SAF Business Case Template Tiers 1 and 2 v2.1 · Web viewInfrastructure Finance and Reform, Treasury (IFR): Reviewing Officer, Major Projects Canberra (MPC) Reviewing Officer, F inance

CABINET-IN-CONFIDENCE (after first entry)

Single Assessment Framework (SAF)

Business CaseTier 1 (over $50 million or High Risk)Tier 2 ($10 million to $50 million)

Project Name:

Total Project Value (estimated):

Capital Appropriation Requested:

Project Stage:

Project Value:

Risk Assessment (high/med/low):

Proposed Delivery Model:

Requesting Directorate:

Requesting Minister:

Business Case Advisors:

NOTE: This template should be completed using the accompanying SAF Business Case Guidance Notes.

Contact Officers

Contact Officer, Requesting Directorate

Reviewing Officer, Infrastructure Finance and Reform, Treasury (IFR):

Reviewing Officer, Major Projects Canberra (MPC)

Reviewing Officer, Finance and Budget Group, Treasury (FABG):

Sign Offs

Requesting Directorate:

IFR

Document in order to proceed

Single Assessment Framework – Business Case Template (All Tiers) 1



MPC:

FABG:

Document in order to proceed – CMTEDD Sign-offs complete




Contents

Instructions.........................................................................................................................................5

1. Executive Summary.........................................................................................................................5

1.1 Statement of Need................................................................................................................5

1.2 Delivery Model.......................................................................................................................5

1.3 Funding Approval Sought.......................................................................................................5

1.3.1. Type of funding sought..................................................................................................5

1.3.2. Cost Estimate.................................................................................................................5

1.3.3. Payment Stream (PPP/DCMO only)...............................................................................5

1.3.4. Incremental Procurement/Transaction Costs................................................................5

1.3.5. Contingencies Included..................................................................................................6

1.4 Treasury Budget Summary.....................................................................................................6

2. Project Outline...........................................................................................................................7

2.1 Description of the Project......................................................................................................7

2.1.1. Overview........................................................................................................................7

2.1.2. Scope of works...............................................................................................................7

2.1.3. Scope of services............................................................................................................7

2.1.4. Project Assumptions and Dependencies........................................................................7

2.2 Review 1 (MPC): Status of Functional Brief/Output Specification.........................................7

3. Needs Analysis...........................................................................................................................8

3.1 Problem.................................................................................................................................8

3.2 Benefits..................................................................................................................................8

3.2.1. Benefits to be delivered.................................................................................................8

3.2.2. Importance of the benefits for Government..................................................................8

3.3 Options Analysis.....................................................................................................................9

3.3.1. Strategic Solutions Analysis............................................................................................9

3.3.2. Recommended Strategic Solution..................................................................................9

3.3.3. Project Solutions Analysis..............................................................................................9

3.3.4. Base Case.......................................................................................................................9

3.3.5. Recommended Project Solution....................................................................................9

3.4 Review 2 (FABG): Needs Analysis...........................................................................................9

4. Cost & Contingency.................................................................................................................10




4.1 Preliminary Cost Estimate....................................................................................................10

4.2 Contingency.........................................................................................................................10

4.2.1. Project Contingency.....................................................................................................10

4.2.2. Delivery Model Contingency........................................................................................10

4.3 Whole of Life........................................................................................................................11

4.4 Budget / Funding Strategy...................................................................................................11

5. Economic Analysis...................................................................................................................12

5.1 Cost Benefit Analysis (or 5.3 Cost Effectiveness Analysis)....................................................12

5.2 Wider Economic Benefits (Tier 1 Only)................................................................................12

6. Delivery Model Analysis...........................................................................................................12

6.1 Outline of Key Risks.............................................................................................................12

6.2 Commercial Principles.........................................................................................................12

6.3 Delivery Model Assessment.................................................................................................13

6.4 Recommended Delivery Model...........................................................................................13

6.5 Review 3 (MPC): Delivery Model Selection..........................................................................13

7. Financial Analysis (PPP and DCMO only) Tier 1 Only...............................................................13

7.1 Financing Assumptions........................................................................................................13

7.2 PPP/DCMO Payment Stream...............................................................................................15

7.3 Incremental Procurement/Transaction Costs......................................................................15

7.4 Public Sector Comparator....................................................................................................15

7.5 Review 4 (IFR): Financial (PPP/DCMO only).........................................................................15

8. Project Governance.................................................................................................................16

9. Stakeholder Engagement Plan (Tier 1 Only)............................................................................16

9.1 Stakeholder Identification....................................................................................................16

9.2 Stakeholder Involvement & Interest....................................................................................16

9.3 Stakeholder Engagement Plan.............................................................................................16

10. Advisor Engagement Plan (Tier 1 Only)....................................................................................16

10.1 Proposed Advisors Roles......................................................................................................16

10.1.1. Legal.............................................................................................................................16

10.1.2. Commercial Procurement............................................................................................16

10.1.3. Commercial Financial...................................................................................................17

10.1.4. Technical Design & Engineering...................................................................................17

10.1.5. Other Specialists..........................................................................................................17




10.1.6. Stakeholder Management and Communication..........................................................17

10.1.7. Project Management...................................................................................................17

11. Timeline...................................................................................................................................17

11.1 Project Timetable.................................................................................................................17

11.1.1. Outline.........................................................................................................................17

11.1.2. Proposed float..............................................................................................................17

11.1.3. Project constraints and/or deadlines...........................................................................17

11.1.4. Project decision points.................................................................................................17

12. Appendices..............................................................................................................................18

Appendix A – Functional Brief/Output Specification.......................................................................18

Appendix B – Investment Logic Map...............................................................................................18

Appendix C – Cost Estimate.............................................................................................................18

Appendix D – Risk Register..............................................................................................................18

Appendix E – Project Programme....................................................................................................18

Appendix F – Assumptions Book......................................................................................................18

Appendix G – Risk Management Plan..............................................................................................18

Appendix H – Stakeholder Engagement Plan...................................................................................18




Instructions For Tier One and High Risk Projects - Please complete all sectionsFor Tier Two - please complete all sections except

Section 5.2 Wider Economic Benefits, Section 7 Financial Analysis (PPP and DCMO only) Section 9 Stakeholder Engagement Plan Section 10 Advisor Engagement Plan

1. Executive Summary

This section is to give a succinct summary of the business case submission and should not include any information not in the body of the document.

1.1 Statement of Need

Summary of Section 3 (Needs Analysis)

1.2 Delivery Model

Summary of Section 6 (Delivery Model Analysis)

1.3 Funding Approval Sought

1.3.1. Type of funding sought Feasibility*

Concept design

Detailed design (note only where D+C has been justified)

Full Business Case

Delivery/Construction

*regardless of dollar value of the feasibility funding being sought, it is the estimated total value of the project which guides which Tier the project is considered under.

1.3.2. Cost EstimateSummary of Section 4.1 (Preliminary cost estimate)

1.3.3. Payment Stream (PPP/DCMO only)Summary of Section 7.2 (Payment Stream)




1.3.4. Incremental Procurement/Transaction CostsSummary of Section 7.3 (Incremental Procurement/Transaction Costs)

1.3.5. Contingencies IncludedSummary of Section 4.2 (Contingency)

1.4 Treasury Budget Summary

Funding Category: Feasibility Study / Forward Design / Construction / Plant and Equipment / Information and Communication Technology

Preliminary Financial Impacts SummaryFinancial Impact 2021-22 2022-23 2023-24 2024-25

$m $m $m $mRequested Funding - Recurrent (GPO / EBT) - Capital Injection Other Recurrent Impact (not funded) - Depreciation* Although feasibility studies may be funded through the Capital Works Program, they are expensed in accordance with ACT Treasury's Accounting Policy guideline for capital works. Therefore appropriation for feasibility studies is provided as GPO. For further information:http://www.treasury.act.gov.au/accounting/html/accounting.htm.

Staffing Impacts SummaryImpact 2021-22 2022-23 2023-24 2024-25Total Additional FTEs

Note: These Budget templates apply for the 2021-22 Budget Year.



http://www.treasury.act.gov.au/accounting/html/accounting.htm


2. Project Outline 2.1 Description of the Project

2.1.1. Overview Provide a brief introduction to the project

2.1.2. Scope of works Outline of proposed capital works. Define outputs (e.g. Build a new road) to be provided by the project.

2.1.3. Scope of services Outline of proposed services. Define the services to be provided by the project

2.1.4. Project Assumptions and Dependencies Outline the major assumptions incorporated into the project and project

modelling. Outline where these assumptions are dependent on other actions (eg passage

of legislation, future decisions of government not yet taken).2.2 Review 1 (MPC): Status of Functional Brief/Output Specification

Sign off that the functional brief/output specifications are sufficiently progressed in order to go to market under the delivery model selected and within the procurement timeline outlined in the business case. Attach the Functional Brief at Appendix A.

Review 1 (MPC) Officer Name: ____________________________________

Signature: ____________________________________

Date: ____________________________________

This is the first review point for MPC and is an assessment of the status of the functional brief/output specification.

Sign off should only occur if the MPC officer is confident that the functional brief/output specifications are sufficiently progressed in order to go to market under the delivery model selected, and within the procurement timeline outlined in the business case.

Risk workshops and quantification of project risks is mandatory for Tier 1 and 2 projects.




Disclaimer: This review does not represent an endorsement or agreement by the signing officer as to the contents of the section or a certification that the work was correctly performed.




3. Needs Analysis

Has an Investment Logic Workshop been undertaken? Please attach the Investment Logic Map at Appendix B.

3.1 Problem

Address each of the following questions: What is the problem? What is the evidence to confirm there is a problem? Does the problem need to be addressed now?

3.2 Benefits

3.2.1. Benefits to be delivered Address each of the following questions:

What are the benefits of addressing the problem? Are the benefits of high value to the ACT Government? Are there measurement mechanisms (KPIs) to provide evidence that the

benefits have been delivered?

3.2.2. Importance of the benefits for GovernmentAddress each of the following questions:

How does this proposal align with strategic objectives and priorities of the ACT Government?

How does the proposal enhance existing ACT Government policies or programs or delivery new ones?

Is the proposal associated with/required by the Government (i.e. legislation, funding or election commitment)?




3.3 Options Analysis

3.3.1. Strategic Solutions AnalysisStrategic options are differing approaches to solving the problem (the preferred option should be Option 1) Address each of the following questions:

What different approaches to the problem have been identified? What is the evidence to demonstrate that the strategic options are feasible? Is the preferred strategic option the most effective way to address the problem &

deliver the benefits? What is the link to agency and long term management strategy? What is the proposed project’s contribution to the agency’s and the Whole of

Government’s service delivery strategies? What are the impacts on other projects, organisations or jurisdictions?

3.3.2. Recommended Strategic Solution What is the recommended strategic option?

3.3.3. Project Solutions AnalysisProject options are differing approaches to achieving the solution. Options analysis is a detailed analysis of the shortlisted options for the scope of the project against the base case. The options analysis will provide evidence that supports the preferred scope of a project, and provide the necessary information to enable the ACT Government to make an informed decision. Address each of the following questions:

What different approaches to the solution have been identified? Is the recommended project option the best value for money way to address the

problem and deliver the results? Can the recommended project option be delivered (cost, risk, timeframe etc)? What were the other options considered & rejected early?

3.3.4. Base Case Is this a “do nothing” OR “do minimum” option? Demonstrate exploration of interim solutions.

3.3.5. Recommended Project Solution What is the recommended project option?

3.4 Review 2 (FABG): Needs Analysis

Treasury directorate to sign off that a case for the project is present in the business case.

Review 2 (FABG) Officer Name: ____________________________________

Signature: ____________________________________

Date: ____________________________________




This is the first review point for Treasury and is assessment of the needs analysis. Sign off should only occur if the Treasury officer is confident that the needs analysis is

robust, is based on evidence and an Investment Logic Workshop (ILW) has been undertaken (if applicable).

Note that Tier 1 business cases anticipate review and signoff by the Under Treasurer.


4. Cost & Contingency

The purpose of the financial evaluation of options is to:

Assess the incremental financial value or cost of the shortlisted project options when compared to the base case in present value terms

Assess the commercial viability of the shortlisted project options (where applicable) Assess any funding requirements or subsidies from other Government bodies Assess the affordability of the shortlisted options.

Completion of the financial analysis provides a set of baseline cash flows. This can be used in the development of cost comparators which are used to assess value for money.

4.1 Preliminary Cost Estimate

Please attach a Cost Estimate at Appendix C. Ensure both capital and operating costs are captured.

Also ensure the Shared Services management fee is taken into account (four per cent of the capital value).

4.2 Contingency

4.2.1. Project Contingency Project contingencies should be based on the Risk Organizer P90 figure; if

another method has been utilised, please outline.

4.2.2. Delivery Model Contingency Please see guidance notes for level of contingency appropriate for the

selected delivery model. This contingency is for uncertainty of risk. This contingency can only be accessed by Treasury







4.3 Whole of Life

Outline the Whole of Life cost impacts

4.4 Budget / Funding Strategy

Define the Government investment requested and budgetary impact.




5. Economic Analysis

5.1 Cost Benefit Analysis (or 5.3 Cost Effectiveness Analysis)

A CBA would include analysis such as: Calculate the net present value of the economic benefits and economic costs of

the proposed investment Calculation of a Cost Benefit Ratio

Do the economic benefits of the project exceed the costs?

*a cost effectiveness analysis can be undertaken as an alternative, only on agreement by Treasury

5.2 Wider Economic Benefits (Tier 1 Only)

Do WEBs inform project justification?

6. Delivery Model Analysis

6.1 Outline of Key Risks

Outline process undertaken for risk management. Has a Risk Organizer (or equivalent) workshop undertaken? If not, was any

Risk Workshop undertaken? Please attach a copy of your Risk Register at Appendix D. Please attach a Risk Management Plan which highlights the process to identify,

assess, allocate and monitor current, anticipated and emerging risks. Please note if utilising the Risk Organizer tool, please outline how often risk workshops will be held and who will be managing the process.

6.2 Commercial Principles

Address the relative importance of each of the following criteria in selection of the appropriate delivery model:

o Time to Marketo Flexibilityo Price Certaintyo Risk Transfero Innovation and Incentive




6.3 Delivery Model Assessment

Design + Construct Design & Construct Design Construct Maintain Design Construct Maintain Operate Managing Contractor Alliance PPP (Availability) PPP (BOOT) Project Management Agreement

6.4 Recommended Delivery Model

Outline recommended delivery model. Outline the implications for procurement

6.5 Review 3 (MPC): Delivery Model Selection

MPC to sign off that the delivery model selected is appropriate for the project risk profile and value.

Review 3 (MPC) Officer’s Name: ____________________________________

Signature: ____________________________________

Date: ____________________________________

This is the second review point for MPC and is an assessment of the delivery model analysis.

Sign off should only occur if the MPC officer is confident that the delivery model selected is the most suitable to the project requirements and level of risk.


7. Financial Analysis (PPP and DCMO only) Tier 1 Only

7.1 Financing Assumptions




The business case for a PPP project will require the development of a number of key assumptions including:

o The use of a debt based or capital markets (bond financing) structure for the project

o The gearing assumptions to be utilised (balance between debt and equity finance)

o The cost of debt and equityo The coverage ratios to be applied o Taxation structure.

The assumptions related to the financing structure and associated cost of funds should be developed in liaison with Treasury.




7.2 PPP/DCMO Payment Stream

Estimate of the annual availability fee that a typical private sector bidder may seek in order to generate its required return on equity.

Represents the costs of delivering the project under the PPP or DCMO delivery option.

Also expressed in net present cost (NPC) terms for comparison with the risk adjusted Public Sector Comparator (PSC).

7.3 Incremental Procurement/Transaction Costs

Identification and estimation of incremental procurement and transaction costs in particular in relation to:

o Legal adviceo Commercial adviceo Technical advice.

7.4 Public Sector Comparator

Description and estimate of the NPC to government if it was to deliver the project under a traditional procurement method for example Design and Construct.

Incorporation of key attributes including: o Based on the reference project – reflecting the cost to government of

delivering the infrastructure and services to the same standards as being procured from the private sector under the most likely traditional procurement model if not a PPP

o Based on whole of life cost of providing the services and maintaining the infrastructure to a prescribed standard

o Risk-adjusted.

7.5 Review 4 (IFR): Financial (PPP/DCMO only)

Not applicable

Treasury to sign off that the financial analysis has been prepared by an appropriately skilled advisor (IFR Panel) and that there are no unacceptable assumptions in the analysis (only applicable for PPP/DCMO delivery models).

Review 4 (IFR) Officer Name: ____________________________________

Signature: ____________________________________




Date: ____________________________________

This is the second review point for Treasury and is an assessment of the financial estimate calculations for PPP and DCMO models.


8. Project Governance

Outline of proposed project governance structure that will be put in place:- Multiple tiers- Chaired at what levels- What are the Government Directorates involved and what are their roles?

9. Stakeholder Engagement Plan (Tier 1 Only)

9.1 Stakeholder Identification

Identify key stakeholder groups.

9.2 Stakeholder Involvement & Interest

Outline of involvement & interest of key stakeholder groups.

9.3 Stakeholder Engagement Plan

Outline the strategy to manage stakeholders. Attach a Stakeholder Engagement Plan at Appendix H (if applicable).

10. Advisor Engagement Plan (Tier 1 Only)

10.1 Proposed Advisors Roles

10.1.1. Legal Will an external Legal Advisor be required?

- Risk mitigation- Estimated cost




- Duration

10.1.2. Commercial Procurement Will a Commercial Procurement Advisor be required?

- For DCMO and PPP this is mandatory- In house resources and expertise advisable

10.1.3. Commercial Financial Will a Commercial Financial Advisor be required?

- For PPP this is mandatory

10.1.4. Technical Design & Engineering Will Technical Design or Engineering advice be required?

- Peer Review?

10.1.5. Other Specialists Will any other specialist advice be required?

- Environmental Advisor? - Heritage/Indigenous Advisor?

10.1.6. Stakeholder Management and Communication Will Stakeholder Management/Communications be required?

- Sensitive project/community objection?

10.1.7. Project Management Will an external Project Manager be required?

11. Timeline

11.1 Project Timetable

11.1.1. Outline Please attach a Project Programme at Appendix E

11.1.2. Proposed float Outline proposed float in the project.

11.1.3. Project constraints and/or deadlines Outline proposed project constraints/deadlines.

11.1.4. Project decision points Outline key project decision points.




12. Appendices

Appendix A – Functional Brief/Output Specification

Appendix B – Investment Logic Map

Appendix C – Cost Estimate

Appendix D – Risk Register

Appendix E – Project Programme

Additional Appendices for (Tier 1 Only)

Appendix F – Assumptions Book

Appendix G – Risk Management Plan

Appendix H – Stakeholder Engagement Plan



Documents

SAF Business Case Template Tiers 1 and 2 v2.1 · Web viewInfrastructure Finance and Reform, Treasury (IFR): Reviewing Officer, Major Projects Canberra (MPC) Reviewing Officer, F inance