| Term | Definition |
|---|---|
| Agglomeration | The benefits of clustering or high concentration of businesses and economic activity in a relatively small geographic area. |
| Appraisal | The process of determining impacts and overall merit of a proposal, including gathering and presenting relevant information for consideration by the decision-maker. |
| Appraisal period | The number of years over which the benefits and costs of an infrastructure proposal are assessed in a cost-benefit analysis. A default value of 30 operational years plus construction time is generally used for infrastructure proposals. Refer to the Guide to economic appraisal for more information. |
| Assessment Framework |
A publicly available document that details how Infrastructure Australia assesses infrastructure proposals. It provides structure to the identification, analysis, appraisal, and selection of proposals and advises proponents how to progress through the following four stages:
|
| Australian Infrastructure Audit | Published in August 2019, the Audit is developed by Infrastructure Australia to provide a strategic assessment of Australia’s infrastructure needs over the next 15 years. It examined the drivers of future infrastructure demand, particularly population and economic growth. Data from the Audit is an evidence base for assessments of proposals for inclusion on the Infrastructure Priority List. |
| Australian Infrastructure Plan | The 2021 Plan was developed by Infrastructure Australia as a positive reform and investment roadmap for Australia. Building off the evidence base of the Audit (see Australian Infrastructure Audit), the Plan sets out solutions to the infrastructure challenges and opportunities Australia faces over the next 15 years, to drive productivity growth, maintain and enhance our standard of living, and ensure our cities remain world class. The 2021 Plan supersedes the February 2016 Plan. |
| Base case |
A project appraisal compares the costs and benefits of doing something (a 'project case') with not doing it (the 'base case'). The base case should identify the expected outcomes of a ‘do-minimum’ situation, assuming the continued operation of the network or service under good management practices. We recommend the committed and funded expenditure approach to defining the base case, but recognise that some states and territories use the planning reference case approach. |
| Base year | The year to which all values are discounted when determining a present value. (See discounting and discount rate). |
| Benefit-cost ratio (BCR) | This is the ratio of the present value of economic benefits to the present value of economic costs. It is an indicator of the economic merit of a proposal presented at the completion of a cost-benefit analysis. (See cost-benefit analysis). |
| Business case | A document that brings together the results of all the assessments of a infrastructure proposal. It is the formal means of presenting information about a proposal to aid decision-making. It includes all information needed to support a decision to proceed with the proposal and to secure necessary approvals from the relevant government agency. Unless otherwise defined, we are referring to a final or detailed business case, rather than an early (for example, strategic or preliminary) business case, which is developed in accordance with state or territory requirements. A business case is prepared as part of Stage 3 of the Assessment Framework. |
| Capital cost | The initial fixed costs required to create or upgrade an economic asset and bring it into operation. This includes expenses such as the procurement of land, buildings, construction, labour and equipment. |
| Cost-benefit analysis (CBA) | An economic analysis technique for assessing the economic merit of an infrastructure proposal. It involves assessing the benefits, costs, and net benefits to society the proposal would deliver. It aims to attach a monetary value to the benefits and costs wherever possible and provide a summary indication of the net benefit. (See benefit-cost ratio). |
| Deliverability | One of three overarching Assessment Criteria we use to assess the merit of every proposal, at every stage. This criterion asks: can the proposal be delivered successfully? We assess whether the proposal is capable of being delivered successfully, whether risks have been identified and sufficiently mitigated, and whether there is a plan in place to realise the benefits. This criterion is divided into five themes: ease of implementation, capability and capacity, project governance, risk and lessons learnt. |
| Demand management | Deliberately managing the rate of use of an infrastructure network to improve its efficiency. This can be done through a variety of methods, such as structuring pricing for electricity consumption around peak periods or promoting water reuse. |
| Developing Regions and Northern Australia | Developing regions with strong growth prospects and where industry composition is changing, and northern Australia, including a mix of regions across the Northern Territory, and the northern parts of Queensland and Western Australia. The population size varies across locations |
| Discount rate | The interest rate at which future dollar values are adjusted to represent their present value (that is, in today’s dollars). This adjustment is made to account for the fact that money today is more valuable than money in the future. Cost-benefit analysis should use real social discount rates. |
| Discounting | The process of converting money values that occur in different years to a common year. This is done to convert the dollars in each year to present value dollars. (See discount rate). |
| Dispatchable power | On demand supply from other energy generation sources to support intermittent power output from renewable power generation (such as wind and solar power). |
| Evaluation summary | Infrastructure Australia’s published assessment of a proponent’s business case. It summarises our review of the business case in accordance with the Assessment Framework and, if applicable, identifies whether or not the proposal has been included on the Infrastructure Priority List. (See Assessment Framework). |
| Fast-growing Cities | Brisbane, Sydney, Melbourne and Perth |
| Firming capacity | See dispatchable power. |
| First Nations | First Nations - Recognises Aboriginal and Torres Strait Islander peoples as the First Peoples of Australia, prior to the settlement of other people or nations. |
| Financial analysis | The evaluation of the benefits and costs, measured in financial cash-flow terms, to a single entity (that is, not the community or the economy). |
| Gross domestic product (GDP | A monetary measure of the market value of all the final goods and services produced in a period of time, often annually or quarterly. |
| High Priority Water | High priority water is a water entitlement product that is prioritised such that water is allocated to this entitlement type before medium priority entitlement holders. Mining, urban and permanent irrigation water users often hold high priority water entitlements. |
| High Productivity Vehicles (HPVs) |
A generic term used for all Performance-Based Standards (PBS) vehicles, as defined by the National Heavy Vehicle Regulator: ‘vehicles designed to perform their tasks as productively, safely and sustainably as possible, and to operate on networks that are appropriate for their level of performance’. Various regulations apply to HPVs, depending on their PBS level (which reflects their configuration, length, and mass limits), including which roads they can access and driver licence requirements. |
| Impact | A generic term to describe any specific effect of a proposal. Impacts can be positive (a benefit) or negative (a cost). |
| Impact (problem or opportunity) timeframe | For Early-stage proposals (Stage 1), this indicates when the problem or opportunity is likely to have a nationally significant impact. |
| Indicative Delivery Timeframe | For investment-ready proposals (Stage 3), this provides the proponent’s indication of when the proposal is likely to be delivered and operational. |
| Infrastructure operating costs | The costs of providing the infrastructure after the proposal has commenced operation (for example, maintenance and administration costs of a facility). |
| Intelligent Transport Systems (ITS) |
ITS-Australia defines Intelligent Transport Systems as: ‘The application of modern computer and communication technologies to transport systems, to increase efficiency, reduce pollution and other environmental effects of transport and to increase the safety of the travelling public.’ |
| Investment-Ready Proposal (Stage 3) | Stage 3 submissions that are positively assessed by us are listed on the Infrastructure Priority List as investment-ready proposals. |
| Land use impacts | A change in the types of activities that occur in a section of land, or the intensity of those activities. Changes in activity may be caused by a change in use of the existing built form or a change in the built form itself. For example, an increase in the amount of high-density housing in the area around train station. |
| Maintenance | Incremental work to repair or restore infrastructure to an earlier condition or to slow the rate of deterioration. This is distinct from construction and upgrading, which seeks to extend infrastructure beyond its original condition. |
| Medium Priority Water (Qld) | Medium priority water allocations generally have lower reliability than high priority water allocations and are mainly used for agriculture. This means during drier conditions, and when storage levels are low, these water allocations are the first to be restricted. |
| Mode share | Passengers using a particular type of transport as a percentage of all passengers in the network or region. For example, the rail mode share would be the percentage of passengers who use rail services to travel. |
| Multi-criteria analysis (MCA) | An analysis tool that differentiates and evaluates options using a set of project-specific criteria with weights assigned to each criterion. The analysis involves scoring and weighting each option against each criterion. MCA can be used for analysing a longlist of options against how they address problems and opportunities but should not be used by itself to develop a shortlist of options. |
| Nationally significant problem or opportunity | The Infrastructure Australia Act 2008 (Cth) defines nationally significant infrastructure as including transport, energy, communications, and water infrastructure ‘in which investment or further investment will materially improve national productivity’. We also consider social infrastructure, such as health, education, social housing and community facilities. As a guide, for a proposal to be considered nationally significant, it should concern a problem or opportunity that will have more than $30 million per annum impact on the economy (nominal, undiscounted). We also take unquantified social benefit considerations into account. |
| Net present value (NPV) | The monetary value of benefits minus the monetary value of costs over the appraisal period, with discount rates applied (See discount rates and appraisal period). |
| Network |
Infrastructure networks are the physical assets that enable the provision of services such as transport connectivity, power, water and internet. In the context of the transport sector, a network refers to a collection of routes that provide interconnected pathways between multiple locations for similar traffic. This can be uni-modal (supporting one type of transport, for example, a rail network) or multi-modal (supporting multiple types of transport, for example, a road network). |
| Network optimisation (transport) | Making better use of existing infrastructure assets and improving performance through low or non-capital cost actions. For example, using technology to improve corridor management, reallocating road space between modes of transport, or encouraging users to shift from congested modes and routes to those with more capacity. |
| Nominal prices | A value or price at a given time. Nominal prices rise with inflation. In contrast, real prices are prices after the effect of inflation has been removed. (See real prices). |
| Non-infrastructure options/solution | Proposals that avoid the need for significant expenditure on new or upgraded infrastructure. For example, changes to pricing or reforms to regulations. |
| Operating costs | The costs of providing the infrastructure after it has commenced operation (e.g. maintenance and administration costs of a facility). |
| Opportunity cost |
The value lost to society from using a resource in its next best alternative use, represented in dollars. Synonymous with ‘resource cost’ and ‘social cost’. This cost reflects market prices where there is an absence of market failure. Where market failure exists, appropriate adjustments are required to estimate the true opportunity cost. |
| Option | A possible solution to a problem, including base case options such as ‘do nothing’ or ‘do minimum’. (See base case). |
| Options analysis | The analysis of alternative options for solving an identified problem or realising an identified opportunity. (See option). |
| Post-completion review | A review of a completed set of actions to determine whether the desired objectives and/or forecast benefits and costs have been realised, and to explain the reasons for any differences between the expected and actual outcomes. The aim is to draw appropriate lessons for future project identification and assessment. A post-completion review is sometimes referred to as an ‘ex-post evaluation’. |
| Potential investment options (Stage 2) | Stage 2 submissions that are positively assessed by us are listed on the Infrastructure Priority List as potential investment options. |
| Productivity | The efficiency with which the economy as a whole convert inputs (labour, capital and raw materials) into outputs. Productivity grows when outputs grow faster than inputs, which makes the existing inputs more productively efficient. |
| Project | An infrastructure intervention. A project will move through the stages of project initiation, planning, delivery and completion. A suite of related projects to address a common problem or opportunity will create a program. |
| Program | A proposal involving a package of projects that are clearly interlinked by a common problem or opportunity. The package presents a robust and holistic approach to prioritise and address the projects, and there is a material opportunity to collaborate and share lessons across states, territories or agencies. The projects can be delivered in a coordinated manner to obtain benefits that may not be achieved by delivering the interventions individually. (See project). |
| Proponent | An organisation or individual who prepares and submits infrastructure proposals to us for assessment. To be a proponent of a business case (a Stage 3 submission),the organisation must be capable of delivering that proposal. |
| Proposal | The general term we use for successful submissions to the Infrastructure Priority List, across the key stages of project development, specifically – early-stage (Stage 1), potential investment options (Stage 2) and investment-ready proposals (Stage 3). Proposals that have been delivered would be assessed in Stage 4. |
| P50 cost | An estimate of project costs based on a 50 per cent probability that the cost estimate will not be exceeded. |
| P90 cost | An estimate of project costs based on a 90 per cent probability that the cost estimate will not be exceeded. |
| Real prices | Prices that have been adjusted to remove the effects of inflation. They must be stated for a specific base year, for example ‘2016 prices’. (See base year). |
| Resilience | The ability of the community to anticipate, resist, absorb, recover, transform and thrive in response to shocks and stresses to realise positive social, economic and environmental outcomes. |
| Risk | Events that have probabilities of occurrence that are predictable and outcomes that can be estimated with some confidence. |
| Smaller Cities and Regional Centres | Smaller capital cities, satellite cities and regional centres home to typically more than 10,000 people. |
| Small Towns, Rural Communities and Remote Areas | Small towns with populations of typically fewer than 10,000 people and more than 200 people, regional communities with fewer than 200 people, and all remote areas outside of recognised settlements, including connecting infrastructure. |
| Smart freeway / Smart motorway |
Smart motorways comprise an integrated package of Intelligent Transport Systems (ITS) interventions. This includes coordinated ramp signalling, speed and lane use management, traveller information (using variable message signs) and network intelligence (such as from vehicle detection equipment). (See Intelligent Transport Systems). |
| Social cost | See opportunity cost. |
| Socially beneficial | Something is socially beneficial if you can demonstrate an evidence-based improvement that will change the quality of life of Australians. For example, through improved health outcomes, access to services/employment, and improved environmental outcomes. |
| Social outcomes | An impact from a project or initiative that will change the quality of life of Australians. For example, health and wellbeing benefits that result from improved access to healthcare services and improved air quality. |
| Societal Impact |
One of three overarching Assessment Criteria we use to assess the merit of every proposal, at every stage. This criterion asks: what is the value of the proposal to society and the economy? We assess whether the social, economic and environmental value of the proposal, and its contribution to community sustainability and resilience is clearly demonstrated by evidence based analysis. This criterion is divided into five themes: quality of life, productivity, environment, sustainability and resilience. |
| Strategic Fit | One of three overarching Assessment Criteria we use to assess the merit of every proposal, at every stage. This criterion asks: is there a clear rationale for the proposal? We assess whether there is a strong case for action, the proposal aligns to the achievement of stated goals and there is a clear fit with the community.
This criterion is divided into five themes: case for change, alignment, network and system integration, solution justification and stakeholder endorsement. |
| Strategic merit | Evidence that the proposal addresses a problem and/or opportunity of national significance and would deliver outcomes consistent with other government priorities and commitments. |
| Sustainability | Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. |
| Travel time savings | The benefit of less time spent travelling as a result of a project. The number of hours saved is typically modelled for both personal and business travel across a network, then converted to a monetary value for use in cost-benefit analysis (see cost-benefit analysis). |
| Twenty-Foot Equivalent Units (TEUs) | An inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 20foot long (6.1 m) intermodal container, a standard-sized metal box that can be easily transferred between different modes of transportation, such as ships, trains and trucks. |
| Urban renewal | The Victorian Planning Authority defines urban renewal as: ‘…unlocking under-utilised areas for jobs, investment, and housing. It can often involve rezoning land, improving an area’s amenity and identifying transport and infrastructure needs.’ |
| Vehicle operating costs | The costs associated with owning, driving and maintaining a vehicle. This includes the costs of fuel consumption, oil and lubrication, tire wear, repair and maintenance, depreciation, and license and insurance. |
| Wider economic benefits (WEBs | Improvements in economic welfare from agglomeration, imperfect competition and labour supply effects that are acknowledged, but have not been typically captured in traditional cost-benefit analysis. (See cost-benefit analysis). |