1. Costing Projects: A Methodology GN-PBO Meeting, Costing Washington, DC December 17, 2014 Sahir Khan Helaina Gaspard Jean-Luc Pepin Research Chair University of Ottawa

2. Purpose  Review the context for costing projects  Present a replicable methodology usable to cost various projects.  What is costing? Why do we do it?  First versus second data point.

3. Context – the stakeholder universe Citizenry PBO’s Peers Think Tanks and Academics Media Executive and/or Legislative PBO

4. Context - diversity of topics posed challenges… …so our strategy had to reflect this reality

5. Context – the environment  Legislative and fiduciary obligations  High expectations from a complex stakeholder universe  Complicated institutional arrangements  Limited resources  A different language in politics

6. Learning Outcomes 1.Methodology for costing  Bottom-up versus comparative/proxy approach 1.Costing case study: public safety radio network infrastructure. 2.Application in other cases.

7. 4-Part Costing Methodology 1.Define parameters/working assumptions 2.Acquire data 3.Sort/analyze data 4.Communicate your findings

8. Define Parameters/Work Assumptions a)What are you costing? Why? b)Does a current figure exist (e.g. from government)? c)Do you have access to the data necessary to undertake the project? d)Have comparable jurisdictions undertaken a similar project? If so, what was their cost?

9. Acquiring Data a)Alternate data sources (e.g. comparative jurisdictions). b)Where to go when other jurisdictions are unwilling to share (e.g. WB)? c)Data credibility is CRUCIAL: i.What is a credible source of data? ii.How can data be verified? iii.The importance of multiple data sources/data points.

10. Case Study Lessons

11. Sorting and Analyzing Data a)What are common cost drivers? b)What are the phases of your project (i.e. design, build, operate)? c)Are there common elements to the projects across jurisdictions?

12. DRIVERS OF COSTS Correlations

13. Towers driving by area The high correlation is to be expected given the current technology and coverage rates (p = 0.70)

14. Capital costs and geographic area Geographic area and urbanization directly influence capital costs (p= 0.63)

15. Total Cost and Agencies

16. O&M and agencies The number of agencies has a relatively strong positive effect on the operating costs (p = 0.65)

17. O&M and end-user devices End-user devices has a relatively strong positive effect on Opex (p = 0.69)

18. The key cost driver – tower sites and total costs  Tower numbers drove total cost of project Towers are the most significant driver of total costs (p = 0.88). Total costs include both capital costs (Capex) and operating costs (Opex)

19. Communicating your Results a)Data visualization. b)Basic correlations. c)Work inductively and let your data lead.

20. Conclusions 1.Be clear about stakeholder needs and choose an appropriate methodology. 2.Both bottom-up and proxy models are dependent on good data. 3.Finding the right cost drivers is key to good cost estimation. 4.Effective communications should balance rigor and accessibility - including the findings and approach.

21. Thank-you Sahir Khan & Helaina Gaspard Jean-Luc Pepin Research Chair University of Ottawa, Canada Faculty of Social Sciences +1 613 562 5800 x1402 www.jlp.uottawa.ca