Infrastructure Australia has released the 2021 edition of its Assessment Framework. Developed over an 18-month period and involving close consultation with government and industry stakeholders, the Assessment Framework is designed to support better infrastructure decision making in Australia.

Infrastructure Australia’s Chief of Infrastructure Assessment, David Tucker, explains how the Australian Government’s infrastructure advisor has broadened its approach to assessing business cases for major infrastructure proposals and incorporated new guidance on sustainability and resilience.

The assessment framework promotes high-quality decision-making

Investing in infrastructure can improve quality of life and productivity, but the outcomes delivered by individual projects depend on the quality of planning and decision-making. To achieve outcomes that benefit the community, projects need to be carefully designed, rigorously assessed, and appropriately timed. Infrastructure Australia’s Assessment Framework provides governments and industry with a national standard for best-practice infrastructure development.

It also outlines a structured, evidence-based, and objective approach to decision-making. Taken together, the guidance in our Assessment Framework supports the development of high-quality business cases, enabling proposals that are deliverable, aligned to government policy and that maximise societal benefits.

We apply the Assessment Framework when assessing proposals for inclusion on the Infrastructure Priority List and when evaluating proposals that have received $250 million or more in Australian Government funding. This ensures that the Priority List provides the community with a national pipeline of beneficial investment opportunities and that our advice to government is robust and evidence based.

Focused on continuous improvement

To ensure the Assessment Framework remains fit for purpose and continues to reflect the latest thinking, we are committed to updating it periodically. This helps us to reflect contemporary approaches, incorporate our own expertise and respond to the needs of stakeholders.

For the 2021 edition, in addition to incorporating the latest thinking, we also focused on improving transparency, useability and alignment with state and territory requirements.

To do this, we undertook a comprehensive review of the Assessment Framework to identify areas of improvement or opportunities for new guidance. Importantly, to support Australia’s economic recovery from the COVID-19 pandemic, we also explored further opportunities to streamline processes.

With clear objectives for the 2021 Assessment Framework, we have made several significant updates including:

♦ A simpler four-stage process that aligns with state and territory frameworks
♦ Broadening our Assessment Criteria, enabling proposals to be considered holistically
♦ Providing a clear definition of national significance
♦ Adopting a pragmatic approach for defining the project base case
♦ Recommending, but not requiring, at least two options and a base case in a business case
♦ An updated cost–benefit analysis (CBA) methodology

To strengthen our technical advice, we also developed four separate technical guides to support the Assessment Framework. These four new technical guidelines will help our stakeholders in the development of their proposals by providing best-practice guidance in the areas of: risk and uncertainty analysis, program appraisal, multi-criteria analysis, and economic appraisal.

We believe that through taking a collaborative approach, we were able to maximise opportunities for alignment and develop an Assessment Framework that adds value to the infrastructure investment decision-making process in Australia.

An updated approach to assessment – going beyond the BCR

One of our most significant updates is the significant steps we have taken to broaden our assessment approach. The Assessment Framework now includes a more detailed definition of our Assessment Criteria, enabling a more holistic review of a proposal’s potential benefits. We have detailed 15 themes that underpin our Assessment Criteria and account for a range of technical, economic, and broader social considerations.

2021 assessment framework – assessment criteria

Strategic Fit: ‘Is there a clear rationale for the proposal?’

• Case for change
• Alignment
• Network and system integration
• Solution justification
• Stakeholder endorsement

Societal Impact: ‘What is the value of the proposal to society and the economy?

• Quality of life
• Productivity
• Environment
• Sustainability
• Resilience

Deliverability: ‘Can the proposal be delivered successfully?’

• Ease of implementation
• Capability and capacity
• Project governance
• Risk
• Lessons learnt

Our updated Assessment Criteria enables us to better take account of benefits such as sustainability, resilience, and quality of life.

Although the Assessment Framework still requires the use of cost–benefit analysis (CBA) to produce a benefit-cost ratio (BCR), this approach means that we now explicitly recognise and promote broader social factors alongside the CBA results.

Despite our new holistic assessment approach, we are still committed to ensuring rigour remains an essential component of the project development process. As such, the Assessment Framework clearly defines our information requirements for broader benefits and includes detailed guidance on how proponents can consider them in a structured manner.

To support this, we have provided new guidance on:

♦ How to capture broader benefits quantitatively
♦ How to present and structure benefits qualitatively
♦ Demonstrating benefits for proposals in regional and remote areas, with a focus on health and education benefits
♦ Analysing equity and distributional effects as a supplement to economic analysis
♦ The criteria for national significance to better consider alignment with strategic policy goals.

Sustainability and resilience in the assessment framework

With a changing climate and increased global uncertainty, the sustainability and resilience of infrastructure networks and assets is of growing importance for governments, industry, and the broader community. In line with this, we have embedded sustainability and resilience throughout the Assessment Framework, including in our holistic assessment approach.

To promote the consideration of sustainability and resilience in project development, we have provided proponents with an array of relevant technical guidance including:

♦ How sustainability and resilience might be included in CBA and how it is considered qualitatively
♦ How to measure the long-term benefits of sustainability and resilience, considering the short-term costs
♦ High-level guidance relating to the consideration of sustainable and resilient design features
♦ How to account for risk and uncertainty throughout project development – including specific guidance relating to climate change
♦ High-level guidance relating to sustainability and resilience in the delivery and operations strategy

Crucially, we explicitly define the different characteristics of resilience and sustainability and outline how they apply to infrastructure.

This is an important consideration as sustainability and resilience are different concepts, which require distinctly different treatments.

For instance, infrastructure is sustainable when it is planned and designed to optimise social, economic, environmental and governance outcomes efficiently and responsibly. On the other hand, infrastructure is resilient when it enables communities to anticipate, resist, absorb, recover, transform, and thrive in response to shocks and stresses.

We hope that by including this guidance, we will start to see a step-change across the industry whereby sustainability and resilience becomes a first-order consideration in the development of infrastructure proposals.

Now that the Assessment Framework has been released, we are pivoting towards its implementation through the assessment of proposals for the 2022 Infrastructure Priority List, to be released in February next year. We hope that the updated Assessment Framework will help influence the development of high-quality proposals that will deliver broad benefits to Australian communities, including positive sustainability and resilience outcomes.

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