Unit receives application: Records receipt, Allocates to a PD, First round assessment NDP Unit prepares shortlist of projects for verification NDP Unit undertakes Verification Process: Site / municipal visits, Complete Verification Report Final short list for submission to Review Committee / Reference Group Reference Group recommendations & Report to DDG with funding envelope recommendations Funding envelope approved by Treasury Induction workshop by Treasury in the Municipality Notify Municipality of award Support Bundles Contents * Support Bundle A1 Toolkit 1: Grant overview Toolkit 2: Grant details Toolkit 3: Guidelines for registration Toolkit 4: Registration form Toolkit 5: Building the Business Case ** Support Bundle A2 Funding Agreement (FA) Schedules
4 THE FUNDING AGREEMENT Extracts to note: Clause 4.2.20: the municipality is responsible for managing performance of the consultants “ Enter into all contracts with the Consultant and/or Contractor as required to complete the Project, and shall be responsible for the management of the performance of the Consultant and/or Contractor in accordance with the contract and for the management of the Project as a whole in accordance with all applicable National Treasury Regulations and related National Treasury Guidelines and municipal supply chain management legislation and policy. Clause 4.2.21: the municipality is responsible for ensuring that the required project management capacity is in place at all times. “Maintain an appointed Project Manager at all times” Clause 5.1: although a funding envelope is potentially available, the NT in the yearly gazette stipulates the actual yearly allocation “The National Treasury shall allocate to this Project, on the terms and conditions set forth in this Agreement, amounts for Technical Assistance and/or Capital Grant Funds, not exceeding the amounts stipulated in the Schedules, and/or as may be revised and agreed to in writing by the National Treasury. Clause 5.9 and 5.10: causes for suspension and or withdrawal of funds: “ Should the Municipality not provide progress reports, financial reconciliation reports, bank statements and updated cash flow projections on a monthly basis, as required by the National Treasury, and should the Municipality submit for payment an invoice of the Consultant in respect of Technical Assistance Funding, or request a drawn-down in terms of the Capital Grant transfer to the Municipality, more than one calendar month from the date of such invoice or request for draw-down, projected by the most recent Milestone Payment Schedule, the National Treasury shall be entitled to withhold payment of further transfers until such time as all required reports are submitted. All costs arising from such delayed payments shall be for the account of the Municipality. 5.10Should the Municipality not meet the agreed milestones on a monthly basis, as required for Technical Assistance or quarterly, as required for the Capital Grant, the National Treasury shall be entitled to withhold or delay payment of further invoices and/or transfers, in whole or in part, until such time as milestones are met. All costs arising from such delayed payments and/or transfers shall be for the account of the Municipality.
5 THE FUNDING AGREEMENT SCHEDULES 1General Project DescriptionYes…ensure you fill in details of the NDPG project manager AND specifics about the project as per your application + the verification report + information from your award letter. 2Overall Project CostsYes. Must reflect the actual and indicative contributions of municipal, other public and private partners. 3Milestone Payment ScheduleYes at least for year 1 4Authorization by the MunicipalityYes, signed by the MM (as Accounting Officer)…name and signature 5Council Resolution supporting NDPG ApplicationYes 6Special ConditionsNo 7NDPG Award Letter from National TreasuryYes 8Any pertinent delegations approved by the Municipality in terms of this project, e.g. payment requests signed off by NDPG Coordinator, or by NDPG Project Manager, any related delegations and evidence thereof, etc. No BUT….. We prefer that the MM delegates the NDPG programme management responsibilities here. Full name and signature of MM and delegated official. MAIN AGREEMENT IS STANDARD. SCHEDULES ARE ORGANIC…CAN BE CHANGED BUT ONLY IF SIGNED BY THE SAME PARTIES WHO SIGNED THE FA…THE MM AND THE CD NDPG
6 Project Preparation: Three Step Process Status Quo Step Pre-Appraisal / Business Case Step Business Plan Step A.YOU HAVE RECEIVED YOUR AWARD LETTER B. YOU HAVE SIGNED THE FA C.YOU KNOW WHAT YOUR GAZETTED ALLOCATIONS ARE: WHAT THEN ARE THE SUGGESTED PROCESS STEPS FOR MANAGING THE PROJECT PREPARATION PROCESS ? Implementation Step Exit Step
7 MANAGING THE PROJECT CYCLE: GUIDELINES ON % SPLIT OF ALLOCATIONS OVER PROJECT LIFE CYCLE
8 EXAMPLE OF MANAGING THE PROJECT CYCLE: GUIDE TO % ALLOCATION SPLIT Case Study: Municipality x received an NDPG award letter stating that they have been awarded a TA envelope of R12m and R150m for CG. The Municipal project manager now draws up an indicative project plan to start the process of contracting external and internal support for the planning and implementation process. A very indicative idea of how the R12m TA and R150m CG could be utilized: 1.Programme Management & Coordination : overall management of the NDPG award from status quo step to exit and review. (ONLY IF NEEDED!) (i) If consultant: max 1% of R162m, to be paid from TA if consultant. (20% of TA = R2.4m). (ii) If a municipal official on contract: to be paid from CG 2.Status Quo Review : programme and project level assessment Approx 10% of TA = R1.2m 3.Feasibilities and other technical or sectoral studies Approx 25% of TA = R3m 4.Business Plans Approx. 30% of TA = R3.6m 5.Exit Reviews, Assessments Approx 5% of TA = R600.000 6.Township Renewal Strategy Approx 10% of TA = R 1.2m 7.Detailed design work to build asset funded by the capital Approx 18% of the CG envelope of R150m = R27m 8.Capital for construction Approx 80% of R150 CG amount = R120m 9.Outsourced Construction Management Approx 1% of R150m CG = R1.5m 10.Kick-start operating funding (BIDs, ops, etc.), if needed Approx 1% of R150m CG = R1.5m
9 STAGE 1: PROJECT CONCEPT (TOOLKIT) STATUS QUO STEP PRE-FEASIBILITY PSC agrees Terms of Reference (ToR) for the Overall Status Quo analysis and report Municipality may appoint consultants (using TA Grant) to prepare Overall Status Quo report Municipality nominates a Project Steering Committee (PSC) that reports to a Portfolio Head (MMC) Draft programme Status Quo report with priorities and phasing of projects and input to Township Regeneration Strategy Final Status Quo report(s) approved by PSC (Overall and Project – and contains scoping of Pre-Appraisal Step) Workshop on Overall Status Quo report with priorities with PSC and NDP Unit. NDP Unit and PSC to formally minute the decision Project Status Quo report(s) prepared for priority project(s) including draft revised schedules and Council resolutions NDP Unit receives Final Status Quo report and reviews it Final Status Quo Report is approved by the Municipal Council and resolution approved Treasury signs new / revised schedules Project baseline 1 established on Treasury Portfolio data base Amended schedules (V2) STRAGIEC REVIEW BY THE NDPG UNIT CONTRACTUAL APPROVAL BY THE NDPG UNIT PARALLEL DEVELOPMENT OF A TOWNSHIP REGENERATION STRATEGY AND IMPLEMENTATION PLAN CAN COMMENCE HERE
10 Pre- Appraisal Report Draft Report with implications for project scope and concept STAGE 2: DETAILED INVESTIGATION (TOOLKIT) PRE-APPRAISAL STEP Consultants appointed and / or briefed on PA step by Municipality Phase 1: Consultants undertake project appraisals: Technical (land, planning, geotechnical, environmental, infrastructure) Economic and Social (economic profile, socio-economic data, potential for leveraging economic investment Phase 2: Impact assessment (based on technical, social, economic studies from above) Technical impacts and risks Economic impacts and risks Social impacts and risks Revise the project concept Prepare final Pre Appraisal report Revised project scope Impact assessment Indicative project budget and work plan Summary of TR Strategy and implications of project for TRP and vice versa Scope the needs of the Business Plan step Include revised schedules and milestone payment schedule Submit final report to Municipal Council for information Submit PA report to NDP Unit Include summary of the TR Strategy and indicate alignment of project to the Strategy Workshop to discuss findings with PSC and Treasury officials, include TRS Treasury and Municipality sign revised schedules SRATEGIC REVIEW BY THE NDPG CONTRACTUAL APPROVAL Amended schedules (V3)
11 STAGE 3: BUSINESS PLAN BUSINESS PLAN STEP Appoint consultants to prepare Business Plan / extend appointment Business Plan contents and aspects to be addressed Technical viabilityInstitutional arrangementsFinancial viability Implementation Plan Draft Business Plan with draft revised Schedules Financial Plan In line with funding envelope Not in line with funding envelope then apply for Exception Municipal Council resolution and Municipal Council approved Business Plan and schedules Business Plan and schedules to NDP Unit for approval Treasury approved Business Plan and endorse schedules Capital Grant award to Municipality Quarterly disbursements of CG to Municipality Treasury sends Municipality letter with conditions and amendments to schedules Treasury monitoring of project progress Partnership / Leverage Plan Workshop with PSC and Treasury and TRP consultants and officials to discuss draft Business Plan and revised draft schedules and alignment with TRP Include summary of TRP and ensure projects aligned with TRP CONTRACTUAL APPROVAL BY NDPG: CAPITAL GRANT TOTAL AMOUNT IS CONFIRMED CONTRACUAL REVIEW BY NDPG STRATEGIC REVIEW BY NDPG Risk Management Plan Ongoing Management / Exit Strategy Plan Municipality revised BP and schedules
12 STAGE 4: IMPLEMENTATION IMPLEMENTATION PSC and NDPG PD’s resolve procurement of resources for the implementation of the Business Plan Municipality mobilises the professional team (new / existing) for implementation Procurement of contractors / extend appointment of professional team to undertake final design Municipality approves final design and NDP Unit provides inputs, if necessary Project implementation / construction Stakeholder engagement PSC oversight and reporting to Municipal Council Implementation team commissions detailed design Final design for implementation Achieve milestone payment points Treasury Implementation review / inspection (quality assurance) Begin consideration of exit requirements Complete project Project Handover Submit project close out report with all support documentation to Municipality Submit draft Exit Strategy to NDP Unit and Municipality NDPG Disburse payment to Municipality NDP Unit confirms close out report submitted NDP Unit considers draft Exit Strategy CONTRACTUAL REVIEW CONTRACTUAL APPROVAL CONTRACTUAL REVIEW
13 STAGE 5: EXIT EXIT STEP NDP Unit undertakes project inspection / review Municipality ensures necessary management and maintenance requirements are in place (financial / budgetary and human capacity) Municipality and NDP Unit exit workshop Municipality and NDP Unit review Exit Strategy Municipality approves final Exit Strategy NDP Unit receives copy NDP Unit updates project data on their systems as status complete
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