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Single-stage business case lite template

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How to use this template

This document provides a template for completing a single-stage business case lite (SSBC lite). The following criteria are required to use the SSBC lite:

the activity has been assessed as low risk and low complexity from an endorsed point of entry, and

the activity has an estimated whole-of-life cost less than $15m, or

for public transport services, there is an undiscounted funding gap in the first three years of less than $15m.

Note that this template is for guidance purposes only and should be completed in accordance with Waka Kotahi NZ Transport Agency examples and Business Case Approach (BCA) guidance

The SSBC lite simplifies business case development for low risk and complexity activities. The key changes for this format are:

Use of tables and directing comments/questions (like the Standard Safety Interventions) to focus responses to the key information needed by Waka Kotahi.

Standardised sensitivity analysis.

Links to the Monetised benefits and costs manual simplified procedures.

Benefits management plan is included with the stated benefits in the strategic case.

Commercial case reduced to a brief paragraph outlining that the activity is using standard procurement procedures from their approved procurement strategy.

The business case approach is designed to ensure that each investment proposal:

is supported by a compelling case for change - the strategic case

optimises value for money - the economic case

is viable - the commercial case

is affordable - the financial case

is achievable - the management case.

The key components of a SSBC lite outline the:

strategic fit of the proposed investment

case for change

options considered

rationale for the preferred option (supported by costs and benefits)

necessary funding and management arrangements for the successful delivery of the activity to be put in place, and

next steps for the proposed investment.

Business cases submitted to Waka Kotahi will be subject to an Investment Quality Assurance (IQA) review.

Text in italics provides commentary and guidance for drafting purposes and should be deleted when no longer required. The remaining standard text and tables can be retained to assist you in developing the SSBC lite.

Contents

How to use this template	2

Purpose	4

Strategic Case	4

Economic Case	5

Commercial Case	8

Financial Case (including affordability)	8

Management Case	9

Next Steps	10

APPENDICES	11

Purpose

Describe the investment proposal in one to two sentences and state what decision makers are being asked to consider or decide.

Strategic Case

Strategic context
Briefly describe the strategic context for the proposed investment, with reference to supporting strategies, activity interdependencies, programmes and plans. Use the strategic context developed in the previous business case phases (including the point of entry) and update for any changes. The strategic context provides an overview of the outcomes that the investment is seeking to achieve or contribute to. If applicable, the strategic context also considers the land use context and any potential network impacts from the investment. Plans, images and maps can be included as an appendix if they are beneficial for understanding the need for investment.
The case for change
Problem or opportunity to be addressed.	Define the problem or opportunity the proposed investment is seeking to address. The problem or opportunity statement should cover the cause and any resulting consequences. Provide a brief overview of the evidence and analysis that supports the proposed investment. Links to publicly available information should be provided. Evidence that is not publicly available and is key to decision making should be appended to the business case. For help developing problem and opportunity statements refer to the guidance below: https://nzta.govt.nz/planning-and-investment/learning-and-resources/business-case-approach-guidance/strategic-case/developing-good-problem-statements/
Investment description	Describe the proposed investment in a paragraph
Scheduling / programming	Does the problem or opportunity have any underlying circumstances that will impact on its timing, urgency and/or criticality for delivery? Are there interdependencies with other any other activities?
Benefits delivered from addressing the problem or opportunity	The following benefits have been identified: *Benefit owner eg Senior Manager Project Delivery **Benefit **Benefit measures Benefit 1 Benefit measure 1 Benefit 2 Benefit measure 2 These benefits have been assessed using the appraisal summary table within the economic case to determine the preferred option. *The benefit owner from the organisation delivering the activity and should be assigned to a role to ensure it survives any staff changes. The owner is expected to monitor the performance of the activity through implementation and post-implementation to the benefits realisation phase phases. **It is expected that the benefit and benefit measures are taken from the Waka Kotahi benefits framework. Selected benefits and benefits measures must link back to the problem or opportunity statement. If the selected measures are not from the Waka Kotahi benefits framework, explain how the measures specified will provide reasonable evidence that the benefits have been delivered in the section below. For guidance on the benefits framework, refer to Benefits management approach in PIKB.
Alignment of the identified benefits to the problem or opportunity statement	Briefly describe the choice of benefits, their importance, and how they link back to the problem or opportunity statement.
Stakeholder and community engagement	Stakeholder/individual/community/partner Summary of engagement, outstanding issues, any relevant links Stakeholder/individual/community/partner name High level summary of current and future engagement activities and any outstanding issues and how they are being managed. Provide a brief overview of the ALL engagement either planned or undertaken, issues resolved, and any outstanding issues. Provide links (ie to stakeholder management plans, communication plans, customer feedback, Maori engagement, etc.) if relevant.

Economic Case

The purpose of the economic case is to identify a preferred option that represents the best value for money by:

identifying up to five shortlisted options, including the do minimum, that have the potential to address the problem or opportunity and will deliver against the identified benefits

assessing the short list options using the appraisal summary table (AST)

recommending a preferred option.

Economic analysis should be carried out in accordance with Waka Kotahi NZ Transport Agency simplified procedures as detailed in the Monetised benefits and costs manual and Non-monetised benefits manual. For the simplified procedures, refer to the manuals.

This section outlines the options analysis undertaken and the preferred option.

Option analysis	Generally, three to five options are considered as part of the options shortlist. A ‘do-minimum’ option needs to be provided to enable a comparison to non-investment. The identified options for shortlist analysis include: Option 1: Do-minimum Option 2: …. Option 3: …. An appraisal summary table (AST) has been completed for each of the shortlisted options. Refer to Appendix 1: Appraisal summary table for the completed tables. The ASTs provide the evidence for recommending the preferred option. Benefits identified in the strategic case are presented using an AST to determine the preferred option. For help completing the AST, refer to the user guide and template under Optioneering in InvestHub.
Incremental analysis	For most activities, incremental cost-benefit analysis of the alternatives and options can be used as part of the process to identify the optimal economic solution. Incremental analysis has been completed. Please refer to Appendix 2

DETAILS OF PREFERRED OPTION

The table below includes an outline of the preferred option:

Scope of the preferred option	The preferred option is [enter preferred option]. The scope of the preferred option includes: In scope The preferred option includes: Item 1 Item 2 The scope of the preferred option needs to be sufficiently detailed to enable decision makers to understand what is being procured as part of the proposed investment. The scope can be outlined using a list of items. The list does not need to specify every detailed aspect for each item. For example, resilience improvements to a tunnel might include: any drainage or stormwater measures ancillary improvements, strengthening or repairs to structures pavement repairs, resurfacing or widening and associated earthworks. Out of scope Outline areas that have been considered but excluded from the preferred option. An overview of the preferred option can be found under ‘Appendix 1: Appraisal Summary Table’. A detailed estimate of the whole of life costs for the preferred option can be found under ‘Appendix 3: Whole-of-life cost estimate for the preferred option’.
Reconfirm prioritisation profile	Revisit the profile based on the Investment Assessment Framework and confirm the priority order.

Sensitivity analysis

Guidance on sensitivity analysis is found in the Monetised benefits and costs manual and Non-monetised benefits manual

SSBC lite sensitivity analysis has been standardised. Due to the small scale of these activities, only the total implementation costs and the discount rate are required to be tested for sensitivity.

However, if a particular sensitivity scenario is relevant to the preferred option, please complete the testing and provide the results in the table below.

Sensitivity analysis has been carried out to test how sensitive the assessed benefits and costs are to change.

The outputs for each sensitivity test are documented below:

Sensitivity scenario	Sensitivity test	Base BCR	Sensitivity value BCR
Total implementation cost	Total implementation costs through to completion increase by 25%
Total implementation costs through to completion decrease by 25%
Discount rate	The discount rate applied to benefits is decreased to 3%
The discount rate applied to benefits is increased to 6%
Public Transport Only Please delete if your investment is not for Public Transport service changes or new Public Transport Infrastructure
Farebox recovery	Total farebox recovery for the first 3 years increases by 25%
Total farebox recovery for the first 3 years decreases by 25%
Contract Cost	Total contract costs for the first 3 years increases by 25%
Total contract costs for the first 3 years decreases by 25%
Total Benefits	Test will be dependent on the investment being undertaken but is likely to include patronage

Commercial Case

The commercial case sets out the plans for the procurement arrangements needed to implement the preferred solution.

Projects using the SSBC lite are low risk and complexity; therefore, most projects will likely be using a standard procurement process. A full commercial case is only required if the project is using a non-standard procurement process.

For a SSBC lite that is using a standard procurement process, all the commercial case needs to outline is how the activity’s procurement approach will align to the organisation’s Waka Kotahi approved procurement strategy.

When was your procurement strategy last approved by Waka Kotahi
Briefly describe the procurement approach and how it aligns to the organisation’s approved procurement strategy

Financial Case (including affordability)

The financial case is used to determine if the activity’s funding implications and if it is affordable.

The financial case needs to outline the activity’s cost, the financial year in which these costs will be incurred and how they will be funded.

The information provided here needs to align with what is submitted in Transport Investment Online.

Financial year
20**/**	20**/**	20**/**	Total
Capital expenditure
Operating expenditure
Total expenditure
Revenue
Affordability
Capital required
Operational funding required
Funding source

Management Case

The management case is concerned with putting in place the implementation plan required to ensure successful delivery of the preferred option and to manage activity risks.

The management case needs to outline the activity’s project governance and management arrangements, and risk management plan, that will be put in place to implement the proposed solution.

Project governance and management

Summarise the project management arrangements	Describe plans to ensure the successful delivery and management of the project. If necessary, include a link to a project management plan.
Provide a diagram or a description of the project governance structure
Outline key milestones	Task Description Interdependencies eg Detailed design completed eg Completed detailed design based on the scope of the preferred option outlined under the economic case eg none eg Procurement eg Commence procurement based on the complete detailed design eg detailed design eg Construction commences eg Construction of the activity commences eg procurement

Risk management

Identify the key risks for this activity; consider: reputation (stakeholders, community, public, media, legal, compliance), cost, delivery, timeliness, health and safety, environmental, etc.

The Risk Management Practice Guide may provide assistance: https://www.nzta.govt.nz/resources/minimum-standard-z-44-risk-management/.

Risk information
Identify any significant constraints or unique issues for this activity	eg corridor goes through an area of high environmental sensitivity
Identify any significant issues that need to be resolved in order to implement the activity	eg consultation and input from Ministry for the Environment
Describe the risk (including cause and impact)	Likelihood of occurrence (Rare/Unlikely/ Possible/Likely/ Almost certain)	Consequence or impact (Insignificant/ Minor/Moderate/ Severe/Extreme)	Risk treatment/ mitigation
Risk 1	Rare	Severe	eg monitoring
Identify the position responsible for any escalated risks
Briefly describe what project assurance processes are in place	Describe the assurance plan in place to manage project risks
Risk allocation How much of the risk is allocated to Waka Kotahi and how much to the Approved Organisation?

Next Steps

The SSBC lite is used for simple, low-risk activities; therefore, most of these activities will move through to the implementation phase. For these activities the ‘Next steps’ can be as simple as:

“The business case has to be submitted to Waka Kotahi NZ Transport Agency, with an accompanying funding request for the implementation phase”

APPENDICES

Appendix 1: Appraisal summary table

The appraisal summary table (AST) is required to be completed for all shortlisted options.

Appendix 2: Incremental analysis

Incremental analysis is required to be completed for Public Transport investments. Refer to the Monetised benefits and costs manual for the incremental analysis spreadsheet.

Appendix 3: Whole-of-life cost estimate for the preferred option

Append the detailed whole-of-life cost estimate for the preferred option. Cost estimates need to be prepared in line with SM014 – Cost Estimation Manual. The cost estimation manual can be found at https://www.nzta.govt.nz/resources/cost-estimation-manual/cost-estimation.html