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This section provides an overview of the Investment Assessment Framework (IAF), its key principles and fit within Waka Kotahi NZ Transport Agency's investment decision making framework.

The IAF is used by:

  • approved organisations and Waka Kotahi to assess and prioritise business cases, programmes, plans, projects and other activities to be submitted for funding consideration. 
  • Waka Kotahi in developing the National Land Transport Programme (NLTP) and to make investment decisions during the 2018–21 NLTP.


Role of the Investment Assessment Framework

The IAF is the framework used to give effect to the Government Policy Statement on land transport(external link) (GPS) and forms part of the Investment Decision-Making Framework (IDMF).

Waka Kotahi, with approved organisations, uses the IAF to translate GPS priorities and expectations in order to develop an integrated prioritised NLTP that gives effect to the GPS.

As part of this, the IAF supports Waka Kotahi and approved organisations to develop land transport activities for inclusion in regional land transport plans (RLTPs. Waka Kotahi then uses the IAF to determine what proposals the RLTPs will be prioritised for inclusion in the NLTP and what proposals should be funded. 


Government priorities for the 2018-21 NLTP

The  2018 Government Policy Statement(external link) (GPS) on land transport was released on 28 June 2018. 

The GPS sets strategic priorities, objectives, short to medium, and long-term results to guide decision makers where to prioritise investment. The GPS has themes that guide how to deliver on the priorities.

The GPS also sets ranges of funding to activity classes that Waka Kotahi is expected to remain within.

The GPS does not determine the individual activities which will be funded, or how much funding any particular activity will receive. The role of Waka Kotahi is to give effect to the GPS by using the IAF to prioritise which proposals should receive funding within the activity class funding ranges.


  • GPS strategic priorities and objectives

    The GPS identifies safety and access as key strategic priorities, and environment and value for money as supporting strategic priorities.

    The GPS objectives have been defined to provide a land transport system that:

    • is a safe system, free of death and serious injury
    • provides increased access to economic and social opportunities
    • enables transport choice and access
    • is resilient
    • reduces the adverse effects on the climate, local environment and public health
    • delivers the right infrastructure and services to the right level at the best cost.
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  • GPS themes

    The GPS includes themes to assist understanding of how to effectively deliver on the GPS priorities. The themes influence how the results should be delivered to ensure the best transport outcomes for New Zealand are achieved.

    The themes for GPS 2018 are:

    • a mode-neutral approach to transport planning and investment decisions
    • incorporating technology and innovation into the design and delivery of land transport investment
    • integrating land use and transport planning and delivery.
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Investment Assessment Framework key principles

Waka Kotahi adopts a range of high level and activity class principles to ensure that the IAF appropriately achieves what the government seeks from investments in the transport sector.


  • IAF key principles

    The IAF is underpinned by following key principles:

    • The IAF must help Waka Kotahi give effect to the GPS and it must ensure there is a visible pathway from GPS priorities and results through to investment.
    • Waka Kotahi gives effect to the GPS by partnering with approved organisations and other sector stakeholders.
    • The IAF is a translation of the GPS priorities and results into a prioritisation framework rather than a simple reiteration of the GPS which does not provide the granularity required for investment decision making.
    • The GPS defines the outcomes and results from the sector which the government is looking for. The IAF interprets those results by defining the investment outputs which have been prioritised in the programme of work delivered under the NLTP.
    • The IAF aims to achieve value for money by prioritising investment proposals which are targeted to achieve the GPS priorities and make efficient use of the available resources.
    • Efficient use of available resources requires cost-benefit appraisal which is tailored for the type of interventions required and the context of those interventions to achieve the GPS outcomes sought.
    • Any activity already approved for local authorities is treated as committed ie they will not be required to be reviewed under the 2018-21 IAF.
    • Any investment proposal seeking funding approval in the 2018-21 NLTP must be assessed and prioritised under the IAF by Waka Kotahi.
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Main features of the IAF

The IAF has four main features: Use of the Business Case Approach, results alignment, cost-benefit appraisal and programme support.

Waka Kotahi has retained the changes to the framework assessment components proposed in 2017, including the reduction to a two-factor assessment approach of results alignment and cost-benefit appraisal.

Waka Kotahi provides a number of tools that support activity and programme assessment, such as the Business Case Approach and the Economic Evaluation Manual (superseded August 2020) and the benefits management approach (from August 2020). Application of these tools will assist Waka Kotahi and the sector to achieve the desired GPS outcomes, as well as demonstrating strategic thinking, good process, and efficient allocation of resources and effort to ensure good value for money.


  • Results alignment

    The results alignment assessment rates the degree of alignment with the results specified in the GPS. It focuses on customer levels service as an outcome, provides a focus on taking an integrated approach to target the right results in the right places, and now includes a Very High rating option reserved for specific results that are deemed necessary by the government to deliver on the investment strategy of the GPS.

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  • 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 as the default approach, although variations may be used in certain circumstances. Cost-effectiveness and performance comparisons are used for road maintenance and public transport programmes. Cost–benefit appraisal includes a Very High rating for improvement proposal benefit–cost ratios above 10.

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  • Programme support

    programme support component for assessing urgency to address the problem in the time frames of the GPS.

    As shown in the diagram below show, programme support will assist in high level filtering of issues and assessing their associated urgency within the national context, to address the identified strategic case within three years, 10 years or beyond 10 years.

    Investment decision-making process


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Value for money

Waka Kotahi uses the IAF to help it achieve value for money in selecting the right investments.


  • How the IAF helps to achieve value for money

    The IAF achieves value for money as it: 

    • builds off the business case for the programme or activity that has a clear understanding of the problems being addressed, the investment objectives and benefits to be realised, and ensures solution alternatives and options have been appropriately considered
    • assesses the contribution that programmes and activities make against the results sought by the GPS and wider purpose of the Land Transport Management Act 2003
    • provides a consistent means of comparing and prioritising land transport activities based on their relative contributions to results
    • takes into account the potential offering of proposed activities and considers the benefits and costs of solutions in a balanced way.
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Requirement to use the IAF

Waka Kotahi requires all approved organisations and Waka Kotahi groups to use the IAF to assess activities and combinations of activities they propose for inclusion in the NLTP.

Regional transport committees (RTCs) may choose to prioritise the activities in their regional land transport plans (RLTPs) in any way they may determine. RTCs are encouraged to use the IAF to prioritise activities proposed for NLTF funding in their RLTPs, as this provides greater consistency with GPS results.

RLTPs are also required to include all other regionally significant expenditure on land transport activities to be funded from sources other than the NLTF. We encourage RTCs to apply the same assessment to these other activities to assist in the overall transparency and integrated planning of all land transport activity.

Prior assessment of business cases

Waka Kotahi requires all new proposals for funding from the NLTP to be supported by a business case that follows the principles of the Waka Kotahi Business Case Approach and is fit for purpose for the stage of development of the business case.


  • The business case in the investment decision making framework

    Rigorous application of the investment decision making framework gives effect to the GPS priority of achieving value for money. Entry to the investment decision making system is through the assessment of the business case, where proposals are assessed for evidence to identify the strategic case for investment.

    The business case approach forms the basis for activity and programme development for investment from the NLTF. It supports planning and investing for outcomes, ensuring early collaboration between stakeholders and progressive development of a robust, evidence based investment case.

    The business case provides the evidence to identify the strategic case for investment, and develops a short-list of potential options. It identifies the best option to address the issue and the benefits that will be realised while managing delivery risk.

    At each investment decision point an assessment of the business case is undertaken by Waka Kotahi before the activity progresses to assessment under the IAF. 

    Proposals that pass the assessment of the business case ‘gateway’ are then assessed against the two IAF factors, results alignment and cost benefit appraisal, and then prioritised. 

    Waka Kotahi will also assess that proposals are appropriately scaled and integrated according to their context, and options for the response are considered on a mode-neutral basis.

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  • Assessment of the business case

    The business case will be assessed before IAF assessment. 

    Waka Kotahi assesses business cases and supporting evidence for investment proposals and considers how well the principles of the business case approach have been applied.

    The assessment of the business case consists of a set of questions specific to the type of activity, ie whether it is an improvement activity, maintenance programme, public transport services programme or road safety promotion programme or activity.

    Investment proposals are expected to get a pass or to undertake a rework to achieve a pass (or a combination of pass and rework by negotiation), before a proposal progresses to the IAF assessment.

    In the case of continuous programmes, proposals requiring rework may proceed provided an agreed time-bound action plan is established by the investment partner (in this context, either an approved organisation or Waka Kotahi) to address the question requirements that will ultimately lead to achieving a pass assessment.

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Benefit capture and reporting

For the 2018–21 NLTP onwards, Waka Kotahi is improving the links between the BCA principle of investing for benefits and NLTP benefit capture and reporting. Waka Kotahi and approved organisations must provide information on the benefits and performance measures that they are investing in and this is to be captured and reported at a regional and national level. The choice of benefits to report is linked to the results alignment by considering how the benefits will target a customer level of service gap for an outcome and a journey.