Quality of major transport infrastructure project business cases

Overview

Objective

To determine whether business cases for major transport infrastructure projects support informed investment decisions.

Issues

Victoria’s strong population growth has prompted a significant uplift in government investment in infrastructure. The Budget Papers for 2020–21 highlighted $134 billion of capital projects funded and underway, and investment averaging $19.6 billion per year over the budget and forward estimates.

This scale of investment brings significant opportunities and risks that demand rigorous evidence‐based analysis to inform government decision‐making. Investments must be well targeted, scoped, planned and costed to enhance the chances of timely project delivery that provides value for money and delivers expected service levels and benefits. 

DTF has published extensive guidance on the format and content of business cases for more than a decade. DTF’s Investment Lifecycle and High Value and High Risk Guidelines (lifecycle guidelines) highlight the fundamental importance of business cases to sound planning and decision‐making on infrastructure investments. 

Previous performance audits have identified major infrastructure projects that did not fully adhere to the lifecycle guideline requirements for business case timing, development and content. In some instances, investments commenced before completion of a business case. In others, the project’s costs and benefits specified in the business case were not well supported, which created risks that project’s benefits were overestimated and costs underestimated.

This audit will examine a selection of business cases developed by DoT, including the Major Transport Infrastructure Authority (MTIA). The audit will assess how this department develops and resources its business cases and engages with external project reviews. 

Proposed agencies

DTF and DoT, including MTIA.

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