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We are in the process of updating the Planning and Investment Knowledge Base to reflect the new draft Investment Assessment Framework (IAF) that has been developed to help give effect to the draft Government Policy Statement on land transport (GPS) during the 2018–21 National Land Transport Programme (NLTP).

 The following Activity Class and Assessment pages have been updated, although changes may still be made to take into account any further changes that may be made to the draft GPS, and feedback from our investment partners that we have received on the draft IAF.

  • Public Transport, Rapid Transit and Transitional Rail
  • Road Maintenance


This section provides an overview of the processes and procedures in the Investment Assessment Framework (IAF) for approved organisations and the Transport Agency to assess and prioritise business cases, programmes, plans, projects and other activities to be submitted for funding consideration.  The IAF will be used by the Transport Agency in developing the National Land Transport Programme (NLTP) and to make investment decisions during the 2018–21 NLTP.

Investment Assessment Framework

The Transport Agency uses the IAF to help give effect to the Government Policy Statement on Land Transport (external link) (GPS) and determine what proposals will be included in the NLTP.

The IAF uses a holistic process based on the Business Case Approach (BCA). Activities and programmes are developed using BCA principles before assessment with the IAF and prioritisation using two factors (results alignment and cost–benefit appraisal) to determine how well they meet the government’s investment strategy, defined in the GPS, and their priority for funding.

The IAF is used to support our investment partners in developing land transport activities for inclusion in their regional land transport plans (RLTP), as part of the development and delivery of the NLTP.

Investment decision making system and the investment assessment framework

Click for larger image [PNG, 82 KB]

  • Use of the BCA as a precursor to the IAF assessment to ensures a consistent input into the investment decision-making process and that investment proposals are assessed in a clear and transparent manner. The BCA and the IAF are clearly linked through the assessment of the business case, which seeks evidence of applied critical thinking required for a robust investment proposal.
  • The Results alignment assessment rates the degree of alignment with the results specified in the GPS, focuses on customer levels service as an outcome, provides a focus on taking an integrated approach to target the right results in the right places, and now includes a Very High rating option reserved for specific results that are deemed necessary by the government to deliver on the investment strategy of the GPS.
  • Cost–benefit appraisal considers how well the proposed solution maximises the value of what is produced from the resources used, and the timeliness of intervention. Assessment of improvement activities uses the benefit–cost ratio as the default approach, although variations may be used in certain circumstances. Cost-effectiveness and performance comparisons are used for road maintenance and public transport programmes. Cost–benefit appraisal includes a very high rating for improvement proposal benefit–cost ratios above 10.
  • A programme support component for assessing urgency to address the problem in the timeframes of the GPS.

The diagram below shows the main features within the investment decision-making process:

Investment decision-making process

The Transport Agency provides a number of tools that support activity and programme assessment, such as the Economic evaluation manual. Application of these tools will assist the Transport Agency and the sector to achieve the desired GPS outcomes, as well as demonstrating strategic thinking, good process, and efficient allocation of resources and effort to ensure good value for money.

Value for money

The Transport Agency uses the IAF to help it achieve value for money in selecting the right investments, as it:

  • assesses the contribution that programmes and activities make against the results sought by the GPS and wider purpose of the Land Transport Management Act 2003
  • provides a consistent means of comparing and prioritising land transport activities based on their relative contributions to results
  • takes into account the potential offering of proposed activities and considers the benefits and costs of solutions in a balanced way.

Requirement to use the IAF

The Transport Agency requires all Approved Organisations and Transport Agency groups to use the IAF to assess activities and combinations of activities they propose for inclusion in the NLTP.

Regional transport committees (RTCs) may choose to prioritise the activities in their regional land transport plans (RLTPs) in any way they may determine. RTCs are encouraged to use the IAF to prioritise activities proposed for NLTF funding in their RLTPs, as this provides greater consistency with GPS results.

RLTPs are also required to include all other regionally significant expenditure on land transport activities to be funded from sources other than the NLTF. We encourage RTCs to apply the same assessment to these other activities to assist in the overall transparency and integrated planning of all land transport activity.

Prior assessment of business cases

The Transport Agency requires all new proposals for funding from the NLTP to be supported by a business case that follows the principles of the Transport Agency’s BCA and is fit for purpose for the stage of development of the business case.

The business case will be assessed before IAF assessment. Investment proposals are expected to get a pass or to undertake a rework to achieve a pass (or a combination of pass and rework by negotiation), before a proposal progresses to the IAF assessment. In the case of continuous programmes, proposals requiring rework may proceed provided an agreed time-bound action plan is established by the investment partner (in this context, either an approved organisation or the Transport Agency) to address the question requirements that will ultimately lead to achieving a pass assessment.

Benefit capture and reporting

For the 2018–21 NLTP on onwards, the Transport Agency is improving the links between the BCA principle of investing for benefits and NLTP benefit capture and reporting. Investment partners must provide information on the benefits and performance measures that they are investing in and this is to be captured and reported at a regional and national level. The choice of benefits to report is linked to the results alignment by considering how the benefits will target a customer level of service gap for an outcome and a journey.