What recent changes to Infrastructure Australia's Assessment Framework mean for your project
Infrastructure Australia (IA) has recently released a refresh of the Infrastructure Australia Assessment Framework (IAAF). This is used to assess submissions to the Infrastructure Priority List (IPL) for potential Australian Government funding.
29 September 2021 | 1 min read
Drawing on the RPS Economics team’s experience reviewing submissions to Infrastructure Australia, peer-reviewing updates to the guidelines, and developing new options assessment (multi-criteria analysis) guidelines and tools, here are some key insights on what these changes mean for proposals and projects in practice, including:
Increased minimum threshold
New criteria themes moving beyond the benefit cost ratio (BCR) including quality of life, resilience, and sustainability.
Greater emphasis on stakeholder engagement, data analytics, and unconventional benefits.
Incorporating stakeholder views into options assessment.
Increased minimum threshold
The first key change to IA’s guidelines is the minimum threshold for funding being sought, which has increased from $100 million to $250 million. This is equivalent to capital costs of between $312.5 million and $500 million, depending on whether the Australian Government contribution is 50 per cent or 80 per cent.
This does not stop proponents submitting for Stage 1 (problem and opportunity) or Stage 2 (options) for inclusion on the IPL, but it means that Stage 3 (business case) submissions won’t be reviewed unless they are requesting at least $250 million in funding.
Projects that do not meet this threshold may only submit if they can be considered as part of a broader program that exceeds the minimum threshold (noting that program evaluation also has a new guideline module).
New criteria themes moving beyond the benefit cost ratio (BCR)
Infrastructure Australia has developed 15 themes mapped against its three assessment criteria. This means that reviewers will take a broader range of evidence into account when completing their assessment.
This is a game-changer for projects with regional development or social objectives where conventional approaches did not give sufficient weight to social value drivers.
Key themes that align with the social value objectives of regional and social infrastructure projects include:
There may be the potential for double counting across themes that include similar considerations, so proponents and reviewers may need to choose one theme to report against where this occurs.
It is important to note that these criteria and themes should not be assessed in a mechanical way (weighted scores for example) but considered in their totality.
Assessment Framework criteria
Greater emphasis on stakeholder engagement, data analytics and unconventional economics
In addition to stakeholder engagement being elevated to its own assessment theme, engaging with community stakeholders will also be critical in providing evidence around social impacts and benefits such as quality of life and community resilience.
Similarly, a move away from reliance on conventional approaches in current economic appraisal guidelines will make additional data analytics and new economic approaches more important. These must be aligned with IA’s themes but draw on existing principles of cost benefit analysis and lessons learned from other social infrastructure sectors.
Incorporating stakeholder views into options assessment
RPS has developed new options assessment guidelines for Infrastructure Australia and modelling tools which were applied across all sectors in the 2021 Australian Infrastructure Plan.
We applied a multi-criteria analysis (MCA) approach as this provides the flexibility to accommodate a range of option types across sectors, and incorporate a range of quantitative and qualitative evidence.
Criteria applied in the 2021 Australian Infrastructure Plan included costs and complexity, risks in implementation, user impacts (quality of services, access and affordability), and community impacts (productivity, environment, quality of life, and governance).
Reporting of results required consideration of at least two evidence-based scenarios:
Community and business – Extensive survey on preferences for different criteria, demonstrating that communities value benefits around twice as much as costs.
Balanced – Reflect the principles of cost benefit analysis where costs and benefits are weighted equally.
Given the large number of options, visualisation of results was a key requirement, including the use of traffic light visuals for ratings and radar diagrams.