Case Study Border Midland West Source: Mr. Gerry Finn Director Border, Midland and Western Regional Assembly Ireland March 2004

Project Selection – General Principles Programme and Measure Objectives Economic Impact – taking account of Deadweight and Displacement Financial Viability – PPP and productive Sector Projects Cost effectiveness Environmental Impact Impact on equality of opportunity Impact on poverty Impact on rural development Programme Complement set out specific criteria to be used Greater degree competition especially aid to private sector Source: National Development Plan 2000 – 2006 P. 212 (3)

Principal Appraisal Techniques Financial Analysis Cost Benefit Analysis Cost Effectiveness Scoring ; Weighting ; Ranking Multi Criteria Analysis (M.C.A) Cost Benefit – Mandatory for projects €50m + – Recommended for other large infrastructural projects Source: Fitzpatrick Associates: Review of Project Selection Procedures and Appraisal Techniques in the CSF. May 1999 (4)

Cost Benefit Analysis KEY FEATURES LIMITATIONS APPLICATION KEY FEATURES LIMITATIONS Essential to demonstrate the economic costs and benefits of projects from the perspective of the national economy or social welfare Comprehensive Comparison of costs and benefits, including non-market. Treatment of risk. Can include estimation of multipliers Impacts require common monetary numeraire Data demands can be considerable Can have inadequate political or social acceptability Source: Fitzpatrick Associates: Review of Project Selection Procedures and Appraisal Techniques in the CSF May 1999 (5)

Project Appraisal – Scoring, Weighting, Ranking (SWR) The criteria against which projects will be appraised are identified A weighting is assigned to each criteria based on importance (no weighting = equal value) Each project receives numerical score against different criteria Different project applications ranked against each other Source: IPA: Implementation and Administration of E.U. Structural And Cohesion Funds in Ireland – Procedures Manual: P. 65 (6)

Project Appraisal – Scoring, Weighting, Ranking (SWR) Criteria Score (0-5) Weight Revised Score ECONOMIC IMPACT Contribute to OP Objectives Impact on Employment Risk of Deadweight Risk of Displacement Cost Effectiveness NON-ECONOMIC IMPACT Contribution to OP Objectives Environmental Impact Impact on Equal Opportunities Spatial Impact Source: Fitzpatrick Associates: Review of Project Selection Procedures and Appraisal Techniques in the CSF May 1999 (7)

Project Appraisal – Scoring, Weighting, Ranking (SWR) Criteria Score (0-5) Weight Revised Score Commercial/Financial Appraisal   Market Need Projected Sales Demand Financial Projections Risk of not Achieving Forecasts Access to Matching Funding Ability of Promoter to Achieve Forecasts Long-term Exchequer Implications Scheme-Specific Criteria Total Score (8)

Project Selection – Transparency Issues Public Promotion Eligibility Criteria Published Criteria for selection available Weightings for criteria available Decisions made by Committee Conflicts of interest avoided (Declarations) Information given to unsuccessful applicants Competitive or queuing basis Appeals system in place (9)

Project Selection – Selection Criteria Included in Operational Programme Objectives Measure specific objectives Economic Impact Financial Viability Cost-Effectiveness Horizontal Principles: Environment: rural development Poverty: Equality Scoring: Weighting: Ranking (10)

Project Appraisal – County Enetreprise Board Procedure CEB County based structure Legal Entity – Company limited by guarantee Directors – State Sector; Social Partners; Elected Members Independent Evaluation Committee Business Expertise Banking Expertise Private Sector Expertise Other – Technical Source: Roscommon CEB Procedures Manual (11)

Project Appraisal – CEB Procedure Idea Initial contact with County Enterprise Officer Business Plan / Formal Application Site visit to project Appraisal by CEB staff Assessment by Evaluation Committee CEB Board decision Roscommon CEB Procedures Manual (12)

Project Appraisal – CEB Criteria for Assistance You must show: that the project is commercially viable That there is a market for the product or service That adequate finance will be available to fund the project That the promoter has the management and technical capacity to handle the project That the promoters tax affairs are in order and proper company structure (13)

Project Selection - Tourism Procedure Initial call for applications – 2 stage process Assessement of Proposals Initial review by Regional Tourism Organisation Assessment and scoring of proposals by Fáilte Ireland Assessed by Fáilte Ireland Assessment Committee Considered and approved by Product Management Board Shortlisted applications complete detailed proposal form Evaluation by Fáilte Ireland evaluation team Assessment Committee review recommendations Product Management Board consider – approve, defer or reject (14)

Tourism Procedure – Monitoring & Evaluation Monitoring of Programme at three levels Implementing Agency Monitoring Committee level National (NDP/CSF) Grantee must retain all records and have available for inspection Retain records of account for 6 years (Irish Law) Retain records 3 years following closure of programme Grantee must file annual financial statements Grantee may have to provide evidence of satisfactory management and financial control procedures Work must comply to all planning conditions Regular progress reports on work Security – Deed of Covenant or Mortgage Grant paid in two instalments – Interim and Final Paid eligible expenditure Evidence matching funds Check no grant aid from other sources (15)

Project Financing Public Sector Project provision included in annual budget estimates of Central Government Department EU receipts also included Recouped in arrears by Exchequer following verification of expenditure Private Sector Project Approved in advance of commencement Project payments made in arrears on basis of verified expenditure (stage payments allowed) Balance of funding provided by promoters own resources, borrowings or other equity investment Equity and loan finance also included Note: All public aid must respect State Aid rules (16)

Tendering Quotations and Tenders Up to €800 – Two oral quotations €800 to €8,000 – Two written quotations €8,000 to €16,000 – Three written quotations €16,000 to €32,000 – Four written tenders €32,000 to €160,000 – Full tender in at least two regional newspapers and/or national newspapers €160,000 and over – Advertisement in Official Journal of EU and national newspapers Source: “A guide to Financial Management” – Special EU Programmes Body (17)

Project Management – Role of Implementing Body Design of overall scheme Seek applications by public advertisement Review and approval of project applications received from project promoters Ongoing monitoring of projects Reviewing progress expenditure, final project costs and irregularity reports if applicable Review, approval and payment of project manager payment claims Prepare claims for Managing Authority on to Paying Authority Source: IPA: Implementation and Administration of E.U. Structural And Cohesion Funds in Ireland – Procedures Manual: P. 65 (18)

Project Management – IT Based System Financial Control Systems Financial Tables Physical Indicators Annual Implementation Reports Other Reports by period county, field of intervention Actual expenditure reports Claims for draw down Payment details Report on receipts and outstanding claims Funds allocation, dispersal instructions Source: IPA: Implementation and Administration of E.U. Structural And Cohesion Funds in Ireland – Procedures Manual: P. 52 (19)

Project Reporting to Monitoring Committee Introduction – description measure, commentary on progress Expenditure to date Performance Indicators – progress to targets North/South Co-operation Information and Publicity Requirements Horizontal Issues – Environment; Gender Equality; Poverty; Rural Development Future Prospects Adjustments required Annexes (20)

Value for Money - Definitions Additionality: Measure of economic output i.e. amount of project output compared to what would have occurred without intervention Deadweight: Opposite to additionality i.e. could project have proceeded without State Aid Displacement: Activities that would or could have been financed by the private sector are displaced by publicly subsidised activity Cost-effectiveness: Projects selected contribute the largest amount possible to policy objectives at the minimum possible cost. Source: Fitzpatrick Associates: Review of Project Selection Procedures and Appraisal Techniques in the CSF. May 1999 (21)

Contact Details BMW Regional Assembly The Square Ballaghaderreen Co. Roscommon Tel. (353) 094 9862970 Fax. (353) 094 9862973 Email: info@bmwassembly.ie Website: www.bmwassembly.ie National Development Plan: Website: www.ndp.ie EU Structural Funds: Website: www.eustructuralfunds.ie