Local Economic Development. LGCP - Project Formulation Workshop
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- Godfrey Phelps
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1 Local Economic Development LGCP - Project Formulation Workshop 1
2 Project Formulation Workshop November Jacir Hotel Bethlehem Paul Munters and Firas Zaghal LGCP - Project Formulation Workshop 2
3 Day 1 09h00-09h30 Opening and getting acquainted Hazem Kawasmi (MDLF) 09h30-10h00 Session 1: Refresher LGCP programme and Local Economic Development Paul Munters 10h00-10h30 Session 2: Problem Analysis Paul Munters 10h30-11h00 11h00-12h30 12h30-13h30 Break Assignment 1: Problem Tree + plenary discussion Lunch Firas Zaghal 13h30-13h45 Session 3: Objective Analysis Paul Munters Assignment 2: Objective Tree + plenary 13h45-15h00 discussion Firas Zaghal LGCP - Project Formulation Workshop 3
4 Day 2 09h00-09h30 Revisiting Problem and Objectice Tree Paul Munters Session 4: Strategy Analysis and 09h30-10h00 Intervention Logic Paul Munters 10h00-10h30 10h30-11h00 11h00-11h30 Assignment 3: Strategy analysis and intervention logic + plenary discussion Break Firas Zaghal Session 5: Preconditions and Assumptions Paul Munters 11h30-12h30 12h30-13h30 13h30-14h30 14h30-15h30 Assignment 4: Preconditions and Assumptions + Plenary Discusssion Lunch Session 6: Indicators and Sources of Verification Assignment 5: Indicators and Sources of Verification Firas Zaghal Paul Munters Paul Munters LGCP - Project Formulation Workshop 4
5 Day 3 09h00-09h30 Revisiting Logical Framework Paul Munters 09h30-10h00 Plenary discussion Assignemant 5 Firas Zaghal 10h00-10h30 Session 7: Activities and Budget Paul Munters 10h30-11h00 11h00-12h00 Break Assignment 6: Activities and Budget + plenary discussion Firas Zaghal 12h00-12h30 Session 8: Economic Analysis Paul Munters 12h30-13h30 13h30-15h00 Lunch Assignment 7: Economic Analysis + plenary discussion Firas Zaghal 15h00-15h30 Questions and answers and closing Nasser Sheikh Ali LGCP - Project Formulation Workshop 5
6 Session 1 Refresher LGCP Programme and Local Economic Development LGCP - Project Formulation Workshop 6
7 The LGCP Programme The LGCP programme: is implemented by the MDLF in close coordination with VNGi. concentrates on increasing the capacity of Palestinian municipalities to enhance, organise and institutionalise Local Economic Development. applies a Grant scheme of 2 phases that invites eligible municipalities to participate in an open competition and develop their own LED project. LGCP - Project Formulation Workshop 7
8 Overview of Phase 1: Project Identification The Call for Project Ideas to 32 municipalities was issued on 26 September 2014 The Call for Project Ideas closed on 23 October From October 2014, an independent assessment of x Project Ideas was done. From 29 October - 2 November 2014, 14 municipalities were visited for an Organisational Capacity Check. 14 municipalities are shortlisted to enter into phase 2 LGCP - Project Formulation Workshop 8
9 13 Shortlisted Municipalities Small sized Municipalities (<10000 inhabitants) Kufor Ra'ie, Qabalan, Silwad Medium sized Municipalities ( inhabitants) Al Khader, Jericho, Salfit, Taffuh Larger sized Municipalities (above inhabitants) Bani N eim, Beitunia, Dura, Hebron, Qalqilia and Yatta LGCP - Project Formulation Workshop 9
10 Next: Phase 2 Project Formulation Call for Project Proposals (3 November), including Arabic template and timeframe Project Formulation workshop (11 13 November) Request for Clarifications (till 17 November) Closing of the Call for Project Proposals and administrative check (4 December) Independent assessment of the Project Proposals and feedback to 7 municipalities on how to convert these into Project Documents A selection of max 7 Project Documents LGCP - Project Formulation Workshop 10
11 LED in easy words Local Economic Development means - Local = in your municipality - Economic = production - Development = more and better How to provide for more and better production in your municipality LGCP - Project Formulation Workshop 11
12 Constraints LGCP - Project Formulation Workshop 12
13 Role of Local Governments in LED Service provider: traditional role including capital investment Regulator: regulate the actions of others to ensure a common good Catalyst: create conducive environment Entrepreneur: engage in investment attraction, place marketing and joint ventures LGs can take on multiple roles. LGCP - Project Formulation Workshop 13
14 Generic Examples Generic Services - Electricity/Energy - Roads and ports - Water - Education and Training Generic Laws and Regulations - Business registration - Building and other permits - Labour legislation - Environmental legislation Business Development Support - SME promotion - Start-up promotion - Promotion and/or extension of productive sectors - Export promotion Sector-specific laws and regulations - Transport - Environment-intensive sectors - (Tele-) Communications - Waste Disposal LGCP - Project Formulation Workshop 14
15 Project Proposal Template 1. Contact details 2. General Information 3. Project Description (10) 4. Stakeholder consultation (10) 5. Problem analysis (25) 6. Logical Framework (45) 7. Activity Planning (10) + Annex F Economic Analysis Scores of Project Proposal and Economic Analysis are weighted. LGCP - Project Formulation Workshop 15
16 Session 2 Problem Analysis LGCP - Project Formulation Workshop 16
17 3. Problem Analysis a. Inventory of LED problems (max. 5 points) b. Problem Tree (max. 10 points) c. Objective Tree (max. 10 points) LGCP - Project Formulation Workshop 17
18 Explanation Problem Analysis The key subject of the Grant Scheme is the capacity of Local Governments to support Local Economic Development. - What are the key problems related to LED? - What are the key constraints of the Local Government to support LED? Why is it important to distinguish? LGCP - Project Formulation Workshop 18
19 Problem Tree The problem tree establishes cause and effect relationships to first ensure that root problems are identified and only then solutions are provided: identifying one or two (initial) major problem(s) affecting the target group(s) identifying related problems/constraints analysing and identifying cause and effect relationships and create a draft problem tree checking the logic LGCP - Project Formulation Workshop 19
20 Problem Tree example Income of Artisanal Fishermen in decline EFFECTS Reduction of fish resources Low sellingprice for fishermen in the villages Destruction of the natural habitar and mangroves Illegal Fishing Practices Poor quality of the processed catch Limited acces to market CAUSES LGCP - Project Formulation Workshop 20
21 Assignment 1 LGCP - Project Formulation Workshop 21
22 Session 3 Objective Analysis LGCP - Project Formulation Workshop 22
23 Objective Analysis Convert the problems into positive achievements through establishing means/ends relationships LGCP - Project Formulation Workshop 23
24 Objective Tree example Income of artisanal fishermen in increased ENDS Reduction of fish resources reduced or stopped Sellingprice for fishermen increased Natural habitat of fishresources protected Illegal fishing practices reduced Processing of the catch improved Access to markets improved MEANS LGCP - Project Formulation Workshop 24
25 Assignment 2 LGCP - Project Formulation Workshop 25
26 Session 4 Strategy Analysis and Intervention Logic LGCP - Project Formulation Workshop 26
27 Strategy Analyisis Consists of: analysing identified (potential) objectives in relation to a set of feasibility and policy priority criteria; assessing the costs and benefits of different potential approaches choosing an appropriate strategy for project implementation LGCP - Project Formulation Workshop 27
28 Strategy analysis criteria Economic and financial costs and benefits Complementarities with programmes or projects financed by other donors Availability of financial resources, expertise, etc. Contribution to the reduction of poverty and inequalities (e.g. gender) Fit with partner s policy and programme priorities Implementation Strategy Institutional capacities of partner/implementing agencies Urgency LGCP - Project Formulation Workshop 28
29 Defining Project Purpose Excluded statements should be considered in the analysis of assumptions/risks Income of artisanal fishermen in increased OVERALL OBJECTIVE Reduction of fish resources reduced or stopped Sellingprice for fishermen increased PROJECT PURPOSE Natural habitat of fishresources protected Illegal fishing practices reduced Processing of the catch improved Access to markets improved RESULTS Fish stock control strategy Market orientation strategy LGCP - Project Formulation Workshop 29
30 5. Intervention Logic a. Overall Objective b. Specific Objective c. Results d. Main Activities (max. 15 points) LGCP - Project Formulation Workshop 30
31 Intervention Logic The intervention logic describes the chain from Activities Results Specific Objective Overall Objective. Activities (Input) Results (Outputs) Specific Objective (Outcome) Overall Objective (Impact) LGCP - Project Formulation Workshop 31
32 Intervention Logic 2 Overall objective Project purpose Results Activities Change in (part of) society as a whole Use of the results by stakeholders The goods and services delivered by the project What the project does to produce the results (work program/tasks) LGCP - Project Formulation Workshop 32
33 Assignment 3 LGCP - Project Formulation Workshop 33
34 Session 5 Preconditions and Assumptions LGCP - Project Formulation Workshop 34
35 Assumptions An assumption is a condition : required for project success; which is not under the control or influence of project management; and which will need to be monitored Assumptions provide the basis on which further risk analysis is carried out. LGCP - Project Formulation Workshop 35
36 Positive Statements Assumptions may relate to such concerns as: the actions of other stakeholders not directly involved in project management the response of target groups to the project s services effective donor coordination and timely fund disbursement price movements for project inputs or outputs changes in relevant government policies Assumptions are written as positive statements while risks are written as negative statements LGCP - Project Formulation Workshop 36
37 Vertical Logic Intervention Logic Verifiable Indicators Sources of Verification Assumptions Overall Objective Project Purpos e Results Activities For each level of the intervention logic, if objectives are achieved and assumptions hold, then... LGCP - Project Formulation Workshop 37
38 Assumption Assessment Grid Probability of assumption holding true Low Risk High Risk High Do not include (low risk, ignore) Do not include (high risk but ignore) Medium Do not include (moderate risk, risk mitigation measures advisable) Include (and monitor!) Low Do not include (considerable risk, but at low impact; risk mitigation recommended) Low Killer Assumption! Change Design, otherwise unfeasible design Impact of assumption if holding true LGCP - Project Formulation Workshop 38 High
39 Assignment 4 LGCP - Project Formulation Workshop 39
40 Session 6 Indicators and Sources of Verification LGCP - Project Formulation Workshop 40
41 SMART Characteristics Indicators should be: Specific: to the objective it is supposed to measure, with clear targets Measurable: in terms of quality and/or quantity Available: Relevant: Timely: at an acceptable cost to the information needs of their users available in time in order to be useful for the project, and time-bound so we know when we can expect the objective/target to be achieved LGCP - Project Formulation Workshop 41
42 Developing indicators (QQTTP) Quality: Quantity: define appropriate object to measure change and select corresponding variable define realistic future levels to be attained given the current baseline (current level) Target Group: define who is concerned Time: Place: when will change take place define where the change will take place LGCP - Project Formulation Workshop 42
43 Be realistic about your ambitions LGCP - Project Formulation Workshop 43
44 Why define Sources of Verification Full agreement and transparency on the source of information that will be used to measure performance as defined by indicators. Avoid confusion and misinterpretation of performance indicators Assure timely availability of information Create clear lines of responsibility Make use of existing information resources to avoid parallel systems and procedures LGCP - Project Formulation Workshop 44
45 Types of Sources of Verification Observation / site inspection Administrative records Routine statistics Special surveys Technical or specialised reports Management reports LGCP - Project Formulation Workshop 45
46 Cost Complexity of Sources of Verification Specialised surveys Management Administrative reports records Adapted available statistics Available statistics Complexity LGCP - Project Formulation Workshop 46
47 Horizontal Logic Intervention Logic Verifiable Indicators Sources of Verification Assumptions Overall Objective Project Purpos e Results Activities Check how achievements are verified LGCP - Project Formulation Workshop 47
48 Assignment 5 LGCP - Project Formulation Workshop 48
49 Session 7 Activities and Budget LGCP - Project Formulation Workshop 49
50 Activity planning and Budget Describe key activities in active tense Plan activities in an activity plan Describe per activity the resources needed in terms of units and cost. LGCP - Project Formulation Workshop Slide 50
51 Activities Activity Month Sub-activity Sub-activity Sub-activity Sub-activity Sub-activity Sub-activity Sub-activity 3.3 LGCP - Project Formulation Workshop 51
52 Budget Example Activity Type of Resource Number Unit Cost Total Funding Source Sub-Activity 1.1 Sub-Activity Sub-activity National training expert 2. Travel inside municipality 3. Travel outside municipality 3. Hotel reimbursement 1. National LED expert 2. Staff Member A 3. Intern 1. Trainer A. 2. Trainer B. 3. Intern 4. Rent Training Room 5. Lunch Participants 6. Office Stationary 7. Communication 8. Transport Total LGCP contribution Total co-funding by municipality Total budget x days x tickets x km x nights x days x days x days x days x days x days x days x lunches Lump sum Lump sum x km /day /ticket /km /night /day /day /day /day /day /day /day /lunch /km Total eligible grant project costs x LGCP Municipality LGCP LGCP Municipality Municipality Municipality LGCP LGCP LGCP LGCP LGCP LGCP LGCP LGCP x% x% 100% LGCP - Project Formulation Workshop 52
53 Eligible cost principles incurred during the project s lifetime; necessary for the implementation of the project which is the objective of the grant; identifiable and verifiable, meaning that when they are incurred by the municipality, they can be recorded in the municipality s accounting system and can be supported by original documents; comply with the requirements of applicable tax and social legislation; reasonable (fair market price), justifiable and comply with the requirements of sound procurement practice (please see MDLF procurement guidelines). LGCP - Project Formulation Workshop 53
54 Assignment 6 LGCP - Project Formulation Workshop 54
55 Session 8 Economic Analysis LGCP - Project Formulation Workshop 55
56 Different perspectives Logical Framework perspective Activities Results Project Purpose Overall Objective Cost Benefit perspective Costs: Human Resources Financial Resources Materials Benefits: Human Resource Development Financial Resource Mobilisation Changed Processes Changed Outputs LGCP - Project Formulation Workshop 56
57 Focussing on Cost and Benefits od different stakeholders Cost Benefits Municipal Administration How will the proposed project be supported by the Municipal Administration in terms of Financing, Materials and Human Resources? How will the proposed project contribute to the development of the capacity of the Municipal Administration- with respect to Local Economic Development - in terms of Human Resource Development, Financial Resources, Processes and Outputs? Private Sector Society How will the proposed project be supported by the Private Sector in terms of Financing, Materials and Human Resources? What negative externalities will the project have for society? How will the proposed Project contribute to the development of the capacity of the Private Sector. in terms of Human Resource Development, Financial Resources, Processes and Outputs? What positive externalities will the project have for society? LGCP - Project Formulation Workshop 57
58 Cost In the budget costs are derived from the activities by estimating the use of various resources and associated prices for: Investments Human Resources Materials - Some costs are not associated directly to activities - Some costs are difficult to quantify or price. LGCP - Project Formulation Workshop 58
59 Externality Sometimes cost are not linked to activities, in particular for externalities: an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit. Air pollution from motor vehicles is an example of a negative externality. The costs of the air pollution for the rest of society is not compensated for by either the producers or users of motorized transport. How about a project that uses a lot of water? LGCP - Project Formulation Workshop 59
60 Benefits Benefits can be financial and non-financial and can be: - non-quantifiable - quantifiable - tangible (expressed in monetary terms). Four types of benefits are used in this economic analysis: Improved or increased Human Resources Improved Financial Resource Mobilisation Improved Processes Improved or increased Outputs LGCP - Project Formulation Workshop 60
61 Human Resource Development Local Government: for instance the number of staff that will work on Local Economic Development, and the development of their skills and knowledge Private Sector: for instance employment and skills demand in the targeted productive sectors Society: for instance new or improved curricula of educational system, increased enrolment in educational system, innovative activities of research institutes, lower reliance on Social Welfare and less enrolment in Labour Office LGCP - Project Formulation Workshop 61
62 Financial Resources Development Local Government: for instance increased local taxes, levies or inter-governmental transfers Private Sector: for instance increased Value Added in the targeted productive sector(s), turnover and profits, increased investment in targeted productive sectors Society: suppliers outside the targeted productive sectors benefit from the increased Local Economic Activity, increase of investment outside of the targeted productive sectors, lower Social Welfare outlays. LGCP - Project Formulation Workshop 62
63 Changed Processed Local Government: for instance rules and regulations, procedures, internal consensus building and teamwork, and external consensus and coalition building with the Private Sector, and productive processes. Private sector (Targeted Productive Sectors and logistics): for instance internal production arrangements, techniques, internal workflow, working conditions and systems. Society: for instance external consensus and coalition building with other the Private Sector entities, unions, professional organisations, associations etc. LGCP - Project Formulation Workshop 63
64 Changed Outputs Local Government: for instance improved development and inclusion in the SDIP of Local Economic Development, understanding of the targeted sector(s), economic analysis, and new and/or improved services for the Private Sector Private Sector (targeted Productive Sectors): for instance Value Chain improvements, increased market penetration, new marketing and/or new products. Society: for instance emerging business opportunities outside targeted Productive Sectors. LGCP - Project Formulation Workshop 64
65 Additionality and discounting When completing the Economic Analysis Matrix, it is important to make realistic estimations of the additional cost and additional benefits of the proposed project, that is based on a comparison of the future situation with project and without project. For municipalities and the Private Sector, it might be worthwhile to discuss the distribution over time of the cost and benefits, and where possible asses how these can be made more favourable. LGCP - Project Formulation Workshop 65
66 Assignment 7 LGCP - Project Formulation Workshop 66
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