chapter  5
31 Pages

Project evaluation and resources

A variety of factors influence the selection of infrastructure projects. The contextual or macro variables such as economic, social, institutional and environmental factors reflecting the policy priorities of a country are crucial. So too are the project-specific or micro variables relating to the type of development, design choice, construction methods, location and duration of the project. Economic growth is a key factor influencing infrastructure investment, but in itself, it is an inadequate criterion for project selection as development is far more complex than that. Other important issues must be considered such as socio-cultural, environmental, institutional and political factors. Typically, social development initiatives on increasing access to education and health services for enhancing human development capacity are vital in supporting the productive sector necessary to facilitate economic growth. However, an economic programme involving the construction of large-scale factories and business parks in a particular region could put small producers and retailers out of business, affecting the livelihoods of local communities and disadvantaged individuals as unintended consequences. Social development programmes aimed at improving water supply and sanitation could increase the standard of living and at the same time alleviate serious environmental problems such as pollution, contamination and the transmission of waterborne diseases. Economic programmes to create rural employment opportunities have the potential to improve social status and empowerment, through earning higher incomes and wages. The above examples illustrate the need to take account of linkages between different contextual variables, as they are sometimes negatively or positively interrelated, in the evaluation of infrastructure projects. Project-specific or micro variables reflecting the type of development, design choice, construction methods, development size, duration and specific location of projects are also related to the contextual factors. These tend to have a more direct impact on employment, wages,

local communities, standard of living and the environment. It is the interrelationship, interaction and impact of these contextual (macro) and projectspecific (micro) variables that form the basis for developing robust criteria for the evaluation of infrastructure projects. The purpose of evaluation is to examine whether a project or programme is worthwhile from the perspectives of the project owner and where appropriate the national context with respect to certain priorities. Two levels of evaluation are often required. Macro evaluation at the national level by government planners, policy and decision makers focusing on the overall goal of a project in terms of its broad impact on economic, socio-cultural, institutional, political and environmental indicators. Micro evaluation by the project owner or sponsor will be concerned with issues relating to the project’s viability within the context of specific objectives. The project owner (whether public or private) is responsible for the implementation of the project, its use and maintenance, and at the national level, the government is responsible (whether local or central government) for the political framework within which the project will evolve. A holistic or systemic view is therefore required in evaluating a project to encapsulate both project-and national level considerations.