Public Investment Management – Resource Enhancement & Accountability Programme

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Outcome 2 : Strengthened Public Investment Management (PIM) for Increased Development Returns on Public Spending.

Objective 3 aims to establish and embed a comprehensive project cycle management approach across Government, focusing initially on selected key sectors. This encompasses support at all stages of the cycle to enhance the economic return from investments as well as value for money, by improving project preparation, independent review processes, use of appraisal in project selection, enhancing procurement and contract management processes, better tracking and management of public assets and strengthening accountability and performance reporting.

A significant amount of training and capacity building is required under this objective across a range of PFM institutions. Training will therefore be embedded within existing government programming of training and options for partnerships with relevant external training institutions for delivery of training, including on-line learning will be explored.

KRA 3.1 : Efficient Identification, Selection and Management of Public Investment Projects (PIPs) and Public-Private Partnerships (PPs)

Key interventions (outputs) include:
1. Improve multi-annual planning and management of high value investments in selected sectors/MDAs. Including align MTEF with the multi-year commitments by sectors and MDALGs;
2. Establish Infrastructure corridor policy.
3. Develop IT-based Integrated Bank of Projects (IBP). Including stocktaking and revalidation of PIP; automation of projects management aspects in the PIP. This should guide phased and more prioritised selection of projects;
4. Strengthen capacity for project cycle management of Public Investments. Including strengthened governance and technical support to the Development Committee; and, development sector specific project appraisals.
5. In addition, institutional capacity will be built across the entire project cycle to prepare quality projects, undertaking rigorous appraisal project development (selection, prefeasibility and feasibility studies), and project management, construct the assets efficiently and at minimum cost, and monitor and maintain these assets.
6. Enhance capacity and agree principles for greening public investment by incorporating changes in the project formulation (DPP preparation), approval, implementation, and post implementation phase and related guidelines. Capacity and tools will be developed to imbibe environmental sustainability into PIM as a key building block. This includes considerations for strengthening the Environmental Clearance Certificate for projects awarded by relevant authorities in line with the national Environmental policy instruments.
7. Establish Investment project costing methodology/formula. Including deepening usage of approved national parameters, shadow prices and conversion factors for the preparation, appraisal and selection; and Unitary Prices Database developed and disseminated;
8. Develop modalities for independent and formal appraisal, including introduction of an annual review of major ongoing and new public investment projects for submission to Cabinet as part of the budget cycle;
9. Enhance governance and institutional arrangements for project selection and appraisal including: review and strengthening National Development Committee (DC); establish appraisal and analysis function with each of the DC representative institutions to enrich the project selection and evaluation process; Strengthen Sector Level Development committees to deepen participation of key stakeholders including CSOs;
10. Strengthen regulatory and institutional framework for management of PPPs including sector role in PPP selection; diagnostic study to harmonize PPP legal framework with other PFM legislation and regulatory framework (PFMA, PPDA, Investment Policy etc)
11. Strengthen capacity for management of PPPs. Including capacity for assessment of fiscal risks of PIPs and PPPs strengthened (models); and
12. Strengthen legal framework for PIM. This will also include development of the Public Investment Management Policy, review the PPP act and harmonising the PIMS legal & regulatory framework

KRA 3.2 : Enhanced VFM in Public Procurement for Large, Complex Public Procurement

This outcome recognises that there is low VfM across all public procurements, but that the greatest impact with limited resources can be achieved by focusing reform efforts on the largest, most complex procurements. The intervention approach for large, complex projects focuses on enhancing the legal and regulatory framework, local content policy and introducing techniques and processes to strengthen the independence and quality of large procurements.

This will be complemented by reforms under Objective 4 (Accountability systems), which will support the roll out of e-Procurement and developing professional training programmes for procurement cadres. In order to support compliance with procurement systems, reform activities will also focus on developing a professional training programme for procurement cadres. Training under this outcome will be limited to central government, with further support provided to Local Government under Objective 5 (Local Government PFM).

3.3 Optimal Utilization and Maintenance of Public Assets and Investments

Key interventions (outputs) include:
1. Public Asset and Investment Management policy to provide overall policy guidance on assets and public investments. The formulation of a PIM legal and regulatory framework shall be guided by this policy. This also includes development of guidelines on asset operation and maintenance;
2. Develop guidelines on Governance of state owned enterprises (SOEs). Including reporting mechanisms e.g. website with a published list of SOEs, information on the assets, income, and number of employees;
3. Policy for management of G.O.U financial assets developed for management of GoU financial assets. Includes design and pilot the IFMS inventory management module in selected MDAs and LGs
4. Non-current assets policy operationalised. Including implementation of road map for accrual accounting based on identified priorities
5. Develop a government asset Management Policy framework. This will guide improved recording, accounting and reporting of government assets in line with the PFMA and accounting standards; and,
6. Develop guidelines on asset operation and maintenance. Includes extension of IFMS functionality for asset & inventory management for all MDALGs.

3.4 Enhanced accountability in resource utilisation and results for project delivery

Key interventions (outputs) include:
1. Policy requirement for DC and Sectors to consider project evaluation reports. This will be monitored through PEMCOM;
2. Harmonize standards and guidelines of public investment management for quality control, greater tracking, and monitoring of results. A shared understanding is needed across institutions related to identification, appraisal, implementation, evaluation of projects. This will include guidelines on independent end term evaluations to allow for more effective and continuous monitoring, data collection, and effective evaluation;
3. Regular performance review and reporting of public projects and PPPs. Especially for investments in the selected frontline service delivery sectors.