Proxy Modelling

Analytical Steps

Step 1: Understand the Proposed Project –What is • Scope - the extent to which it tackles a specific purpose. • the extent individuals might benefit from services, different regions covered,

or issues dealt with as part of the project

• Lifecycle-successive stages the project passes through,• such as the design, build and operation stages of the project. It is important that all stages in the Lifecycle of the project are costed

• Scale-set of amounts that measure the size of the project.• Context in which the project is being implemented• incorporate any extraneous variables that would have an impact on the

costing. For example, political considerations

Step 2: Comparative Analysis & Methodology• Identify key characteristics based on an analysis of the purpose,

scope, lifecycle, scale and context of the projectb) Analyze Political Processes- Environment assessment required?c)Identify Key Variables•These vary from one infrastructure type to another

d) Develop Comparative jurisdictions- ensure its apple to apple- •Similar infrastructure-lifecycle, width if a road, type, •Use and Purpose-volume & type of traffic•Geography & climate-topograpgy

Ideal number of Jurisdictions is 6-7 but 3-4 is enough

STEP 2: Comparative Methodology continuedINFRASTRUCTURE TYPE KEY VARIABLES

Road Width, Length, Durability, type of road( Engineering specifications are good source) ; risk(Modality & Cost/financing); Fixed vs. Variable costs

Communications Towers, Number of Users, lifecycle, end user devices

Energy To be created by GN-PBO Group

Ports To be created by GN-PBO Group

Rail To be created by GN-PBO Group

Bridges To be created by GN-PBO Group

Sewers To be created by GN-PBO Group

Education e.g. schools To be created by GN-PBO Group

Health e.g. hospitals To be created by GN-PBO Group

Defense To be created by GN-PBO Group

Step 3: Cost Buckets(Categories of Data)• Capital Expenditure

Expenditures that will go beyond the immediate year (e.g. plant, property and equipment), ..• Operating + Maintenance costs

costs to keep and run the project

Step 4: Data Collection• Scenario 1: No time• Raise good & useful questions for Parliamentarians e.g lifecycle costs,

• Scenario 2: Some time- Data Sources include• Domestic data based on similar projects • Look in GN-PBO

• epbo blasts• Good Practices for data reference- include a cover sheet to define the terms and

references( if agreeable, need volunteers to create a template)• Checklist of Data Sources ( if agreeable, need volunteers to create a template by

probably)

Step 5:Normalize the Data • Same currency in real terms (select a base year)• Identify specifications and break down costs accordingly (e.g. per

metre, per kilometer, per user etc.) • Identify Quantities (e.g. number of users, traffic volume, etc.)

Look for unique costs and outliers and remove them

Step 6: Develop a shadow costIdentify the cost drivers- Can use CorrelationsDevelop a reasonable cost rangeEstablish if the Government`s cost is reasonable-within the range!

Step 7: Defensibility of Results• Peer Review the work -the GN-PBO community, researchers or

experts in that sector• Publish the Methodology

Feedback & Proposals for Improvement!