Dr Baholo Baholo Sector Leader Energy (Africa & Middle East) Aurecon

Transcription

1 Dr Baholo Baholo Sector Leader Energy (Africa & Middle East) Aurecon

2 OUTLINE Understanding the project process perspective assessments, preparation, implementation and operation Unavoidable facts about large scale hydropower Project life cycle Key elements for project assessment Project preparation considerations Implementation for successful operation Sustainable operation

3 UNAVOIDABLE FACTS Large scale hydropower is generally public infrastructure Long development timeframes Disaggregated development process Prefeasibility study Feasibility study Detailed design Construction/commissioning Operation

4 UNAVOIDABLE FACTS Role players with disaggregated interests Sponsor Developer Owner Consultants Suppliers OEMs, contractors Financial institutions

5 PROJECT LIFE CYCLE Identifying the need for new infrastructure assets & preparing for implementation Designing the infrastructure assets, and constructing them Operating the assets, maintaining them, renewal/refurbishment, revenue management, etc Planning Implementation Operations & Maintenance Policy & strategy Planning Design Operations Construction Maintenance Revenue colection Ratio of total cost: 0.1% 1% 4% 40% 55%

6 SOFTER CONSIDERATIONS Service levels Performance management Consumer focus Accountability Monitoring and evaluation Benchmarking Affordability to supplier and consumer

7 KEY ELEMENTS FOR PROJECT ASSESSMENT Hydrological Risk: Accuracy of hydrological model Availability of water Seasonal flows vs perennial flows Perennial flows result in the necessity of reservoirs Regulatory environment

8 KEY ELEMENTS FOR PROJECT ASSESSMENT Geotechnical Risk: Seismic activity Cyclic load Rate at which reservoir fills up Static load Tendency is to concentrate more on at the dam wall site upstream activity is also a risk Tunnel and Machine hall Inadequate geotechnical investigations at feasibility stage

9 WHY PROJECT PREPARATION?

10 PROJECT PREPARATION STEPS PHASE 1: ENABLING ENVIRONMENT Designing enabling legislation Designing regulatory approaches Project relevant institutional reforms Capacity building to support project PHASE 4: PROJECT STRUCTURING Public / Private options assessment Technical / Engineering Project finance Legal Structuring PHASE 2: PROJECT DEFINITION Identification of desired outputs Prioritization vs. Other projects Action planning (TORs, etc.) Identification of project champions Pre-feasibility studies PHASE 3: PROJECT FEASIBILITY Organizational / Administrative Financial / Financial Modelling Economic Social Technical / Engineering Environmental Studies PHASE 5: TRANSACTION SUPPORT Project Finance Technical / Engineering Legal Structuring Procurement Negotiation Post-signing financial agreements PHASE 6: POST-IMPLEMENTATION SUPPORT Monitoring Evaluation Renegotiation / Refinancing

11 Sponsorship/ Leadership Commitment from HoS or political leadership Project management team Financing options and sources Clear Objectives Risks Definition of roles and responsibilities Political Market Commercial Technical Financial Laws & Regulations Identification of parties/stakeholders Assignment of roles and responsibilities Risk allocation Other

12 SERVICE DELIVERY Institutional development Business process analysis Ringfencing Organisational design Restructuring Change management Institutional reform Stakeholder engagement IMPROVEMENT Policy and strategy development Standards development Training and capacity building

13 SERVICE DELIVERY IMPROVEMENT Credit worthiness improvement assessment Performance assessment Benchmarking Citizen Report Cards, etc Public administration legal & Compliance Institutional feasibility studies Municipal Systems Act Section Section 78 assessments (South Africa) Monitoring and evaluation

14 SERVICE DELIVERY IMPROVEMENT Regulatory Compliance audits Regulatory policy / standards development Tariffing Master / business planning Consolidated infrastructure planning Backlog eradication Funding application support Utility management Revenue cycle management Management and technical support Asset management planning Feasibility studies

15 Life cycle management of assets Strategic managemen t Service levels, polices, etc Long term plans yrs Capital investment management: Funding, financing Service levels, quality monitoring Long term investment planning Tactical managemen t Plant/Networ k plans Programme management Community awareness Losses Maintenance refurbishment planning Tariffing Operational managemen t Project approvals, EIA s etc Design, call for tenders Construction Operations, treatment, pumping Reactive maintenance Billing, collections Policy & strategy Planning Design Operations Construction Maintenance Revenue colection Duration (months) Ad hoc Ongoing Ongoing Ongoing

16 Life cycle management of assets key plans Strategic managemen t Long term plans yrs Capital investment management: Funding, financing Comprehensive Infrastructure Plans Service levels, quality monitoring Long term investment planning Tactical managemen t HM Plant/Networ k plans Master Plan Programme management Community awareness Asset management plans Losses Maintenance refurbishment planning Tariffing Operational managemen t Project approvals, EIA s etc Design, call for tenders Designs Construction As-built plans Operations, treatment, pumping Reactive maintenance Billing, collections Policy & strategy Planning Design Operations Construction Maintenance Revenue colection Ad hoc Ongoing Ongoing Ongoing

17 Potential institutional support needs Strategic managemen t Long term Linkages with political structures Support provided re long term strategic decisions (investment planning, service delivery, etc) Tactical managemen t Operational managemen t Longer term planning ensure integration Higher levels of expertise Longer term Higher levels of expertise Project-based (shorter term) Higher levels of expertise Longer term planning ensure integration Medium levels of expertise Opportunity for small contractor development, job creation Policy & strategy Planning Design Operations Construction Maintenance Revenue colection

18 Asset Management Good asset management is: Ability to meet production targets In the most cost effective manner over the life of the asset This needs to be achieved while understanding the exposure to business risk

19 Successful operation Determining the health of the delivery chain: Failure mode analysis Asset life cycle Effects of production Condition based maintenance plan Condition and performance base assessment

20 Risk Exposure Establishing the current risk exposure: Failure mode focus Failure consequences Failure probability Forced outage costs Maintenance costs

21 Environment & Governance No impact on production but need to be managed: Client care issues Compliance with regulations Environmental Public relations issues

22 Conclusions Critical to adopt sound asset management practices/principles Regulatory environmental critical to the sustainability of operation Scenario planning critical to mitigating the project risks Management of hydrological and geotechnical risks is fundamental to the success of a project

23 Thank you