Investment performance measurement superseded August 2020

For further information explaining the background, including why performance information needs to be captured and how it works, please see:

• activities required to have performance measures and how it works
• framework for investment performance measurement
• list of investment performance measures to choose from.

Approved organisations and Waka Kotahi (state highways) need to provide performance measures for:

• road improvement activities with a total cost of $10m or more
• public transport improvement activities with a total cost of $4m or more
• walking and cycling improvement activities with a total cost of $4m or more
• all activities with funding contribution from the Urban Cycleways Fund (UCF).

This information is mandatory in order to receive funding approval from Waka Kotahi.

For new activities/programmes/packages under the above thresholds, Waka Kotahi has the option of selecting specific activities/programmes/packages for monitoring. In this case, the affected approved organisation or Waka Kotahi (state highways) will then be asked to provide the performance measures (if they have not already done this).

In future, a 10% sample of further activities/programmes/packages will be selected by Waka Kotahi auditors. Approved organisations and Waka Kotahi (state highways) will need to complete monitoring requirements for these activities.

There are a number of benefits to be gained for approved organisations, Waka Kotahi (state highways) and Waka Kotahi:

• Better investment decision making will provide valuable information on the effectiveness of the types of interventions we invest in and test the validity of the assumptions in the Economic evaluation manual.
• More useful reporting – in time, the feedback on activities/programmes/packages will be reported, and this may lead to changes in assumptions included in the Economic evaluation manual (based on actual performance).
• Shared learning – case studies can be used to showcase the benefits for all.
• Improved network optimisation will allow for greater recognition of the opportunity cost of different types of investment. This will give approved organisations, Waka Kotahi (state highways) and Waka Kotahi greater confidence in certain solutions, and may allow such projects to be fast-tracked.
• A formal process for best practice – including performance measures as part of the approval process will create discipline to ensure completion of the benefits realisation stage, which is part of best practice project management.

This information will allow Waka Kotahi to:

• track themes and inform decision making
• better target benefit realisation reviews
• validate assumptions in the Economic evaluation manual
• share learnings with approved organisations and Waka Kotahi (state highways).

 It will also mean that future audits or reviews can focus more on validation and will allow deeper investigation of outliers (good and poor).

Aside from the mandatory requirement to provide performance measures for new initiatives that fit the above criteria, the impact should be minimal.

Approved organisations and Waka Kotahi (state highways) using the business case approach will have been through a ‘benefits mapping’ exercise to determine the benefits that an activity is expected to deliver. Creating a benefit–cost ratio (BCR) will entail measurement and estimation of some key factors. The required performance measures are aligned with these same key factors. Approved organisations and Waka Kotahi (state highways) that use best practice will already be completing benefit realisation reviews for their projects, for accountability purposes and for their own education.

The requirements have been in effect for funding approvals since 1 July 2012.

Initially only applying to investments over or equal to $10m, for the 2015–18 NLTP the threshold for public transport, walking and cycling was lowered to $4m, and the requirement extended to include all activities with Urban Cycleways Fund contribution.

The main reasons Waka Kotahi requires this additional information are to:

• help demonstrate that we are achieving value for money with land transport investments
• enable us to learn from our investments and apply what we learn to future investments
• align our investment review process with the Waka Kotahi business case approach
• facilitate more efficient and effective post-implementation reviews by providing more comprehensive performance/benefits information.