To assist with the investment decision, the Business Case will provide details on:
• the drivers and objectives for the project
(sometimes referred to as part of 'the Problem' definition, i.e., what are the current gaps and/or problems in service delivery to be addressed);
• the enabling assets and the changes (to human resources, physical resources, management systems, etc) required to address the Problem; (sometimes referred to as 'the Solution', i.e., how best to address the identified the current gaps and/or problems in service delivery); and
• the service Benefits for the community to be realised by the public.
This Business Case approach of presenting the Problem, Solution and the Benefits is illustrated in Table 2 for a major infrastructure project within the transport sector. This logic is often depicted (in greater detail) in an Investment Logic Map (ILM), and a Benefit Management Plan.13
The government will focus its decision making on achieving community service benefits, which are not always directly associated with the activities for which the alliance is responsible. Generally, the alliance is only responsible to deliver the enabling capital asset described in 'the Solution'.
Table 2: The 'investment lifecycle' terms illustrated for a rail project
| Problem (current gaps and/or problems in service delivery) | Solution14 (how best to realise the identified benefits) | Benefits |
| Drivers: • public transport congestion is eroding the city's liveability • existing public transport infrastructure will not support future demand. Objectives: • providing capacity to meet current and future demands. | This improvement in service level will require creation of rail and rolling stock assets. | Perceived service benefits and related KPIs • reduced impact of transport on the environment measured by a KPI of increase by 20% share of trips taken by public transport • improved liveability in the city measured by KPIs such as: - 20% increase in the % of public transport services that arrive on time - 50% increase in the frequency of services. |
| To assist with the investment decision, the Business Case should fully analyse and dimension the risks and opportunities of the 'Problem' and the 'Benefits'; as well as fully analyse the costs, benefits and risks of the options to achieve the 'Solution'. | ||
In making the investment decision, the government decision makers will want to know (from the Business Case):
1. how the investment 'Problem' and 'Benefit' fit in with government service priorities;
2. how the project will impact on the community; and
3. how much the investment 'Solution' will cost and whether it is affordable (in the total context of government priorities and programs competing for new funding).
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13 Refer Investment Management Standard, Version 3.0, 10th June 2008, (Victorian Department of Treasury and Finance) and related documents for further detail.
14 For the avoidance of doubt, the term 'solution' refers to the non-capital enablers and the capital asset enablers proposed by the Owner, rather than the design / engineering / construction project delivery solution (ie the methodology to deliver the capital asset) which is developed by the alliance Proponents. Normally, the details of the 'project solution' will not yet be determined at the time the VfM proposition is articulated.