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A comprehensive and constructive Business Case provides justification for undertaking a Greenfield Infrastructure Project or Brownfield Infrastructure Project.

It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.

Business Case is the generalised term for Cost-Benefit Analysis. 

The foundation stone of a Cost-Benefit Analysis is a Base Case Financial Model.

Below are extracts from Commonwealth Dept of Finance 'Developing a Business Case':

Note:

• This Toolkit item relates to Part 1 - Investment Proposal and Business Case Development.

• This Toolkit item should be read in conjunction with the Cost Estimation Toolkit.

What is a business case?

A business case sets out the problem or opportunity, considers options, analyses costs, benefits and risks, and ultimately supports an investment decision. The completion of a detailed business case on investment proposals coming forward is encouraged. The business case should clearly outline the nature of the policy problem the investment is seeking to address that directly links to the goals and objectives of the Government in the market/sector in which the investment is proposed.

A business case is considered the key document to support investment decision-making. To ensure that it achieves its purpose the business case should be continually updated throughout the development and decision-making process to include the best information available, while taking into account whole-of-life cycle considerations.

The essential elements of a business case are outlined below.  These have been modified from Infrastructure Australia guidance for application in a broader range of policy proposals.  For infrastructure projects where Australian Government funding sought is greater than $100 million please refer to the Infrastructure Australia Assessment Framework.

Essential elements of a business case

1. Identify problems and/or opportunities

The purpose of this stage is to identify current and emerging problems and opportunities and demonstrate the benefits of addressing them.

A ‘problem’ is a cost to be avoided or saved, while an ‘opportunity’ is a benefit to be gained.

The impact of problems or opportunities should be demonstrated using evidence, including:

• the scale of the problem or opportunity, expressed in monetary terms where possible
• the timing of the problem or opportunity — when the costs and benefits will occur, and how this timeframe influences investment decisions

• the underlying or root causes of the problem or opportunity.

Key questions to address include:

• Is the problem/opportunity expressed as a straightforward statement?
• Is the problem/opportunity to link to other problems, programs and projects?
• How does the problem/opportunity align with relevant Government priorities/policy objectives?
• Is the problem/opportunity measured by quantitative and/or qualitative data?
• Has the problem/opportunity been monetised over time?
• What are the assumptions about future trends in drivers (e.g. population, economic growth, technology, climate trends)?
• Have the project/opportunity interrelationships been described?

2. Options analysis

The purpose of this stage is to present a wide range of options, including a base case, to address an identified problem or opportunity. You should then assess each of these options through a rigorous process to determine which are likely to most benefit the Australian community. Options Analysis should identify a long list of options to address the problems and opportunities that were identified above.

The long list of options should represent a wide range of reasonable alternatives (both capital and non‑capital) and a detailed and evidence-based assessment to determine a shortlist of these options. You should consider how individual initiatives and options can be packaged together or better coordinated for a more efficient and effective outcome, and how such options can handle future uncertainty if necessary.

The key deliverables from this stage are:

• a description of each option
• benefits
• cost information (including capital expenditure and operating expenditure, where relevant), at a high level
• a description of the option’s expected impact in terms of efficiency, equity and productivity, imposed on or gained by stakeholders by the possible initiatives

3. Detailed business case development

The purpose of this stage is to refine and finalise your business case by:

• developing in greater detail the options you shortlisted above to address the problem or opportunity. This includes detail on the costs, benefits, delivery and risks of each option.
• refining options on the basis of your analysis. For example, you may refine route alignments, interchanges or building design standards

• ensuring that all factors relevant to the success of an option are comprehensively addressed. For example, operations, land use planning and governance structures.

Key questions to address include:

• How was the project contingency estimated?
• For each benefit component, how were the benefits estimated? What are the forecast benefits?
• What are the characteristics of the underlying demand model?
• What timeframe has demand been modelled over (month, quarter, year etc.)?
• Who were the capital cost estimates prepared by?
• What are the underlying characteristics of the cost-benefit analysis  conducted for each project case?
• What are the ongoing costs associated with the project, including maintenance and operating costs?
• Are costs consistent with best practice cost estimation guidelines?
• What sensitivity analysis has been undertaken?
• Related initiatives or projects – Are the benefits and costs closely related to, dependent upon or potentially influenced by other initiatives or projects?
• Are there any non-monetised costs and benefits? If so, what are the potential project benefits from them?
• What is the Delivery Strategy and Operations Strategy?
• How will the project be funded and financed?
• What are the unmitigated project risks?
• What is the Post Completion Review strategy/approach

See also Greenfield,  Eleven Steps To Complete A Greenfield Or Brownfield Infrastructure Project Finance Transaction.