Planning & Investment Knowledge Base

The Business Case Approach and the Assessment Framework


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


One of the tools the NZTA uses to provide planning and investment signals is through its support of Programme and Indicative Business Cases.


NZTA support of Programme Business Cases and Indicative Business Cases is generally targeted to complex integrated planning issues and large improvement activities.  Small improvement activities generally will be developed through an Activity Management Programme Business Case, which the NZTA intends to support.     


The benefits of support  

NZTA support gives Approved Organisations and the NZTA:

  • 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 NZTA to seek investment to further develop the activities further through the business case process.


The process gives the NZTA(planning & investment):

  • An early view of transport proposals, their fit to the NZTA 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).


Assessment Framework for Programme Business Cases and Indicative Business Cases

The NZTA Assessment Framework is used to assess Programme and Indicative Business Cases for support and the Detailed Business Case for investment approval. The assessment profile is progressively developed through the business case process and is confirmed in full at the detailed business case. 


Business Case Stages

Strategic Fit Assessment

Effectiveness Assessment

Efficiency Assessment

  1. 1.   Strategic Case


Indicative (conditional where appropriate)

Not applicable

  1. 2.   Programme Business Case


Indicative (conditional where appropriate)

Indicative (conditional where appropriate)

  1. 3.   Indicative Business Case

Reconfirmed (continued alignment)


Indicative (conditional where appropriate)

  1. 4.   Detailed Business Case

Re-confirmed (continued alignment)

Re-confirmed (continued alignment)




Indicative strategic fit and effectiveness for Strategic Case

The NZTA (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 NZTA investment direction. 


Support for Programme Business Cases

Support for a Programme Business Case would enable activities within the business case to progress to the Indicative Business Case phase. 


A full assessment profile will be determined by the NZTA (planning & investment), including the indicative economic efficiency of the Programme Business Case, before activities within the case proceed to the Indicative Business Case phase.  The economic efficiency 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 NZTA (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. 


NZTA (planning & investment) support for the Programme Business Case does not commit the NZTA 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 will be required before proceeding to the detailed business case, confirming the strategic fit and effectiveness factors. An assessment of economic efficiency will be undertaken by the NZTA (planning & investment) based on development of the activity efficiency. Refinement of the programme efficiency should occur as the activities are confirmed and developed.


NZTA support for the Indicative Business Case does not commit the NZTA to investing in the activities within the case.  


Support for Activity Management Programme Business Case

The NZTA intends to support an Activity Management Programme Business Case to provide Approved Organisations and the NZTA (state highways) with confidence that small, less complex and routine activities contained within the Activity Management Plan align with the NZTA 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 NZTA (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.


A full assessment profile will be determined by the NZTA (planning & investment) before the activity proceeds to the implementation phase.


Approval of the detailed business case and NZTA 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 NZTA investment threshold.


Support in part

The NZTA may not support a programme business case or indicative business case in its entirety.  There may be elements that the NZTA 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.  


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


Currency of the NZTA support 

Although the NZTA will endeavour to provide long term certainty to investment partners, the NZTA 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 NZTA policy that mean the grounds for the NZTA 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. 


NZTA support does not guarantee funding

NZTA 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 NZTA 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 cannot be generated with a robust degree of certainty. As the activity is developed, the assessment profile will be refined and this may impact NZTA 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 NZTA has a constrained budget which is affected by economic changes. National prioritisation is required to maximise outcomes from this investment.





Last Updated: 03/11/2015 7:56pm