This page relates to the 2021-24 National Land Transport Programme.
The Investment Prioritisation Method for the 2021–24 NLTP has three factors, namely:
Each of the factors is outlined below.
GPS alignment indicates the alignment of a proposed activity or combination of activities (eg programme or package) with a Government Policy Statement on land transport (GPS) 2021 strategic priority and identifies the potential contribution to achieving the GPS strategic priority.
We (Waka Kotahi NZ Transport Agency as investor) apply a rating of very high/high/medium/low alignment, which reflects both the extent of alignment and scale of the expected contribution to a GPS strategic priority. Where an activity contributes to more than one GPS strategic priority, we assign the rating based on the highest expected contribution to a single GPS strategic priority.
Scheduling indicates the criticality or interdependency of the proposed activity or combination of activities with other activities in a programme or package or as part of a network.
Criticality and interdependency are defined as follows:
We apply a rating of high (H) /medium (M) /low (L) impact across either criticality or interdependency with other activities.
An H or M rating is often associated with being an integral part of a programme or package.
Where neither criticality nor interdependency is an issue (including any standalone activity), we will give the activity/activities a rating of L.
Efficiency indicates expected return on investment and considers the whole-of-life costs and benefits through cost–benefit analysis.
The efficiency factor looks at monetised impacts, generally using the benefit–cost ratio (BCR). We will consider other non-monetised impacts under the prioritisation factor ‘GPS alignment’, while the full range of non-monetised impacts is expected to be assessed through the Business Case Approach.
For some activities, eg to replace a facility or technology at the end of its life, you may use the present value (PV) of costs (previously called PV end of life) where an asset is at the end of life and is being replaced on a like-for-like basis.
In the early stages of developing a proposed activity, there may not have been detailed consideration of the cost of ownership and quantification of benefits. To assist in these cases, we have developed a new tool to calculate an indicative efficiency rating (IER) for the purpose of investment prioritisation (see below).
When a proposed activity does not yet have a calculated BCR, use the IER tool to calculate an IER for the activity. The IER tool provides a high-level estimate of monetised costs and benefits.
The IER tool also provides a consistent, simple method for calculating an IER that can be applied across all modes, and to services as well as infrastructure, and incorporates a range of typical benefits by outcome sought and by mode.
The IER is designed to remove reliance on the ʽL*’ rating previously used for investment prioritisation in the absence of a calculated BCR.