This page relates to the 2021-24 National Land Transport Programme.
All organisations applying for investment funding from the National Land Transport Fund (NLTF) or through the National Land Transport Programme (NLTP) must use the principles of the Business Case Approach (BCA) when developing investment proposals.
The BCA is a robust, principles-based approach for developing business cases for investment through the NLTP. It is based on the New Zealand Treasury’s Better Business Cases. The business case provides the evidence base for investment.
Business Case Approach guidance
Approved organisations and Waka Kotahi (for its own activities) develop business cases progressively and iteratively, based on emerging evidence and understanding of the problem/opportunity depending on the nature of the activity. Project owners must develop a point of entry view of the potential problem to enable us (Waka Kotahi NZ Transport Agency as investor) to:
The point of entry and business case that needs to be developed will vary depending on the size, cost, complexity and risk of the proposed activity. Business cases are assessed at the end of a business case phase.
Determining your pathway through the business case phases
The Waka Kotahi Investment Prioritisation Method (IPM) is used to prioritise activities in the National Land Transport Programme and as part of the assessment for investment approval. An activity's investment profile is progressively developed through the business case process and is confirmed in full at the detailed business case or single-stage business case phase.
2021–24 NLTP Investment Prioritisation Method
The investment profile is progressively developed through the business case process:
Business case phase | GPS alignment assessment | Cost-benefit appraisal | Degree of investment commitment at end of stage |
Point of entry | Indicative | Not applicable |
Endorse point of entry Consider funding for development of business case Either approve or decline with conditions |
Programme business case | Indicative | Indicative (conditional where appropriate) |
Endorse case Consider funding for next stage Either approve or decline with conditions |
Indicative business case | Reassessed (continued alignment) | Indicative (conditional where appropriate) |
Consider funding for next stage Either approve or decline with conditions |
Detailed business case | Reassessed (continued alignment) | Confirmed |
Consider funding for next stage Either approve or decline with conditions |
Single-stage business case | Reassessed (continued alignment) | Confirmed |
Consider funding for next stage Either approve or decline with conditions |
Endorsement of a programme business case provides approved organisations, Waka Kotahi (for its own activities) and us with:
Endorsement of these stages does not commit us to investing in the programme or activities within it. Approval of funding for a subsequent stage in the process is a separate decision which will consider the funding required to develop a business case or to fund implementation of a programme.
We may not endorse a programme business case in its entirety. There may be elements that we are prepared to endorse, and consequently assist their funding, and other elements that do not align with the Government Policy Statement on land transport (GPS) and which therefore cannot be funded from the NLTF.
If endorsement is limited to particular elements of a programme, these will be documented at the time of assessment, with accompanying reasoning, in Transport Investment Online (TIO).
Transport Investment Online(external link)
In some situations we will support the direction of a programme business case but may decide not to invest in subsequent business cases.
Although we will endeavour to provide long-term certainty to our investment partners, endorsement is at a point in time. As the context within which the endorsement was given changes, the endorsement may need to be reconfirmed through a revised programme business case, an addendum to the programme business case, or an adjustment to the next phase of business case development. Some of the reasons for reviewing endorsement are:
Following development of the detailed business case or single-stage business case, we expect funding applications to cover the full implementation phase. The detailed business case should have been developed to a level that provides us with sufficient confidence that all the steps involved in implementing the activity will be undertaken. We discourage splitting implementation into a pre-implementation phase (covering design) and full implementation phase funding applications, other than for very large, complex and high-risk activities.
In some cases we may approve a three-year programme of standard improvement activities at the adoption of the NLTP that is delivered within a longer-term endorsed programme business case. A three-year programme of standard improvement activities would need to have a benefits management plan and governance structure in place that maintains TIO requirements, including the programme monitor. Approved organisations and Waka Kotahi (for its own activities) will need to demonstrate growing capability and transparency in decision making to maintain autonomy with programme funding.
Continuous programmes are made up of a group of activities that relate to existing assets and services that are required to be delivered. The aim of the programme is to maintain an appropriate level of service. Examples are road maintenance programmes, existing public transport services, promotion of road safety and the road safety partnership programme.
The way the BCA and IPM are applied to continuous programmes differs from how it is applied to improvements. Rather than a progressive development of the business case through a largely linear process, their application to continuous programmes is cyclic, with the investment gate being the periodic funding approvals linked to development of the next NLTP based on supporting documentation such as an activity management plan or regional public transport plan.
The principles of the BCA apply to continuous programmes through:
Requirements of a road maintenance programme
Public transport continuous programmes
The foundation for applying the BCA to continuous programmes is activity management planning, documented in:
The activity management planning document should demonstrate that the proposed programme represents value for money by doing the:
In doing so it achieves desired outcomes and benefits from addressing the key issues and/or the contextual state of play in the area covered by the plan.
Underpinning this approach is robust evidence and critical analysis that supports the delivery of an effective investment proposal.
The way we assess a business case depends on its phase and is detailed in our phase-specific guidance.