4. Contents of a Business Case
This section complements Table 1 by providing further details of what a Business Case should contain. The discussion below aims to be comprehensive. Whether any given Business Case will require coverage of all these elements will vary from case to case. Generally, the Business Case will vary in line with the scale and complexity of the specific initiative. The larger and more complex the initiative, the greater the extent and depth of coverage of the items below.
The Business Case should include:
- An Executive Summary
- Clear description of the initiative
- The strategic context
- Description of the problem to be addressed
- A description of the ‘problem identification, assessment and priority’ process, and the evidence-based results (see F2)
- Description and quantification (if possible) of the relationships between the problem and other parts of the transport system. This could include inter-relationships between problems, or with other initiatives (see F3)
- Discussion of the contribution that solving the problem will make to achieving the jurisdiction's agreed transport system objectives and targets (see F1)
- The basis and results of the Strategic Merit Test (SMT) and the resulting degree of strategic alignment (see F3)
- A description of the ‘options generation and assessment’ process, and the evidence-based results that led to declaring the preferred option/solution (see F3)
- The cost-benefit analysis (CBA) (detailed, or rapid if detailed appraisal has not yet commenced) results and methodology, including separation of benefits and costs (see T2)
- Adjusted CBA details and results - if this approach was used by the proponent
- An Appraisal Summary Table (AST) summarising monetised and non-monetised benefits and costs side-by-side (see F3)
- Stakeholder views and details of the process used to gather those views
- Social impacts, gainers and losers
- Risk assessments
- A Benefits Management Plan
- A Benefits Register
- Assessment of readiness of the proposed initiative
- Timing, costs, staging
- Relevant reports associated with benefit management and realisation.
Additional items that should be included in a Final Business Case, but not necessarily in the earlier Business Cases, include:
- A financial analysis (clearly distinguishing it from the CBA) where relevant
- A review of funding and financing options (e.g. role of user pays, public private partnerships)
- A distributional and equity analysis
- Budgetary impacts (e.g. the cost of the initiative as reflected in the budget of the relevant government agency)
- A suitable environmental assessment and, in cases required under legislation, an Environmental Impact Statement (if required and if available)
- Land use planning implications
- Legal issues
- An initiative implementation plan (e.g. contracting arrangements and risk management).
Private sector participation introduces additional issues into the Business Case such as:
- Long-term budgetary impacts when private sector participation creates recurrent spending obligations
- Examination of risks accepted by the government, including contingent liabilities
- Effects of leveraging on BCR (see NGTSM06, Volume 3, section 2.18).
For guidance on initiatives involving the private sector, see the National Public Private Partnership Policy and Guidelines
Other points to note:
- The Business Case will contain the results of the SMT, CBA, AST and other analyses discussed earlier.
- For smaller initiatives, the SMT and rapid appraisal may suffice. For larger, more complex initiatives, the Final Business Case will also report the results of detailed appraisal.
- The format of the Business Case will differ between jurisdictions, so no attempt has been made in the ATAP Guidelines to develop a detailed template. Treasury Departments and bodies such as Infrastructure Australia and the Australian Department for Infrastructure and Regional Development may provide templates or specify particular information requirements that should be included in the Business Case.
- To facilitate and support decision-making, the assumptions, issues and results of analyses for short-listed options should be presented in a way that readily enables comparison.
- The Business Case should list and discuss all the options generated and assessed, with issues and results of analyses for the different options presented side-by-side for comparison.
- Developing the Business Case should be an iterative process. During the process, the proposal may be revised many times to explore and modify options and to ensure that the necessary information is provided and necessary analyses undertaken.