Planning & Investment Knowledge Base

Framework for investment performance measurement

 

Introduction

This section is about the NZ Transport Agency’s approach to investment performance measurement.

 

It provides a brief overview of:

 

  • why investment performance measurement is important
  • the role of investment performance measurement in the Business Case Approach
  • the Transport Agency’s framework for investment performance measurement
  • the benefits of the framework
  • how to use it
  • where to find it
  • the research we’ve built the framework on.

 

 

Why measure investment performance ?

Investment performance measurement is important because it helps us (the Transport Agency, and our investment partners) to:

 

  • determine whether the investment has achieved its intended benefits
  • learn from this for future investment decisions
  • fulfil our respective reporting requirements
  • be accountable for the money spent on the public's behalf.

 

Role in transport planning & project delivery

Throughout all stages of the transport planning and project delivery process, it is essential to consider how performance will be measured. In particular under the business case approach, early identification of measures for the expected benefits is a key step in planning an investment.

 

Once the activity has been implemented, the measures will be used to review the performance of the investment. This will show whether the investment is a success and will help to shape future investments.

 

The performance framework

To make it easier to measure investment performance, the Transport Agency has developed a framework for investment performance measurement.

The framework is divided into 5 outcome classes:

  • network performance and capability
  • safety
  • health
  • environment
  • cost

The outcome classes are further divided into investment benefits to make it easier to select measures.

 

For further information on how the outcome classes are structured see Layers

 

This framework is populated with measures. Existing measures will be updated as more effective measures are developed or discovered. 

 

While working with the framework throughout the business case approach, it is important to also consider which Government Policy Statement (GPS A Government Policy Statement on Land Transport Funding issued under section 86 of the LTMA ) impacts the activity will contribute to, as this information is required as part of the funding application.

 

Benefits of the framework

The key benefits of the investment performance measurement framework are as follows:

 

  • it provides a structured set of measures so that users are no longer obliged to come up with their own;
  • it is politically robust, so that while strategic priorities, and therefore the investment focus, may change over time, the framework itself will remain valid, and;
  • the framework may be used throughout the entire investment process, i.e. for developing the Strategic Case, including Investment Logic and Benefits Mapping, as part of the Business Case Approach, when preparing a TIO The NZTA's web-based funding allocation system. application (together with GPS A Government Policy Statement on Land Transport Funding issued under section 86 of the LTMA impacts) and for Post Implementation Reviews.

To identify which activities require performance measures see Activities required to have performance measures.

 

How to select measures

In the early stages of business case development, as part of the problem identification and benefits mapping workshops, initial measures will be selected for each of the benefits the investment is expected to deliver. These will be included in the Strategic Case, and will need to be revisited and firmed up as the business case progresses. The process is as follows:

  1. workshop participants will identify which outcome classes are relevant for each of the expected benefits from the investment.
  2. they then identify the investment benefits to be targeted by the investment, and finally, what the appropriate measures are.
For an illustration of how this fits into the Business Case Approach process, see Selecting measures.

 

List of measures

Click here for the list of measures.

 

The research behind the framework

The Transport Agency has based the investment performance measurement framework on sound research, including international best practice.

 

Research Report 522: Blueprint for a best practice measurement indicator set and benchmarking Benchmarking is undertaken when the NZTA makes comparisons against similar regions and the national average. A lack of information supporting differences from regional and national averages may result in changes to the efficiency rating for public transport or maintenance programme or a requirement for a study as a condition of investment approval. Trends in these measures over time are used rather than just annual values. sets out this research and is available at http://nzta.govt.nz/resources/research/reports/522/index.html 

 

 

 

Last Updated: 01/09/2017 3:58pm