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Some information within the 2018–21 NLTP Investment Assessment Framework (IAF) pages may currently be out of date. We are in the process of updating the Planning and Investment Knowledge Base to reflect the new draft IAF that has been developed for the 2018–21 National Land Transport Programme (NLTP). This work will be completed by mid-May 2018. The draft IAF is currently available for feedback until 18 May, and will be finalised by 30 June 2018.

Find out more about the draft IAF


The Transport Agency assesses investment proposals in the 2018-21 National Land Transport Programme (NLTP) using the information contained in the business cases and supporting information submitted in Transport Investment Online (TIO). After the business case has been assessed and passed, the information is then distilled down to two ranking factors, Results Alignment - the alignment of the proposal's key transport issues with the Government Policy Statement (external link) on Land Transport (GPS), and Cost-benefit Appraisal - how efficient resources are used to deliver benefits from the proposed solution.

The information relating to developing assessment profiles is organised by activity class groupings, with guidance provided on each of the two factors within the groupings.

Assessment factors

The Transport Agency assesses investment proposals under two factors, being:

  • Results alignment - the alignment of the proposal's key transport issues identified in the strategic case with results sought under the GPS, and
  • Cost-benefit appraisal - how efficiently resources are used to deliver benefits from the proposed solution.

The specific guidance on how each of these apply to activity class groupings is provided in relevant sections listed at the bottom of this page. 

Results Alignment

Assessment of results alignment considers how the problem, issue or opportunity identified in the strategic case aligns with the results sought under the GPS.

Results alignment focuses on the problem, issue or opportunity being considered without regard to the possible solution.

The assessment considers how the problem/issue/opportunity:

  • matches the desired GPS result(s)
  • is significant in relation to the desired GPS result(s)
  • is significant in relation to the scale of the gap to the appropriate customer level of service or performance measure
  • is significant as part of an end to end journey
  • is significant from a national perspective (given local, regional, national perspectives)
  • is significant in relation to GPS timeframes, i.e. a significant issue/opportunity within 3/10/10+ years

Any potential need for investment comes from addressing a level of service gap and/or system performance gap in delivering the appropriate level of service. Historically, the gap has not been explicitly or consistently defined.

The One Network Road Classification (ONRC) defines nationally consistent customer levels of service. Over time, all roads in a particular category should offer an increasingly consistent fit for purpose customer level of service for users. Identifying the gap to the ONRC customer levels of service is a key input into the assessment of Results Alignment for road maintenance and improvements.

No nationally consistent level of service or classification yet exists for public transport or walking and cycling. In these activity classes we use proxies to determine the significance of the problem, issue or opportunity including the geographical classification such as main urban areas or primary routes.

Customer Levels of Service

The appropriate service level for each part of the transport system should be defined by its relevant framework or benchmarks.

A gap in the levels of service is defined as the difference between the appropriate level of service and the current level of service. Evidence is needed to support the significance of the gap. The problem and benefits should have been described in the strategic case with reference to appropriate levels of service. Evidence collected about the current performance compared to the expected performance will help define a gap, if any.

Evidence is needed to show that:

  • the right level of service framework is being used to define the gap
  • the framework is being used appropriately for the activity
  • current system performance expectations or customer levels of service are not being met
  • the benefits will deliver an improvement in levels of service or system performance
  • the benefits are significant with regards with GPS priorities

The level of service gaps are defined as follows:

  • Significant gap –Evidence shows that there is significant under performance in at least one key aspect resulting in performance lower than its classification and the gap to the appropriate service levels or system performance significantly impacts on the customer experience. This will have been robustly defined against appropriate levels of service (or other proxy) relevant for the issue.
  • Identified gap –Evidence shows that a gap in service level or system performance exists that does not meaningfully meet at least one or more aspect described in its classification, intended use or function.
  • Addresses an issue – Evidence shows that the level of service or system performance materially achieves all aspects described in its classification. The value of benefits and change to levels of service or system performance are not significant or robustly defined.

During preparation of a Business Case, there may be situations where critical thinking through the business case approach uncovers no strong evidence that a gap in levels of service or system performance exist. This is a perfectly acceptable outcome to the Transport Agency and could, in fact, suggest the system is running optimally.

Also during the preparation of the Business Case, service levels may be shown to be above expectations. This amounts to a system performance gap and further effort may be needed to assess the significance of this gap and consider system performance and optimisation.

 Customer LoS Gaps

Cost-Benefit Appraisal

Cost-benefit appraisal considers how well the proposed solution maximises the value of what is produced from the resources used, and the timeliness of intervention.

Assessment of improvement activities uses the benefit–cost ratio calculations as the default approach.

Cost effectiveness and cost performance comparisons are used for road maintenance and public transport programmes.

Benefit Cost Ratio

The Benefit Cost Ratio (BCR) is the primary tool used to measure the efficiency of improvement activities.

All improvement activities other than low cost low risk improvements and specified exceptions  (see below) should be supported by the provision of a robust BCR.

The Transport Agency requires that Approved Organisations and the Transport Agency use the Transport Agency Economic Evaluation Manual procedures and templates to determine the BCR for improvement activities.

Alternatives to benefit cost ratio

For assessment of road maintenance, existing public transport programmes and road safety promotion programmes, alternative methods may be used in place of the BCR.

A brief description of these methods is provided below:

Present value method (PV)


The present value of future costs of options are determined and compared to identify the long term least cost option.

The method is recommended to determine if replacement/renewal is more cost effective than on-going maintenance. Where the future costs of the do-minimum exceeds the costs of replacement/renewal then the net present value of the option can be assessed in the cost benefit appraisal as the best present value end of life approach.

In certain cases the use of benefit streams rather than future costs may be more appropriate.

Cost effectiveness method

Cost effectiveness analysis is used where the objective is to compare the cost of different ways of achieving a given effect (e.g. level of service), or comparing the relative cost of different strategies with different effects.

This approach is used to evaluate the benefit and cost appraisal of public transport, maintenance, or road safety promotion programmes by comparing a programme with similar programmes for other organisations.

Benchmarking method

This approach involves making comparisons of programme benchmark and key performance measures against peer groups, similar regions and the national average. A lack of evidence to support differences from peer group, regional and national averages may result in a lower benefit and cost appraisal rating for the programme. Alternatively it may result in a requirement for a review of the supporting business case as a condition of investment approval.

Trends in benchmarking measures over time are used rather than just annual values.

Marginal contribution method

The marginal contribution of programme expansions and incremental new services will be considered through benchmark and key performance measures. The cost-effectiveness of the changes will be considered as well.

Specific guidance relevant to activity class groupings is provided in activity class assessment page, see below for links.

Non-monetised benefits and additional benefits

If a proposed solution has demonstrable non-monetised benefits, then these should be taken into account and may, if the Transport Agency considers these benefits to be significant, result in a higher rating.

Additional benefits are benefits that are not specifically covered by the Transport Agency’s Economic Evaluation Manual. The Transport Agency may consider additional benefits as reasonable and may determine a higher rating as a result. Alternatively, it may consider that the additional benefits should be presented as part of sensitivity analysis that will not impact the rating.


Cost-Benefit Appraisal is not required for some activities.

Activities which are not required to calculate a benefit and cost appraisal include:

  • individual low cost low risk improvements activities, when included in the low cost low risk improvements allocation
  • Transport planning activities, under work categories 001, 002, 003 and 004
  • Road safety promotion activities with a total cost of $1 million or less
  • Total mobility activities, under work categories 517, 519 and 521
  • SuperGold Card concessions..

Use of placeholder, generic or default BCR

In specific cases generic or default BCRs may be used in lieu of a calculated BCR for the activity. These are:

  • Stock Effluent Facilities - a generic BCR of 12 may be applied to a stock effluent facility identified in the 2008 National Stock Effluent Strategy, instead of a calculated BCR
  • Projects which are evaluated on a whole of life, net cost present value basis, e.g. bridge renewals. A default default present value end of life (PVEOL) will be applied to an activity instead of a calculated BCR which ranks the activity very highly for cost-benefit appraisal. However, where an improvement component exists in such a project, it must be supported by a calculated BCR. The present value evidence must be attached in TIO to support the PVEOL rating.
  • Low cost, low risk improvement programmes  - a generic rating of Medium may be applied provided the Transport Agency is satisfied that the activities proposed in the programme target Medium and/or High Results Alignment , that the programme will be targeted to GPS outcomes and that the activities represent reasonable value for money.

No other placeholder, generic or default BCRs should be used.

Peer review

The Transport Agency reserves the right to require a peer review of benefit and cost appraisal determinations and measures, including any non-monetised/additional benefits and adverse impacts, regardless of the scope, prior to an investment decision.

Cost-Benefit Appraisal Application to improvements

Insufficient information (1* or Low*)

An activity can be included in the National Land Transport Programme (NLTP) when no benefit and cost appraisal has been made or when robust evidence is lacking to support the assessment. In such cases the rating for a benefit and cost appraisal will default to 1* for improvement activities and Low* for programmed activities. The Transport Agency represents these activities as 1* or Low* to indicate that more information is required to achieve a robust assessment profile.

An activity will not be considered for funding approval with a 1* or Low* status.

BCR Ranges 

BCR range 0- 0.9

All activities with BCR greater than or equal to 0 and below 1 are in this band. The Transport Agency may, at its discretion make an assessment of any non-monetised benefits to determine whether the total of monetary and non-monetary benefits outweigh costs and the incidence of benefits and costs in the context of individual proposals.

BCR range 1- 2.9

All activities with BCR greater than or equal to 1 and below 3 are in this band.

BCR range 3 - 4.9

All activities with BCR greater than or equal to 3 and below 5 are in this band.

BCR range 5 - 9.9

All activities with BCR greater than or equal to 5 and below 10 are in this band.

BCR range 10 or more

All activities with BCR greater than or equal to 10 are in this band.


A PVEOL (Present Value End of Life) rating is given to all activities assessed on a net present value basis where the net present value of ongoing maintenance and operating costs exceeds the net present value of the cost of replacement together with the new maintenance and operating costs. The PVEOL rating replaces the previous BCR 99 rating for these activities. 

Application to continuous programmes

Continuous programmes, e.g. road maintenance, existing public transport services, road safety promotion and minor improvements,  are assessed with a benefit and cost appraisal rating based on their relative cost effectiveness or performance comparisons.

The ratings are:

  • Low - when cost effectiveness or performance shows below-average efficiency
  • Medium - when cost effectiveness or performance shows average efficiency
  • High - when cost effectiveness or performance shows above-average efficiency

Incremental benefit and cost appraisal

Incremental cost - benefit appraisal is required for option selection, optimisation (other than between projects within packages) and scope change proposals.

Pre-assessment requirements

A number of criteria need to be satisfied before assessing an activity for inclusion in the NLTP for funding approval.

Requirements for NLTP inclusion

Inclusion of an activity in the NLTP requires that:

  • sufficient evidence has been used to justify the activity, dependent on its stage of development;
  • the activity is included in a Regional Land Transport Plan (RLTP), or is a proposed Road Policing Programme, or is part of a Transport Agency nationally delivered programme;
  • the problem/issue/opportunity is clearly identified in a Strategic Business case;
  • the requirements of the Land Transport Management Act have been met, that the activity:
    • is assessed by the organisation that proposes it;
    • identifies the objective or policy to which it will contribute;
    • provides an estimate of the total cost and the cost for each year;
    • shows its expected duration (automatically generated from the cash-flow plan in Transport Investment Online);
    • shows any proposed sources of funding other than the National Land Transport Fund (NLTF); and
    • provides any other relevant information.

Requirements for NLTF funding

Seeking approval for funding from the National Land Transport Fund requires all of the above, plus:

  • the proposed activity or programme is eligible for NLTF funding (consistent with the GPS activity class definition and the Transport Agency's work category definition);
  • all required information is provided in Transport Investment Online (TIO) and has been checked for completeness;
  • the proposal is ready to proceed. 

Reviewing and updating the assessed profile

The assessment profile assigned to individual activities must be reviewed at each stage of the activity's development and updated as necessary to reflect the latest information and any changed circumstances.

An activity’s profile assessed at the time of NLTP inclusion must be confirmed prior to any investment and funding decision. This may result in a reduced profile if the Transport Agency considers the evidence to be insufficient or that the risks around delivery of the activity’s outcomes are too high.


Additional factors

The Transport Agency may consider any exceptional additional factors not otherwise captured by the two assessment factors, including additional economic and community benefits.

These will be specific to the activity or combination of activities being assessed and relevant to determining its overall priority and funding source in the programme.

Evidence will be required if additional factors are to be considered.

Activity class groupings

Links to guidance on developing assessment profiles for each of the activity class groupings are provided below.