copy the linklink copied!5. Proposed procedures for project cycle management

5.1.1. Project eligibility criteria

Clearly specifying the eligibility criteria (in terms of project types, beneficiaries and project costs that will be supported by the programme) and setting robust project appraisal criteria will make programme implementation more transparent and efficient. It will also make the programme credible for financiers – be they public or private, local or foreign.

This section describes the minimum eligibility criteria. These are “knock-out criteria”, i.e. failure to meet even one of these criteria at this stage results in rejection of the project (though the option of re-designing the project proposal could be considered). Projects that pass the eligibility assessment but lack sufficient information can be returned to the applicant with a request for clarification. Annex D contains a template of an eligibility evaluation form that can be adapted for project screening.

Eligibility criteria allow the programme to conduct an initial and simple assessment of those projects that appear to address all crucial objectives related to the CPT Programme and that can potentially qualify for financing. The criteria include the types of eligible projects, eligible costs and eligible beneficiaries (project owners) for screening individual projects that apply for public support. The purpose of eligibility criteria is to conduct an initial and simple assessment of those projects that appear to address all the objectives related to the CPT Programme and that can potentially qualify for financing. Eligibility criteria should be simple, straightforward and clearly specified.

The following groups of eligibility criteria could be used to screen projects (detailed lists should be prepared by the Ministry of Economy before the programme launch):

1. 1. Location of the project: limited to urban centres and suburban areas (Phase 1).

2. 2. Types of eligible projects:

   1. a. the project type should be identified in the list of eligible projects

   2. b. all proposed costs of the project should be possible to identify in the list of eligible costs

   3. c. replacement of buses that are more than 10 years old and equipped with below Euro 5/V engines.

3. 3. Types of eligible beneficiaries (project owners):

   1. a. private public transport operators that currently provide services in eligible urban centres (Phase 1) and suburban areas of the pilot cities or inter-city connections (Phase 2 – for a description of phases, see Section 2.3 and 2.4 above)

   2. b. municipal public transport operators that already provide services in eligible urban centres and suburban areas of the pilot cities (Phase 2)

   3. c. pilot cities’ administrative governments (for preparing the necessary studies and support investments).

4. 4. Other eligibility criteria: existing city plans for additional (support) investments to improve the city’s urban public transport system.

Also, at this stage, a list of eligible vehicle models available on the market could be prepared in order to simplify the procedure and eligibility testing. The list could be updated in the future when new models come on the market. If the type of vehicle proposed for purchase is on the approved list, the IU can proceed without contacting the Ministry of Economy. If not, the project documents, especially technical specifications (which should be delivered by beneficiaries, bus producers or importers on request) should be sent to the Ministry of Economy for evaluation. The Ministry of Economy evaluates whether the vehicle model fulfils the programme objectives – if it does it is added to the list. If it does not fulfil the objectives of the programme, the Ministry of Economy informs the IU, the beneficiary is informed. The project can be re-evaluated if the beneficiary proposes a different vehicle type.

If a project does not comply with the eligibility criteria (i.e. if it receives a “no” response to any of the questions in the eligibility assessment), it is rejected and a written explanation is sent to the applicant. The project may be re-evaluated upon modification and re-submission.

The IU should select employees to help review and evaluate projects. The employees should participate in training by the Ministry of Economy to give them the skills to evaluate whether the project meets the CPT Programme objectives and complies with the eligibility criteria.

5.1.2. Project appraisal criteria

A project that meets the eligibility criteria then needs to be appraised to assess if it is worth funding. The appraisal is also done on the basis of clearly specified and rigorous criteria. These allow programme managers to compare, rank and select the most cost-effective projects for financing. When these criteria are applied uniformly across all (similar) projects, they can also help reduce management bias in selecting individual projects for financing.

Experience shows that a well-designed appraisal system is fundamental for selecting the most cost-effective investment projects for financing with public resources (see Figure 2.10 above). All projects that pass through the eligibility screening (pre-appraisal) are then appraised and ranked according to a set of appraisal and ranking criteria listed briefly below and scored using an evaluation table (see Annex E). Projects with the highest scores would make the biggest contribution to the CPT Programme objectives and therefore should be the first to be selected for co-financing.

The following appraisal criteria are proposed to evaluate projects in this pipeline:

1. 1. Project preparation:

   1. a. prepared business plan or strategic plan for implementation of the clean public transport in the city.

2. 2. Project location:

   1. a. buses to be replaced are operating in polluted districts of the cities (list of polluted districts)

   2. b. buses to be replaced are used only in the centre of the eligible city

   3. c. buses to be replaced are used in the city centre and on the outskirts/suburbs of the eligible city

   4. d. buses to be replaced are used in the city and connecting rural areas outside the eligible city.

3. 3. Project type:

   1. a. buses have higher priority than minibuses

   2. b. compressed natural gas (CNG) buses have higher priority than liquefied petroleum gas (LPG) buses

   3. c. modern diesel buses are assigned the lowest priority.

4. 4. Project size:

   1. a. replacement of more than 20 buses

   2. b. replacement of between 10 and 20 buses

   3. c. replacement of fewer than 10 buses1.

5. 5. Proposed system of improvements of the urban public transport system in the city:

   1. a. length of new bus lanes

   2. b. number of traffic lights with priority for public transport

   3. c. number of bus stops newly equipped with online information for passengers

   4. d. number of new bus stops.

6. 6. Environmental efficiency: Cost per reduction of a unit of particulate matter – PM2.5.

The applicants submitting applications and supporting documentation for those projects that pass the cut-off level for financing are then contacted by the IU in writing to inform them that their project has been selected for financing.

5.4.1. Performance indicators

The following performance indicators could be used by the institution managing the expenditure programme:

• number of buses replaced, 15 years or older, including minibuses

• number of buses replaced, 10 years or older, including minibuses

• number of LPG-fuelled buses replacing outdated buses

• number of CNG-fuelled buses replacing outdated buses

• number of new trolleybuses

• number of model diesel-fuelled (Euro V or better) buses replacing outdated buses

• kilometres of dedicated bus lanes

• tonnes of carbon dioxide (CO₂) reduced per year

• tonnes of particulate matter – PM10 – reduced per year

• tonnes of particulate matter – PM2.5 – reduced per year.

5.4.2. Impact assessment

In contrast to the control and monitoring procedures during project implementation described above, post-implementation control and monitoring (ex-post evaluation) involves determining whether the project has met its stated objectives. This is the primary responsibility of the IU, which reports the results to the Ministry of Economy (as manager of the CPT Programme).

Since direct and immediate measurement of project outcomes in terms of air pollution reduction and fuel consumption is very difficult, only the physical outcomes of the project should be monitored, namely:

• the number of buses by engine type and whether buses are used to provide public transport services in urban centres

• verification that emission reduction equipment remains installed in diesel engines

• implementation of accompanying investments.

If the objectives have not been met, the beneficiary may have to return a part or all of the financial support provided under the programme. The contract must clearly rule on such an eventuality.

5.4.3. Maintaining a database of project and programme impacts

A final element of PCM is creating and maintaining a database of project and programme impacts. The Ministry of Economy should determine the best format for the database, such as an Excel-based system or a database software. The following parameters need to be included and maintained in the database:

Programme:

• expenditures by year for each type of project

• actual expenditures compared to those budgeted

• calculated emission reductions by year.

Projects:

• number of projects by type, by year

• physical outcomes by year: number of buses by engine type

• calculated emission reductions by year (estimated based on buses replaced)

• project cost-effectiveness: cost per unit of emission reduction.

The database should be used to inform future beneficiaries, to adjust eligibility and appraisal criteria as needed and to ensure relevance.