Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

ESTABLISHING A PROGRAMME MANAGEMENTSYSTEM FOR THE CATO MANOR DEVELOPMENT

PROJECT

Ezio GoriProject Management and Development Consultant

1 The Snicket, off Florida Road, Morningside, Durban, 4001Telephone : +27 (31) 312 5508, Fax : +27 (31) 312 2856,Mobile : 083 300 2385, E-mail : whatabuz@iafrica.com

Abstract :- The implementation of the Cato Manor Development Project (CMDP), an RDP Presidential LeadProject valued at approximately R3,5bn in constant prices, requires a dedicated Programme ManagementSystem (PMS) to monitor and evaluate development progress. The primary function of the PMS being totranslate the physical and institutional dimensions of the development into a time and cost monitoring andevaluation framework. Furthermore, since the CMDP is located within the Durban Metro Council (DMC),the PMS has to harness and\or re-orientate existing government management systems instead of imposing acompletely new PMS. This paper provides an insight into how the PMS was established by the Cato ManorDevelopment Association (CMDA), the organisation tasked with overall programme management of thedevelopment of the CMDP.

Keywords :- Cato Manor Development Project (CMDP), Cato Manor Development Association (CMDA),Programme Management System (PMS), monitoring and evaluation, project cycle, chart of accounts andprogress reporting.

1. INTRODUCTION

This paper is written in order to provide an insight into how the PMS for the CMDP was established by theCMDA and how the principles of this PMS can be used for similar developments. The writer and architectof the PMS, was employed as a consultant by CMDA and held the position of Programme and BudgetManager during the early years of the organisation. The PMS was established through consultation with manyofficials from both provincial and local (DMC) government. Although some time has passed since the PMSwas established, it is felt that the writing of this paper will assist the establishment of similar systems for otherdevelopment projects. Furthermore, it is hoped that the efforts required to establish and refine such embryonicsystems are appreciated.

The paper initially describes the scope of the project in order to appreciate the magnitude of the wholedevelopment. Thereafter, the project cycle adopted as a standard implementation process is described beforean outline of the project structure into programmes \ projects and a chart of accounts is explained. The internalproject organisational structure and its external links are then outlined in order to understand the responsibilitiesfor project preparation and project implementation. This then leads onto the format of progress reports andcomputer systems that have been used.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

2. PROJECT SCOPE

The CMDP has been likened to the development of a town within a city and at the time of writing is the singlelargest housing development worldwide. The project covers some 2000 hectares (ha) and its epicentre is only7 kms from the Durban CBD. Various development scenarios have been modelled using Linear Programmingto test a range of development yields. The most likely development yield suggests that some 30 900 housingunits for approximately 180 000 people can be accommodated with the commensurate number of social,community and business facilities. More specifically, the application of appropriate planning standards, the180 000 population will require 36 pre-schools, 40 primary schools, 22 secondary schools, 5 technicalsecondary schools, 66 worship sites, 3 libraries, 9 community halls, 1 civic centre, 5 clinics, 1 communityhealth centre, 22 sportsfields, 3 sports complexes, 59 urban parks, 2 police stations and a large cemetery.Provision has also been made for 53 ha of commercial mixed use, 28 ha of office accommodation and 29 haof light industrial development.

Linking these facilities internally, and externally to the surrounding urban fabric, is a transportation systemcomprising activity corridors, arterial roads, secondary and tertiary roads. There is also a wide range ofcapacity building and training programmes that have been devised to run in conjunction with the capital deliverytype projects. Furthermore, institutional programmes such as, spatial planning, land assembly and programmemanagement, all lead the capital delivery projects.

Funding for the project is derived from many sources. The RDP and EU (European Union) have madesubstantial grants to kick-start the development, with the remainder of public funds to be provided by theDMC and various provincial government departments, such as, Housing, Education and Transport. The totalproject value in constant prices is approximately R3,5bn, made up of R1,3bn public and R2,2bn private sectorfunding, respectively. The public sector being responsible for the basic infrastructure, housing subsidies, socialand community facilities, and the initial planning and programme management. To date some 300 public sectorfunded capital delivery projects have been conceived. The private sector contribution is expected in termsof commercial developments of business premises and light industrial estates, and home loans.

3. THE PROJECT CYCLE

In order to initiate and control the various stages of a project, a uniform project cycle with accompanyingresponsibilities, has been adopted, as shown in Table 1. The link between Planning and Implementation tasksis determined through the sub-tasks, Project Concept, Project Feasibility and Project Brief. The content ofthe three latter sub-tasks have been standardised in order to facilitate their preparation and approval.

CMDA is ultimately responsible for approving all facets of the Planning tasks and leads this process throughthe preparation of the Project Concept, which in turn is a brief to a consultant or service provider for thepreparation of the Feasibility Study. The approach recommended by the Feasibility Study then becomes theProject Brief for the Implementation of the project, at which point the CMDA hands over the leadership ofthe project to the local \ provincial government department and\or a consultant or service provider.

Needless to say, as the project moves into implementation, a more detailed construction \ works supplyprogramme will be prepared for monitoring and evaluation purposes.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Table 1 - The Project Cycle

Task Action

PlanningProject Concept

Project IDPrepare project concept documentConcept approval

Project FeasibilityAppoint service provider for feasibility studyFeasibility studyApprove feasibility study

Project PackagingPrepare project briefApprove briefAppoint service provider

ImplementationDesign & Documentation

Preliminary designPreliminary design approvalsDetailed designDetailed design approvalTender documentationApprove tender estimate

Tender ProcurementTender periodPrepare tender reportTender Board adjudicationEXCO approvalAward contractPre-contract period

Construction \ Works SupplyConstruction \ Works supply - detailedprogramme

CMDA : FPUCMDA : PUCMDA : CEO

Implementation AgencyService ProviderCMDA : CEO

CMDA : PUImplementation AgencyImplementation Agency

Service ProviderImplementation AgencyService ProviderImplementation AgencyService ProviderCMDA : PU

Service ProviderTender BoardEXCOService Provider

Service Provider

4. PROJECT STRUCTURING

The wide range of projects have been clustered into compatible programmes, as shown in Table 2. The first8 programmes are all capital delivery orientated, whilst the balance account for the Overall Co-ordination andManagement Systems.

This programme structure also provided ideas for a project numbering system that was developedsimultaneously with the Project Chart of Accounts. More specifically, the first digit (alpha) indicates theprogramme, the second digit (alpha) the sub-programme, and the third and fourth digits (numerical) the projectnumber starting with 01.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Table 2 - Project Structure

Programme \ Sub-Programme Examples - Project Number \ Project Name

A. Transportation ProgrammeAA Arterial RoadsAB Public Transportation SystemB Housing ProgrammeBA In-Situ ProjectsBB Incremental ProjectsBC Bond Financed ProjectsC Educational Facilities ProgrammeCA Pre-SchoolsCB Primary SchoolsCC Secondary SchoolsD Social Facilities ProgrammeDA LibrariesDB Community HallsDC Civic CentreDD SportsfieldsE Health Facilities ProgrammeEA Community Health CentreEB ClinicsF Bulk Engineering InfrastructureFA Access RoadsFD Stormwater DrainageG Environmental Conservation and ParksH Economic Development Programme

AA02 - Bellair Road Upgrade ProjectAB01 - Public Transportation Terminal

BA01 - Cato Crest Upgrade Project Phase 1BB01 - Wiggins Fast Track ProjectBA01 - Chesterville Bond Finance Phase 1

CA01 - Cato Crest Pre-SchoolsCB01 - Primary School No.1 - Cato CrestCB02 - Secondary School No.2 - Wiggins

CA01 - Library No.1 - Cato CrestCB02 - Community Hall No.2 - Wiggins

DD02 - Sportsfield No.2 - Wiggins

EA01 - Community Health CentreEB01 - Clinic No.1 - Bellair Road

FA06 - Cato Crest FootbridgesFD05 - Umkumbaan-Booth Road Culvert

5. PROJECT ACCOUNTING

Much time was spent in consulting with Service Units of the DMC, such as, Physical Environment, Water andWaste, Electricity and Corporate (Treasury Department), in order to devise an appropriate Chart of Accountsfor the project. It transpired that each Service Unit had a unique financial management system which wascollated by an overall financial system controlled by the Treasury Department. Furthermore, the digital costcoding of expenditure items varied amongst financial management systems. At this point, it is worth noting theobjectives of the RDP and CMDA in harnessing existing management systems of local \ provincial governmentinstead of initiating new ones.

Ultimately, the limitations of the financial management system of Physical Environment Service Unit was usedto formulate the Chart of Accounts the since this unit is responsible for the majority of the DMC expenditureon the CMDP. The financial management system of Physical Environment Service Unit has scope for an eightdigit cost code. This code was rearranged so that four digits are used for the project numbering system, threefor the accounting code and one for the funding source. The accounting code in turn comprises of cost centresand related cost items. The level of detail in cost items being as practical as necessary. For example, costitems for construction work is related to the sub-sections of a bill of quantities. The extent of the accountingand funding codes are illustrated in Table 3.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Table 3 - Accounting Codes

Examples - Cost Centre \ Cost Item

A Professional WorkA01 Architectural FeesA03 Construction ManagementA06 Civil Engineering DesignA13 Project Management

B Construction WorkB01 Bulk EarthworksB04 CulvertsB10 Preliminary & General ItemsB14 Roadworks

C Building WorksC02 Alterations & DemolitionsC07 MasonryC09 Roof Coverings

D Housing ResidualE SiteworksF Site Connections

The cost code for any item of expenditure therefore comprises the project number, which also indicates theprogramme and sub-programme; the accounting code showing the cost centre and cost item; and, the fundingcode, as shown in Table 4.

Table 4 - Cost Coding

Project \ Invoice Type \ Funding Source Examples - Cost Coding

Cato Crest Upgrade Phase 1 \ Project Management Fee \ PHDBPrimary School No.1 - Cato Crest \ Architectural Fees \ EUClinic No.1 - Bellair Road \ Roof Covering \ DMCUmkumbaan-Booth Road Culvert \ Earthworks \ RDP

BA01 - A13PCB01 - A01EEB01 - C09DFD05- B01R

It is interesting to note that Physical Environment Service Unit did not use its 8 digit cost code in any structuredmanner prior to discussions with CMDA. This may have assisted in structuring a Chart of Accounts for otherdevelopments within the DMC. This form of cost coding allows the comparison of cost centres and\or costitems between projects, as well as amongst programmes. For example, a comparison can be made of projectmanagement fees amongst housing projects within a sub-programme, amongst sub-programmes within thehousing programme, and amongst all programmes.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Figure 1 - Organisational Structure

6. PROJECT ORGANISATION

The internal organisational structure of CMDA has been subject to several changes to accommodate particularexpertise of individual staff, changes in staff, and a response to the external environment. Nonetheless,throughout these changes, CMDA has been governed by a Board of Directors drawn from local and provincialgovernment politicians and senior officials, and, community and business representatives.

One of the more solid and better understood internal organisational structures of the CMDA was one whichcomprised three units, namely, Forward Planning, Projects and Corporate Services, all reporting to the CEO,as shown in Figure 1. Also reporting to the CEO, but interacting with all units, was the Programme andBudget Manager. The Forward Planning Unit included the functions of Spatial Planning and GeographicalInformation Systems, Land Assembly, and Capacity Building and Training. The Projects Unit was responsiblefor project implementation of capital delivery projects whilst Corporate Services Unit provided the financialservices, communications, public relations and secretarial functions. The Projects Unit in turn was responsiblefor various capital delivery programmes, such as, transportation, housing, educational facilities, social andcommunity facilities, bulk engineering infrastructure, environmental conservation and parks, and local economicdevelopment.

Other internal organisational structure models which the CMDA considered, and even tested, were those ofco-ordinating development according to planning precincts as apposed to capital delivery programmes.However, this model was found to occupy too much time of senior staff and officials and was abandoned.

Externally, the CMDA interacts at both technical and political level. At a technical level, the CMDA interactswith senior functional managers of the DMC and provincial government departments, whilst at a political level,the CMDA reported to a Provincial Special Presidential Projects Committee (PSPPC) comprising politiciansand very senior officials from provincial and local government. Initially, the PSPPC was headed by provincialgovernment which through time, handed over key responsibility to local government structures, the DMC.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Figure 2 - The Development Management System

The CMDA regularly postulates its future role and timing of vesting the management of the overalldevelopment within the DMC. This uncertainty has resulted in the CMDA often being under resourced interms of senior management capacity and several key posts within CMDA are not filled or else headed byseconded or part-time consultants.

7. PROJECT PREPARATION AND PROJECT IMPLEMENTATION

The development is driven through the implementation of the project cycle for each project. However, beforeeach project cycle is initiated, the project fundamentals need to be achieved. Furthermore, the timing of theproject fundamentals are determined by the project cycles. This situation is likened to the proverbial “whichcame first, the chicken or the egg”. In order to explain this anomaly, reference is made to the DevelopmentManagement System as shown in Figure 2.

The Development Management System illustrates how the spatial arrangement of projects, and the timingthereof, is arranged in a long term time schedule called the Implementation Strategy Plan. The ImplementationStrategy Plan is how the CMDA envisages the development to occur over time and basically schedules allproject cycles over an 8-year period. This 8-year period was initially estimated to be a feasible developmentperiod given the expected annual funding contributions to be made by various government agencies. Thisdevelopment period has in all likelihood been extended due to the slower than expected rate ofimplementation, the economic downturn and consequential limitation of government funding.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

The Implementation Strategy Plan effectively establishes the long term implementation base line which indicatesthe budget distributions required from various funding organisations. However, the Implementation StrategyPlan cannot be taken for granted and requires a constant reminder to funding organisations to commit fundingto the project. Only once such funds have been secured, is the Annual Work Programme and baseline foreach project cycle confirmed and project performance monitored accordingly.

The securement of funds is only one of the project fundamentals that needs to be confirmed before the projectcycle can be launched. The other project fundamentals being the spatial planning approval, availability of land,and a basic project screening. Furthermore, the spatial planning approval requires a project to be locatedwithin an approved precinct plan, and, in an appropriate context in relation to other adjacent sites.

The mechanisms for securing the project fundamentals lie with the CMDA’s interaction with the technicalcommittees of the provincial government and DMC. The latter interface occurs through the Planning ApprovalCommittee, whilst the Project Approval Committee deals with interim project approvals during theimplementation of the project cycle. This implies that although the project cycles are used to determine theImplementation Strategy Plan, the forward link is the preparation of the project fundamentals. This linkprovides the working link between the Forward Planning Unit and Projects Unit within CMDA. In otherwords, the Forward Planning Unit is responsible for securing the project fundamentals through the workingsof the Planning Approval Committee in respect of DMC projects, whilst the Projects Unit is responsible forimplementing the project cycle through the workings of the Project Approval Committee for DMC projects.With respect to provincial government funded projects, such as those from the departments of Housing,Education, Transport and Policing, the CMDA interacts with the Provincial Technical Committee.

Another way of explaining the above interactions is that the CMDA’s Forward Planning Unit is responsiblefor securing project fundamentals according to the Implementation Strategy Plan, whilst the Projects Unit isresponsible for the implementation of projects according to the Annual Work Programme. This situationallows a review of progress of both the Annual Work Programme and the Implementation Strategy Plan.

8. PROGRESS REPORTING

Progress was initially based on monitoring and evaluating the Annual Work Programmes. A 5-yearImplementation Strategy Plan was prepared during the early days of the CMDA but the objectives of this planwere too optimistic and not monitored. However, it was soon discovered that even the early Annual WorkProgrammes were too optimistic since it was assumed that the project fundamentals would “fall” into placeas soon as the project cycle was implemented, or, that the project fundamentals would be resolved during thecourse of implementing the project cycle.

These factors caused some internal tension within the CMDA as to progress accountability and were onlyresolved when the efforts in securing the project fundamentals were more fully appreciated. The progressreporting eventually evolved to monitor and evaluate progress of the Project Preparation Programme and theProject Implementation Programme, with the former being the responsibility of the Forward Planning Unit andthe latter the Projects Unit, respectively. This system ensures that a project remains on the Project PreparationProgramme until all the project fundamentals are resolved before it reverts to the Project ImplementationProgramme.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Figure 3 - Programme interaction and reporting

However, this form of progress reporting was improved with the incorporation of the programmes within theOverall Co-ordination and Support Systems, now referred to as the Enabling Environment Programme.Recapping, the latter included the spatial planning and GIS, land assembly and capacity building and training,and communications programmes. This completed the picture for progress reporting on the wholedevelopment project. An illustration of the interaction amongst the Enabling Environment, Project PreparationProgramme and the Project Implementation Programme, is shown in Figure 3.

A hierarchy of progress reports are prepared on a monthly basis. The progress report includes a report onthe Enabling Environment Programme, the Project Preparation Programme, the Project ImplementationProgramme, and the Financial Expenditure Report.

9. COMPUTER SYSTEMS

The computer software used for the above reporting includes Quattro Pro (QPRO), Project Scheduler 6 or7 (PS6/7) and ACCPAC 2000. The selection of these software packages was done with the intention ofcreating an integrated information system. For instance, PS6/7 is the software used to prepare the projectcycles and consequential baseline schedules, resource distributions, and monthly time reporting. Furthermore,the strength of PS6/7 is its ability in grouping projects within programmes, and, its ability to summarise theoverall development into the various tasks \ sub-tasks of the project cycle.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

The intention of ACCPAC 2000 was to cater for the cost codes developed for the Chart of Accounts andfinancial reporting capabilities. Initially, data from Physical Environment Service Unit was downloadedelectronically into the ACCPAC system and reports produced as per the Chart of Accounts structure.Unfortunately, this financial data was hardly used by management for analytical purposes. Instead, the bottomline expenditure was used as the primary source of gauging development progress. Nonetheless, the Chartof Accounts structure remains in place for discerning managers.

The possibility of linking ACCPAC 2000 to PS6/7 were also explored but never implemented. However,the opportunity exists to link these two systems in order to link time and cost reporting into one system.

The function of QPRO became useful for illustrative progress charts in respect of the Project PreparationProgramme and the Project Implementation Programme, as shown in Schedules 1 and 2, respectively. Theseillustrative progress reports provide a good assessment of development progress. Furthermore, they alsoshow the monthly progress movement in grey shading.

10. SUMMARY

The establishment of the PMS for the CMDP considered a variety of factors, namely, the project dimensions,institutional arrangements, organisational structure, project cycle, project numbering, chart of accounts, shortand long term planning horizons, project packaging, monitoring and evaluation, reporting formats and computersystems. Furthermore, the PMS was established with consideration to existing operating systems within theDMC.

The PMS has been established on a sound platform and with a solid framework for analytical assessment.This framework also allows the PMS to continually improve the quality of reporting. In fact, during its earlydays, the PMS was continually improved to cater for a growing demand of information regarding projectimplementation status at various levels of the management hierarchy.

Having outlined the above inter-related factors considered in the establishment of the PMS for the CMDP,it is hoped that the management systems required for similar large projects are appreciated and notoverlooked. The experience learnt from establishing and maintaining the PMS, is that dedicated people arerequired to operate such as system. Furthermore, the co-operation of key people is paramount to ensure thataccurate information is captured timeously, analysed and incorporated into project reports.

The author is extremely grateful to the CMDA, as well as officials of the DMC and KwaZulu Natal ProvincialGovernment, for the support and opportunity to formulate, test and initiate the PMS.

Lastly, readers are invited to visit the CMDA web page at www.cmda.org.za. This web page incorporatesa progress update of the Project Implementation Programme based on the project cycle described above.

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Schedule 1

Project Management Institute South Africa (PMISA)‘Regional African Project Management’South Africa, 3 – 5 November 1999Edited Conference PresentationsDocument Transformation Technologies

Schedule 2

• Programme Management• Project Packaging• Development Business Planning• Housing Developments• Labour Based Construction• Development Facilitation• Change Management

PROJECT MANAGEMENT & DEVELOPMENT CONSULTANTEzio Gori • M.Sc. Construction Management • MSAIB

1 The Snicket • off Florida Road • Morningside • Durban • 4001 • South AfricaCell 083 300 2385 • Tel +27 (31) 312 5508 • Fax +27 (31) 312 2856 • E-mail whatabuz@iafrica.com

SUMMARY CURRICULUM VITAEWork Experience :

(1994 ... Present) : Project Management and Development Consultant to the Cato Manor DevelopmentAssociation (CMDA), Scott Wilson (SW), De Leuw Cather (DLC) and Land Data Services (LDS). Work forCMDA has been in respect of development programming and budgeting, and including the preparation ofprogrammes, budgets, business plans; and, modelling of development scenarios, funding allocations, projectincome and recurrent expenditure. Work for DLC involved integrated development planning and programmemanagement services for the Greater Port Shepstone - KwaNdwalane RDP Urban Renewal Programme. Workfor SW involves programming, budgeting, development modelling and strategic advice to their portfolio of informalsettlements projects. Work for LDS includes development and project management for a range of tenure upgradeand housing projects. Provided proposals for a decision-making framework and a progress monitoring, evaluationand control system for the Durban Spatial Development Initiatives for Mr. G. Seneque. Lectured modules in aHousing Management and Development Workshop series and the Local Government Management andDevelopment Programme organised by Professor P.S. Reddy from University of Durban-Westville. Also servingas Trustee of the Richmond Farm Community Development Trust. Have published a paper in and refereedpapers for, “Construction Management and Economics”, an international journal published by E & FN Spon.

(1993 to 1994) : Programme/Budget Co-ordinator for the Urban Foundation's Informal Settlements Unit onthe Besters Camp In-Situ Upgrade Project (R68m). The position also included the construction administrationof the labour intensive operation and training of local emergent contractors.

(1992) : Full-time masters student in the Department of Property Development and Construction Economicsat the University of Natal, Durban. Received an M.Sc. degree for a thesis entitled "The Application of LinearProgramming in Urban and Regional Planning" in 1994. Also part-time consultant to SW undertaking variousfeasibility studies on large urban development projects, such as, Cato Manor, Lower Langefontein andWelbedagt.

(1988 to 1991) : Project Manager - Scott Wilson, incorporating Horne Glasson Partners, a firm of multi-disciplinary consultants in engineering, town planning, urban design and project management, Durban. Workentailed the project\construction management and feasibility studies of large housing developments. Co-initiatedthe Project Management Division at SW in 1991.

References :Mr. C. Forster - CEO CMDA, F (031) 261 6640Mr. M. Wright - Partner : Scott Wilson, F (031) 566 2201Mr. J. Simmons - Director : DeLeuw Cather, F (031) 207 5550Mr. G. Seneque - Town Planner, F (031) 207 3983Mr U. Bleibaum - Project Management Consultant, F (021) 786 1028Mr. D.Batte - RDP Programme Manager, Department of Local Government & Housing, KZN,F (0331) 953083Professor P.S. Reddy - University of Durban-Westville, F (031) 204 4578Professor D. Smit - Executive Director, Durban Metro Housing Unit, F (031) 365 3311Mr. R. Burnett - Partner LDS, F (0331) 461 666