Over the past five years NZTA has developed their “Business Case Approach” to guide transport funding decisions. In many ways this is a good process – it requires a clear articulation of the problems you’re trying to solve, how significant they are, what the desired outcomes are (and why) and then an evaluation of possible options and alternatives. Probably the best business case for following this approach is the one Auckland Transport prepared for cycling. It goes through the justification for why cycling needs to play a greater role in meeting Auckland’s transport needs, then it goes through different ways of achieving this at a high level, then through a long-list and short-list process for where investment should be focused.

However, for other projects it often seems the business case process is incredibly drawn out and repetitious. The “Central Access Plan“, which acted at the key business case for light-rail, is 97 pages of mostly process oriented detail that struggled to cut to the heart of the issue around easily explaining when light-rail would be required and why light-rail was preferable to other modes.

Further, the current business case process seems to be targeted to very large investments (e.g. light-rail) or whole programmes that will be made up of many different projects (e.g. cycling). But it seems that the whole complicated process needs to be used for all projects, which creates a huge amount of churn for what seems to be relatively little gain. There are no less than five different stages to the process, with four business cases needed.

Example Flow Chart of Process from Cycling PBC

However, recently that has changed at least for two linked business case preparations which have gone out for tender which they are calling SSBC’s (Single Stage Business Case)

  1. Airport to Botany Mass Rapid Transit;
  2. Short-Term Airport Access Improvements;

What the SSBC looks to be doing is combining the Indicative Business Case and Detailed Business Case into one business case reducing the number of cases needed for 4 to 3. Given that indicative business cases should be pretty detailed pieces of work, this makes enormous sense and I hope to see these two phases of the process essentially merged into one going forward.

We need to do proper business cases to hash out potential issues, to make sure we are picking the best option and know what we are getting into, but let’s be honest here four business cases was always a little much.

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5 comments

  1. The “single stage business case” means that business cases now only have three stages? Sigh. 2 should be plenty.

    1. The cycling case is a really good example of why more than one case is necessary. Basically, the IBC identified the type of infrastructure that should go on the types of routes across the whole city. The PBC identified the actual routes that should have infrastructure and an approximate order. The SSBCs will get the infrastructure funding for the design and builds.

      That’s really good practice and gives AT good overall guidance on where and when to implement stuff. This will help to make it easier to get funding for every project.

  2. I see no problem with this. There are probably too many stages in the current process. What matters is that projects are developed as part of an overall strategy, and not on an ad hoc basis.

  3. The amount of effort going into a business case (and how many stages & details are needed) should be proportionate (on a sliding scale) to the total net present value of the financial cost of the project. i.e. how much money are we risking.

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