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Introduction

The Transport Agency's Investment Assessment Framework links to the Business Case Approach. The way the Assessment Framework is applied and the degree of commitment that the Transport Agent makes to investment in each activity reflects the type of activity (improvements, continuous programmes and regional land transport plans) and its stage of development.

Application to Improvements

Overview

The criteria in the Transport Agency's Investment Assessment Framework are used to assess improvement activities for support and investment approval. An activity's assessment profile is progressively developed through the business case process and is confirmed in full at the detailed business case stage. The point of entry and the number of cases that need to be developed will vary depending on the size, cost, complexity and risk of the proposed improvement.

Business case stage 

Strategic fit assessment

Effectiveness assessment

Benefit and cost appraisal

Degree of investment commitment at end of stage 

Strategic case

Indicative

Not applicable

Not applicable

Support case

Approve funding for next stage

Programme business case

Confirmed

Indicative (conditional where appropriate)

Indicative (conditional where appropriate)

Support case

Approve funding for next stage

Indicative business case

Reconfirmed (continued alignment)

Confirmed(conditional where appropriate)

Indicative (conditional where appropriate)

Approve funding for next stage

Detailed business case

Reconfirmed (continued alignment)

Reconfirmed (continued alignment)

Confirmed

Approve funding for next stage

Implementation     

Reconfirmed (continued alignment)

Reconfirmed (continued alignment)

Reconfirmed

 

 The benefits of support  

Support of strategic and programme business cases provides Approved Organisations and the Transport Agency with:

  • an appreciation of the scale of the problem and the benefits that should be achieved
  • an indication of the activity's alignment to the Government Policy Statement on Land Transport (GPS)
  • a reasonable degree of certainty for Approved Organisations and the Transport Agency to invest to further develop the activities through the business case process
  • an early view of transport proposals and the potential scale and timing of investments
  • the opportunity to assess the affordability of transport proposals and identify potential future funding demands.

Support of these stages does not commit the Transport Agency to investing in the programmes or activities subsequently identified to address the issues. Approval of funding for a subsequent stage in the process is a separate step which will consider the business case assessment profile, its priority relative to other cases, any changes that have occurred as a result of new information, and the availability of funding in the relevant activity class.

 

Support in part

The Transport Agency may not support a programme business case in its entirety.  There may be elements that the Transport Agency is prepared to support, and consequently assist their funding, and other elements that do not align with the GPS and which cannot be funded from the NLTF.  

If any elements are not supported these will be documented, with accompanying reasoning, in Transport Investment Online(external link) in the Transport Agency (planning & investment) assessment. 

 

Strategic case assessment and support

A strategic case must be established for all activities to be considered for investment. The strategic case will be reviewed at each investment gate. The Transport Agency will assess strategic cases for their strategic fit, once these cases  have been agreed with stakeholders.  This will indicate how well the issues identified, along with their benefits, align with the results/outcomes set out in the GPS. 

If the strategic case is not aligned with the GPS results, it will be rated Low and subsequent business cases will not be funded through the National Land Transport Fund (NLTF).

A rating of Medium or High strategic fit should enable the Transport Agency to support the strategic case, and the activity should be able to progress further through the Business Case Approach with funding from the NLTF, subject to funding availability and programme optimisation.

 

Programme business case support

Programme business cases will be assessed by the Transport Agency to confirm their strategic fit and provide indicative ratings for  effectiveness and benefit and cost appraisal. The benefit and cost measure, e.g. benefit-cost ratio, should be a range, reflecting the spread of potential benefits, costs and risks of the preferred programme(s) to achieve the benefits identified in the strategic case.

The Transport Agency will support the programme business case if:

  • the strategic fit rating is confirmed at Medium or High, 
  • the indicative effectiveness of the proposed programme in addressing the issues is rated Medium or High, and
  • the indicative benefit and cost appraisal rating is sufficient to justify ranking the programme above the activity class investment threshold.

In some situations the Transport Agency will support the direction of a programme business case but may decide not to invest in subsequent business cases. This could happen where a proposed programme does not include sufficient transport benefits, and therefore is not eligible for NLTF funding, but it does provide targeted outcomes, e.g. in land use or economic development, that support the desired shape of the transport network. 

 

Currency of the Transport Agency support

Although the Transport Agency will endeavour to provide long term certainty to its investment partners, it will need to review its support from time to time. Some of the reasons for reviewing support are: 

  • significant change in government or Transport Agency policy that means the grounds for the support have changed, or that support is no longer applicable
  • changes to the underlying assumptions, such as population growth and/or the sequencing of development, which have altered the degree to which the business case is fit for purpose and provides value for money. 

 

Support does not guarantee funding  

Transport Agency support does not mean an ongoing guarantee of funding, due to a number of factors, including:

  • changes in the GPS investment direction
  • activities no longer meet the requirements and thresholds for investment from the NLTF, including regional land transport plan inclusion
  • Approved Organisations and the Transport Agency reviewing their investment policies
  • as an activity is developed, the assessment profile will be refined and this may impact Transport Agency investment decisions for future phases.
  • implementation plans at the programme business case stage are intended to demonstrate the feasibility of a proposed programme, rather than being a definitive list of works that is locked in when the programme business case is supported.
  • hypothecated revenue into the NLTF means that the Transport Agency has a constrained budget, which is affected by changes in both global and national economic activity.

 

Subsequent Business Cases

Following its support of strategic cases, and programme business cases for significant investment proposals, the Transport Agency will assess subsequent business cases when the activities are progressed to the next investment gates, to decide whether to invest in these. Its approval of funding for subsequent cases confirms the Transport Agency's support for the assessed case, i.e. there is no formal support for business cases after the strategic case/programme business case.

Full assessment profiles are required at each business case stage, which should be refined as the activity is progressed through the business case approach.

 

Implementation funding applications

Following development of the detailed business case, the Transport Agency expects funding applications to cover the full implementation phase. The detailed business case should have been developed to a level that provides sufficient confidence to undertake all the steps involved in implementing the activity. The Transport Agency discourages the splitting of implementation into a pre-implementation phase (covering design) and full implementation phase funding applications, other than for very large, complex and high risk activities.

Application to Continuous Programmes

Overview

Continuous programmes comprise small, low risk activities, largely aimed at maintaining existing levels of service, that are delivered as ongoing programmes. Examples are road maintenance programmes and existing public transport services programmes.

The principles of the Business Case Approach apply to continuous programmes through the:

  • identification, articulation and evidence of the key issues facing the transport network covered by the programme in question
  • identification of the benefits that will be achieved by addressing the key issues
  • the performance measures that will be used to measure the effectiveness of the proposed solutions
  • consideration of options, and selection of the best value for money option(s), to address the issues taking into account funding and other constraints.

The way the Business Case Approach and Assessment Framework are applied to continuous programmes differs from improvements. Rather than a progressive development of the business case through a largely linear process, their application to the programmes is cyclic with the investment gate being the periodic funding approvals linked to development of the next NLTP. 

 

Activity Management Planning Cycle

The foundation for applying the Business Case Approach to continuous programmes is activity management planning, documented in:

  • activity management plans for (mostly roading) transport networks
  • regional public transport plans,
  • and road safety action plans.

The Activity Management Planning Cycle section provides guidance on the continuous process of updating and improving activity management planning documents.

The activity management planning document should demonstrate that the proposed programme represents value for money by doing the:

  • right thing(s)
  • in the right place
  • at the right time
  • for the right price, and
  • in the right way.

In doing so it achieves desired outcomes and benefits from addressing the key issues and/or the contextual state of play in the area covered by the plan.

Underpinning this approach is robust evidence that supports the investment proposed in the plan.

  

 Assessment and support of activity management programme business case

Transport Agency support for activity management programme business cases proposed by Approved Organisations or the Transport Agency will be based on assessment of the plan demonstrating that the programme meets the expectations of the BCA approach and its fitness for purpose, value for money and alignment to GPS results. 

Application to RLTPs

Links to NLTP assessment

The Transport Agency(planning & investment) considers the statement of regional land transport priorities and, where required, the regional priority assigned to each activity, when assessing and prioritising activities for inclusion in the NLTP. Robust application of Business Case Approach  principles to the RLTP will help to inform this process.

 

Application of the business case approach

The application of the Business Case Approach principles to Regional Land Transport Plans will assist in the:

  • identification, articulation and evidence of the key issues facing the transport network covered by the programme in question
  • identification of the benefits that will be achieved by addressing the issues
  • consideration and prioritisation of the interventions and investments proposed for inclusion in the RLTP
  • assessment as to how the programme of interventions and investments included in the RLTP will contribute to GPS results/outcomes.

 

Whole of RLTP assessment

The regional transport committee's assessment of its RLTP, required under the Land Transport Management Act, is made at a whole of RLTP level and, therefore, does not determine the individual assessment for each activity. The whole of RLTP assessment will, however, inform the assessment that the Transport Agency makes for each activity. Each activity must be submitted to the RLTP with an assessment by the activity owner.

 

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