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GOVERNMENT OF PAPUA NEW GUINEA

DEVELOPMENT PROJECT DOCUMENTATION

Plan Results

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Department of National Planning & Monitoring

August 2007

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Project Identification Document and Project Formulation Document 1.0 Introduction

Projects are vehicles through which development needs are responded to and outputs attained. Poorly designed projects in the past have resulted in too many incomplete projects and great wastage of limited resources and little to no impact on the lives of our people. To overcome the problems of project not being thought out well the guidelines are to be followed. It is intended that this Project Formulation Documentation Guidelines will assist Planners and Development Workers access project funding on behalf of communities and including districts through proper documented projects. Attached are revised forms to guide project proposal writing through the Public Investment Program and other development initiatives through the Department of National Planning and Monitoring. In addition to projects being funded through the PIP, there are other schemes as well with their own requirements, however, the common principles of; meeting all selection criteria, still apply across all proposals and are to be responded to. Often there are less funding than projects proposals which mean that in overcoming a highly competitive situation, projects have to be well thought out initially and documented. The revised forms are for the Project Identification Document (PID) and Project Formulation Document (PFD). These forms are to be used for the identification and formulation of all projects at every level of Government and for both GoPNG and donor funded projects The revisions made to these forms were aimed at making them less complex and more relevant to the needs of District, Provincial, Sectoral and National level planners – in particular with regard to each level of responsibility under the Organic Law. Both the PID and PFD are explained within this booklet as well as their purposes and who is responsible at the different levels of Planning from the Identification stage to Formulation to Appraisal and Approval. Information on the PID and PFD can be obtained by writing to the; Secretary, Department of National Planning and Monitoring, Level 3, Vulupindi Haus, PO Box 631, WAIGANI, National Capital District. For further information, the following officers can be contacted from the Development Planning and Programming Division;

1. First Assistant Secretary Phone: 328 8560

2. Assistant Secretary Phone: 328 8371 Social Sector

3. Assistant Secretary Phone: 328 8371

Infrastructure Sector

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4. Assistant Secretary Phone: 328 8371

Economic Sector

5. Assistant Secretary Phone: 328 8559 Law, Justice and Administration

The Project Identification Document is used to introduce a project idea into the project cycle process and more specifically into the planning process. It can be completed by any public servant or community member. The PID is usually no more than 2 – 3 pages in length. It provides an overview of a project idea and its main purpose is to obtain approval from higher decision-making bodies for project ideas. The PID should be submitted to the Planning Officer within the relevant level of Government – District, Provincial or National for screening. Alternatively, for those sectors where sector coordinating mechanisms exists, PIDs should be submitted to the relevant sector technical committee or Working Group for vetting to ensure compliance with specific sector plans and strategies. If approved after screening the PID should be signed by the appropriate authorizing officer usually the Planning Officer or Sector Coordinating Committee Secretary (refer Section C of PID) who will organize any support needed by the PID initiators to further develop the project into a Project Formulation Document. If unsuccessful the relevant agency should send a reply to the initiator giving reasons for its rejection.

The Project Formulation Document is to be used when the project idea has been approved via the PID by the relevant government agency or Sector Coordinating Mechanism. The PFD will vary in length and complexity depending on the nature of the project; however, it needs to contain all information necessary to assist relevant agencies to make an in-depth appraisal. 2.0 Project Endorsement All proposals should be screened, endorsed, and prioritized by the relevant committee. These committees are;

The Joint District Planning and Budget Priorities Committee (JDPBPC) Project Screening Committees within Line Agencies and Statutory bodies (if such

committee do not exist, endorsement must be provided from the highest level within the agency)

The Working Groups of Sector Coordinating Mechanisms where these mechanisms exist. 3.0 Eligible Organizations The only organizations that are eligible to submit proposals for development funding from the GoPNG’s Public Investment Program are;

Government Line Agencies Provincial Administrations District Administrations Local-level Government Administration Statutory Bodies and Public Institutions

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As its is GoPNG policy to encourage bottom-up planning and public-private partnerships, proposals should be developed in broad consultation with relevant stakeholders, especially beneficiaries and those who will somehow be involved in the implementation of the project. Moreover, any agency or individual – including Ward administrations, political representatives, non-government organisations community-based organization and cooperative – are able to identify project ideas. However, they need to submit their proposals (using the PID) to the relevant decision-making bodies for screening and prioritization and, if approved, development into PFDs and full Project Design Documents. Private individuals and companies are ineligible to apply directly for development funding from the GoPNG’s Public Investment Program. 4.0 Eligible and Ineligible Projects The following activities will not be considered for development funding;

Recurrent costs such as salaries, office rental, routine travel, maintenance etc Direct donations or charity Compensation payments Overseas travel or study Religious activities e.g. church buildings

For complex projects whose cost exceeds K300, 000 or those which are of a lesser value but in need of special assistance for project preparation and implementation, a Project Design Document will need to be prepared accompanied by appropriate feasibility studies and technical reports. DNPM may approve on request technical assistance for the completion of Project Design Documents and in rare cases such as for landowner projects approval will be provided for other forms of technical support. But a request needs to be made firstly to DNPM before hiring of any specialist assistance. Approvals will not be made retroactively. 5.0 Appraisal Criteria Projects will be assessed in terms of their anticipated social and economic benefits, cost effectiveness and the capacity of the applicant(s) to carry out the intended tasks on time and within budget. Therefore proponents need to provide sufficient information in Section B of the PFD to enable the appraising organization and DNPM to asses the proposal. It is in the applicant’s interest to provide all the information detailed in this form. The appraising agency and/or DNPM may seek additional information from applicants or reject the proposal outright if it does not comply with the funding criteria. All income earning projects should include a cash flow statements and business plans. 6.0 Environmental Impact Assessment Environmental Impact of any project should be addressed in the PFD. Projects for which the anticipated environmental impact is very low or neutral no further action is required. However, projects with potential environmental impact such as agricultural water and sanitation or transport infrastructure projects will need to be referred to the Provincial or

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National Office of Environment and Conservation for their input. If the impact is considered medium to high, a formal Environmental Assessment will be required. 7.0 Cross Cutting Themes The PFD will require detailed explanation of how the intended project may impact positively or negatively on women, and on HIVAIDS. It is not sufficient to state that projects will have no or minimal impact, or worse still, that this question is “not applicable.” If you are unsure seek advice from the Gender Development Unit in the Department of Community Development, Waigani, and or respective Gender Desks within agencies and sectors. 8.0 Sub National Linkages (PLLSMA) With the formal establishment in the Department of Provincial and Local Government Affairs in 2006 of the Provincial & Local Level Service Monitoring Authority (previously the National Monitoring Authority), agencies and departments submitting PFDs that will be implemented at the Provincial, District, Local Level Government and Ward Levels are strongly advised prior to concluding their PFDs to discuss their implementation and monitoring plans with the PLLSMA Secretariat in Department of Provincial and Local Government Affairs, Somare Foundation Haus, Waigani.

9.0 Language To facilitate, bottom-up planning the PID can be prepared in English, Tok Pisin, Motu or Tok Peles. However the PFD will need to be written in English. 10.0 Time Frame for submission of PFDs PFDs can be submitted at any time of the year, however only proposals submitted by 30 June will be considered for the subsequent year’s budget. The timeframe for the design, appraisal and selection process each year is as follows; 30th June of each Year Final date for submissions to be considered for the subsequent

financial year. July – August of each Year Desk Appraisals and Cluster Appraisal Visits 31st August of each Year Finalisation of Appraisals for potential projects September – October of each year

Project selection under the Development Budget process

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Project Identification Document

(A PID is not necessary if a project idea has already been agreed upon and is in the relevant plan. In such cases proceed on to drafting the PFD).

Section A: Summary Information

Project Title

___________________________________________________

Project Location ___________________________________________________

Originating Organisation

___________________________________________________

Contact name and address

___________________________________________________ ___________________________________________________

Phone _______________________ Fax ______________________

Summary Description of Project

How long do you estimate it will take to complete the project? _____________________

Section B: Project Description and Justification

Please answer the following questions, using as much text as you feel is necessary to adequately answer the questions. For programs comprising multiple projects please substitute the word “program” for “project”

Summary Estimate Project Cost Personal K ______________

Equipment K ______________

Training K ______________

Capital Works K ______________

Other K ______________

TOTAL K ______________ Note: Both totals should equal

Proposed Project Funding Sources* _________________

K____________________________________

K __________________

_________________ K ____________ _____

_________________ K __________________

_________________ K __________________

TOTAL _____________K _________________

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1. How was the project identified? 2. Who was consulted (number and types of beneficiaries, landowners, others?) 3. How is the project in line with District, Provincial, Sectoral Strategies or national

Development priorities? 4. (a) What problem or opportunity does the project seek to address? (b) Identify stakeholders

who may share this problem that you may need to consult? 5. What is the objective of the project? 6. What will the project do to achieve this objective? (Identify tangible outputs) 7. Identify all those who will benefit from this project and explain how they will benefit? 8. What will the originating organisation contribute to the project? 9. How will the project resources and activities be maintained once the project ends? 10. Identify any land ownership issues 11. What are other funding sources for this project other than the Public Investment Program? PID submitted by: Name: Signature: ___________________________ ________________________ Title: Date: __________________________ ________________________

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Project Formulation Document

Section A: Summary Information

How long do you estimate it will take to complete the project? __________________________

Project Title

___________________________________________________

Project Location ___________________________________________________

Originating Organisation

___________________________________________________

Contact name and address

___________________________________________________ ___________________________________________________

Phone _______________________ Fax _____________________

Summary Description of Project

Summary Estimate Project Cost Personal K __________________

Equipment K __________________

Training K __________________

Capital Works K __________________

Other K __________________

TOTAL K __________________ Note: Both totals should equal

Proposed Project Funding Sources* _______________

K____________________________________

__ K __________________ _________________

K ____________ _______

_________________ K ____________________

_________________ K ____________________

TOTAL K ___________________

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Section B: Outline of the Project

Please use your own paper and take as much space as you need to answer the following questions. Remember that the development budget is limited and the selection of projects is highly competitive. Therefore provide as much information as you feel is necessary to justify your project, but avoid writing information not directly relevant. Please note that programs comprising multiple projects substitute “program” for “project”

1. Development Objective

1.1 Describe how the project is in line with District, Provincial, Sectoral Strategies and/or Plans or National Development priorities? (Please provide page references to the relevant plan and attach a photocopy of the relevant page/s).

1.2 What is the overall high level Development Goal of the project? (Link to MTDS or Sector Plan?).

1.3 What is the Objective or Primary Purpose of the Project? (must contribute to the Goal).

2. Project Description

2.1 How was the project identified and designed? Who was consulted? (number and types of beneficiaries, landowners, others?)

2.2 What is the problem, development opportunity or sector priority(ies) that the

project seeks to address?

2.3 Identify stakeholders who may share this problem/challenge that you may need to consult?

2.4 What have you (or others) done already to try and address this problem/opportunity?

2.5 How will the project address the problem/opportunity to achieve its objective? 3. Project Benefits

3.1 Who will benefit from the project (e.g. number of women, men youth, organisations etc)? How will they benefit (e.g. social, economic, environmental benefits, employment, business opportunities, etc)? How and when were these beneficiaries consulted?

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4. Technical Aspects

4.1 Were alternative approaches considered to achieve the objectives? Why is the current approach being suggested in this project the best approach to address the problem/opportunity?

4.2 Identify other relevant technical issues 5. Project Sustainability

5.1 What are the risks to the project? How will the risks be overcome or managed? (Please attach a risk management table).

5.2 How will recurrent costs such as staff costs or maintenance and repair costs be met, both during and after the project?

5.3 What will the originating organisation or local community contribute to the project?

5.4 Have any land ownership issues been resolved? (if necessary, attach land agreement).

5.5 Who will own and/or be responsible for any infrastructure, equipment and materials that come out of the project?

6. Cross-cutting Issues

6.1 What positive, negative or neutral impacts will the project have on the environment? Please describe? Is an Environmental Impact Assessment necessary? (Discuss with the Office of Environment and Conservation)What positive or negative impact will the project have on women? For example, how will women benefit? Will any steps be taken to encourage the participation of both women and men? Will the project impact on other minority groups such as ethnic or religious groups?

6.2 How will the project impact on the spread and control of HIV/AIDS (e.g. people traveling to new areas; transportation access being created)? Is there an opportunity to include HIV/AIDS awareness in the project? (Discuss strategies with the National or Provincial HIV/AIDS Coordinator)

7. Institutional Capacity of Implementing Agency

7.1 Who will implement the project? Will it be implemented in association with other organizations including Non Governmental Organizations and Community Groups?

7.2 Explain why you believe the implementing agency or agencies will be able to successfully carry out the project? Describe staffing being provided to the project (eg. Identify Project Manager, Project Management Committee); qualifications of key staff; similar projects carried out previously by the agency and the persons involved etc.

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8. Monitoring & Evaluation

8.1 Drawing from Implementation Schedule show summary of key timelines and milestones for monitoring?

8.2 How will Outputs and Outcomes be monitored and reported upon? (NB. DNPM requires quarterly and six monthly reporting of implementation for all PIP-funded activities; show how you are able to comply with this)

8.3 Who will be responsible for Monitoring & Evaluations?

8.4 Have you consulted with PLLSMA of the Department of Provincial and Local Government Affairs (DPLGA) – previously the National Monitoring Authority -- about your sub- national implementation and monitoring plans? If not, why?

8.5 How will monitoring information be used? eg. To address delays

9. Procurement

9.1 The Financial Management Manual on the procurement procedures comes in two sets, with different requirement for Minor Procurement and Major Procurement. Minor Procurement relates to procurement less than K100,000. The minor procurement requirements are set out in detail at Part 11 and 12 of the Revised Financial Management Manual. Eg. Verbal Quotations for purchases less than K5,000 but to be recorded in a Quotations Register (Part 12.7) and three written quotations for purchases valued from K5,000 and less than K100,000 (part 12. 14 – 22)

9.2 Major procurement is above K100,000. Under Section 47 B of the Public Finances and Management Act any procurement above K100,000 must receive an Authority to Pre- Commit Expenditure (APC) from the Secretary of Finance before entering into any tender or contractual arrangements. The APC and the Supply and Tendering requirements are set out in detail in Parts 11, 12 & 13 of the Revised Financial Management Manual.

9.3 In relation to projects managed by Departments, failure to obtain an Authority to Pre-Commit Expenditure from the Secretary of Finance will render any contract entered into null and void (Section 47 C of the Public Finances (Management) Act).

9.4 In relation to projects managed by public bodies, Section 61 of the Public Finances (Management) Act requires the approval of the Minister for Finance before any contract involving the payment or receipt of an amount exceeding

K100,000 or

In the case of a public body declared by the Head of State , acting on advice, by notice in the National Gazette, to be a public body – K500,000.

9.5 Funds will not be released from the main account for any of the Supplementary Budget Trusts where a required Section 61 approval has not been issued, even where a contract has been entered into.

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9.6 Section 40 of the Public Finances (Management) Act requires that tenders shall be publicly called where the estimated cost is greater than K100, 000.

9.7 Tenders are expected as the normal procurement process. A Certificate of Inexpediency (COI) may be issued, where appropriate, by the Central Supply and Tenders Board. A COI cannot be used to avoid the tender process. It should not be assumed that a Certificate of Inexpediency will be issued other than in very exceptional circumstances. It is only applied in a situation of Natural Disasters, Defence Emergency, Health Emergency and Civil Unrest.

9.9 The requirements for seeking and obtaining a COI are in Part 13 Division 4 of the Revised Financial Management Manual. This requirement must also be adhered to by Provincial and Local-level Governments.

Section C: Attachments

The following attachments are required for appraisal of the PFD;

Attachment 1: Log Frame Attachment 2: Risk Management Table Attachment 3: Implementation Schedule Attachment 4: Cost Schedule Attachment 5: Cash Flow Analysis and Business Plans if Income Earning Project

The following attachments are optional and will depend on the nature of the project;

Land Agreements Scope of Works Bill of Quantities Quotations from suppliers Curriculum Vitae of key personnel Structure of Program/Project Management team/arrangements, showing lines of

communications and reporting arrangements Human Resources Mobilisation Plan showing key personnel who will be used in

the project, relevant training and capacity building that will be undertaken, control mechanisms, etc

Organisational Diagram showing project management structure and how it fits into larger organization

Monitoring & Evaluation Framework Other supporting documentation

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ATTACHMENT 1 (a) Logframe Format (for relatively simple projects)

Objective Hierarchy (Narrative summary, intervention logic)

Performance Questions and indicators

(Objectively verifiable indicators, targets)

Monitoring Mechanisms (Means of Verification, sources of information)

Assumptions and Risks

Goal Overall aim, Development Objective The long term aim, change of state or improved situation towards which the proposed intervention (policy, program or project) is making a contribution Preferably draw from GoPNG MTDS How to write it up? Put the verb in the past tense, as something already achieved over the long term

Performance questions and indicators at goal level – high level impacts Refer to MTDS and MTDS PMF Indicators if available in the sector

How necessary information will be gathered

For consistency with MTDS, MTDS PMF and Long Term sustainability

Purpose (Intervention objective – either policy, program or project) The immediate project objective, the overall observable changes in performance behaviour or resource status that should occur as a result of the project How to write it. Put the verb in the present or past tense, as if already achieved

Performance questions and indicators for each purpose (component) – lower level impact and outcome indicator Monitoring for Change at the level of OUTCOME is CRITICAL for managing IMPACT. The 3 ways of dealing with larger projects in Attachment 1 (b) all help make the outcome level more explicit and detailed and also easier to monitor and evaluate


Assumptions in moving from purposes to goal

Outputs (Results) The products, services or results that must be delivered by the project for the component objectives and purpose to be achieved How to write it. Put the verb in the present or past, as if already achieved

Performance questions and indicators for each output – output indicators


Assumptions in moving from outputs to purposes

Activities The actions taken by the project that are required for delivery of the outputs How to write it. Put the verb in the infinitive, as something to do

Note the needed inputs go here, not indicators for activities

Assumptions in moving from activities to outputs

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ATTACHMENT 1 (b) For complex multi-component projects and/or programs three options for adjusting the structure of the logframe matrix.

Type of Structure Description Advantages Disadvantages

Standard objective hierarchy with Goal (desirable long term development impact stated here ideally drawn from the MTDS or MTDS Performance Management Framework)

Four levels: 1 x goal, 1 x purpose, any number of activities per output

- is very simple - is commonly used and understood

- Oversimplifies larger, multi-component projects, programs, policies - Does not make project outcomes clear

Multiple purposes Four levels: 1 x goal, as many purposes as needed, any number of outputs per purpose, any number of activities per output

- Maintains the standard four levels of the logframe matrix - The standard is one purpose, so this may cause confusion

- Confusion between purposes and outcomes can still occur

Cascading logframes (Objective hierarchies)

Several interlinked, standard four-level logframes; each project component written up in a separate logframe; the purpose level = the component objective

- Maintains the standard four levels of the logframe matrix - Enables a focused “sub-project” approach to management

- Doesn’t give an overview of cross-cutting objectives - Focusing on integrative impact is difficult - Is more complex

Extra layer(s) Five levels: 1 x goal, 1 x purpose, any number of key outcomes (or component objectives), any number of outputs per outcome, any number of activities per output

- Makes a clear distinction between output, outcome and purpose levels, facilitating M&E - Is consistent with standard LFA - Some agencies already using

- More detail has to be included in the logframe matrix

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ATTACHMENT 2 Risk Manager Table Project Risks are all the possible incidents that may happen that will negatively impact on the implementation and overall success of the project. A Risk Analysis helps you anticipate risks, and therefore plan to manage them before they happen. Steps for risk analysis; 1. Consider every aspect of the project. Are there any possible risks? List each risk below in

Column 1. (Some risks are already included) 2. How serious would the consequences be if this risk occurred? Give a rating in Column 2. 3. How likely or probable is this risk? Give a rating in Column 3.

4. Multiple the numbers in columns 2 & 3. The higher the number the more serious the risk. 5. What strategies will you use to manage the risks?

Risks – List all possible risks you can think of for your project:

Consequence 4 Extreme 3 High 2 Medium 1 Low

Probability 4 Almost certain 3 Likely 2 Possible 1 Unlikely

Risk Rating (multiply columns 2 by 3)

Risk Management Strategy (If risk is medium to high explain how you manage it; and if the risk is low explain why this is so)

Lack of Political or Administrative support

Low capacity of key personnel

Land not secured

Maintenance & recurrent costs not met

Project assets personalised

Lack of community support

Poor transportation

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ATTACHMENT 3 Implementation Schedule Output/Activity Who Year 1 Year 2 Year 3 Year 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

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ATTACHMENT 4 Cost Schedule (K'000)

UNIT unit

cost K'000

Quantity Total Cost

Year 1 Year 2 Year 3 Year 4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INPUTS

Personnel

Sub-total Personnel Equipment

Sub-total Equipment Capital Works

Sub-total Capital Works

Training Sub-total Training Other Sub-total Other Quarterly Costs TOTAL COST