Support through the Business Case Approach

Introduction

The Transport Agency wishes to give clear and early planning and investment signals to provide stakeholders with investment confidence.

One of the tools the Transport Agency uses to provide planning and investment signals is through its support of Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. and Indicative Business Cases.

Support of Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Cases and Indicative Business Cases is generally targeted to complex integrated planning For the NZTA, integrated planning means leading and working with central, regional and local government, private developers and other partners such as Kiwi Rail and port companies, to bring land use planning, and transport planning and investment together, to deliver an affordable Demonstrates that adequate funding to deliver the activity, or combination of activities, is available from identified sources, e.g. a funding plan has been identified. transport system that supports a growing economy, safe and vibrant communities and a healthy environment, now and in the future. It is an approach we follow to deliver on the outcomes we seek. issues and large improvement activities.  Small improvement activities generally will be developed through an Activity Management Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case, which the Transport Agency intends to support.     

The benefits of support  

Support gives Approved Organisations and the Transport Agency:

• Acceptance of the scale of the problem and the need to address it
• An indication of the robustness of the developed business case and alignment to the current assessment framework 
• A reasonable degree of certainty for Approved Organisations and the Transport Agency to seek investment to further develop the activities further through the business case process.

The process gives the Transport Agency (planning & investment):

• An early view of transport proposals, their fit to the Transport Agency investment direction and the likely scale of investment requests
• The opportunity to assess the affordability of transport proposals and identify possible future funding demands on the National Land Transport Fund (NLTF The fund established under section 10 of the LTMA ).

Assessment Framework for Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Cases and Indicative Business Cases

The Transport Agency Investment Assessment Framework is used to assess Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. and Indicative Business Cases for support and the Detailed Business Case for investment approval. The assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. is progressively developed through the business case process and is confirmed in full at the detailed business case. 

Indicative strategic fit and effectiveness for Strategic Case

The Transport Agency (planning & investment) will provide indicative strategic fit and effectiveness ratings for the Strategic Case, following discussion with stakeholders.  This will give an initial indication whether the proposed piece of work aligns with the current Transport Agency investment direction. 

Support for Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Cases

Support for a Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case would enable activities within the business case to progress to the Indicative Business Case phase. 

A full assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. will be determined by the Transport Agency(planning & investment), including the indicative benefit and cost appraisal of the Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case, before activities within the case proceed to the Indicative Business Case phase.  The benefit and cost measure, e.g. benefit-cost ratio, at this stage should be a range, reflecting the range of potential benefits, costs, options and the effectiveness of the preferred programme to achieve the benefits.

In addition to the assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. , the Transport Agency(planning & investment) will consider the strength of the business case using the investment decision checklist, timing of the interventions and the likely affordability of the programme(s) in arriving at its decision to provide support. 

Support for the Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case does not commit the Transport Agency to investing in the programmes or activities it identifies.  

Support for Indicative Business Cases

Support for an Indicative Business Case would enable the activity to progress to the Detailed Business case phase.

A full assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. will be required before proceeding to the detailed business case, confirming the strategic fit and effectiveness factors. An assessment of the benefit and cost appraisal will be undertaken by the Transport Agency (planning & investment) based on development of the activity. Refinement of the programme benefit and cost appraisal should occur as the activities are confirmed and developed.

Support for the Indicative Business Case does not commit the Transport Agency to investing in the activities within the case.  

Support for Activity Management Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case

The Transport Agency intends to support an Activity Management Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case to provide Approved Organisations and the Agency (state highways) with confidence that small, less complex and routine activities contained within the Activity Management Plan align with the Transport Agency investment direction. 

Further information on activity management planning, and how this aligns with the business case approach will be provided to Approved Organisations and the Agency (state highway) as the process is developed.

Approval for Detailed Business Case

Approval of the Detailed Business Case enables an activity to proceed to implementation and receive funding assistance from the NLTF The fund established under section 10 of the LTMA .

A full assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. will be determined by the Transport Agency(planning & investment) before the activity proceeds to the implementation phase.

Approval of the detailed business case and Transport Agency investment in the implementation phase will be conditional on a number of factors, for example the costs after detailed design and procurement remaining within a specified range and the activity/programme meeting the Transport Agency investment threshold.

Support in part

The Transport Agency may not support a programme business case or indicative business case in its entirety.  There may be elements that the Transport Agency is prepared to support, and therefore assist their funding, and other elements that do not align with its investment direction, which normally would not be funded from the NLTF The fund established under section 10 of the LTMA .  

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

Currency of the NZTA support 

Although the Transport Agencywill endeavour to provide long term certainty to investment partners, the Transport Agency will need to review its support from time to time. Some (but not all) of the reasons for the review of support are: 

• Significant change in government or Transport Agency policy that mean 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 cases is fit for purpose and provides value for money Selecting the right things to do, implementing them in the right way, at the right time and for the right price. . 

NZTA support does not guarantee funding

Transport Agency support does not mean an ongoing guarantee of funding. Funding cannot be guaranteed due to a number of factors, for example:

• Changes in investment direction set out in the Government Policy Statement on Land Transport Funding mean that  the criteria for strategic fit can change substantially
• Activities must continue to meet the requirements for investment, including regional land transport programme inclusion
• The ability of Approved Organisations and the Transport Agency to form or review their future policy directions
• The coarseness of information early in the development of activities, particularly around economic efficiency, means that a full assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. cannot be generated with a robust degree of certainty. As the activity is developed, the assessment profile will be refined and this may impact Transport Agency investment decisions for future phases.
• Affordability issues and funding plan risks can take time to resolve and are often in an indicative state at the time programme business case support is given. Implementation plans at this level 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 means that Transport Agency has a constrained budget which is affected by economic changes. National prioritisation is required to maximise outcomes from this investment.