DEPARTMENT OF WORKS

EAST WEST HIGHWAY

UPGRADING TO SEAL -19KM
FROM LORENGAU TO
WILLIAM METHI (POWAT) IN
MANUS PROVINCE
SUBMISSION, 2016 - 2019

Business/Project Case Template

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 Table of Contents
Table of Contents.....................................................................................................................2
Guide Box..............................................................................................................................5
Document Information..........................................................................................................5
Version Control.....................................................................................................................5
Document Approval..............................................................................................................5
Audience................................................................................................................................6
Acronyms/Technical Terms..................................................................................................6
Executive Summary...............................................................................................................7
1. Description of why the project is needed....................................................................8
1.1. Overview of the Agency..........................................................................................8
1.2. Service Need (What are some of the problems to be solved by the project?).........8
1.3. Elaboration on Major Drivers..................................................................................9
1.4. Government Policy Drivers.....................................................................................9
1.5. Agency Limitations................................................................................................10
1.6. Critical Success Factors.........................................................................................10
1.7. Benefits of the Project............................................................................................11
1.8. Additional Opportunities.......................................................................................11
2. Project Objective and Scope......................................................................................12
2.1. Project Vision........................................................................................................12
2.2. Project Objectives and Performance Measures.....................................................12
2.3. Project Scope.........................................................................................................14
2.4. Alignment with Government Policy and Strategic Objectives..............................14
2.5. Agency’s Strategic Directions...............................................................................15
2.6. Alignment with Supporting Studies or Previous Assessments of the Projects......15
3. Stakeholder Identification..........................................................................................16
3.1. Stakeholder Identification......................................................................................16
3.2. Summary of Project Benefits and Stakeholder Beneficiaries................................18
3.3. Communication/Management Plan for Stakeholders............................................18
3.4. Relationships to Other Projects..............................................................................19
4. Summary of Options...................................................................................................20
4.1. View from Long Term Plan or Policy Background...............................................20
4.2. The End Result of “Doing Nothing” Option.........................................................20

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 4.3. Option 1 – “Doing Nothing/Current Trend/Status Quo”.......................................20
4.4. Option 2 – “Minimum Requirements”...................................................................21
4.5. Option 3 – “Ideal Alternative”...............................................................................21
4.6. Comparison of Options..........................................................................................21
4.7. Assessment of Options...........................................................................................22
4.8. Conclusions............................................................................................................22
5. Critical Assumptions or Limitations.........................................................................23
5.1. Critical Assumptions..............................................................................................23
5.2. Known or Emerging Constraints...........................................................................23
6. Social and Environmental Analysis...........................................................................25
6.1. Social Benefits.......................................................................................................25
6.2. Environmental Impacts..........................................................................................27
7. Economic and Financial Analysis..............................................................................28
7.1. Financial Analysis..................................................................................................28
7.2. Economic Benefits.................................................................................................28
8. Risk Analysis and Management.................................................................................29
8.1. Risk Management Process.....................................................................................30
8.2. Risk Management Plan..........................................................................................30
9. Procurement Strategy.................................................................................................32
9.1. Context...................................................................................................................32
9.2. Compliance............................................................................................................32
9.3. Sustainability of “Design and Construct” Model..................................................33
9.4. Procurement Options.............................................................................................33
9.5. Option 1- Construct to Design...............................................................................34
9.6. Option 2- Design and Construct............................................................................34
9.7. Conclusion.............................................................................................................35
10. Budget Analysis and Funding Strategy.....................................................................36
10.1. Funding Strategy....................................................................................................36
10.2. Budget Analysis.....................................................................................................36
11. Public Interest Issues..................................................................................................38
11.1. Public Interest Issues.............................................................................................38
12. Implementation and Timing.......................................................................................41
12.1. Organization’s Preparation for Project Delivery...................................................41
12.2. Project Supervision................................................................................................41

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 12.3. Project Steering Committee...................................................................................42
12.4. Project Management Team....................................................................................42
12.5. Project Implementation Timetable.........................................................................42
12.6. Implementation Issues...........................................................................................44
13. Recommendation of the Preferred Option...............................................................45
13.1. Recommendation of the Preferred Option.............................................................45
14. Sign-Off........................................................................................................................46
14.1. Sign-Off.................................................................................................................46

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Guide Box

Guide Box
The level of detail included in the template will vary depending on the size, risk and
complexity of the proposal. Some of the issues in the template may be of little relevance to
some proposals and need to be only noted. In this way, the template should reflect that each
of the issues listed in the template has been considered.
This template is designed for Projects with a capital value of more than K20.0m as this is the
thresh hold at which a number of additional requirements come into effect regarding
procurement approaches undertaking a full public interest test etc.
In completing the template, the target audience needs to be considered and consequently
language should be plain English and avoid the use of technical terms wherever possible.

Document Information

Criteria Details
Document ID DEPARTMENT OF WORKS
Document Title East West Highway Upgrading to Seal 19km from Lorengau to
William Methi (Powat) Primary School.
Document Owner Provincial Works Manager
Document Author Provincial Works Manager
Version 16th April 2015
Issue Date

Version Control

Version Date Description

07/04/15 Date of first issue
13/04/15 Major inputs incorporated including catalysts in the version.

Document Approval
This document requires the following approval:

Name Title Organisation

Mr. Roy Mumu Secretary & Chairman Department of Transport and Transport
Sector Coordination Monitoring and
Implementation Committee (TSCMIC)
Mr. David Wereh Secretary Department of Works (DoW)

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Audience
Who/what is the target audience? This section will usually include those Departments and
Agencies who will be instrumental in approving the sought funding and/or validating the
project case.

The target Audience of this project case is the Secretary of the Department of Transport. He
is the Chairman of TSCMIC in charge of approving funding and validating the project case
and the Secretary of the Department of National Planning & Monitoring. He is the Chairman
of the Governors’ three (3) nominated projects committee established during the Alotau
Accord in February 2013.

Acronyms/Technical Terms

Name Description
ADB Asian Development Bank.
Agency The Proponent or Sector proposing the project.
AusAID Australia AID (Australia International Donor).
CBA Cost Benefit Analysis.
Charter Alignment The project proposal must be supported with relevant facts and
figures.
DoW Department of Works.
DoT Department of Transport.
DSIP District Services Improvement Program.
Financial Responsibility The agency or project proponent to take care of project funds
earmarked for the project.
Government Policy The project or initiative must align with government policy
Compliance guidelines
GoPNG Government of Papua New Guinea.
Government Risk Any risk associated with the project which will then become a
liability to the government.
Guide Box An overview of what the section is intending to explain.
HHRMP Highlands Highway Rehabilitation and Maintenance Program.
KRA Key Result Area.
LLGSIP Local Level Government Service Improvement Program.
M&E Monitoring and Evaluation
MCP Manus Corporate Plan
MIDP 2011 – 2015 Manus Integrated Development Plan 2011 – 2015.
MoA Memorandum of Agreement
MoU Memorandum of Understanding.
MPG Manus Provincial Government
MTDP Medium Term Development Plan.
MTTP Medium Term Transport Plan.
MV2030 Manus Vision 2030.
NEC National Executive Council.
NGOs Non Government Organizations.
NTS National Transport Strategy.
Outputs delivery Services or goods delivered by the project.

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 PCE Provincial Civil Engineer.
PEB Provincial Engineering Branch.
PNG Papua New Guinea.
PMT Project Management Team.
PMV Public Motor Vehicle.
Proponent Agency or sector proposing the project.
PSC Project Steering Committee.
PSIP Provincial Service Improvement Program.
PSTB Provincial Supply & Tenders Board.
PWM Provincial Works Manager.
RPC Regional Processing Centre.
Statutory Compliance The project or initiative must meet all governing laws of the
country.

TSCMIC Transport Sector Coordination Monitoring & Implementation

Committee.
ULLG Urban Local Level Government.
V2050 Vision 2050.

Executive Summary

Guide Box
The Executive Summary is the very last part of the template to be completed. The Executive
Summary should not introduce new information and it should not make statements that are
not supported by data, information or analysis in the main body of the document.
The executive summary is an essential part of any Project Case. Decision makers get first
hand information through the executive summary when assessing a proposal. It contains a
clear, concise, and written in plain English summary of the entire proposal, including the
main reason for carrying out the project.
The executive summary is separate to the main body of the proposal. It provides:
 An outline of the proposal and the project idea;
 A summary analysis of the options and alternatives considered;
 Details of the preferred option; and
 Texts, graphs, and tables of critical numbers should be used to present the key
arguments and findings to decision makers.
Key supporting documents should be referenced in the table of contents, executive summary
and/or the body of the project proposal. If these key supporting documents were not affixed
to the project case, it should be readily available from the project proponent.

[Less than 5 pages]

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1. Description of why the project is needed.

Guide Box
This section should highlight:
 The project idea,
 Detailing the project needs,
 The problems or issues to be addressed, and
 Identifies the internal and external business/technical drivers and strategies.
The above highlighted are some of the needs that will have shape the design of the project.
In other words, this section should highlight why the project should be undertaken or why the
infrastructure should be built and why the service should be provided.

1.1. Overview of the Agency (DoW)

[Not more than half a page]

In this section, describe the Agency submitting the project proposal in terms of:

Department of Works Mission Statement-

Department of Works Vision-

The Department of Works Corporate Strategic Plan 2011 – 2015 to meet the National
Government’s road infrastructure targets in PNG.

1.2. Service Need (What are some of the problems to be solved by the project?)
[1 page]
In this section, introduce all or some of the problems or reasons the project is going to solve.
This is a high level introduction as they will be explained in detail in the next section. The
intention is to explain what is behind the project proposal. Projects are often responses to a
number of inter-related problems and this introduction is used to highlight how the problems
are linked to each other.
 The road from Lorengau to Tingou forms part of the Manus National Highway which should link to
the western and South part of the province serveing over 15, 000 people from all inland areas from
Tingou to Mundrau, Mundrau to Bundralis, Kawaliap to Worei, Worei to Djekal, Tingou to Bunai
and Lawes . The Schools, Health facilities, Churches and other institution as already outlined
above, depend entirely on this road for;

 Ease of access to health education services available in the province.

 Aid in generation of income & other revenues.
 General Public: - accessibility and mobility for socio economic reasons.
 Businesses: -Improve business activities.
 District Administration: - road will pave way for effective delivery of services to the people by
improved ease of logistics and transportation requirements.
 Women – Access to markets, access to Health Centre when in labour, MCH Clinic etc.
 Youth – Access and mobility to participate in sports, employment etc.

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 This project will pave way for the benefit of the second township at the Western end of
Manus. Preparation and development work on the second township have commenced as
this is one priority of the current Provincial Government.

 Development and commercial activities at the second township will heighten and cause a
rapid change to the west coast people of Manus Province.

 The province is surrounded by a very large sea area and thus the current Provincial
Government is focusing to utilize its sea area for economical values. Upgrading the
current road networks will also pave way to better achieve this priority.
1.3. Elaboration on Major Drivers
[1 page per major motivating factor/driver]
Elaborate on some of the motivating factors that will make necessary changes to the
operating and service delivery environment in terms of financial need underpinning the
project.
This means that the proposal will need to quantify what the actual problems are – e.g. how
long it takes to travel, average travel time/speed, type of vehicles being used, what are the
actual cost of transporting a kilogram of cargo, how frequent the service is, etc.

 This Road will affect about 15, 000 Manusians whom live along the roads where the
project will run through. Spin offs benefits will be realized.
 The project will decrease PMVs operation costs thus decreasing the PMV fare for
both the benefit of the PMV owner and the general public.
 Smaller sized vehicles can actually use this road once completed and providing better
comfort.
 This project will also cut down on the continuous annual maintenance activities which
funding is an on-going problem.
 Road accidents awareness programs will be properly advocated to all stakeholders
and users of the project.
 The project will be annually supported for maintenance works after 2020 by
respective Government stakeholders.

1.4. Government Policy Drivers

[2 pages]
In this section, try to identify if the proposed project is consistent with any related
government policies and also outline what are the outputs this project relates to and how it
will contribute?

Upgrading to Seal Lorengau Tingou Road is in line with;

 The National Government’s Vision 2050, “Development of high quality infrastructure
is critical to ensure that there is effective service delivery” (V2050, pg.13 ),
 MTDP 2011 – 2015 pg 46 states that “to achieve 2030 target of 25,000km of national
roads in good condition, work must commence immediately on several fronts”, It is
also stated that some particulars of work relating to the Economic Corridors and
Missing Link Roads as identified by the Government to be very important for the
country’s future, will take some time to complete, but “it is possible to commence

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 work immediately to bring the existing national roads (8,460km) to good condition.
Maintenance, rehabilitation and an upgrade of the existing network will be a
significant contribution to the final target and will quickly deliver real improvements
to citizens”. Therefore the upgrading of Lorengau Tingou has to be attended to
immediately as it is the implementation of MTDP 2011-2015, 2030 target and V2050.
 Manus Corporate Plan (2014 – 2016); KRA 1, Effective Internal Management &
Coordination of technical plans and sectoral targets, page 12, “1.3 Efficient
Coordination & Management of Projects”. KRA 2, Mobilizing Support of Key
Stakeholders, page 14. “2.3 Effective Management & Compliance of Guidelines in
the Implementation of LLGSIPs, DSIPs & PSIPs”. KRA 3, Integrated Planning &
Budgeting and Effective Financial Management, page 15. KRA 6, Operations
Performance Management & Technical Systems, page 18 all have one way or the
other linked with effecting service deliveries in Manus Province. The Transport
Sector Infrastructure Development is appreciated in the MCP coupled it with the
signed MoA.
1.5. Agency Limitations
[1/2 page]
If relevant describe any limitations on the current operations of the Agency and how they
impact on delivery of the project proposed in this project case.
Take note of government’s policies for the agency and sector in which services are provided
as they relate to the project or development proposed in this project case.
Department of Works;
o Unskilled casuals.
o Lack of qualified civil engineers & foremen.
o Unskilled contractors.
o Compensations.
o Lack of machinery & equipment.
o Project’s distance isolation.
o Rugged terrain for road constructions.

Manus Provincial Government;

- Lack of funds support.
- Lack of coordination.
- Lack of road infrastructure development information.

1.6. Critical Success Factors

[2 pages]
In this section, discuss some of the very important factors in relation to the proposed project.

 Rise in business/commercial opportunities.

 Infrastructure developments.
 Effective & efficient Government services such as; Education, Health, Commerce &
Industry, Agriculture, Fisheries, Technical Services and others.
 Ndrahukei Township is realized.
 Fish Cannery Initiative realized.

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  Highway roadside SMEs development.
 Tourism opportunities.
1.7. Benefits of the Project
[2 pages]
In this section, explain the benefits that the project is intending to provide to those who will
be using the road, the general public, communities in the area and other impacted
stakeholders.

o Effective road transport system.

o SMEs opportunities.
o Site seeing tours.
o Effective health deliveries.
o Effective education deliveries.
o Social events.
o Ndrahukei Township.
o Fish Cannery Development.
o Logging operations.
o Hydro power initiative.
o Decreased annual maintenance cost
1.8. Additional Opportunities
[2 pages]
This section should include any other opportunities that may be available as a result of:
 Undertaking the project,
 Future likely developments and, or
 The capacity of the private sector to pull off any investment.

i. Opportunities the project will bring;

 Local contractors.
 Casual employment.
 Awareness.
 Accessibility to Government/business services.

ii. Future likely developments;

 Ndrahukei Township Development.
 Fish Cannery Development.
 Hydro Electricity Project.
 SMEs Growth.

iii. Private sector investment involvement;

 Infrastructure development.
 SMEs

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 2. Project Objective and Scope
Guide Box
This section should give the summary of what will be done, or how far is it going to be done
with the resources or funds made available for the proposed project in line with government’s
priorities, policies or plans.
An understanding of the Project Objectives and Scope will assist funding/donor agencies in
assessing the capability of the project proponent to deliver the project.

2.1. Project Vision

[1/2 page]
Is the project part of a larger vision? Highlight the vision and indicate how the project
supports the vision, including whether there is any associated development that will be part
of another following proposal in the future.
Manus Vision 2030; “A Safe, Wise, Healthy & Wealthy Society” This will only be realized
once the road infrastructure is upgraded to the quality required which is also in line with
vision 2050 for quality infrastructure. This will also pave way for the Manus vision to have a
road network built right around main Manus Island (around 2,149 square kilometres)
maximizing 70km to inter – connect villages and wards along the ring road to further
strengthen their capacity in building themselves towards achieving the Manus Vision.
The project in a way will also create jobs opportunities for short term while the growth of
SMEs along the East West Highway stretch will be medium and the definite development of
the Ndrahukei Township, the Fish Cannery Initiative and the hydro - electricity initiative will
be the long term development targets of the ring road project.
2.2. Project Objectives and Performance Measures
[1/2 page plus table]
In this section, highlight what are the purposes to be served by undertaking this project and
how each of these undertakings be measured. Hence, Table 1 – Project Objectives and
Performance Measures highlight some of these purposes against the decision criteria
supporting the project and emphasize so that they can both be counted and measured.
These purposes to be served by the project and the decision criteria in table 1 will form the
basis against which options to be assessed in Section 5.7 – Assessment of Options.

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Table 1 – Project Objectives and Performance Measures
No Decision Project Objective Performance Measure Measurement
Criteria Methodology
1 Outputs Upgrading to Seal the All vehicle types and the Interviews
Delivery Existing National Road from inland population of
Lorengau to Tingou 15,000 enjoying a Surveys
comfortable ride on a high
quality infrastructure.

2 Statutory Project complying with Completion of road Assessment by

Compliance Government road batchments in five (5) Civil Engineer.
infrastructure requirements. years.
Progress
Reports.
3 Government Road Infrastructure target by The National Highway PMT’s
Policy DOW and desirable policy improving to high quality monitoring &
Compliance in place. infrastructure evaluation.
development.
4 Charter All stakeholders support is Concerns raised by all Media
Alignment required for the project’s stake holders and the Interviews.
benefit. general public

5 Stakeholder Project to benefit; locals, Increases in spin – offs Surveys &

Benefit business houses, other
services providers and
general public who use the
land transport for their
survival.
opportunities. awareness.
Better quality land
transport service provided.

6 Financial Project to be delivered Project funds report by Audits by DoW

Responsibility according to the budget. Project Manager.
7 Government Funds Delay. Financial report by Project Progressive
Risk Manager. Report.

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 2.3. Project Scope
[2 pages]
Describe how the funds allocated for the project will be spent. This should include a
breakdown of major activities and/or assets that will be required and how much each item
will cost.
Figures should be current and will be consistent with the figures outlined in the financial and
economic analysis undertaken later in the business/project case. This may include pie charts
to highlight the relative funding significance of aspects of the project and, as suitable, might
be grouped according to the outputs to which the project will contribute or the
objectives/decision criteria outlined above.

Table 2A – Category of Expenditure (Per Year as of 2016 – 2020)

Major Activities Total Costs K (Million)

Group 1 General Clauses 0.200
Group 2 Establishment 0.800
Group 3 Clearing & Grubbing 0.400
Group 4 Earthworks 1.200
Group 5 Pavement 3.600
Group 6 Bituminous Surfacing 11.200
Group 7 Drainage 0.900
Group 8 Road Furniture 0.500
Group 18 Protection Works 0.500
TOTAL 19.231
Over Heads (4%) 0.799
GRAND TOTAL 20.000

Table 2B – Project Scoping Summary

Project Brief Commence Completion Contract Total
Name Description ment Date Amount Length
Date K(m) Km
East West Upgrading to Seal 01/02/2016 31/11/2019 20.0 19
Highway 19km of the existing
Upgrading to Graveled National
Seal Road from Lorengau
(NBC) Junction to
Powat (William
Methi) Primary
School.

2.4. Alignment with Government Policy and Strategic Objectives

[1/2 page plus table]
Demonstrate that the project is in line with key Government Policies identified in Section 2.4
– Government Policy Drivers. Take out the key Goals and Commitments from these policies
and highlight the relevant outcomes of the project that will contribute to their delivery.

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Table 3 – Government Policy Initiatives supported by the Project.
Goal Commitment Project Outcomes
Ensuring effective Government funds Enjoyment of effective services from all
service delivery support sectors.
Seeking immediate Annual maintenance Lower Maintenance Cost with better reliable
attention to funds services.
government services.

Note: The above table provides an outline describing the relationship where Government
Policy Initiatives are supported by the Project.

2.5. Agency’s Strategic Directions

[1/2 page plus table]
Demonstrate that the project is in line with the Agency’s Corporate and Strategic Plans
(please attach copies as appropriate - electronically) by elaborating on those identified in
Section 2.4 – Government Policy Drivers. Link the Priorities and Strategies to the relevant
outcomes of the project that will contribute to their delivery.
Table 4 - Agency’s Strategic Directions supported by the Project.
i
Agency’s Corporate Priority Strategy Project
Plan Outcome
The Provincial Works Road and transport Provide technical and For continuity of
Department is infrastructure engineering support for all service delivery in
resourced with Civil development in PNG new and existing transport the provincial
Engineers within its to meet the National infrastructures in Manus capital of Manus
Provincial Engineering Goals Province. Province.
Branch (PEB).

Note: The above table provides a framework for describing the relationship where the
Agency’s Strategic Directions are supported by the Project.

2.6. Alignment with Supporting Studies or Previous Assessments of the Projects

[1/2 page plus table]
If there are any previous strategic assessments or studies that the project will respond to in
part or full, highlight the purpose/objectives of the assessment or study and identify whether
any of these recommendations have received Government or Departmental endorsement.
Take note of any financial contributions made as a result of the assessment or study that went
beyond projects and/or contributions to feasibility studies, business/project case
development, etc.
Link these recommendations to related Project Outcomes with any strategic planning and
policy assessments or studies.
 Ndrehet Logging Base Camp Development.
 Ndrahukei Township Development as Second Township.
 Fish Cannery Initiative.
 Airport Development.
 Hydro electricity project location.
 Logging transport.

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  Cash crops transport efficiency.
 Tourism opportunities.
Table 5 – Departmental Strategic Directions supported by the Project.
Review Title Recommendation Project Outcome
Bridges Identify bridges for constructions per Progressive completions of
Constructions. project year commencing 2016. bridges per annum.
Customary land Social mapping & advocacies. Customary landowners
Compensation appreciating road
developments.
Project In compliance with DoW projects Effective service delivery.
Implementation. standards & requirements.

Note: The above table provides a framework for describing the relationship where
Departmental Strategic Directions are supported by the project.
3. Stakeholder Identification
Guide Box
The main reason for carrying out a stakeholder consultation is to allow decision makers to
be aware that adequate stakeholder consultation was undertaken. They would also want to
know if these key stakeholders will be affected or have a direct interest in the project.
Take note that key stakeholders will differ depending on the type of projects undertaken
and may include bidders, investors, users, politicians and officers at the Local and National
Government levels, special interest groups and community groups etc.
Major infrastructure projects such as the Highlands Highway Rehabilitation and
Maintenance Programs (HHRMP) etc are required to complete a public interest test as part
of the business/project case seeking approval. Government takes this test into account when
considering an application for project funding. It is important to ensure that the consultation
strategy or plan links with the public interest test, including identifying key groups for
consultation and reviewing information gathered.

3.1. Stakeholder Identification

[1 page plus table]
In this section, describe any stakeholder consultation that has been undertaken in relation to
the project. Stakeholders should include:
 Politicians, donor agencies, government departments, business houses and others
who will make financial contributions towards the project,
 Users or those who will benefit from the project,
 Workers who will be employed by the project,
 Relevant LLGs of the project impact area and development partners,
 Similar or comparable commercial services providers,
 Community, environmental and cultural groups,
 Special interest groups such as people living with disabilities, athletes etc.

16
If there were some studies or assessments undertaken in the past on stakeholder
identification, it should be identified in this section.
In identifying the “Current Issues” consider the concerns that are currently being expressed
by stakeholders and how the project is/will be responding to the issues raised. Below is an
example of a stakeholder engagement and analysis table.

Table 6 – Stakeholder Engagement and Analysis

Stakeholders Current Stakeholder Stakeholder Analysis
Engagement Status Current Issues Ongoing Stakeholder
Engagement Planned
Government
Manus Governor Governor briefed on the Outstanding and Governor to pursue
project. requires to be with Planning Minister
addressed. about the project.
STATUS - Supportive
Affected LLGs Project submission to Project submission Next quarterly meeting
Presidents; PNKA, Transport Department to be forwarded to to determine for project
Bisasopa, Pobuma, Secretary. screening fund screening process.
Erekele, Tetidu, Nali committee.
STATUS- Supportive
and Lorengau

Local Community & User Groups

Mundrau Public awareness was Users to be aware Regularly awareness
Bundralis carried out in mid 2014 and of the road commencing June
Tulu made everyone aware of upgrading and 2015.
Tawi the project. prepare for the
Pelipowai development.
Kawaliap STATUS- Supportive
Tingou
Sohoneriu
Yiringou
Powat Ndranou
Lundret
Sapon
Rossun

Business Community Stakeholders (Competitive and Commercial Relationship)

Manus Chamber of Vehicles and PMV Various business Awareness by Manus
Commerce operators, school children, services along the Chamber of Commerce
the disabled and the general main highway. on use of transport
public will be the main system along the main
users of the project once highway.
completed.
STATUS- Supported

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 3.2. Summary of Project Benefits and Stakeholder Beneficiaries
[1/2 page plus table if required]
This section should summarize the benefits that the project will provide to a number of
stakeholders and identify how these stakeholders will benefit from the project. For more
details, please refer to table below.
Table 7 – Summary of Stakeholder Beneficiaries and Project Benefits

Stakeholder Beneficiaries Project Benefits

National Government Project will help to achieve the National Government’s
development objectives (i.e., The Vision 2050 and Medium
Term Development Plan, MTDP, etc.)
Manus Provincial MCP 2014 – 2016, MIDP 2013 – 2017, PSIPs, DSIPs,
Government LLGSIPs, Public Servants
Local Contractors Business opportunities
Business House Ease in Transportation of goods
Hospitals Effective & efficient deliveries of health services into the
inland areas.
Schools 8 Primary Schools directly benefitting.
Cash crops farmers Access to land transport delivers their cash crops into
Lorengau Town.
Sick people Land transport effectiveness in receiving health services at
the door steps.
General public Convenience for social and economic gains by Manusians
accessing through a more comfortable road system.
Note: The respective benefits discussed in this table will vary depending on the type of
project initiated.
3.3. Communication/Management Plan for Stakeholders
[1/2 page plus table]
Table 8 – Stakeholder Communication/Management Plan should include all the stakeholders
identified in Table 6 – Stakeholder Engagement and Analysis and combines this with the
benefits listed in Table 7 – Summary of Project Benefits and Beneficiaries to provide a single
approach to future communications regarding the project.
On the current “Support Status” column, it should indicate whether documented written
endorsements of the project were provided by stakeholders through letters and/or media
releases etc.

Table 8 – Stakeholder Communication/Management Plan

Stakeholder Support Status Stakeholder Communication/Management Plan

Key Messages Methodology
Government
Manus Governor Fully supports Priority to improve the current Meeting.
project idea. road condition and further
connects the existing National
Road to the Western end of
Manus
Affected LLGs; Overwhelming Priority to improve the existing Meeting.

18
 PNKA, Tetidu, Nali, support from these gravel road.
Erekele, Lorengau LLGs
Manus DoW Fully supports the Project case funding Letter advice &
project idea. confirmation. meeting.

Manus Provincial Fully support the Project case to be supported in Letter advice &
Administration project idea. the submission process for the meeting.
2016 budget.

Project User Groups

General public Supported the Illegal road blocks by Awareness &
project despite the disgruntled landowners due to Radio Manus.
rising social issues. non payments of land royalties.
Customary land Fully support the Easy access to customary land Meetings.
owners project idea. for agriculture purposes.
Churches, NGO’s Fully support the Movements of church goers Feedback from
project idea. will be convenient. churches.
The Disabled Fully support the Access to land transport for Personal
project idea. their survival. feedback.
Manus Chamber of Commerce (Competitive and Commercial Relationship)
Local Contractors Supports the project Meeting Government roads Meetings.
idea. infrastructure standards.
Local suppliers Fully support the Other road project materials are Feedback from
project. supplied hence providing local suppliers.
investments back in Manus.
Civil Engineering Fully support the Civil contract works & Advertisements
project. drainage contracts. and awareness.
Social Community (Sports and Cultural Events)
Sports, Youth and Fully support the Effective transport system for Feedback from
Cultural Groups project. various groups utilizing the groups.
Road.

3.4. Relationships to Other Projects

[1 page]
Describe how the proposed project relates to other existing or new projects in the area. The
description should be from the perspective of how this proposed project will, (1) support or
entertain other projects (new and existing) in the area, and/or (2) sidetrack or divert other
projects (new and existing) in the area, if the project does not proceed.
Focus on this section should be on balancing the project costs and benefits, whether the
projects might assist some of the existing businesses in the community, or be able to share
the resources to fund the costs of relocating the plant and equipment, etc.

Project’s relationships to new projects in the area;

 Maintenance & constructions continuity by Manus DoW.
 Outstanding upgrading road constructions to meet the Ring Road target.
 Encourages Ndrahukei Township to develop.
 Fish Cannery to develop.
 Airport to develop.
 Logging transportation much easier.

19
  Effective cash crops commodity transportation.
 Further development of SMEs.

4. Summary of Options
Guide Box
This section is required to show decision makers that different options to address the problem have
been considered. In order to do so it is important to provide at least 3 options. These options are:
1) The ‘Status Quo’ or “Do Nothing” option;
2) An optimal or ideal option that represents the desired proposal; and
3) A realistic option that would be provided if there were no financial constraints.

4.1. View from Long Term Plan or Policy Background

[1/2 page]
If the project is initiated as a result of studies done on some projects in the past, simply
highlight the Terms of Reference (TOR) of that past study as to when it has been undertaken
and how the presented options link with or support the recommendations of that study.
Hence, three options should be introduced as follows:
 Do Nothing or Status Quo Option – Do nothing about it or just maintain the current
level of output/service delivery,
 Minimum Requirement Option – The option that should be necessary to implement
the project, and
 An Ideal Alternative Option – The most suitable option that is required when
additional service or infrastructure capacity being sought where the ‘Minimum
Requirement Option’ cannot be able to meet the rising demand, etc.
Note: The option names will be changed whenever possible depending on the nature of the
proposed project.
4.2. The End Result of “Doing Nothing” Option
[1 page]
Knowing very well that the end result of “Doing Nothing” will not support the project,
however, should this option be necessary then it should be considered and discussed.
Otherwise, do away with this option and consider the “Status Quo” option as the minimum
requirement for maintaining the current level of service or output delivery.
4.3. Option 1 – “Doing Nothing/Current Trend/Status Quo”
[1/2 page]
If knowing that the ‘Doing Nothing’ option will not assist the project in any way, then the
‘Status Quo’ option should be considered just to maintain the current level of service or
output delivery.

……………………………

Note: A detailed financial assessment is undertaken in Section 7 – Economic and Financial

Analysis to provide background information or to give further supporting explanation on this
section.

20
 4.4. Option 2 – “Minimum Requirements”
[1 page]
If the ‘Status Quo’ option for just maintaining the current level of service delivery is not a
required option, then a minimum required option should be considered and discussed. This is
the ‘Minimum Requirements’ option which should be necessary to implement the project.

……………………………
4.5. Option 3 – “Ideal Alternative”
[1 page]
If in the event that additional resources or technical capacities are sought for the particular
project, ‘Option 3 – Ideal Alternative’ should be considered since there may be more
potential benefits of undertaking this project now rather than to defer it.

……………………………..
4.6. Comparison of Options
[Introduction plus table]
The three options discussed above should be compared with some key statistics with tables
similar to one of the examples highlighted in ‘Table 9 – Summary of Estimated Financial
Position’ below.

Table 9 – Summary of Estimated Financial Position

Expected Average Annual Values Option 1 Option 2 Option 3

(Presented as average annual budget “Do “Minimum “Ideal
over a ten year period in today’s cash Nothing/Current Requirements” Alternative”
terms) Trend/Status Quo” K(million) K(million)
K(million)
Operating Revenue 0.0
Operating Expenditure 0.0
Net Operating Surplus/(Deficit) (deficit) 0.0 0.0 0.0
Externally Generated Contribution 0.0
Total Government Funded 20.0
Contribution (Operating)

Following are the analysis of the Summary of Estimated Financial Position highlighted in
Table 9 above.
 Option 1 – The agency has operating revenue of K10.0m (K2.5m from externally
generated contributions and K7.5m from total government funded contribution) and
the operating expenditure for that particular year is K15.0m (K5.0m deficit). If
‘Doing Nothing/Current Trend/Status Quo’ option is considered here, the agency will
be put in an unsustainable position for over expenditure and be in a critical situation
as to how to source funding to off-set the K5.0m deficit. As a result, Option 2 –
‘Minimum Requirements’ must be considered.
…………………………………….

21
  Option 2 – The agency’s operating revenue is also similar as it is in Option 1 above
but this time the operating expenditure is K10.0m which equals to the operating
revenue of K10.0m. This is the ‘Minimum Requirement’ option to have a balanced
budget for the year. However, due to a 50% CPI increase and for reasons; the agency
could not sustain its operations with the current operating revenue of K10.0m. As a
result, the agency is to consider another option which is the ‘Ideal Alternative’ option
to off-set the 50% CPI as well as other increasing demand.

…………………………………….
 Option 3 - The ‘Ideal Alternative’ option is to increase the externally generated
contribution from K2.5m to K6.5m (K4.0m increase) in order to cater for the 50%
CPI increase and other increasing demand.

Manus DoW opts to utilize the “Ideal Alternative” to source the relevant funds to
commence the Upgrading of unsealed National Roads for up to four years
commencing 2016.

4.7. Assessment of Options

[11/2 page plus table]
Options should be assessed in terms of their ability to deliver the services or outputs against
the objectives identified in Section 2 – Project Objective and Scope. Each objective should be
linked to Government’s sought outcomes, with discussions about how the project will support
the achievement of these outcomes.

Referred to below is ‘Table 10’ summarizing the assessment of the Agency’s position in terms
of its ability to deliver services or outputs under each strategic option.
Table 10 – Alignment of Options with Project Objectives and Outputs
Objectives/Output Option 1 Option 2 Option 3
Category “Doing “Minimum “Ideal
Nothing/Current Requirements” Alternative”
Trend/Status Quo”
Statutory Compliance 0 0 3
Policy Compliance 0 0 3
Charter Alignment 0 2 0
Stakeholder Benefit 0 2 3
Financial Responsibility 0 0 3
Governance Risk 0 2 3
Overall Outputs Delivery 0 2 3

Degree of Alignment Low (0) Medium (1 – 2) High (3–4)

4.8. Conclusion
[1/2 page]
After considering the analysis on Table 9 – Summary of Estimated Financial Position and
Table 10 – Alignment of Options with Project Objectives and Outputs, conclusion should be
made to consider the most preferred option. And state the reasons how and why this option
should be considered as the most preferred option among the other two options.

22
………………………………….

5. Critical Assumptions or Limitations

Guide Box
Critical assumptions are what is believed or assumed to be available in terms of the resource
or financial capacity for the project to be undertaken. These assumptions are things that with
a small change are likely to have a significant impact on the structure, shape or viability of
the project.
This section is about highlighting those assumptions that underpin the particular choice that is
being suggested. The assumptions should be listed so that if they were to change, they are
likely to have a significant impact on the project delivering the desired outcome. These
assumptions will be reviewed in Section 7 – Economic and Financial Analysis and Section 8
– Risk analysis and Management in order to discuss the risk they present and the responses
that might be put in place to address them.

5.1. Critical Assumptions

[1/2 page]

Following are some examples of critical assumptions in the Existing Road Upgrading project;

 The four (4) year project funding segments will cause the Manus Roads Infrastructure
plan meet its development goals.
 There is likely to be a mass utilization of the roads network once completed.
 The Manus socio – economic boost will materialize and further strengthened for the
project.
 The National Government’s road infrastructure target will be much appreciated in
coincidence with the MPG’s.

5.2. Known or Emerging Constraints

[1/2 page inclusive Table]
For new projects, decision makers will always want to know how well the project will be
managed. Therefore, highlighting known or emerging constraints of a project in a proposal
is very important. Discuss them in details using tables if necessary. The following is an
example.

 The project will be managed and supervised by Manus DoW with assistance from the
Engineering Unit of the Division of Technical Services.

Table 11 – Known or emerging constraints

Area Constraints
Legislative The awarding of contracts by the PSTB may have conflict of interests hence
delaying the project implementation.
Timing Depends on the accountability of the Contractor and its efforts to commence the
project implementation with approval by the PSTB.
Resources Lack of civil engineers and delay in operational funds to allow the project team to
commence the project.

23
Stakeholder Stakeholder needs come in various forms and will delay the PMT to address from
Needs time to time.
Other Projects These are the Provincial and Local Level Governments’ roads request that may
hinder progress of the project once encountering them.
Future Rainfall patterns have been unpredictable hence will delay the project
Considerations implementation. Camping stations can be isolated and risky at time for the PMT
and Contractor.

24
6. Social and Environmental Analysis
Guide Box
A Social Analysis is undertaken to ensure that social issues arising from a proposed project
are clearly identified and accounted for in the decision making process.
Stakeholders in some areas take the responsibility to control and manage social issues. In a
project case, it is very important to identify these stakeholders and how these social issues are
managed and controlled as these social issues will have significant impact on the proposed
project.
The environmental analysis of a project assure decision makers that all relevant legislative
requirements and community concerns have been identified, considered and addressed.
The project proposal should be consistent with Government environmental policy such as
Environmental Effects Statement (EES), Environmental Impact Assessment (EIA),
Environmental Plan (EP), etc. These environmental assessments are often done so that if any
of these assessments confirm significant environmental concerns, possible options are
undertaken to address these concerns.

6.1. Social Benefits

1/2
[1 page inclusive tables]

Provided below are some examples of social benefits derived from the East West Highway
Upgrading Works;
o Local casual employment opportunities.
o Community support programs by the Contractor, Manus DoW and the MPA’s
Engineering Unit.

Table 12 – Performance Measures of Social Benefits flowing from the Project

Social Benefits Performance Measure Frequency
(%)
Increased community participation in social & 90 Occasionally
economic activities.
Increased community pride in hosting main 85 Occasionally
sporting events.
Increased participation and interest in 100 Regularly
employment opportunities in the cash crop and
livestock farming sector.
Increased community events and social 75 Monthly
entertainments as a result of the project.
Increased employment opportunities for local 25 Weekly
labor force.
Increased support of community programs and 45 Occasionally
initiatives from the project.
Development opportunities for local community. 80 Occasionally
Note: Performance measures of social benefits above are measured in percentage.

25
Table 13 – Groups receiving Social Benefits from the Project
Social Benefit

Receiving

Receiving

Receiving

Receiving

Receiving

Receiving

Receiving

Receiving

Receiving
Same list as in Table 12 –

Benefit
Group

Group

Group

Group

Group

Group

Group

Group

Group
Performance Measures of
Social Benefits flowing
from the project.

Increased community
participation in economic      
activities.

Increased community pride

in hosting main sporting       
events.

Increased participation and

interest in employment      
opportunities in the cash
crop and livestock farming
sector.

Increased community
events and social       
entertainments as a result
of the project.

Increased employment
opportunities for local        
labor force.

Increased support of
community programs and     
other initiatives from the
project.

26
 Development opportunities
for local community.      

6.2. Environmental Impacts

[1 page]
East West Highway Upgrading to Seal is on an existing graveled road. Its likely adverse
environment impacts are;

 Erosions and flooding on roads to rivers and creeks.

 Destruction of Manus unique flora and fauna.
 Destruction of insects, animals, birds and river inhabitants’ homage.
 Noise pollution.
 Destruction to springs for human consumption.
 Destruction to sago plains for human survival.

For major projects such as this will affect the natural environment, it is ideal to undertake
Environmental Impact Assessments to identify possible negative implications so that
appropriate remedial actions will be undertaken.

27
7. Economic and Financial Analysis

Guide Box
Economic and Financial Analysis are lists of all the costs that will incur in undertaking a
project and compare that with the benefits underpinning the project. Economic and
Financial Analysis is sometimes referred to as Cost Benefit Analysis (CBA).
CBA is often done to assess the viability of a project as in the following:
 Where derived benefits are greater than calculated costs of a project, the project is
said to be viable and is recommended to go ahead, and
 Where derived benefits are less than calculated costs of a project, the project is not
viable and will not be recommended.
In terms of new projects seeking funding or existing projects seeking for additional funding,
decision makers often make decisions upon the assessment of a project using the CBA
model to determine the viability of a project.

7.1. Financial Analysis

[3 pages]
In this section, list all costs that will be involved in undertaking the project (i.e., costs of
buying plant and equipments, hiring technical experts, etc). These costs must be relevant and
should be undertaken in accordance with guidelines set by the agency intending to sponsor
the project.
It should be more appropriate to include a detailed discussion of the financial analysis
calculations as an Appendix.

This project is intended to be done in two parts. One part would be the Sealing component of
the project and the other all other activities apart from the Sealing.

The Sealing component will be will be contracted whist the preparation work will be done by
DOW on day labour.

The cost analysis of this project is done per activity in unit rates. The unit rates for all
activities are outlined in the project scope.

7.2. Economic Benefits

[2 pages]
In this section, discussion should include all the sectors that will benefit from the project and
detail the potential level of these benefits.

 Education, all schools within the five LLGs on the inland of Manus will have access
to the roads facility for their travels into the main administrative and commercial
centre..
 Health, effective movements of health deliveries to the outskirts and hinterlands of the
Manus Island would be notable.
 Economic, business development at the affected project areas will be notable.

28
  Social activities by various stakeholders will increase along the project area.

8. Risk Analysis and Management

Guide Box
Project risk is an uncertain event or condition that if it occurs, has either a positive or negative
effect on the project in terms of time, costs, scope or quality. The Business/Project Case shall
be more concerned with the negative impacts as they affect the project implementation.
Project risk analysis helps to identify and analyze information about the uncertainty of the
project.
Project risk analysis helps to understand and plan for uncertainty using a comprehensive
quantitative risk analysis approach. Project risk analysis/management is the systematic
process of identifying, analyzing, and responding to project risk. Successful project risk
analysis will greatly improve the probability of the project to be successful.
Risk management refers to the process of making decisions based on an evaluation of the
factors that present a threat to delivering the project.
The Business/Project Case must identify all risks associated with the proposal, and indicate
who will be responsible to deal with those risks and also develop a risk mitigation plan as a
means to manage risk.
 Each project proposal will still involve some element of risks and uncertainty. Risks
consist of a range of factors, which may result in a proposal failing to deliver the
expected outputs and/or the outcomes may not be produced within the estimated costs
and time frame.
 In most cases, risk and uncertainty cannot be removed or ignored, but can usually be
managed. Risks should be assessed in detail and develop options and actions to
reduce or manage them.
 Where possible, risk monitoring and control action plans can be developed to manage
the risks; they should be documented and included in the project case.
To assist in identifying the various risks associated with a project proposal, the following
categories of risks should be considered;

Technical External Organizational Project Management

Technology Contractor/supplier Financial Project Planning
Quality Regulations Investment planning Implementation
Political Operations Management
Market Resources Controlling
Environment Impacts Staffing Communication
Customer
Bad weather
Change in law/policy
Demand

29
 8.1. Risk Management Process
[2 pages]
For a project to be successful, the project proponent (agency) shall be committed in
assessing and addressing the risks. These risks need to be assessed for the Business/Project
Case on an on-going and routine basis during proposal development. A risk management
planning process should also be covered as it will guide the project proponent to decide how
to approach, plan and implement the risk management activities for the project.
8.2. Risk Management Plan
[3 pages plus tables]
A risk management plan is critical as it will lay out the ways or options used to reduce the
risks to an acceptable level. The steps involved in performing a risk analysis can be broken
down into few categories:
 Identifying the risks and determine which risks might affect the project,

 Risks in this Road Upgrading project:

- Bad weather.
- Compensations.
- Materials delay.
- Mobilization delay.
- PSTB approval process delay.
- Unskilled casuals.
- Theft.
- Arson.
- Physical threats.
- Lack of public relations.
 Determine the potential impact of the risks identified.

 Potential impact risks of the project:

- Delays in project implementation due to prolonged rains.
- Customary land disputes disallowing progress of project meeting its targets.
- Contractor extends implementation due to materials delay causing variations.
- Lack of financial capacity by Contractor to mobilize.
- Underlying delay by PSTB to approve Contractor and lack of communication.
- Project is poorly constructed due to unskilled labor and lack of supervision.
- Fuel and project equipment being unnecessarily stolen and poor reporting.
- Disagreements by casuals or landowners attempting arson.
- Threats by casuals and landowners to sabotage the project.

 Develop a risk response planning which shall consist of options and actions to
address and manage the risks, and

 Risk Response Plan

- Mitigation measures to vary implement project due to unprecedented rains.
- PMT requesting Lands & other corporate stakeholders to advocate the aggrieved.
- PMT to closely liaise with the Contractor on mobilization.
- PSTB to assist the Contractor in financial management training.
- Improve communication links with PMT, PSTB & Contractor.
- Advocacies by PMT to general public including prupose of project.

30
 - PMT to tighten project rules & policies on thefts and associated disputes.
- PMT to develop a Risk Response Plan to mitigate technical deficiencies.
 Risk Monitoring and Control Plan is required for tracking the identified risks,
identifying new risks, implementing the risks response plan and evaluating their
effectiveness throughout the project development.

 Risk Monitoring & Control Plan

- PMT to facilitate the Risk Monitoring & Control Plan.

31
9. Procurement Strategy
Guide Box
Procurement Strategy talks about some of the approaches in which services or projects are
acquired. These approaches are sometimes known as Procurement Models. There could be
many Procurement Models used to acquire services and projects, however, following are
some examples:
 Construct to Design,
 Design and Construct, and
 Design, Construct and Manage.
Discussions of these models are very important to decision makers as they will be interested
on the type of approaches that the project will undertake to acquire plants and equipments,
skilled labors and other valuable resources to be used for the project.

9.1. Context
[1/2 page]
The main reason for discussing the Procurement Strategy in a Business/Project Case is to
ensure a ‘value for money’ solution to the delivery of the project. In general ‘Value for
Money’ simply means, the cost of project must be justified with associated benefits. This is
further guaranteed by the following principles:
 Cost Effective Allocation of Risks – This means that the risks involved in the project
must be allocated to groups or participating stakeholders who can be able to manage
and mitigate the risks involved.

PMT to use the Risk Monitoring & Control Plan to identify stakeholder to handle
affects risks.
 Minimize Project Life Costs – This means that the project must be of high quality and
also to be seen as a national standard, hence by minimizing the costs in the entire life
of the project.

The project will be supervised and managed by Manus DoW and MPA’s Engineering
Unit to minimize its life costs.

9.2. Compliance
[1/2 page]
Major projects worth more than K5.0m are approved for funding by the Central Supply &
Tenders Board (CSTB), while those that are above K0.5m and below K5.0m are approved
through the Provincial Supply & Tenders Board (PSTB). Small projects worth below K0.5m
are approved by the financial delegate of an agency. Big or small projects, as long as they
are funded by the Government must comply with the Financial Management (Amendment)
Act 1995.
Provide further details on additional compliance requirements if necessary, such as
Ministerial Directions, etc.

32
Furthermore, try to establish the best procurement options in this Business/Project Case and
highlight as to whether they meet the compliance requirements.

Because the asking project fund is K20 million in a break up of K5m per year for four years,
it will comply with the PSTB within the Manus Provincial Administration. The project cost
estimate will be outlined by the Manus DoW.

9.3. Sustainability of “Design and Construct” Model

[½ page plus table]
For smaller projects, there could be doubt that “Design and Construct” procurement model
will be appropriate. However, the reason why there is doubt in this model should be
explained.
The table below provides a framework for outlining these reasons and demonstrating that the
option was considered.
Table 14 – The “Design and Construct” Model Analysis
Characteristic Conclusion
Contract value at K5m Procured through Manus PSTB.
Project life – 40 years or more DNPM to fund the project and the sustenance on the durability of
the project will remain the responsibility of Manus DoW.
Measureable service outputs - This Road project will cause the general public to use the road
government requirements can system more effectively in the Province.
be expressed and measured in
output terms
Risk transfer - Projects need Minor project’s discrepancies will be obtained once the PSC and
to be structured to achieve PMT continue to advocate the beneficiaries of the project in the
optimal risk allocation. Province.
Innovation Will come in to play once the PMT sees what’s there to offer
during the project construction.
Market appetite This Road Development project will be of national standards as
the Project Manager will monitor every technical aspects.

9.4. Procurement Options

[1/2 page plus table]
Two procurement options were identified for detailed analysis. These options were:
 Construct to Design, and
 Design and Construct.

33
Table 15 – Risk retained by the proponent under procurement options
Option 1 Option 2
Risk Construct to Design (%) Design and Construct (%)
Design 100
Construction 100
Revenues
Construction(Capital)
Costs
Operating (Recurrent) 65
Costs
Time Delays 40
9.5. Option 1- Construct to Design
[1 page]

 Manus DoW to take the responsibility to build own and operate all component of the
project.
 Manus DoW is responsible for the final design of project and award contracts.
 Manus DoW to take up the responsibility for the operation and maintenance of the
project.
a) Advantages of ‘Option 1’
 Manus DoW will manage the project and ………………………………..
 Cut down on unnecessary costs by awarding contracts ………………………………
 Manus DoW takes ownership of the project.
b) Disadvantages of ‘Option 1’
 Manus DoW takes all the risks involved in the project. In such cases, projects
……………..
 As various sections of the construction components are contracted out, the final
outcome of the project ………………….
 By taking ownership of the project, Manus DoW …………….
9.6. Option 2- Design and Construct
[1 page]

 Manus DoW to design, construct and manage the project.

 Manus DoW gives away responsibility for road construction to Contractor through
bids at the PSTB.
 Manus DoW to take responsibility for the operation and maintenance of all roads
project.

34
 a) Advantages of ‘Option 2’
 Sharing of costs among development partners.
 Contracts are awarded to different local construction firm to speed up
implementation.

b) Disadvantages of ‘Option 2’
 Sharing of project costs among development partners, interested stakeholders are
sometimes unreliable.
 Give away construction works to various local contracting companies that do not have
technical and financial capabilities.

9.7. Conclusion
[1/2 page]

After analyzing the two procurement options discussed in the above example, identify which
option is the preferred option and state the reasons why?
Manus DoW prefers to take the Option to Design, Construct and Manage after weighing out
the advantages and disadvantages of the two procurement options as per the analysis
provided above.

35
10. Budget Analysis and Funding Strategy

Guide Box
A budget analysis should show how the preferred options to be considered in the funding of
services and capitals such as construction equipments, heavy machineries, etc that are going
to be used in the project. The analysis should allow decision-makers to consider the options
which will deliver the best outcomes in line with government objectives and have a
demonstrable impact on output/service delivery performance.
The budget analysis must identify the expected revenue and expenses over the projects life
cycle and the impacts the costs will have on the entire project’s life together with cash flows
for each financial year over the forward estimates period.

10.1. Funding Strategy

[1 page]
In requesting for funding, the agency has to do up a Budget Submission and has to put
together on the basis of the investment required to contribute to the Government’s targets for
the sectors as outlined in the Development Strategic Plans. The submission has to prioritize
and recognize capacity constraints in the next year and should reflect the investment
required to deliver the Government’s plan as outline in the Government’s overall long term
development plans.

10.2. Budget Analysis

[1 ½ pages plus tables]
In this section, an analysis of the budget should be prepared for any particular project as it
will allow decision makers to know exactly on how funding allocated for the project will be
expended. For an on-going project, doing a budget analysis is important because decision
makers will be much concerned on how the funds appropriated for a project will be utilized
during the course of implementing the project, also to determine whether the project will
receive funding in the progressive year especially when seeking funding from a secured loan
or donor agencies.

Table 16 – Funding Estimates and 5 Year Funding Plan

Funding Program (K’000)

Source 2014 2015 2016 2017 2018 2019 2020
Actual
Internally sourced (within the agency) 5.0 5.0 5.0 5.0
ADB Donor
Counterpart
AusAID Donor
Counterpart
World Bank Donor
Counterpart
Other Donor (pls specify) Donor
Counterpart

36
Other Donor (pls specify)Donor
Counterpart
GoPNG Additional to counterpart
funding
TOTAL 5.0 5.0 5.0 5.0 5.0

FUNDING HISTORY
Total Submission 2013 2014 2015 2016 2017 2018 2019 2020
Actual Appro
.

37
11. Public Interest Issues

Guide Box
Describe the impact of the project on the eight (8) elements of public interest. They should be
discussed in answering the following questions:
 Effectiveness - Is the project meeting the desired government policy objectives?
 Accountability and Transparency – Is the project complied with the Financial
Management (Amended) Act, 1995?
 Affected Individuals and Community – Are affected individuals and community
rights protected through fair appeals, i.e., environmental impacts, etc.?
 Equity - Is the project serving the interest of everyone in the community?
 Consumer Rights – Does the project provide sufficient safeguards for service
recipients?
 Public Access - Will the project be accessed by the public?
 Security – Does the project provide assurance that community health and safety will
be secured? and
 Privacy – Does the project provide adequate protection of users’ rights to privacy?
The public interest test is normally undertaken to ensure whether suitable measures can be
established so that these suitable measures satisfactorily protect the public interest.

11.1. Public Interest Issues

[3 pages plus tables]
In this section, it is important to highlight all public issues relating to a proposed project and
establish suitable ways on how these public issues could be settled. Decision makers always
want to know how project proponents were going to settle public interest issues as they are a
common treat to interfere in the initial project implementation stage. Special consideration
must be given on how the eight (8) elements of public interests are managed.
Table 16 – Public Interest Test Results

Public Interest Element Standard Assessment

Effectiveness Relevant policies and The project is consistent
strategies include: with a number of
Is the project effective in meeting (e.g., Medium Term government policy
government objectives? Development Plan objectives, thus meeting
(MTDP), Medium Term the needs of the people.
Meeting Manus Ring Road Development Transport Plan (MTTP),
plan and the Department of Transport’s National Transport
Sector Development objectives in PNG. Strategy (NTS), etc.
Road infrastructure plan in Manus must
be achieved by 2030. DoW Corporate National Roads
Strategic Plan 2011 – infrastructure needs.
2015, Vision 2050,
Manus Vision 2030,
MCP 2014 – 2016,
MIDP 2013 – 2017,

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 MTDP 2009 – 2013.
Accountability and Transparency Relevant policies and PMT to manage project.
responsibilities include:
Does the project arrangement ensure that: (e.g., project to comply Project Funds to be
- The community can be well informed with Finance audited by the Office of
about the obligations of government and Management (Amended) the Auditor General.
the private sector contractors? and Act, 1995.
- The Auditor-General’s responsibility to
check project funds.
Affected Individuals and Communities The list of key project Environmental damages
Have those affected been able to stakeholders identified are assessed and
contribute effectively at the planning in (section 3) and those compensated.
stages, and are their rights protected identified through the
through fair appeals processes and other extensive Risk Analysis
conflict resolution mechanisms? process (section 8)
Equity Project designed
In terms of employment opportunities considering needs for all
during the project by genders and the genders and the disabled
disabled. but managed by the PMT.
Public Access Relevant standards Where there is an
Are there safeguards that ensure ongoing include: improved road condition,
public access to essential infrastructure? (e.g., NTS allows there is an increase in the
everyone for the use of movement of people.
public transport
infrastructures, such as
roads and bridges, etc.
Consumer Rights Relevant consumer There are guarantees
Does the project provide sufficient rights standards include: where safety of these
safeguards for service recipients, (e.g., Emergency groups of people will be
particularly those for whom government crossings near schools, protected.
has a high level of duty of care, and/or the hospitals, parks, etc.)
most helpless?
Travels to schools, Road safety rules to be
School aged children, the disabled and businesses and sports emphasized.
travelling public will use the roads facilities will be
facilities more safely. convenient.

Security To ensure reduction in

Does the project provide assurance that road accidents and the
community health and safety will be Lorengau PHA drop in traffic
secured? awareness, Lorengau infringement on monthly
Town ULLG health basis.
awareness, Manus
Transport Board
The project is addressing over flooding
and dusts hence causing contaminations in
the livelihoods in Lorengau Town.

Privacy Issues of privacy

Does the project provide adequate relevant to the project
protection of users’ rights to privacy? include:

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12. Implementation and Timing

Guide Box
Decision makers will be interested in the initial implementation and timing of the project,
therefore it is necessary to include project timelines and details on how the project will be
implemented.
A number of project delivery performance measures are necessary at the project level
including those related to standards to be met such as timing issues, benefit realization and
project costing.

12.1. Organization’s Preparation for Project Delivery

[1/2 page]
Manus DoW will deliver the project using the ‘Design, Construct & Manage’ model to assess
and result in the organizational re-positioning once completed. These changes will allow the
organization to provide sufficient resources, making it possible for both supervision and
implementation functions to manage the procurement and delivery of the project under a
“Construct, Design & Manage” procurement model.

12.2. Project Supervision

[2 ½ pages plus charts]

The Project Manager in this case, Manus DoW will provide general project guidance and
approvals for the implementation and delivery of the project. The Project Manager will also
need to identify and engage consultants and local contractors, manage tender processes,
appoint approved suppliers, make decisions in respect of the project outcomes and generally
represent the project funder. The Project Manager will implement a project monitoring
process applying the following principles:
- Transparency – Transparent reporting on the project in achieving favorable technical
outcomes;
- Accountability:
 Internal –This include roles and responsibilities undertaken in project planning,
risk management and identification and review of progress against performance
measures; and
 External – regular reporting on the progress of the project will been undertaken
through the project funder’s reporting arrangements;
- Risk Management – Risk analysis and management for this project has been
undertaken and included in Section 9 of this Project Case. Other risk management
strategies will include: regular reviews of project timelines and ongoing risk
identification and management, reporting and monitoring, performance management,
appraisal, client/stakeholder monitoring and separation of duties;
- Sustainability – Managing the continuation and arrangement of the project includes
setting clear objectives and an appropriate fair framework operating in the public
interest, establishing due process, encouraging business risk assessment, and
appointing appropriate skills to give effect to the governance regime.

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  Structures include monitoring and reporting through the quarterly corporate
planning process, incorporating risk management plans, clear internal
delegations, quality control systems checks and balances, benchmarking and
performance monitoring; and
- Service Levels – Service levels for this project will be formalized and agreed between
the project funder and (consultants & local contractors where applicable)
12.3. Project Steering Committee
[1 page]

The members of the Project Steering Committee will comprise the relevant stakeholders and
Agencies where resources and advice will be sought or made available.

Members of the PSC: Provincial Administrator as Chairman, Deputy Administrator – ETS as

Deputy Chairman, PWM, Provincial Engineer, Technical Services Executive Manager,
Project Coordinator.
12.4. Project Management Team
[Less than 2 pages]

Identify Project Manager and team members, organizational affiliation, skills, etc.

Members of the PMT: PWM as Project Manager, PCE as Project Engineer, Provincial
Engineer and Project Coordinator.
12.5. Project Implementation Timetable
[1 page]

Refer to the next page for the Implementation Schedule. This project is scheduled for four
years commencing 2016 to 2019.

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Implementation Schedule

Gro
up Activity Who 2016 2017 2018 2019
No
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th
QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR QTR

1 General Clause

2 Establishment

3 Clear &Grubb

4 Earth Works

Base and Sub-Base

5
Pavement Courses

Bituminous
6
Surfacing

Drainage &
7
Drainage Structures

Road Furniture and

8
Markings

18 Erosion Protection

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 12.6. Implementation Issues
[Less than 2 pages]

The following external factors are critical to the successful implementation of the Project.
Detail some issues which you think will have an impact in the successful implementation of
the project. Also identify corrective measures to addressing these issues.

 Delay in the procurement procedure – Documentation to be prepared well in

advance
 Bad weather hindrance – Maximizing production on better working days.
 Land issues regarding local material sources – Formalizing arrangements with
more material sources.
 Traffic Movements – Making aware of work programs.
 Equipments break down – ensuring spare parts are available on site.
 Shortage of fuel supply – Formalizing fuel supply arrangement well in
advance.
 Interferences from the general public – awareness to the general public with
the support from the provincial administration.

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13. Recommendation of the Preferred Option

Guide Box
A clear recommendation is required for the preferred option, clearly outlining the reasons for
the recommendation.

13.1. Recommendation of the Preferred Option

[1/2 page]
A clear recommendation is required for the preferred option, clearly outlining the reasons
for the recommendation.

Manus DoW hereby strongly recommends that the project submission is considered through
the funding selection process as per the requested appropriated fund of K5m per annum for
four years commencing from 2016.

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14. Sign-Off

Guide Box
It is important that the primary author of the business case is identified and signs it off.
 Provide details of any review process (e.g. Commission of Enquiries, Departmental
Reviews), and
 Further signatures of Chief Financial Controller and the Departmental Secretary are
required for project cases to be considered for funding approval.

14.1. Sign-Off
[1 page]
Proponent will review the project to access whether:
 Service delivery standards have been met, and
 Project objective have been achieved and project drivers satisfied.
The Review Outcomes will be reported to Government as part of the proponent’s annual
reporting obligations.
The undersigned declare that this Business/Project Case evaluation has been carried out
carefully and is a true representation of full costs and service delivery outcomes that will be
reasonably achieved if this Project is implemented.

Action Officer :………………………………………….…...............Date: /…../….. /…..

Chief Executive Officer:……………….…………………................Date: /…. /…. /….

Chief Financial Controller/Departmental Secretary:…………………Date: /…. /…. /....

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