Capital Projects Appraisal Unit (CPAU)
The Capital Projects Appraisal Unit (CPAU) provides specialised analytical support to its key client, the National Treasury, for the assessment of proposed large infrastructure investments. Project appraisals of megaprojects are undertaken to determine the likely economic and financial viability of the project, particularly where financial support of one form or another is being requested from the fiscus.
CPAU also performs related types of analysis, such as the likely impact of infrastructure investments on the financial sustainability of public utilities, financial cost comparisons of different elements of proposed investment programmes, and potential funding mechanisms for infrastructure projects and programmes.
GTAC’s aim is to ensure that government has support in identifying public projects that offer the greatest value for money and contribute the most towards promoting economic growth and social welfare.
CPAU has developed in-house methodologies for assessing projects and programmes and aims to be part of developing national and global best practice in the field, including cost benefit analysis and cost-effectiveness analysis. In addition, capacity is being built to assess the range of existing and new financing mechanisms that can be utilised for different project types.
- Capital projects appraisal to determine the financial and economic viability of a proposed new infrastructure investment
- Assessment of the likely financial and economic sustainability of an infrastructure investment programme from a sectoral, corporate and national perspective
- Assessment of the likely fiscal requirement or impact of different types of infrastructure projects
- Assessment of the suitability of public or private financing mechanisms for different types of projects.
Project in the spotlight
The Capital Projects Appraisal unit assisted with the conceptualisation of the Infrastructure Fund. The Infrastructure Fund focuses on blended-finance projects, to increase private-sector investment in public infrastructure, and contribute to higher economic growth, productivity and job creation.
The public sector has already committed R100 billion to the Fund, which will be used to close funding gaps and reduce risks for private sector investment. The unit will continue to prioritise activities in infrastructure reform, given the importance of this sector to drive higher levels of economic growth and job creation to alleviate poverty.
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Budget Facility for Infrastructure:
Five technical appraisal reports were produced for Budget Facility for Infrastructure (BFI). The unit drafted updated BFI guidelines and produced a budget statement template. Twenty-five submissions were selected for detailed analysis and the unit produced reports on the findings and made recommendations based on a rigorous technical assessment process, incorporating wide stakeholder consultation.
GTAC Project Preparation Facility:
GTAC collaborated with National Treasury on the operationalisation of a GTAC Project Preparation Facility. This facility will deal with some of the challenges experienced during the infrastructure planning process, where poor planning undermines the development of coherent and credible projects.
Electric and Energy-efficient Vehicles Research report:
This report explored the trends and drivers behind the recent increases in global production and sales of electric and energy-efficient vehicles and the impact this will have on global automotive value chains and the opportunities for South Africa.
Integrated Resource Plan report:
This report analysed the policy choices made by the 2019 Integrated Resource Plan and considers whether these are consistent with other reform plans to restructure and make sustainable the electricity sector. This report meaningfully contributes to the ongoing policy dialogue in the country.
GTAC’s Knowledge Hub contains a wealth of resources that are available to people working in and with government. These resources are freely available to all key stakeholders to enhance public sector capacity and enable more effective public service delivery.