Project Appraisal Guidelines for National Roads Unit Business Case

Transcription

1 Project Appraisal Guidelines for National Roads Unit Business Case October 2016

2 TRANSPORT INFRASTRUCTURE IRELAND (TII) PUBLICATIONS About TII Transport Infrastructure Ireland (TII) is responsible for managing and improving the country s national road and light rail networks. About TII Publications TII maintains an online suite of technical publications, which is managed through the TII Publications website. The contents of TII Publications is clearly split into Standards and Technical documentation. All documentation for implementation on TII schemes is collectively referred to as TII Publications (Standards), and all other documentation within the system is collectively referred to as TII Publications (Technical). Document Attributes Each document within TII Publications has a range of attributes associated with it, which allows for efficient access and retrieval of the document from the website. These attributes are also contained on the inside cover of each current document, for reference. TII Publication Title Project Appraisal Guidelines for National Roads Unit Business Case TII Publication Number Activity Planning & Evaluation (PE) Document Set Technical Stream Document Number Project Appraisal Guidelines (PAG) Historical Reference Publication Date October 2016 PAG Unit 8.0 TII Publications Website This document is part of the TII publications system all of which is available free of charge at For more information on the TII Publications system or to access further TII Publications documentation, please refer to the TII Publications website. TII Authorisation and Contact Details This document has been authorised by the Director of Professional Services, Transport Infrastructure Ireland. For any further guidance on the TII Publications system, please contact the following: Contact: Standards and Research Section, Transport Infrastructure Ireland Postal Address: Parkgate Business Centre, Parkgate Street, Dublin 8, D08 DK10 Telephone: infopubs@tii.ie

3 TRANSPORT INFRASTRUCTURE IRELAND (TII) PUBLICATIONS TII Publications Activity: Stream: TII Publication Title: TII Publication Number: Planning & Evaluation (PE) Project Appraisal Guidelines (PAG) Project Appraisal Guidelines for National Roads Unit Business Case Publication Date: October 2016 Set: Technical Contents Table 1. Overview Context Managing the Business Case Structure and Content of the Business Cases Evaluation, Implementation & Monitoring... 9 Page i

4 TRANSPORT INFRASTRUCTURE IRELAND (TII) PUBLICATIONS Updates to TII Publications resulting in changes to Project Appraisal Guidelines for National Roads Unit Business Case Date: February 2017 Page No: 4 Section No: 4 Amendment Details: Additional guidance included in relation to the format of Business Case documents for clarity. Page ii

5 1. Overview The Business Case document is the primary deliverable from the project appraisal process. A Preliminary Business Case (PBC) is produced in the first instance which then evolves into a Detailed Business Case (DBC) as the project progresses. This PAG Unit outlines the structure and detail to be provided in the Business Case document and outlines the project phases for which the PBC and DBC must be prepared. Moreover, this Unit sets out the category of projects for which Business Case documents are required to be prepared. The Preliminary Business Case (PBC) is a report that summarises the preliminary appraisal process undertaken during Phase 1 - Concept & Feasibility Studies and Phase 2 - Option Selection. The preliminary appraisal process establishes whether a sufficient case exists for considering a proposal in more depth and considers the range of alternatives and options proposed to solve the identified problems. The PBC brings together the Project Brief (PB), Transport Modelling Report (TMR), Cost Benefit Analysis (CBA) and Project Appraisal Balance Sheet (PABS) to form a complete statement documenting the rationale behind, and justification for the preferred option(s) following the completion of the Phase 2 Option Selection process. The Detailed Business Case (DBC) will form an update to the PBC following detailed consideration of scheme planning, design and costs during Phase 3 Design and Environmental Evaluation. Again, the DBC brings together the PB, TMR, CBA and PABS to form a complete statement documenting the rationale behind, and justification for the project following the Phase 3 - Design and Environmental Evaluation process. The DBC enables the Sponsoring Agency to bring together all of the evidence to support their contention that the scheme should be implemented. The Business Case will form the basis upon which the Sanctioning Authority makes a decision to progress to the next stage of the project and ultimately sanction its implementation. Therefore the Business Case must provide a complete picture of all of the arguments for the scheme together with all the positive and negative impacts of the scheme in question in a non-biased approach. The TII have developed a Business Case Template that is available for download from the Downloads section of the TII Publications website under section _Unit 8. This PAG Unit has been developed with reference to the Common Appraisal Framework (CAF) for Transport Projects and Programmes (Department of Transport, Tourism & Sport, March 2016), which outline the approach to the preparation of Business Cases for transport infrastructure. Page 1

6 2. Context National Road Capital Expenditure Projects are classified into three main categories, each requiring a different and proportionate level of appraisal. The three categories are as follows: Major Project cost > 20m; Minor Project costing between 5m and 20m; and Minor Project costing between 0.5m and 5m. PAG Unit 2.0: Project Appraisal Deliverables provides full details of the deliverables for each project category. In accordance with the CAF, PAG Unit 2.0 specifies that Business Case reports are developed for all Major Projects. For Minor Projects formal Business Case documents are not required per se, however, there is a requirement to develop a Project Appraisal Report (PAR) which is in essence a condensed form of the Business Case documents required for Major Projects. Further details in relation to the development of a Project Appraisal Report are provided in PAG Unit 12.0: Minor Projects ( 5m to 20m). Under this guidance and in accordance with the CAF, Business Case documents are not required for minor projects costing less than 5m, although there is a requirement for a Project Appraisal Balance Sheet (PABS) to be produced. Further details in relation to the PABS for minor projects are provided in PAG Unit 14.0: Minor Projects ( 5m to 20m). Page 2

7 3. Managing the Business Case The Business Case should be prepared at the following project phases: Preliminary Business Case - Phase 2 Option Selection; Detailed Business Case - Phase 3 Design and Environmental Evaluation; Revised Detailed Business Case (if necessary) Phase 4 Statutory Processes; Updated Detailed Business Case - Phase 5 Enabling and Procurement; and Revised Detailed Business Case (if necessary) Phase 6 Construction & Implementation The Business Cases are prepared by the Appraisal team, with input from the design team as appropriate. Page 3

8 4. Structure and Content of the Business Cases The Preliminary Business Case and Detailed Business Case should be prepared in accordance with the structures outlined in Tables 8.1. Table 8.1 shows each of the sections required for a PBC and a DBC. The level of detail in the latter sections of the document will be greater in the DBC (Phases 3 to 6) than the PBC (Phase 2). These structures are consistent with the requirements presented in the CAF (DTTAS, March 2016). Page 4

9 Table 8.1: Structure of the Preliminary and Detailed Business Case Documents Section Content The first section of the BC provides the background to the project, including its origins, previous relevant studies and their findings, together with the context of the current BC. 1 Introduction 2 Project Context 3 Analysis Tools A statement should be provided in relation to the assumptions and parameters used in the appraisal of the project to confirm they are in line with central guidance and have been agreed with DTTAS s Economic Financial and Evaluation Unit (EFEU) as per the requirements of the CAF. A programme logic model (diagram) showing the linkages between the project inputs, activities, outputs and outcomes is required. The need for the scheme (i.e. the issues the proposed scheme is intended to address) should be presented in this section of the BC, including a sound body of analysis to show specific problems that establish a need for an intervention and an economic rationale for the intervention. The current transport-related problems, future transport-related problems and the underlying causes should be assessed to give a detailed presentation of the existing/future conditions. A review of European, national, regional and local policy which is applicable to the project should be provided to inform the need for the scheme. Any high level financial, legal, environmental and administrative constraints should also be identified and discussed in this section. Any previous experience regarding similar projects should also be outlined. A set of project objectives should be defined based on the need for the scheme and the known constraints. The objectives should be clearly defined and independent of each other, and specifically relevant to the current project and should be classed under the CAF appraisal criteria headings (Economy, Safety, Environment, Accessibility & Social Inclusion, Integration and Physical Activity). Further details are provided in PAG Unit 3.0: Project Brief. A description of the analysis tools used in support of the preparation of the BC should be provided. Such tools may include transport models, safety models, economic models, emissions models and accessibility models. A summary of the development and validation of the models should be provided, with reference to technical modelling reports as appropriate. Further details are provided in PAG Unit 5.0. Page 5

10 Section Content Consideration of Alternatives & Options The Preferred Option Preliminary / Detailed Appraisal Risk Assessment A description of the structured process undertaken to identify the preferred option for the project should be provided in this section and should cover the following: Consideration of Alternatives (across all modes); Consideration of Options (single mode); Narrowing of Options (Phase 2 Option Selection Stage 1); and Appraisal of Options (Phase 2 Option Selection Stage 2). Reference should be made to PAG Unit 4.0: Consideration of Alternatives & Options for guidance. A Multi-Criteria Analysis (MCA) approach should be adopted as per the guidance set out in PAG Unit 7.0: Multi-Criteria Analysis. Details of the cost of each option at Stage 2 should be provided in the BC alongside expenditure profiles and funding sources. Any incremental analysis undertaken as part of the appraisal of options should be provided. Introduction of the preferred option emerging from the Phase 2 Option Selection process. This section should provide information on the design standards used, and present demand projections for the preferred option. The chapter should also set out the detailed composition of scheme costs for the preferred option. An overview of the preliminary / detailed appraisal of the preferred scheme, including the following: Economic Appraisal Cost Benefit Analysis Multi-Criteria Analysis Financial Appraisal (where appropriate) Sensitivity Analysis (project costs, transport demand, benefits etc.) Project Appraisal Balance Sheet (PABS) Identification of the key risks associated with the project that require consideration in any decision making process, and in subsequent stages of the project. Risks should include cost risks, programme risks, funding risks, affordability risks and acceptability risks. A risk mitigation strategy should be provided which outlines how risks were identified, evaluated, monitored and tracked. 8 Procurement A discussion on procurement options or the preferred procurement strategy if such has been decided. 9 Implementation Proposals Any relevant proposals for implementing the project. Page 6

11 Section 10 Evaluation Plan Content An evaluation plan is now a requirement within the BC. This plan ensures that the project can be evaluated robustly either at the end of the project and/or at the pre-selected time in the future. Page 7

12 The Business Case should be supported by and make reference to the following documents which are to be included as appendices to the Business Case document: Appendix A Project Brief (PB); Appendix B Transport Modelling Report (TMR); Appendix C Cost Benefit Analysis (CBA) Report; and Appendix D Project Appraisal Balance Sheet (PABS). The appendices for the Business Case should only include the current Phase PAG deliverables relevant to the current Phase of the Business Case. Page 8

13 5. Evaluation, Implementation & Monitoring In the CAF the third stage of the appraisal process is the Evaluation, Implementation and Monitoring of the proposed project or programme. The CAF states: Once the detailed appraisal is of sufficient quality and the project has been approved, the implementation process can commence. It is important to monitor the costs, timelines and any other important information about the project to ensure there are no overruns. At the end of the project or at a pre-selected time in the future, the project/programme should be evaluated against its objectives to ensure that the programme achieved/is achieving its objectives. At the completion of any project, it is a requirement of the TII Project Management Guidelines (PMG) that a Project Closeout Report be prepared. The Project Closeout Report verifies that all aspects of the project have been completed, confirms project budget information and discusses the issues that arose in project development, particularly those that have implications for future road planning and implementation. Once sufficient time has elapsed to allow a project or programme to be properly evaluated with sufficient evidence of the flow of benefits and costs from it a Post Project Review is undertaken. The Post Project Review process which is outlined in PAG Unit 9.0: Post Project Review evaluates the following four stages of a project: 1. Project Conception; 2. Project Planning; 3. Project Implementation, and 4. Project Operational Performance. The contents of the Project Closeout Report and Post Project Review therefore must meet the requirements of the CAF in relation to the evaluation, implementation and monitoring of a project. Page 9

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