Writing Successful Business Plans

Transcription

1 Writing Successful Business Plans Presented by Viv Naidoo Deputy Director Water Sector Support Water Services Master Class # August 2012 Gauteng Birchwood Hotel Contents Background Section 1- Project Introduction Section 2- Needs Determination Section 3- Engineering Viability Section 4- Institutional Sustainability Section 5- Economic /Socio Economic Analysis Section 6- Financial Viability Section 7- Environmental Acceptability Section 8- Conclusion Section 9- Recommendations Section 10- Project Approval Common Problems with Water and Sanitation BPS First Draft Course Content 1

2 Background The following is based on the Department of Water Affairs generic format guidelines for submitting project feasibility reports/ Business Plans for funding applications. The format and guideline applies to both Water and Sanitation projects. Section 1- Project Introduction Project title Project name Number, Type, Latitude, Longitude & Local Muns. Location of scheme (footprint) Villages & Communities with distance to nearest town Locality Map 1: Project objectives O&M, Health, Community Uplifting, Capacity Building, etc Purpose of feasibility study Water & Sanitation supply, community profile, Project Costing, BEE Overview of regional planning/studies Alignment to WSDP, IDP & neighbouring developments First Draft Course Content 2

3 Section 2- Needs Determination Demographics Current population Source of information with 5-10 growth rates Growth projections ( Statement of motivation) Demand/Need parameters Service Levels (volumetric base data) Water: Design Consumption, Institution Demand, Agri& other users, Water Losses, Water Demand. Sanitation: Type of Superstrucutre, Size of Top Structure, Size of Pit/ Pit Volume, Nature of Pit Lining. Flow Rates Bulk Pipe Sizing, Pressure, Peak factors, Reservoir Storage Quality Motivate water quality criteria for different user groups Section 3- Engineering Viability Options Considered Source Hydrological / Geohydrological Analysis (Methodology) Hydrological flow records at point of abstraction Flood hydrographs for applicable return periods Exploitability of Groundwater Water Balance (DWA) Consideration of Provincial Water Resource Strategy Medium / Long Term Sustainability Medium to long-term water source yield sustainability. Infrastructure Project Layout (Catchment to Consumer) Specific Infrastructure Layout Configuration relevant to options considered. First Draft Course Content 3

4 Section 3- Engineering Viability Cont.. Water quality As before relating to Water or Sanitation. Engineering consideration Planning norms and design parameters Motivate in terms of infrastructure components- Materials, Safety Margins, etc Existing infrastructure Emphasis on current levels of service Proposed infrastructure Physical design considerations Bill of Quantities Table form and must include VAT(not at end) Capital Cost per capita / household based on present population figures Section 4- Institutional Viability Community structures Organisations and leadership profiles Community Structures and Leaderships profiles Present practices/ perceptions/ attitudes with the inclusion of women Level of community awareness and development Income level and sources of income Community involvement Water Service Authority Responsibility What is the responsibility in terms of applicable legislation Status and Proficiency Ability of the WSA to plan implement and manage the project First Draft Course Content 4

5 Section 4- Institutional Viability Cont.. Water Service Provider Section 78 Determination (outcomes of the study) Status and proficiency of the Selected WSP Level of administration, meter reading, billing and payment functions Identify Potential WSP to assist with project Consumer / Customer Relationship Legal Requirements Water Use Registration (DWA) Intended Compliance to National Water Act Project Registration (DEA)- If applicable Section 5-Economic /Socio Economic Analysis Infrastructure Initial Capital Investment Cash Flow Long Term Operation and Maintenance Cost Replacement/Refurbishment Cycle Cost Social and Socio Economic Opportunities (Provincial Growth & Economic Development Plan) Co-ordination and Linkages to other initiatives Training, facilitation and capacity building scope of work Labour based construction(percentage of the project) Cost estimates (options for above implementation) Net Present Value / Socio Economic Quantification First Draft Course Content 5

6 Section 6- Financial Viability Funding Sources Capital Investment (Inclusion of municipal loans where applicable) Long Term Operation and Maintenance Cost recovery ( Free Basic Services, Indigent Policy, High Level of Service, Institutional Service Delivery) Deficit Funding (Inclusion of municipal loans where applicable) Cashflow forecast Monthly Basis Both Graphically and Tabular Milestone schedule for the project PERT Format (Project Evaluation Review Technique) Similar programme against time NB: Project Phasing. MIG incorporation Section 7- Environmental Acceptability Natural Environment Impact Assessment Scoping Exercise Social Environment Relocation Considerations What is the WSA policy for relocation with consideration for compensation for private and public betterment. Socio-economic Opportunity Maximisation Emphasis on co-ordination and alignment to WSDP, IDP & neighbouring developments Environmental Management Plan Management and Mitigation of adverse environmental impact. First Draft Course Content 6

7 Section 8- Conclusion Optimal Project Choice this should summarise the proposed option for Manco/Exco decision Water need: Domestic: households Institutional: Kl/month Agriculture: Kl/month Water Source: (describe very briefly in one sentence) Raw water Storage: (describe very briefly in one sentence) Treatment: (describe very briefly in one sentence) Dispensing: (describe very briefly in one sentence) Total Capital Cost: R Funding: Section 8- Conclusion Conditional Government Grant: R _ million Conditional Donor Grant R _ million Council Budget Grant R _ million Council Capital Loan R _ million Estimated O&M Cost: R _ per annum Funding: Council Budget R _ per annum Council Loan R _ per annum First Draft Course Content 7

8 Section 9- Recommendations Firm Recommendation Detailed to reflect: Intended Project Project Cost Duration Financial Years Section 10- Project Approval WSA Management WSA EXCO First Draft Course Content 8

9 Common Problems with Water and Sanitation BPS Economies of scale not being achieved Costs not falling within the National benchmarks Cost per sanitation unit exceeding the National Subsidy Guidelines without any justification 8% inflation for unit cost not factored in for sanitation projects implemented for more than one financial year (multi year projects) Duplication of scope of work with other projects Sanitation technologies not in alignment to the Ground Water Protocol Common Problems with Water and Sanitation BPS Higher feasibiltyoption chosen without justification/motivation Availability and reliability of Water source not being confirmed Abstraction and discharge licenses not confirmed and available Excessive ISD cost Lack of inter and intra sectoralcollaboration resulting in poor planning.(integrated holistic developmental approach) Not considering the access of services to institutions within the project area First Draft Course Content 9

10 Common Problems with Water and Sanitation BPS No EXCO approval Lack of a committed 5 year O&M plan that is not signed off by the MM and CFO No commitment of relocation plans wrtvips that require lining Planning for a higher level of service without considering affordability of consumers ( Indigent population ) Lack of Alignment to WSDP, IDP & neighbouring developments Thank You!!!! First Draft Course Content 10