EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
SCORING RESULTS AND KEY FINDINGS
ANNEXURE C
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Demacon is a member of
SOUTH AFRICAN PROPERTY OWNERS ASSOCIATION (SAPOA)
SOUTH AFRICAN COUNCIL OF SHOPPING CENTRES (SACSC)
The information contained in this report has been compiled with the
utmost care and accuracy within the parameters specified in this
document. Any decision based on the contents of this report is,
however, the sole responsibility of the decision maker.
Enquiries:
Hein du Toit
+27 12 460 7009 (t)
+27 12 346 5883 (f)
+27 82 8988 667
hein@demacon.co.za
www.demacon.co.za
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
TABLE OF CONTENTS
1.
BACKGROUND AND INTRODUCTION TO THE CPM ........................................................................ 4
1.1
1.2
2.
THE CAPITAL PRIORITISATION MODEL PROCESS ........................................................................ 6
2.1
2.2
2.3
2.4
3.
METHODOLOGY FOR DETERMINING THE CPM VARIABLES................................................................ 13
THE CPM VARIABLES DEFINED ...................................................................................................... 14
THE W EIGHTING AND SCORING SYSTEM ......................................................................................... 15
THE CAPITAL PRIORITISATION MODEL SUMMARY ............................................................................ 19
CPM PROJECT EVALUATION RESULTS AND KEY FINDINGS ..................................................... 23
4.1
4.2
4.3
4.4
4.5
5.
DEPARTMENTAL APPRAISAL (TIER 1) ............................................................................................ 7
CIF / BUDGET EVALUATION (TIER 2) ................................................................................................. 7
ALLOCATION AND IMPLEMENTATION (TIER 3) ................................................................................... 11
PROJECT READINESS .................................................................................................................... 11
THE PRIORITISATION MODEL METHODOLOGY: SCORING SYSTEM ......................................... 13
3.1
3.2
3.3
3.4
4.
PROJECT BACKGROUND .................................................................................................................. 4
METHODOLOGY ............................................................................................................................... 4
DEPARTMENT’S RESPONSE RATE ................................................................................................... 23
TOP 20 HIGHEST SCORING PROJECTS............................................................................................ 25
BOTTOM 20 LOWEST SCORING PROJECTS ...................................................................................... 33
INDICATED PROJECT CATEGORIES VS. CPM EVALUATION ............................................................... 40
OTHER KEY ISSUES AND RECOMMENDATIONS BASED ON FIRST ROUND TESTING.............................. 41
WAY FORWARD ................................................................................................................................. 42
5.1
REFINEMENT OF THE CPM ............................................................................................................. 42
5.1.1 Changes to the CPM Weighting ............................................................................................. 42
5.1.2 Changes to the CPM Variables .............................................................................................. 43
5.2
SUMMARY OF HYPOTHETICAL TESTING ........................................................................................... 44
5.3
KEY RECOMMENDATIONS AND W AY FORWARD................................................................................ 45
APPENDIX A: DEPARTMENTAL INTERACTION ...................................................................................... 47
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
1. BACKGROUND AND INTRODUCTION TO THE CPM
1.1 PROJECT BACKGROUND
This document forms part of the larger process of the Financial and Projection Modelling of the
Capital Investment Framework and Related Planning Processes (to be conducted on an as and
when required basis) for the Ekurhuleni Metropolitan Municipality EMM).
Demacon Market Studies were commissioned by the Ekurhuleni Metro Focus Project
Management to compile a comprehensive research study for the Modelling of the Ekurhuleni
Metropolitan Municipality Capital Investment Framework (CIF). The purpose of the study is to
inform the CIF, and as such assist with the refinement of the CIF geographic priority areas and
the refinement of the Capital Prioritisation Model (CPM). The following paragraphs outline the
methodology / approach taken for the identified study.
The purpose of this document is to assist in the refinement of the EMM Capital Prioritisation
Model by developing a workable scoring system to guide and inform the prioritization
process of capital projects. The report presents the methodology used to develop the CPM as
well as the results and key findings based on the analysis conducted from testing the CPM
scoring system against the 2015/16 to 2017/18 multi-year capital budget.
1.2 METHODOLOGY
The research study consists of ten interrelated tasks, and in terms of the project brief these ten
tasks include the following (Table 1-1): This report represents the research findings and
recommendations for Task 6.
Table 1-1: Project Methodology
Task
Task 6 – Capital Prioritisation
Model
Activities
The following modelling is required so as to assist with the
refinement of the CIF geographic priority areas and the
refinement of the Capital Prioritisation Model:
1.
To provide economic and financial guidance
2.
Assess risk assessment evaluation criteria (from the EMM Risk
Assessment Report) as part of the existing evaluation of the CPM.
3.
Define the CPM evaluation criteria.
4.
Assess the utilisation of risk assessment scoring as a weighting
system for the prioritisation of municipal projects from the CAPEX.
5. Testing of the risk assessment scoring.
6. Evaluation of Capital Projects
7. Analysis of the CPM Evaluation Results
Outcome of Task 6
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Task 6 of the CIF financial and projection modelling study aimed to provide guidance in terms of
the Capital Prioritisation Model of the EMM, in order to prioritise capital projects for the EMM’s
capital budget planning process. The outcome of Task 6 is a systematic and realistic framework
for scoring and weighing capital projects against a number of criteria identified for the Capital
Prioritisation Model. Furthermore a Capital Prioritisation Manual / Guidebook was presented to
guide relevant parties in terms of applying the Capital Prioritisation Model criteria and scoring
system so as to appropriately prioritise capital projects for the EMM’s multi-year capital budget
planning process.
Finally Task 6 also included testing the scoring system and evaluation of the EMM’s capital
projects which formed part of the 2015/16 to 2017/18 multi-year capital budget. The purpose of
this report is to present the proposed scoring system, and some of these key findings and results
from the CPM testing and project evaluation.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
2. THE CAPITAL PRIORITISATION MODEL PROCESS
The CPM manual identified a three tier approach to project prioritisation for the Capital Budget
Evaluation process. This approach ensures an evaluation of projects in three different stages.
The following three stages are identified (Diagram 2.1):
ALLOCATION & IMPLEMENTATION
Reject Project
Initial Project List
Capital Prioritisation Model Evaluation
Amend Project
Successful Project
Unsuccessful Project
Budget Allocation
Finance
Project Implementation
Responsible
Department
Monitoring and Evaluation
Expenditure
Report
Budget Adjustment
6
Operational Task Team
Departments
Departmental List
Multi-Year Cycle
CIF / Budget Evaluation
DEPARTMENTAL APPRAISAL
Diagram 2.1: Three Tier Project Prioritisation Model
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
2.1 DEPARTMENTAL APPRAISAL (TIER 1)
This stage of the model is concerned with the project evaluation within each of the departments
within the EMM. The departments within the EMM develops a wish list of a number of projects
important to that department in terms of reaching their objectives and needs.
Each department determines its own unique criteria and weighs those criteria based on values,
strategic direction, departmental goals and objectives, available resources, IDP wards needs
analysis etc. Projects are then evaluated internally and an initial list of prioritised projects for
each department is determined.
It should be determined why certain projects from the wish list have been rejected during this
stage of internal evaluation, so as to address the issues in order to ensure that projects can be
accepted for the initial project list in the next financial year.
A second phase of project testing is ten required (Tier 2). The need for the second phase
evaluation process stems from the fact that certain departments do not have their own internal
comprehensive prioritisation process. Therefore an overarching prioritisation model is required,
as this will assist with the effective prioritisation of capital projects as part of the budget
evaluation process.
Projects forming part of the initial project list within a department is than provided to the Special
Projects Unit, in order to determine the priority of each of these projects in order to assist in the
EMM budget planning process and allocation. A project brief will need to be filed for each project
which will serve as info for input into the capital budget spreadsheet. The purpose of the project
brief will be to clearly define each project based on a set of items, including among other the
following:










Project description
Phasing / timing of project
Duration of project
Type of project
Location of the project
Project magnitude and components
Objectives and outcomes of the project
Project investment
Employment creation
Etc.
The project brief will assist decision making and scoring during the prioritisation process of as
identified in the second tier.
2.2 CIF / BUDGET EVALUATION (TIER 2)
The Operational Task Team has been identified to assist with the CIF / Budget evaluation
process to determine the ranking order / priority of each project based on the Capital
Prioritisation Model.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
As part of this tier the following diagram / process will be followed in order to evaluate and score
the projects: (Diagram 2.2).
Diagram 2.2: The Capital Prioritisation Model Process for the Delivering City
STEP 1
STEP 2
STEP 3: Departments submit their draft multi-year capital budgets.
(Includes project category, locality and scoring criteria)
STEP 4: Allocate all individual projects as submitted by
departments into the CIF (Per project category and Per Priority
Area).
PROJECT CATEGORY
GEOGRAPHIC
PRIORITY AREA
PERCENTAGE (%)
OF 2015/16 BUDGET
GPA 1
GPA 2
URBAN
RESTRUCTURING
GPA 3
OUTSIDE GPA
OUTSIDE URBAN EDGE
UNMAPPED
GPA 1
GPA 2
UPGRADING AND
RENEWAL
GPA 3
OUTSIDE GPA
OUTSIDE URBAN EDGE
UNMAPPED
GPA 1
GPA 2
ECONOMIC
DEVELOPMENT
GPA 3
OUTSIDE GPA
OUTSIDE URBAN EDGE
UNMAPPED
STEP 5: Score individual capital projects to determine ranking per
category and per geographic priority area.
STEP 6: Screen all submitted projects for IDP, SDBIP, PMO and
CIF Compliance.
STEP 7: One on one engagement with Departments
STEP 8: Monitor departmental expenditure as a comparison to
financial year budget as per the priority 8areas and as per the
project categories.
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Step 1 – Define Project Categories:
Step 1 of the Capital Prioritisation Model defines project Categories for the Capital budget (all
funding sources). The following project categories are defined:
Category 1 – Urban Restructuring: The portion of the capital budget to be spent on eradicating
the backlog of services that relates to physical infrastructure and social services. This can be
termed ‘The City Past’ category of the budget. Projects included should focus on major housing
projects and poverty eradication areas as described in e MSDF.
Category 2 – Upgrading and Renewal: The portion of the capital budget to be spent on
upgrading and renewal of existing infrastructure. This can also be termed ‘The City Present’
category of the budget. Projects included here should focus on industrial areas and poverty
eradication areas as described in the MSDF but will mainly be guided by departmental
infrastructure management plans. The definition of this category can be expanded upon as per
the definitions of upgrading and renewal by National Treasury. Upgrading refers to the extension
of existing bulk capacity, whilst renewal refers to the maintaining of existing bulk infrastructure,
which does not necessary equate to an extension of capacity.
Category 3 – Economic Development: The portion of the capital budget to be spent on growing
the economy of the city. This can also be termed ‘The City Future’ category of the budget.
Projects included here should focus on industrial areas and major investment and development
projects as described in the MSDF. According to the definition from National Treasury this
category refers to projects that are focussed towards extending bulk infrastructure for the
purpose of the stimulating growth and are therefore purely income generating projects.
Category 4 – Local Interventions: the portion of the capital budget to be spent on specific
political identified and prioritised projects not necessarily included in other categories of the
capital budget. This can also be termed ‘The City Always’ category of the budget. Identification of
such projects will be at the discretion of the Executive Mayor.
Step 2 – Allocate budget percentage per Project Category:
Category 1 – Urban Restructuring: 30% of the capital budget.
 Category 2 – Upgrading and Renewal: 40% of the capital budget (including furniture,
vehicles and equipment). National Treasury with reference to the MFMA circular no. 66
as read with MFMA circular no. 55 has advised municipalities to allocate no less than
40% of the capital budget to upgrading and Renewal.
 Category 3 – Economic Development: 29% of the capital budget.
 Category 4 – Local Interventions: 1% of the capital budget.

Step 3 – Departments submit their draft multi-year capital budgets. (Includes project
category, locality and scoring criteria)
Departments need to submit their draft multi-year capital budgets with all the relevant information
captured, including the information pertaining to the Capital Prioritisation Model evaluation.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Step 4 – Allocate all individual projects as submitted by departments into the CIF (Per
project category and Per Priority Area).
Individual projects will be allocated to the project categories, based on the definitions of each
project category as described by National Treasury (Refer to Step 1).
Furthermore departments’ projects will be allocated to the City Planning GIS division based on
erf numbers and township names, to provide project locality over the multi-year Capital Budget.
The mapping process will also require departments be able to identify a projects sphere of
influence. The provision of a project’s property description must be noted as a requirement in
terms of National Treasury Form SA36.
Step 5 – Score individual capital projects to determine ranking per category and per
geographic priority area.
This step provides for the scoring of the individual projects based on a scoring system per project
category. Furthermore the CPM Manual was developed to serve as a manual for the CPM
process and scoring system. A set of prioritisation criteria and weighting systems (as discussed
in the following sections) was used to prioritise the capital projects for the planning process of the
EMM’s multi-year budget programme. It is important to note that the Capital Prioritisation Model
aimed to prioritise projects that have already been evaluated during the first tier (Departmental
Appraisal). Therefore the aim is not to eliminate projects, but to prioritise them in a ranking order
so as to assist in the EMM’s budget planning process. Projects that are marked unsuccessful
during this phase, in terms of budget allocation of the specific budget period, will need to be
amended, in order to ensure that the project receives a higher score in the following financial
year, ensuring a higher priority and budget allocation to the project.
The aim of the CPM is not to eliminate / reject projects, but to prioritise them in
order to assist in the budget allocation process for a specific financial year.
Step 6 – Screen all submitted projects for IDP, SDBIP, PMO and CIF Compliance.
The capital budget projects will be screened in a joint sitting with Finance, City Planning,
Economic Development, Human Settlements, EPMO, Environmental Resource Management,
Real Estate as well as Strategy and Corporate Planning Departments. The following evaluation
criteria will be utilised in the assessment process:

Legally committed projects
Projects committed due to appointment of consultants or contractors
 Evaluation of feasibility of project plans developed on PCS
o Realistic project timelines
o Realistic budget phases
 New versus existing projects
 Alignment with the CIF geographic priority areas

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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Step 7 – One on one engagement with Departments
One on one engagements with departments will take place after the individual capital projects
have been evaluated and scored based on the CPM model, so as to ensure that the information
provided and captures is correct and realistic. Departments will have the opportunity to provide
proof for the information given in terms of the capital prioritising model.
Step 8 – Monitor departmental expenditure as a comparison to financial year budget as
per the priority areas and project categories
This will form part of the expenditure report on a quarterly basis. This step forms part of the third
tier of the approach to project prioritisation, which is discussed in the following section.
2.3 ALLOCATION AND IMPLEMENTATION (TIER 3)
Projects that have been successfully prioritised in stage two goes through to the next phase of
the three tier approach, the allocation and implementation stage. During this stage the capital
budget is allocated to prioritised projects.
Furthermore this stage includes the project implementation, after the budget has been allocated,
and continuous monitoring and evaluation needs to take place based on expenditure of capital
projects. The monitoring and evaluation process assists in identifying whether there is a need for
budget adjustments, based in monitoring expenditure against the CIF priority areas and project
categories. Multi-year projects needs to go through the CPM phase in determining budget
adjustment for the next financial year for these projects, and go through the entire process from
stage two to stage three.
2.4 PROJECT READINESS
A number of the capital projects on the EMM budget are in planning / pre-feasibility stages and
therefore might not have all the necessary information required to test these projects through the
Prioritisation Model. These projects should therefore be tested in a separate model and scored
against specific criteria, other than that of the Prioritisation Model designed for capital projects
that are in implementation phase.
These initial projects will only be tested against the policy variables as defined in the CPM in the
following section. Therefore the following categories have been identified for evaluating the initial
capital projects:
1.
2.
3.
4.
5.
6.
Project compliance with the CIF Priority Areas of Influence
GDS alignment
SDF and RSDF alignment
Compliance with legislation
Compliance with other strategic documents
Does it unlock development backlogs / constraints to significant growth
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
The evaluation of the initial capital projects will also assist in prioritising these projects for
feasibility
purposes.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
3. THE PRIORITISATION MODEL METHODOLOGY: SCORING SYSTEM
The purpose of this sub-section is to clearly define the methodology used to determine the
Capital Prioritisation variables and scoring system.
It is important to note that the scoring and weighting system defined in this section is the first
draft utilised for the first round testing of departments’ individual projects as part of the
departments’ draft budget submission. Therefore based on the outcomes and key findings of the
first round testing, certain changes will be made to the scoring and weighting system. Some
of these changes are reflected in Section 5 of this report in term of the way forward for the CPM
and future testing of projects.
3.1 METHODOLOGY FOR DETERMINING THE CPM VARIABLES
Diagram 3.1 illustrates the methodology used to determine the variables used for the
prioritisation of the capital projects.
From the diagram it is clear to see that the variables determined for the CPM was based on the
following:

A review of case study literature on other capital prioritisation models to determine best
practices and benchmarking. The case studies used includes inter alia:
o Drakenstein Municipality, Prioritisation Model for Capital Assets Investment, 2014
o Queensland Treasury, Project Evaluation Guidelines, 1997
o Project Scoring & Prioritization for Maximum Results, San Francisco, 2012
o Okhahlamba Local Municipality, Identification and Prioritisation of Projects, n.d.
o Ekurhuleni Metropolitan Municipality, Environmental Policy, 2012
o Ekurhuleni Growth and Development Strategy, 2012
o University Of Wisconsin Madison, Project Prioritization: A Structured Approach To
Working On What Matters Most, 2012
 Variables were also identified based on their ability to add value to National Treasury
definitions in terms of the capital project categories
 Interaction with a number of government departments to determine specific needs of
these departments (Appendix A)
 A desktop review of relevant policy and strategic documents, was done to determine the
objectives and outcomes relating to these capital projects.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Diagram 3.1: Methodology for CPM Variables
Ekurhuleni Metro Capital
Prioritisation Criteria and
Scoring
3.2 THE CPM VARIABLES DEFINED
Based on the abovementioned process, four key prioritisation variables were identified for the
EMM’s Capital Prioritisation Model, namely:
Policy & Legislation Alignment
Economic Variables
Environmental Variables
Social Variables
Each of these four variables have been subdivided into a number of related rating criteria, which
will be used to assess and score each of the capital projects so as to prioritise the vast list of
capital projects identified for the EMM budget (Diagram 3.2).
Each of these variables and scoring criteria reflected in the manual have been incorporated to
the multi-year capital budget for inclusion as per columns BR to CO, and are to be populated as
part of testing the CPM weighting system.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Diagram 3.2: CPM Key Variables and their Sub-Categories
3.3 THE WEIGHTING AND SCORING SYSTEM
The first step in developing the prioritisation model was to determine the variables / criteria that
will be used to assess the importance / priority of each project, as defined in the previous
paragraphs. For each of these identified variables / criteria, a rating scale should be developed to
use in assessing how well a particular project satisfies the criteria. To ensure consistent use of
the rating scale, the following paragraphs provide some details to define how the criteria and
ratings should be applied.
The CPM will make use of a weighting system in which each of the key variables and their rating
criteria will receive a specific weighting percentage. Furthermore a scale of impact for the rating
criteria will be implemented.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Weighting
Each of the four key variables will have a weight attached to it, of which the sum of
these weights must total 100. Within a main variable, each of the rating criteria will
also have a weight attached to it, which will also need to total to 100.
In the past, policy and social variables were considered to be the most important factors in
prioritising capital projects (Figure 3.1).
Figure 3.1: Past to Present Thinking
However it is important that economic growth be prioritised, or focused on, in the next 10 to 15
years. Therefore for the purpose of this model, a ‘new thinking’ attitude towards project
prioritisation has been identified, where the weighting system is based on the three CIF Project
Categories.
It is important to note that each project will be evaluated based on all three weighting scenarios
for purpose of testing the modelling results. In terms of the ‘New Thinking” for project
prioritisation three scenarios have been identified, the urban restructuring weighting system
(Figure 3.2), upgrading and renewal weighting system (Figure 3.3), and the economic
development weighting system (Figure 3.4).
The reason behind these three scenarios is that the scoring scenarios should be more strongly
linked to the National Treasury Definitions of these three different project categories.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Figure 3.2: Urban Restructuring Weighting System
Figure 3.3: Upgrading and Renewal Weighting System
Figure 3.4: Economic Development Weighting System
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Furthermore as part of developing the scenarios, a number of projects were tested against these
scenarios, in order to determine the effectiveness of the weighting scenarios. The initial testing
was conducted against the 2014/15 budget during the development of the scoring criteria and
weighting allocations. The following methodology was implemented to test the projects against
the weighting scenarios:
1. A number of different projects were selected from each project category, i.e. urban
restructuring projects, upgrading and renewal projects and economic development
projects.
2. Projects were also selected from a number of different departments, so as to reflect fair
inclusion different types of projects, i.e. projects from DEMS, EMPD, Health, Economic
Development, Roads, SRAC, etc.
3. In order to effectively test the weighting scenarios on a fair basis, projects were compared
based on their geographic priority areas’ of influence, i.e. priority area 1, priority area 2,
priority area 3, and no priority area.
4. Furthermore new projects were compared with refurbishment projects.
5. Comprehensive testing was conducted against the 2015/16 to 2017/18 multi-year capital
budget.
The wide array of different projects and comparisons ensured effective and realistic testing of the
three different weighting scenarios
Scale of Impact
Each criteria within the key variables will receive a score based on five scales of
impact. (Table 3-1)
Table 3-1: Scale of Impact for Rating Criteria
Scale of impact
Scoring
None
0
Low
25
Not Applicable
50
Moderate
75
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
High
100
The following paragraphs summarises the CPM that was used in prioritising capital projects for
the Metro’s 2015/16 to 2017/18 financial years.
3.4 THE CAPITAL PRIORITISATION MODEL SUMMARY
The following tables summarise the key variables, their sub-categories, and scale of impact /
rating criteria. Each of these variables, sub-categories and scoring criteria have been
incorporated to the multi-year capital budget for inclusion and were populated as part of the CPM
weighting system.
Table 3-2: Policy Alignment Summary
POLICY AND LEGISLATION ALIGNMENT
Projects are assessed to determine their alignment with specific legislative and strategic
documents, on a national, regional and local level. This variable also considers the alignment
of projects with the CIF priority areas and project categories
Project Compliance with CIF Priority Areas of Influence
The Project is strategically located within
the area of influence of the three CIF
priority areas
0 and 5
The project does not fall within any of the CIF
priority areas of influence, i.e. Unmapped /
outside the Urban Edge
4
Inside the Urban Edge, but no priority area of
influence
3
The project falls within the CIF Priority 3 area of
influence
2
The project falls within the CIF Priority 2 area of
influence
The project falls within the CIF Priority 1 area of
influence
GDS Alignment
1
The project is aligned with the growth None
sectors identified in the GDS
Low
No alignment with any growth sectors
Some alignment with important sectors (not
necessarily key sectors)
Moderate
Some alignment with key growth sectors
High
Strategically aligned with key growth sectors
SDF and RSDF Alignment
The project is spatially aligned with None
future plans for growth and development Low
as indicated in the EMM’s SDF and Moderate
RSDF
High
No alignment
Somewhat spatially aligned
Spatially aligned with the MSDF
Strategically and spatially aligned with the MSDF
and RSDF’s
Compliance with Legislation
Project compliance with key legislative No
documents (National, regional, local
Yes
legislation).
No compliance with any legislation
Compliance with legislation (proof should be
provided)
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Compliance with Other Strategic Documents
Project compliance with other strategic
No
No compliance with any strategic documents
plans / documents. Examples include:
 Master Plans
Compliance with strategic documents / plans
 Sector Plans
Yes
(proof should be provided)
 Council strategies
Does it unlock development blockages / Constraints to significant growth
The project is strategically located and
None
consumer demand is strong, but due to
infrastructure backlogs, demand could
not be met. This intervention will Low
therefore be the key to unlocking future
growth and development.
No potential
development
for
unlocking
growth
and
Very low potential for unlocking future growth and
development, however could lead to slight
backlog eradication
Moderate
Could possibly result in eradicating certain
constraints and resulting in growth and
development
High
Key project for significantly unlocking growth and
development for the EMM.
Table 3-3: Economic Variables Summary
ECONOMIC VARIABLES
It is important that the project contributes to economic growth and development within
the area. Therefore this variable determines the project’s ability to contribute to
economic growth, deliver rateable assets, create employment opportunities, and
generate income for the local government.
Will the project contribute to sustainable job creation
The project is situated in an economic None /
growth node and creates significant job Negligible
opportunities.
Low
Less than 25 Jobs
25 to 100 Jobs
Moderate
101 to 500 Jobs
High
More than 500 Jobs
Will the project catalyse future economic growth
The project is located in an economic None /
growth node, there is potential for future Negligible
growth, proven demand, and results in Low
the creation of rateable assets.
Moderate
High
Smaller than R 5 million
R 5 million to R 50 million
R 51 million to R 100 million
More than R 100 million
Economic Sectors
Does the project align with high priority None
sector?
Low
No significant sector alignment
Residential, agriculture
Moderate
Manufacturing / industrial / warehousing /
distribution / mining
High
Services sectors (retail, business services,
etc.)
Leverage potential (Ancillary and downstream projects)
The “Cotton-on” Effect – The project will None /
create a strong magnet and nodal Negligible
anchor by attracting and stimulating Low
further growth in investment (productive
Moderate
Smaller than R 5 million
R 5 million to R 50 million
R 51 million to R 100 million
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
income generating assets)
High
More than R 100 million
Does the project create rateable assets
The projects ability to create additional
annual rates and taxes, resulting in
increased revenue for government.
None /
Negligible
Smaller than R 5 million
Low
R 5 million to R 50 million
Moderate
R 51 million to R 100 million
High
More than R 100 million
Time Factor
Is there a time factor involved for this
project that will negatively influence any
other project
None
No urgency for development
Low
There is a certain time factor to ensure market
demand / optimum market entry
Moderate
A certain time factor involved based on both
market demand as well as dependency of other
projects on the development of this project
High
Urgent development needed – for ideal market
entry and other important projects highly
dependent on the project’s development
Table 3-4: Environmental Variables Summary
ENVIRONMENTAL VARIABLES
This variable gives an indication of the impact of the project on the environment
locally and within the urban region/regional ecosystem. It identifies the potential
environmental benefits and costs of the project and gives higher scores to those
projects that make an improvement to living standards, public health and a green
environment.
Conservation Value
Perceived Conservation Value (Create
or Extend an Environmental Asset)
None
No contribution to the environment
Low
Minimal contribution to the environment
Moderate
Moderate extension
environmental asset
High
Very high conservation value
or
creation
of
an
Is there an EMP
Is
there
an
Environmental
Management Plan in place, addressing
issues such as mitigation and
maintenance factors?
Is
there
an
Environmental
Management Plan in place, addressing
issues such as mitigation and
maintenance factors?
Not
Applicable
The project does not require an EMP
No
No EMP in place
Yes
EMP in place (proof should be provided)
Green Building and Design Principles
Compliance with Green Building
Principles or other green design
guidelines
Not
Applicable
The project does not need to comply with any
green building and design principles
No
Does not comply with any of the principles
Yes
The project complies with key green building
and design principles
Table 3-5: Social Variables Summary
SOCIAL VARIABLES
21
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
The social variable is very much contained / addressed in the economic variable
aspect, especially with respect to job creation and the social benefits associated with
increased employment. Projects with an explicit focus on increasing community wellbeing by means of delivering or contributing to certain social services (i.e. education,
health, etc.) will receive priority / higher scoring.
No
Yes
Does the project contribute to public safety?
Does it contribute to basic service delivery?
No
Yes
Does the project contribute to basic healthcare?
No
Yes
Does the project contribute to skills development?
No
Yes
22
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
4. CPM PROJECT EVALUATION RESULTS AND KEY FINDINGS
The purpose of this section is to highlight some of the key findings of the CPM Project Evaluation
process. Each Department was responsible for completing the CPM Model Criteria for their
capital projects, which formed part of multi-year capital budget.
The key findings are presented in this section under the following headings:
Department’s Response Rate
Actual Project Categories vs. CPM Evaluation
 Top 20 Highest Scoring Projects
 Bottom 20 Lowest Scoring Projects
 Other Key Issues


4.1 DEPARTMENT’S RESPONSE RATE
The following table illustrate the response rate of each department based on the completion of
the CPM Evaluation as part of the multi-year budget process. The analysis excludes equipment,
vehicles and furniture projects.
Table 4-1: Department’s Response Rate to the CPM Evaluation
Total Number
of Projects
Projects with no
CPM Information
% Response
Rate
City Planning
1
1
0%
Corporate Legal Services
4
4
0%
Council General
3
3
0%
EPMO
1
1
0%
Finance
8
8
0%
Human Resources Management & Development
1
1
0%
Internal Audit
1
1
0%
Legislature
1
1
0%
Customer Relations Management
11
9
18%
Health & Social Development
68
38
44%
SRAC
67
37
45%
Fleet Management
10
5
50%
Water & Sanitation
49
21
57%
Environmental Resources Management
15
6
60%
Disaster & Emergency Management Services
41
16
61%
156
58
63%
Real Estate
59
16
73%
Transport
28
4
86%
Economic Development
10
1
90%
Department
Roads and Stormwater
23
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Total Number
of Projects
Projects with no
CPM Information
% Response
Rate
EMPD
23
0
100%
Energy
174
0
100%
Human Settlements
50
0
100%
ICT
24
0
100%
Waste Management
19
0
100%
231
72%
Department
TOTAL
824
Findings (Table 4-1)
The overall response rate amounted to 72%, indicating that the majority of the departments
completed the CPM Evaluation columns as part of the multi-year capital budget. It is important to
note that although the overall response rate is fairly high, in certain aspects departments did not
fully complete all of the columns for the CPM Evaluation.
The following departments recorded a 100% response rate:
 EMPD
 Energy
 Human Settlements
 ICT
 Waste Management
Departments that did not complete any of the CPM Evaluation Criteria include:
 City Planning
 Corporate Legal Services
 Council General
 EPMO
 Finance
 Human Resources Management & Development
 Internal Audit
 Legislature
It should however be noted that the abovementioned departments dominantly have projects that
are of an operational nature and the operational projects were excluded from the CPM
evaluation. The capital projects for these department were not of a significant infrastructural
nature, and therefore these departments did not have any information with respect to the CPM
evaluation process.
Some of the key findings / issues in terms of the response rate of departments can be
summarised as follows:
 From the analysis it was determined that generally departments responded fairly well to
the CPM Evaluation process and could somewhat grasp the criteria and scoring thereof.
 In some cases however it was clear that departments only selected the scoring option
that would give them the highest overall scores for their projects.
 It was also found that in some cases the departments only responded to certain of the
CPM criteria. The reason behind this could be that departments only responded to the
24
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
criteria they felt related specifically to their projects, departments did not have any
information for the specific criteria, or department did not understand some of the criteria.
 This relates to the departments’ understanding of the CPM evaluation criteria,
emphasising that it is crucial for departments to understand the evaluation process as
well as each of the different scoring criteria, so as they are able to effectively and
accurately provide the information for each of the CPM evaluation criteria
The following sections indicate the top 20 highest scoring and bottom 20 lowest scoring projects,
for each of the CIF project categories, i.e. Upgrading and Renewal, Urban Restructuring and
Economic Development.
4.2 TOP 20 HIGHEST SCORING PROJECTS
The following tables illustrate the top 20 projects for each of the CIF categories, which recorded
the highest scores based on the CPM Evaluation Criteria.
25
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
26
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 4-2: Top 20 Upgrading and Renewal Projects
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Human Settlements
Tembisa Urban Renewal Framework
Projects
Upgrading and Renewal
1
90.0%
Urban Restructuring
94.6%
Human Settlements
Germiston Urban Renewal (Civic Precinct)
Upgrading and Renewal
1
89.0%
Urban Restructuring
93.8%
Energy
Germiston Network enhancement
Upgrading and Renewal
1
85.5%
Urban Restructuring
91.9%
Energy
Kempton Park Network enhancement
Upgrading and Renewal
1
85.5%
Urban Restructuring
91.9%
Human Settlements
Germiston Urban Renewal (Cultural
Precinct)
Upgrading and Renewal
1
85.5%
Urban Restructuring
92.1%
Human Settlements
Germiston Urban Renewal (Fire Station)
Upgrading and Renewal
1
85.5%
Urban Restructuring
92.1%
Environmental Resources
Management
Upgrading of Ambient Air Quality
Monitoring Stations
Upgrading and Renewal
1
81.3%
Urban Restructuring
89.6%
Energy
Benoni Lighting
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Benoni Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Boksburg Lighting
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Boksburg Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Daveyton Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Edenvale Lighting
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Edenvale Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Germiston Lighting
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Kwa-Thema Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Springs Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
Energy
Tembisa 2 Network enhancement
Upgrading and Renewal
1
80.5%
Urban Restructuring
89.4%
27
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Human Settlements
Tembisa Urban Renewal Framework
Projects
Upgrading and Renewal
1
90.0%
Urban Restructuring
89.4%
Human Settlements
Germiston Urban Renewal (Civic Precinct)
Upgrading and Renewal
1
89.0%
Urban Restructuring
89.4%
Findings (Table 4-2)

From the above table it is clear that the two highest scoring projects are from the Human Settlements department, and both these projects
are urban renewal projects (Tembisa Urban Renewal Framework Projects and Germiston Urban Renewal – Civic Precinct). Both these
projects are located within priority area 1 of influence.
 The majority of the top 20 projects are from the Energy department, and all of them are located within priority area 1 of influence.
 As mentioned earlier each project was evaluated based on all three the weighting scenarios, no matter the initial project category indicated
by the departments. From the table it is clear to see that all of the top 20 upgrading and renewal projects, actually scored the highest in the
urban restructuring weighting scenario. This could indicate two issues in terms of the CPM evaluation process, projects are initially not
correctly categorised by departments, or the weighting scenarios might need to be re-evaluated to determine the optimal percentage split
between the four CPM variables, i.e. the policy alignment, economic, environmental and social variables.
28
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 4-3: Top 20 Urban Restructuring Projects
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Human Settlements
Leeupoort Development (Bulk
Infrastructure)
Urban Restructuring
2
93.3%
Urban Restructuring
93.3%
Energy
Corporate Electrification INEP
Urban Restructuring
1
93.1%
Urban Restructuring
93.1%
Energy
Renewable Energy Projects
Urban Restructuring
1
93.1%
Urban Restructuring
93.1%
Human Settlements
Dersely
Urban Restructuring
1
92.8%
Urban Restructuring
92.8%
Human Settlements
Germiston Social Housing -Extension 4
Urban Restructuring
1
92.1%
Urban Restructuring
92.1%
Human Settlements
Rehabilitated Land Angelo
Urban Restructuring
2
91.8%
Urban Restructuring
91.8%
Energy
Corporate Electrification
Urban Restructuring
2
90.9%
Urban Restructuring
90.9%
Human Settlements
Acquisition of Land for New Human
Settlements
Urban Restructuring
2
90.6%
Urban Restructuring
90.6%
Human Settlements
Acquisition of Land for New Human
Settlements
Urban Restructuring
1
90.3%
Urban Restructuring
90.3%
Human Settlements
Acquisition of Land for New Human
Settlements
Urban Restructuring
1
90.3%
Urban Restructuring
90.3%
Human Settlements
Acquisition of Land for New Human
Settlements
Urban Restructuring
1
90.3%
Urban Restructuring
90.3%
Roads and Stormwater
Construct Daveyton CBD/N12 Interchange
Urban Restructuring
1
89.6%
Urban Restructuring
89.6%
Energy
Daveyton Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Duduza Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Etwatwa Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Kwa-Thema Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
29
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Energy
Tembisa 2 Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Tembisa Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Thokoza Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Energy
Tsakane Lighting
Urban Restructuring
1
89.4%
Urban Restructuring
89.4%
Findings (Table 4-3)

Similar to that of the upgrading and renewal projects, the highest scoring project is from the Human Settlements department, and is located
in priority area 2 of influence.
 The majority of the top 20 urban restructuring projects, are form the Human Settlements and Energy departments, and mainly located
within priority area 1 of influence.
 From the above table it is clear that the urban restructuring projects scored somewhat higher than that of the Upgrading and Renewal
projects. The average score of the top 20 urban restructuring projects is approximately 91%, whereas the average score for the top 20
upgrading and renewal projects amounted to 83%.
 From the above table it is clear that the top 20 urban restructuring projects all scored the highest in the corresponding weighting scenario,
i.e. urban restructuring.
30
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 4-4: Top 20 Economic Development Projects
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Economic Development
Refurbishment & Expansion of the Fresh
Produce Market
Economic Development
3
83.1%
Economic Development
83.1%
Transport
Integrated Rapid Public Transport
Network(IRPTN)
Economic Development
1
80.2%
Upgrading and Renewal
80.8%
Economic Development
Ekurhuleni Industrial Parks
Economic Development
3
79.4%
Urban Restructuring
85.9%
Energy
Corporate Substations
Economic Development
1
76.1%
Urban Restructuring
93.1%
Energy
Corporate Revenue enhancement
Economic Development
2
74.3%
Urban Restructuring
90.9%
Energy
Corporate Energy efficiency
Economic Development
1
69.9%
Urban Restructuring
91.9%
Transport
Integrated Rapid Public Transport
Network(IRPTN)
Economic Development
1
68.8%
Economic Development
68.8%
Water & Sanitation
Water Loss Eradication Programme
Economic Development
1
67.6%
Urban Restructuring
68.9%
ICT
DCS: Broadband Fibre
Economic Development
1
67.4%
Economic Development
67.4%
Water & Sanitation
Pomona: New Eastern OF sewer
Economic Development
1
65.6%
Urban Restructuring
72.6%
Economic Development
Township Economies Development
Economic Development
2
64.7%
Economic Development
64.7%
Energy
Benoni Revenue enhancement
Economic Development
1
57.4%
Energy
Boksburg Revenue enhancement
Economic Development
1
57.4%
Urban Restructuring
Urban Restructuring
89.4%
89.4%
Urban Restructuring
Energy
Edenvale Revenue enhancement
Economic Development
1
57.4%
Energy
External Infrastructure Development Glen
Gory
Economic Development
1
57.4%
Energy
Germiston Revenue enhancement
Economic Development
1
57.4%
31
89.4%
Urban Restructuring
Urban Restructuring
89.4%
89.4%
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
Urban Restructuring
CPM Score
Energy
Kempton Park Revenue enhancement
Economic Development
1
57.4%
Energy
Kwa-Thema Revenue enhancement
Economic Development
1
57.4%
Energy
Kwa-Thema Revenue enhancement
Economic Development
1
57.4%
Urban Restructuring
89.4%
Energy
Springs Revenue enhancement
Economic Development
1
57.4%
Urban Restructuring
89.4%
Urban Restructuring
89.4%
89.4%
Findings (Table 4-4)





From the table it is clear that the average score of the top 20 economic development projects is much lower than that of the upgrading and
renewal projects as well as the urban restructuring projects. The average score for the economic development projects amounted to 66%.
The highest scoring economic development project is the Refurbishment & Expansion of the Fresh Produce Market, and is located in
priority area 3 of influence.
It is also evident form the table that there are a number of projects from the Energy department scoring fairly high in terms of the economic
development projects.
The majority of the top 20 economic development projects are located within priority area 1 of influence, with a few projects in priority area
2 and 3.
From the above table it is evident that the majority of the top 20 economic development projects, actually scored the highest in the urban
restructuring weighting scenario. This clearly illustrates the weighting of the CPM variables across the different scenarios will need to be reevaluated to determine why the majority of the projects are actually scoring higher under the urban restructuring weighting scenario.
From the above analysis it is clear that the majority of all the top 20 highest scoring projects are from the following departments:
Energy
Human Settlements
– 36 Projects
– 13 Projects
32
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
4.3 BOTTOM 20 LOWEST SCORING PROJECTS
The following tables illustrate the bottom 20 projects for each of the CIF categories, which recorded the lowest scores based on the CPM
Evaluation Criteria.
Table 4-5: Bottom 20 Upgrading and Renewal Projects
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Disaster & Emergency
Management Services
High Volume Emergency Water Relay
System
Upgrading and Renewal
Unmapped
5.0%
Urban Restructuring
11.3%
ICT
Business Process Re-Engineering
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
Credit Control and Debt Management
System
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
Customer Revenue Call Centre
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
DCS: Access Point Network for mobility
such as 3G and urban management
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
DCS: Wireless Security
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
DCS: Re-configuration of Wireless Network
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
Fibre Verification for excess capacity
towards digital city
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
Fix the fibre breakages and new links for
Digital City positioning to be an Internet
Service Provider
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
ICT
Upgrade of the Call Manager with
automated reporting capability
Upgrading and Renewal
Unmapped
6.5%
Upgrading and Renewal
6.5%
Real Estate
Develop: Cemeteries Muslim Section
Upgrading and Renewal
Unmapped
8.5%
Upgrading and Renewal
8.5%
Roads and Stormwater
Constr. Of Small Holding Roads(Eastern
Region)
Upgrading and Renewal
2
9.0%
Upgrading and Renewal
9.0%
Transport
Replace Municipal buses
Upgrading and Renewal
Unmapped
11.3%
Upgrading and Renewal
11.3%
33
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Real Estate
Modernisation Replacement of the Lift
Systems at the SPRINGS CCA LIBRARY
BUILDING 6th AVE
Upgrading and Renewal
3
12.0%
Upgrading and Renewal
12.0%
Real Estate
Develop: Conservation areas Southern
Region Meyersdal Koppies
Upgrading and Renewal
3
13.5%
Upgrading and Renewal
13.5%
Real Estate
Rehabilitation of the Boksburg Lake
Upgrading and Renewal
1
13.5%
Upgrading and Renewal
13.5%
Disaster & Emergency
Management Services
Replacement of Breathing Apparatus Sets
Upgrading and Renewal
2
14.0%
Urban Restructuring
18.0%
Health & Social Development
Ext& Upgrade Tswelopele Clinic( Add
Level 2)
Upgrading and Renewal
Unmapped
15.0%
Urban Restructuring
33.8%
Roads and Stormwater
St Austell Stormwater Drainage
Upgrading and Renewal
Unmapped
15.5%
Economic Development
17.4%
Roads and Stormwater
Rehab. Of Roads: From Opex
Upgrading and Renewal
Unmapped
16.3%
Urban Restructuring
26.4%
Findings (Table 4-5)






The lowest scoring projects, in terms of the upgrading and renewal projects, are from the Disaster & Emergency Management Services
department, and the project was also recorded as unmapped.
Its clear form the table that the majority of the 20 lowest scoring projects are from the ICT department, and all these projects were
unmapped.
A number of these lower scoring projects did not provide all the necessary information in terms of the CPM evaluation criteria, and also
could not be mapped
The average score of the 20 lowest scoring upgrading and renewal projects amounted to approximately 10%.
Lack of locality and or incorrect property descriptions hindered the scoring of projects. The comprehensiveness of the populated
information into the CPM to derive accurate scoring and prioritization was also lacking.
From the above table it is clear to see that in terms of the bottom 20 projects, the initial project category mainly corresponded with the
relevant weighting scenario, i.e. upgrading and renewal.
34
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 4-6: Bottom 20 Urban Restructuring Projects
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
Human Settlements
Driefontein 85-IR
Urban Restructuring
Unmapped
4.5%
Upgrading and Renewal
8.5%
Human Settlements
Olifantstontein 402- JR
Urban Restructuring
Unmapped
4.5%
Upgrading and Renewal
6.0%
Human Settlements
Acquisition of Land for New Human
Settlements
Urban Restructuring
Unmapped
5.8%
Upgrading and Renewal
6.0%
SRAC
Community Art
Urban Restructuring
3
5.8%
Upgrading and Renewal
7.8%
Real Estate
Develop: Kromvlei Cemetery - phase 2
Urban Restructuring
Unmapped
6.4%
Upgrading and Renewal
8.5%
Transport
Bus Ticket System
Urban Restructuring
Unmapped
11.1%
Upgrading and Renewal
14.8%
Transport
Ramaphosa Taxi Rank
Urban Restructuring
Unmapped
11.1%
Upgrading and Renewal
14.8%
Human Settlements
Acquisition of Portion 402 of the Farm
Driefontein 85 IR
Urban Restructuring
2
11.3%
Upgrading and Renewal
15.0%
Human Settlements
KLIPPORTJIE 112 IR
Urban Restructuring
2
11.3%
Upgrading and Renewal
15.0%
Human Settlements
KLIPPORTJIE 112 IR
Urban Restructuring
2
11.3%
Upgrading and Renewal
15.0%
Human Settlements
Witpoortjie 117IR
Urban Restructuring
2
11.3%
Upgrading and Renewal
15.0%
Human Settlements
Witpoortjie 117IR
Urban Restructuring
2
11.3%
Upgrading and Renewal
15.0%
Transport
Du Plessis Taxi rank
Urban Restructuring
Unmapped
12.4%
Upgrading and Renewal
16.5%
Human Settlements
Olifantstontein 402- JR
Urban Restructuring
1
13.5%
Upgrading and Renewal
18.0%
SRAC
Construction: Ablution facilities
Urban Restructuring
3
15.4%
Upgrading and Renewal
20.8%
35
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area
of Influence
CPM Score
Highest Scoring CPM
Weighting Scenario
CPM Score
SRAC
Construction & Development of
Duduza Reconciliation Park
Urban Restructuring
Unmapped
16.4%
Upgrading and Renewal
22.8%
Roads and Stormwater
South: Sidewalks and Rd Reserve
Urban Restructuring
Unmapped
16.9%
Upgrading and Renewal
22.5%
Environmental Resources
Management
Development and Upgrading
Community Environmental Education
Centres: Blesbok spruit
Urban Restructuring
Outside the
Urban Edge
19.7%
Urban Restructuring
19.7%
Roads and Stormwater
Turnkey Roads (East)
Urban Restructuring
Unmapped
25.1%
Economic Development
26.1%
SRAC
Construction of a new swimming pool
in Eden Park
Urban Restructuring
Inside Urban
Edge (no
priority area)
26.4%
Urban Restructuring
26.4%
Findings (Table 4-6)





The average score for the 20 lowest scoring urban restructuring projects amounted to approximately 13%, somewhat higher than that of
the upgrading and renewal projects.
From the table it is evident that the lowest scoring projects is those from the Human Settlements department, which is also unmapped
projects. Overall the majority of the 20 lowest scoring projects are mainly from the Human Settlements department.
The majority of the 20 lowest scoring urban restructuring projects are unmapped projects, however there are a few projects located within
priority areas 1, 2 and 3.
In some cases these low scores can be attributed to information gaps within the CPM evaluation columns as part of the multi-year capital
budget as well as the fact that many of these projects are unmapped.
The majority of the urban restructuring projects, scored higher in the upgrading and renewal weighting scenario.
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 4-7: Bottom 20 Economic Development Projects
Department
Roads and Stormwater
Project Name
CIF Project Category
External Infrastructure Development
Glen Gory
Economic Development
Economic Development
Fabrication Laboratory
Real Estate
Priority Area of
Influence
CPM Score
1
22.8%
Urban Restructuring
42.0%
Economic Development
Unmapped
26.8%
Urban Restructuring
27.5%
Develop: Blesbokspruit for tourism
Economic Development
Outside the Urban
Edge
27.8%
Urban Restructuring
55.1%
Water & Sanitation
Pomona: Bulk supply Albertina Sisulu
Corridor
Economic Development
1
31.6%
Urban Restructuring
61.1%
Economic Development
Trading Stalls
Economic Development
Unmapped
34.7%
Upgrading and Renewal
42.3%
Transport
Drive Thru Alberton
Economic Development
Unmapped
34.7%
Urban Restructuring
44.4%
Transport
Drive Thru Boksburg
Economic Development
Unmapped
39.2%
Urban Restructuring
48.9%
Transport
Drive Thru Germiston
Economic Development
Unmapped
39.2%
Urban Restructuring
48.9%
ICT
DCS: Redundancy and Peering with
Network Operators
Economic Development
1
42.4%
Urban Restructuring
55.1%
Energy
Pole mounted boxes Palm Ridge
Economic Development
Unmapped
43.6%
Urban Restructuring
79.1%
Energy
Relocation of meters Leachville
Economic Development
Unmapped
43.6%
Urban Restructuring
79.1%
Energy
Retrofit in Phomolong
Economic Development
Unmapped
43.6%
Urban Restructuring
79.1%
Energy
Corporate Revenue enhancement
Economic Development
Unmapped
43.6%
Urban Restructuring
79.1%
Energy
Hartebeest substation
Economic Development
Unmapped
43.6%
Urban Restructuring
79.1%
Unmapped
43.6%
Urban Restructuring
79.1%
Energy
Corporate Substations Upgrade
Economic Development
Economic Development
Township enterprise Hubs
Economic Development
1
45.2%
Upgrading and Renewal
57.0%
Energy
Pole mounted boxes Windmill Park
Ext9
Economic Development
Inside Urban Edge
(no priority area)
45.5%
Urban Restructuring
81.4%
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Department
Project Name
CIF Project Category
Priority Area of
Influence
CPM Score
Energy
Edenvale Industries substation
Economic Development
Inside Urban Edge
(no priority area)
45.5%
Urban Restructuring
81.4%
Energy
Crystal Park substation
Economic Development
Inside Urban Edge
(no priority area)
45.5%
Urban Restructuring
81.4%
Energy
Phomolong substation
Economic Development
Inside Urban Edge
(no priority area)
45.5%
Urban Restructuring
81.4%
Findings (Table 4-7)





With respect to the economic development projects, it is clear that the average score of the 20 lowest projects are much higher than that of
the upgrading and renewal projects as well as the urban restructuring projects. The average score of the 20 lowest scoring economic
development projects amounted to approximately 40%.
Therefore although the average score of the top 20 highest scoring economic development projects is lower than that of the top 20 projects
in the other categories, it is clear that the lower scoring economic development projects recorded fairly good scores in comparison to the
other categories.
The lowest scoring economic development project is from the Roads and Stormwater department, and is an infrastructure development
located within priority area 1 of influence. The majority of the 20 lowest scoring economic development projects are from the Energy
department, and many of these projects fall within the urban edge, however does not fall within any of the priority areas of influence.
There are also a number of projects that have not been mapped, and a few projects fall within priority area 1 of influence.
It is also evident that the majority of the economic development projects scored higher in the other two weighting scenarios, specifically
urban restructuring.
From the above analysis it is clear that the majority of all the 20 lowest scoring projects are from the following departments:

ICT
Energy
 Human Settlements

– 10 projects
– 10 projects
– 9 projects
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EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
The following table illustrates the number of projects that scored higher than 50 and the number
of projects that scored lower than 50 per department. The list of projects excludes projects that
have no information at all for the CPM evaluation, as well as projects such as equipment,
vehicles, furniture, etc.
Table 4-8: Projects per Department Above 50% and Below 50%
Total Number Actual Number
Department
of Evaluated
of Projects
Percentage
Projects
Above 50%
Customer Relations
2
1
50%
Management
Disaster & Emergency
25
22
88%
Management Services
Economic Development
9
3
33%
Actual Number
of Projects
below 50%
Percentage
1
50%
3
12%
6
67%
EMPD
23
21
91%
2
9%
Energy
Environmental
Resources Management
Fleet Management
Health & Social
Development
Human Settlements
174
135
78%
39
22%
9
5
56%
4
44%
5
5
100%
0
0%
30
26
87%
4
13%
50
39
78%
11
22%
ICT
24
5
21%
19
79%
Real Estate
43
7
16%
36
84%
Roads and Stormwater
98
32
33%
66
67%
SRAC
30
0
0%
30
100%
Transport
24
13
54%
11
46%
Waste Management
19
6
32%
13
68%
Water & Sanitation
28
14
50%
14
50%
TOTAL
593
334
56%
259
44%
From the Table it is clear that overall more than half (56%) of the capital projects did score higher
than 50% in terms of the CPM evaluation process.
The following departments recorded more than 70% of their projects above 50%:
 Fleet Management
 EMPD
 DEMS
 Health and Social Development
 Energy
 Human Settlements
The following department recorded more than 70% of their projects below 50%:
 SRAC
 Real Estate
 ICT
39
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
4.4 INDICATED PROJECT CATEGORIES VS. CPM EVALUATION
Each department had to identify the correct CIF project category for their capital projects as part
of the multi-year budget analysis. As mentioned in the previous section three weighting scenarios
were developed based on the three CIF project categories, i.e. urban restructuring, upgrading
and renewal and economic development.
Each projects was evaluated based on all three the weighting scenarios, no matter the specific
CIF project category identified by the departments. The ideal is that the project category
identified by the departments correspond with the corresponding weighting scenario, i.e. did the
indicted CIF project category match the highest score in the same category for the weighting
scenario?
The following table summarises the key findings in terms of the indicated project category and
the CPM Evaluation, for each of the three project categories.
Table 4-9: Indicated Project Category vs. CPM Evaluation
Upgrading and
Urban
Renewal
Restructuring
Indicated category
79%
30%
match highest score
Indicated category does
21%
70%
not match highest score
Economic
Development
Overall
5%
42%
95%
58%
Findings (Table 4-9)





From the above table it is clear to see that overall for the majority of the projects the
indicated project category did not correspond with the highest weighting scenarios (58%).
With respect to Upgrading and Renewal Category it is clear that the majority of the
indicated project categories did not match the corresponding weighting scenario’s highest
score (70%)
The Urban Restructuring Category had the highest percentage of projects with a
corresponding category (79%) scoring the highest.
The Economic Development Category had a very large percentage of projects not
matching the corresponding highest score in the weighting scenarios (95%)
A more in-depth analysis of the project categories and the CPM evaluation scenarios
revealed the following:
o The majority of the projects indicated as Upgrading and Renewal projects by the
departments, mainly scored higher in the Urban Restructuring scenario.
o Similarly the majority of the projects indicated as Economic Development projects
by the departments, mainly scored higher in the Urban Restructuring scenario.
From the above analysis of the CPM evaluation results, it is clear that the project categories
indicated by the departments do not correspond with the scenarios indicating the highest scores.
Therefore going forward with the CPM model, these three weighting scenarios need to be
investigated to determine whether the weighting the variables need to be adjusted. The projects
that indicated project categories that do not match the highest scoring weighting scenarios
should also be investigated to determine whether the projects have been correctly categorises.
40
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Poor completion of the CPM evaluation information requirements as well as the inaccuracies in
the mapping data, also had certain implication on the above findings.
4.5 OTHER KEY ISSUES AND RECOMMENDATIONS BASED ON FIRST ROUND TESTING

The CPM evaluation process was somewhat time consuming, due to the fact that the
initial models for the CPM evaluation was not linked to the multi-year budget. This implied
that each project had to be evaluated separately based on information provided by
departments as part of the CPM criteria information requirements so as to derive a
percentage score for each project that is linked to the multi-year budget. This process
identified the urgent need for an electronic data system, which will make the CPM
evaluation process much more efficient and accurate.

Furthermore due to the sensitivity of the CPM model, it is very important for departments
to understand that they should not amend the variables presented in the dropdown lists in
the multi-year budget spreadsheet. Each variable is linked to a specific score, as
discussed earlier in the report (Scale of Impact) and therefore if the variables are
amended by departments it becomes very difficult to link a score to that specific
response, which will imply that a score of zero will be allocated, negatively influencing the
projects. Some of the departments that amended the dropdown lists include
Environmental Research Management, Human Settlements and Real Estate
departments. It is recommended that the dropdown lists be locked so as to avoid a
situation where departments are able to type in their own information, and are forced to
choose the best possible option from the dropdown lists.

In some cases a pattern was picked up during the analysis of the CPM evaluation results,
where it was clear that departments selected the highest possible variable within the CPM
evaluation columns, ensuring that their projects score very high, or for a number of
projects the exact same options were selected. This trend was mainly recorded for
projects from the Energy department. It is recommended that these projects be
investigated to determine if the evaluation was conducted accurately.

Going forward it is recommended that the CPM weighting scenarios be investigated to
determine why certain projects do not score the highest in the indicated project category,
and at the same time it should be determined whether the indicated project category is in
fact the correct category for that specific project. Departments should also be made
aware of the importance of providing accurate and honest information for the CPM
evaluation columns, as this will greatly affect the outcome of the scores. This also
indicates the need to remove the subjectivity from the evaluation process.

Need to relook the criteria and especially the weighting allocations in order to address
inaccuracies with the scoring.
41
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
5. WAY FORWARD
Based on the analysis and key finding from the CPM first round evaluation, some key issues
where highlighted (as outlined in Section 4). In order to overcome some of these key issues a
number of changes were made to the CPM evaluation system and hypothetical testing was
conducted in order to see whether these changes will deliver the desired results. A sample of 80
capital projects were identified, representing a wide variety of different projects, in terms of
project category, project location, departments, etc.
The following sub-sections illustrate the changes made to the CPM and summarises the key
findings from the hypothetical testing of the changes.
5.1 REFINEMENT OF THE CPM
The following changes were made to the CPM system:
5.1.1 Changes to the CPM Weighting
From the first round testing, it was found that a number of capital projects scored much higher in
some of the weighting scenarios compared to the others. This indicated that there could possibly
be some discrepancies in terms of the different weights given to the CPM variables within each
scenario. Therefore in order to create greater alignment with the definitions of the different
project categories the following changes were made to the Urban Restructuring and Economic
Development scenarios:
Table 5-1: Changes made to the Weighting of the Urban Restructuring Scenario
Urban Restructuring
Policy Variable
Economic Variable
Environmental Variable
Social Variable
First Round Weighting
New Weighting
30
10
15
45
40
15
15
30
Table 5-2: Changes made to the Weighting of the Economic Development Scenario
Economic Development
Policy Variable
Economic Variable
Environmental Variable
Social Variable
First Round Weighting
New Weighting
25
50
15
10
30
40
15
15
The weighting of the variables for the Upgrading and Renewal scenario was kept the same as
was used in the first round testing. These changes were applied to the sample projects, in order
to determine whether the alignment of project categories and scenarios were more realistic and
correct. Based on the changes in the scoring system it was further determined that some
changes had to be made to the scoring of some of the variables, i.e. the economic and social
variables.
42
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
5.1.2 Changes to the CPM Variables
In order to further refine the CPM system, changes were made to both the economic and social
variables in terms of their scale of impact. The following changes were made for the hypothetical
testing of the sample capital projects:
Social Variables:
The scale of impact for the social variables were only defined as a no or yes answers. It was
decided to elaborate the scale of impact so as to include the following scoring options, similar as
to the scale of impact identified for the other variables:
Scale of impact
New Scoring
None
0
Low
25
Moderate
75
High
100
The evaluation of the capital projects in terms of the social variables, resulted in some projects
scoring extremely high under these variables due to the fact that there were only two scales of
impact (No = 0 and Yes = 100). Therefore based on these changes to the scale of impact,
differentiation can be made between refurbishment of a facility versus the development of a new
facility.
Economic Variables
During the first round of testing, it was found that a number of the projects scored very low in
terms of the Economic Variables. From the evaluation it was concluded that many of these
projects scored quite low due to the scale of impact identified for the Job Creation and Capital
Investment categories. The scale of impact was based on the following:
Table 5-3: Economic Variables First Round Testing Scale of Impact
ECONOMIC VARIABLES
Will the project contribute to sustainable job creation
None / Negligible
Less than 25 Jobs
0
Low
25 to 100 Jobs
25
Moderate
101 to 500 Jobs
75
High
More than 500 Jobs
100
Will the project catalyse future economic growth (Based on the Capital Investment)
None / Negligible
Smaller than R 5 million
0
Low
R 5 million to R 50 million
25
Moderate
R 51 million to R 100 million
75
43
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
ECONOMIC VARIABLES
High
More than R 100 million
100
Leverage potential (Based on the Capital Investment)
None / Negligible
Smaller than R 5 million
0
Low
R 5 million to R 50 million
25
Moderate
R 51 million to R 100 million
75
High
More than R 100 million
100
Does the project create rateable assets (Based on the Capital Investment)
None / Negligible
Smaller than R 5 million
0
Low
R 5 million to R 50 million
25
Moderate
R 51 million to R 100 million
75
High
More than R 100 million
100
Based on evaluation of the first round testing it was clear that a number of the projects fell into
the “none / negligible” category in terms of job creation and capital investment, therefore scoring
a 0 under both these categories. However these projects do contribute to job creation and create
catalytic effects based on their capital investment, and therefore cannot be scored negatively.
The scale of impact for these variables have therefore been changed to the following:
Scale of impact
New Scoring
None
25
Low
50
Moderate
75
High
100
The abovementioned changes were made to the CPM system and hypothetical testing was
conducted on the sample capital projects. The following section provides a brief summary of the
results of the hypothetical testing.
5.2 SUMMARY OF HYPOTHETICAL TESTING
The aim in making the abovementioned changes to the CPM model, was to increase the
alignment of project categories identified and actual scenarios scoring the highest for each
project.
The following table summarises the key findings in terms of the indicated project category and
the CPM Evaluation, for each of the three project categories for the first round testing, as
captured in section 4 of the report.
44
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
Table 5-4: Indicated Project Category vs. CPM Evaluation (First Round Testing – All projects)
Upgrading and
Urban
Economic
Overall
Renewal
Restructuring
Development
Indicated category
79%
5%
42%
30%
match highest score
Indicated category does
21%
95%
58%
70%
not match highest score
Table 5-5 illustrates the results from the hypothetical testing of the sample projects in terms of
the indicated project category and the CPM Evaluation based on the changes made to the CPM
system.
Table 5-5: Indicated Project Category vs. CPM Evaluation (Hypothetical Testing – Changes to CPM)
Upgrading and
Urban
Economic
Overall
Renewal
Restructuring
Development
Indicated category
53%
31%
55%
69%
match highest score
Indicated category does
47%
69%
45%
31%
not match highest score
From the above table it is clear to see that in terms of Upgrading and Renewal Category and the
Economic Development category the alignment with indicted project categories have increased,
however in terms of the Urban Restructuring category the alignment has decreased. The overall
alignment is more than 50% based on the evaluation of the sample projects (considering the
changes made to the CPM system).
It should however be kept in mind that there were a number of other issues identified during the
evaluation of the first round testing of the CPM, which cannot be addressed in terms of changes
made to the COM scoring and weighting. The following paragraphs identifies some of these
issues and provides a key set of recommendations in going forward.
5.3 KEY RECOMMENDATIONS AND WAY FORWARD
The following key recommendations should be considered in going forward with the CPM for the
next budget evaluation process:
1. Information Provided
Departments should be made aware of the importance of providing accurate and honest
information for the CPM evaluation columns, as this will greatly affect the outcome of the scores.
During the evaluation of the first round testing it was found that there were some information
gaps or information provided was incorrect. In some cases the columns for the CPM were
completely left blank, which has a huge impact on the results of the CPM testing, and creates a
skewed picture of these results.
Departments should take the responsibility to provide the correct information, and all the columns
should be completed in full for each project.
45
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
2. Application of the Three Scenarios
It should be kept in mind that the CPM scoring system is not designed to ensure alignment of the
project categories selected by departments with the highest scoring CPM scenario. Instead each
scenario is specifically designed to accommodate the all capital projects of the same category,
so as to enable comparison between these projects. Therefore it is recommended that the capital
projects be tested against the appreciate scenario based on the project category selected by the
departments, instead of evaluating the projects against all three scenarios.
In order to further ensure that the project categories selected by the departments are correct, a
task team should evaluate each project separately to determine whether projects are correctly
categorised. This exercise should be conducted before projects are evaluated against the CPM
system.
3. Engagement with Departments
The CPM scoring system will be subject to further one on one departmental engagements in the
process of refining and strengthening the model. This will create an opportunity for information to
be verified with the relevant departments, and where no information have been captured can be
obtained from the departments.
The one on one engagement with departments will need to take place each year during the
budget evaluation process in order to verify the information provided by departments.
46
EMM Capital Prioritisation Model – Scoring Results and Key Findings – March, 2015
APPENDIX A: DEPARTMENTAL INTERACTION
Department
Environmental Resource
Management Department
GCRO
Finance Department
SRAC
EMPD
Environmental Resource
Management Department
Economic Development
DEMS
Human Settlements
Health and Social Development
EPMO
City Planning GIS
Real Estate
Finance Department
Key Contact Person
Date of Meeting / Correspondence
Elsabeth van der Merwe
07/08/2014
Christina Culwick
Owen Witbooi
Tshepo Mofokeng
Lovedalia Selabe
Rico Reneke
Jabu Dhladhla
Madelaine Bloemhof
07/08/2014
Elsabeth van der Merwe
Gugu Shelembe
Jorro Segabutla
Sanmari Briedenhann
Bernard Williamson
Fikile Ndlovu
Miemie von Malitz
Jaco Brits
Kulani Mayayise
Phillip Viljoen
Pieter Grobler
Hannes Dednam
47
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
21/08/2014 and 25/08/2014
17/10/2014