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The business case: a mandatory step in construction

The Directive sur la gestion des projets majeurs d’infrastructure publique (the “Directive”), the Directive on management of major public infrastructure projects, makes it clear that the presentation of a “dossier d’opportunité”, or business case, is now a mandatory step in the startup phase of a project considered to be major according to the criteria determined by the Conseil du trésor.

Since November 2013, a new legal framework has been deployed by the Gouvernement du Québec with the Public Infrastructure Act, which has the purpose of establishing governance rules for public infrastructure investment planning and public infrastructure management.

Under this Act, the Directive came into force on February 12, 2014. The provisions presented are relevant for the governance of any infrastructure or real estate project, whether public or private.

Role of the business case in the management project of a major infrastructure project

Based on our experience and expertise in preparation of the business case, this analytical step has positive impacts on the planning of the major projects envisioned.

Indeed, one of the special conditions of the Québec context regarding the funding and procurement of major projects is the emphasis of the rigour of the processes and requirements, both in quantitative analysis of the project inputs and in the environmental, societal, economic and fiscal impacts.

The methodology proposed by Strategia Conseil for preparation of a business case seeks to emphasize the following distinctive factors to achieve the objectives of the mandates to be performed:

  • An exhaustive review of the inputs related to evaluation of the costs by our cost estimating specialists;
  • The transformation of past studies into decision help tools, combining the lessons learned with the solidity of the technical and financial analysis;
  • The selection of the most interesting scenarios in collaboration with the client, thanks to a dynamic and synthetic analysis;
  • A major effort for synthesis and communication of the results for use and rapid appropriation by the decision-makers of the conclusions of the results of the mandate.

This approach is supported by a structured work program consistent with the previous studies and all the inputs available, in order to take advantage of the efforts undertaken up to the time the business case is prepared, while providing a new perspective and directly actionable analysis and communications tools.

Issues and challenges marking the preparation of a business case

Taking into consideration the Directive’s precise instructions, we consider that the issues and challenges related to the achievement of the objectives of the different studies and mandates to be performed essentially depend on the following aspects.

Activities on the critical path

Obtaining inputs related to estimating of the project costs and the project’s risk analysis processes are activities that must be considered to be on the critical path.

Ensure a level of maturity and quality required for the inputs

They will support the analyses, particularly for the financial analysis of the performance modes.

 

Synthesis

The demonstration of a high-level capacity for synthesis allows presentation of options, scenarios and analyses to support decision-making.

Communication

The demonstration of communication abilities that allow guidance and support of strategic thinking around the development of projects.

Preparation of a business case: Strategia Conseil’s expertise

The preparation of a robust business case is the best approach to optimize the probabilities of success of a major project, not only in terms of deadline and cost compliance, but also by accounting for the project’s risks and the infrastructure life cycle.

The preparation of important decision-making documents that must be able to progress smoothly throughout the decision-making and authorization process is a complex exercise involving several stakeholders.

Strategia Conseil has major experience in mandates involving analysis of conventional development mode (traditional and management) and alternative mode (turnkey, DBF and PPP).

Thanks to this experience, we understand how the risks associated with construction of a project, the infrastructure life cycle and optimization of the transfer of the risks associated with major projects have impacts in terms of value added for the public funds invested.

If you would like to discuss and learn more about the business case, don’t hesitate to contact our expert advisor Sylvain Rouillard with your questions and comments.