Prioritising Capital Infrastructure Projects

Transcription

1 Presenter: Don Vincent, GHD

2 Basic premise: Agency with multiple projects Multiple priorities Capital is constrained Things change

3 Why prioritise capital projects? Fundamentally shapes your business by defining what you invest in: Provides visible proof of your commitment to strategies Decides what risks you manage Determines the service levels you deliver Identifies your customer priorities

4 How the Perfect Capital Prioritisation Process Works Collate all your capital projects for the year

5 How the Perfect Capital Prioritisation Process Works Put them into the prioritisation processor

6 How the Perfect Capital Prioritisation Process Works Turn the handle.

7 How the Perfect Capital Prioritisation Process Works Lo and behold Projects all packaged and ready to deliver.

8 Content 1.Defining capital prioritisation 2.The capital prioritisation project 3.Principles of capital prioritisation 4.Best practice capital prioritisation process

9 Defining Capital Prioritisation

10 What Do We Mean By Capital Prioritisation? Defining a capital program that meets corporate objectives within constraints and tolerable risk levels. Capital program? Corporate objectives? Constraints? Tolerable risk?

11 Defining Capital Prioritisation Capital Prioritisation Capital Project Evaluation/ Justification Capital Bids or Submissions Capital Prioritisation and Optimisation Prioritised Program Approval (Board, Council, Shareholder) Approved Program Capital Program Delivery Delivered Program Including Program Monitoring and Reporting

12 Capital Prioritisation Project

13 Development of Water Industry Capital Prioritisation Guidelines

14 Why Prioritise Capital Programs Water Industry Drivers

15 Principles of Capital Prioritisation

16 Seven Principles of Capital Prioritisation 1. Outcome-focused 2. Sound Governance 3. Stakeholder Communication 4. Robust and Consistent Inputs 5. Analytical and Judgemental Decision-making 6. Established Processes 7. Documented Outcomes

17 Best Practice Capital Prioritisation Process

18 Implementation Tasks Best Practice Capital Prioritisation Process Capital Prioritisation Governance Capital Prioritisation Policy Management of Inputs Process Manuals and Procedures Methodology and Tools Managing Deliverability Managing Program Volatility Monitoring and Reporting Outcomes Audit, Review and Improvement Support Information Systems

19 Capital Prioritisation Governance Structure, coordination, review and approval processes

20 Capital Prioritisation Policy I want to make something that everyone needs

21 Management of Capital Prioritisation Inputs Requires confidence in consistency of project inputs

22 Process Manuals and Procedures Adopt a management systems approach

23 Methodology and Prioritisation Tools Recognise there is a balance between analysis and judgement the tool should not make the decision

24 Managing Capital Program Deliverability Build the best possible program, considering risks and issues impacting on capability to deliver

25 Managing Capital Program Volatility Volatility: the level of change to the program once it is approved, recognising the changing environment

26 Monitoring and Reporting Outcomes

27 Audit, Review and Improvement Supports good governance and alignment with objectives

28 Support Information Systems Corporate systems-based

29 Concluding Remarks

30 Concluding Remarks Capital prioritisation is critical to your business: it visibly defines your strategic commitments to stakeholders Universal principles identified from international research Leading practice process model Aligned with ISO management systems Practical application Provides confidence in investment outcomes

31 References PAS-55: Institute of Asset Management, UK IIMM Institute of Public Works Australia (IPWEA) Portfolio Management Office of Government Commerce, UK Government Finance Officers Association (GFOA), USA and Canada Infrastructure Australia (IA), Australia Project Management Institute, USA Water Environment Research Foundation, USA

32 Acknowledgements: GHD acknowledges the program sponsor, Water Services Association of Australia, and the participating water utilities in the development of the Capital Prioritisation Principles and Guideline for the Urban Water Sector

33