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- A. Economic and Financial Analysis
39. At this stage, the overall project risk rating is “Substantial”, with four major risks that could impact the achievement of the PDO: institutional capacity for implementation and sustainability, fiduciary, stakeholders, and other. The explanations of key risk elements that are rated “Substantial” are summarized below: 40. Institutional capacity for implementation and sustainability: This is considered as a substantial risk because of the expected change in the implementation arrangement by no later than 24 months after the effectiveness date of the project when CPTU is likely to be transformed into an Authority. Most existing staff of the CPTU are likely to be absorbed in the proposed Authority when it is established. In addition, the new Authority will be strengthened with skilled staffing in adequate number. Nevertheless, until those arrangements are in place with full strength and fully functional, there remains a risk. The new Authority is envisaged to be responsible for the implementation of the project once it is established. To mitigate the risk, a number of upfront indicators are agreed including the organizational structure of the proposed Authority and its key positions. The Government will continue to fund the CPTU/Authority from revenue budget, and the Authority will have enough autonomy to recruit skilled staff from the market. Further associated risk is described under “Other” below. 41. Fiduciary: There are four major contracts. Although CPTU has previous experience of managing such contracts, given the complexity and nature of contracting, it is likely to face challenges. Concurrently, LGED, which will manage procurement for all local government institutions (900 procuring entities), may face challenges mainly due to the large number of procuring entities though it has good experience of implementing Bank funded projects. On the financial management side, CPTU’s capacity needs substantial strengthening in accounting and financial reporting. A set of technical support activities have been incorporated in the project that will assist CPTU and LGED in managing the procurement and FM associated risks. In addition, an Enterprise Resource Planning (ERP) system is likely to be introduced to automate most of the financial management functions. 42. Stakeholders: The e-GP expansion involves cross cutting stakeholders: policy makers, regulatory body like CPTU, public procuring organizations, bidding community, private sector, and the beneficiaries. It will be challenging to manage all stakeholders’ expectations although by now the e-GP agenda has created good ownership at the policy level, key procuring organizations and associated bidding community. The challenge lies to bring other procuring organizations and part of the private sector on the same pace. To mitigate the risk, the ongoing PPRPII’s Public-Private Stakeholders Committee and Government-Tenderers‘ Forum combined with citizen engagement activities are expected to play a critical role in building a constituency for furthering the reform agenda with increased use of innovative IT-based tools. Both of these elements will continue in the proposed project with enhanced focus on citizen engagement and strategic communications with extensive consultations and workshops. 43. Other: This reform is considered highly charged and challenging in terms of its mandate in changing the procurement environment in the country. The risk is associated with the need for passing a separate law to allow creation of the proposed Authority and some legal amendments to the existing Public Procurement Act. The e-GP agenda enjoys high commitment from the highest authority, yet it has associated political economy context. To manage the risk, there have been extensive consultations about the in-depth strategic framework study that has been carried out for the restructuring of CPTU. Four major workshops were held with the stakeholders involving all key ministries including the Cabinet Division and Prime Minister’s Office. The proposed law for the new Authority is at the preparation stage.
44. The direct benefits envisaged under the project would include faster and efficient use of public resources with increased transparency, contributing to the reduction of procurement delays with improved contract management. The project would also enhance the capacity of the domestic construction and consulting industries to participate more effectively in national and international procurement. In the longer term, all the above would create a powerful force toward more transparent and accountable institutions, resulting in accelerated economic growth and faster poverty reduction. Furthermore, to gauge the impact of the proposed interventions, each SPSOs will make use of the already developed procurement performance measurement systems with indicators to monitor the performance of target agencies. 45. In view of the nature of the project, since benefits cannot be quantified in monetary terms, no calculation of economic rate of return is attempted. However, the PPRPII was designed with declined financing for the e-GP system during the project period so that the e-GP system can run and operate from its own resources at project end. Currently, the system is generating more revenues than the business model estimated target and, thus is becoming self-sustainable. The result shows that the e-GP system earned over US$4 million in FY15 and over US$5 million in FY16. Starting January 2017, the GOB is fully financing the e-GP system management and operation from its earned revenues. Under the proposed project, e-GP will continue to increase it’s earning from processing thousands of system transactions, bidders registration, and sale of bidding documents. From 2017 to 2022, CPTU forecasts growth of registered bidders from 26,000 to over 100,000, with expected revenue generation of US$10 million annually. Directory: curated curated -> Concept stage curated -> Concept stage curated -> Republic of Côte d'Ivoire Urbanization Review curated -> Report No: aus11011 Central America curated -> Report No. 94474-pk fiscal Disaster Risk Assessment Options for Consideration curated -> Environmental and Social Management Framework for the Costa Rica Telecommunications Sector Modernization Project curated -> Environment Impact Assessment For Jiangxi Shangrao Sanqingshan Airport Beijing Guohuantiandi Environmental Technology Development Center. Ltd. Oct. 2012 Content curated -> Growth through Innovation An Industrial Strategy for Shanghai By Shahid Yusuf Kaoru Nabeshima April 22nd, 2009 curated -> Report No: 70178. People's Republic of China Download 0.83 Mb. Share with your friends:
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