The document outlines Saudi Arabia's Public Investment Management (PIM) framework and Project Portfolio Planning (PPP) process. It introduces the Five Case Model business case approach used in PPP. The model assesses the strategic, economic, commercial, financial, and management cases for projects. It then discusses each step of Saudi Arabia's PPP process in detail, including screening projects using a strategic assessment, risk assessment, and strategic outline case with cost-benefit analysis. The best projects are prioritized to create a five-year project portfolio plan. Project execution is supported by a stage gate process and standardized 'White Book' procedures.

1. The Role of the Business Case in
Public Investment Management and
Project Portfolio Planning
Dr. Rupert Booth
Senior Economist, Mashroat
MA, MSc, FRICS, PMP, FCMA, FIET, CEng

2. Topic Objective
Public Investment Management (PIM) is essential to the development of Saudi Arabia to fulfill Vision
2030. There are three pillars to effective PIM:
• Strategic Planning
• Budgetary Control
• Project Execution
To function, PIM also requires a mobilized Project Portfolio Planning (PPP) process to create a Five
Year Project Portfolio Plan.
This paper outlines the official Mashroat PPP process. The paper then introduces a business case
method, the international Five Case Model, that allows the development of:
• Strategic Case and the need for the project
• Economic Case and the benefits of the project
• Commercial case for contracting for the work
• Financial Case, to confirm affordability
• Management Case, to check feasibility.
The paper then concludes with a summary of the tools that Mashroat is providing to improve project
execution, introducing its Stage Gate process and the ‘White Book’ of standard procedures.

3. About the Speaker
• Dr. Rupert Booth is author of the infrastructure appraisal procedures published (in 2017)
by Mashroat, covering risk assessment, strategic fit and value-for-money. He is also the
author of the land acquisition strategy and project prioritization procedures. He has
subsequently applied the procedures for a range of investments.
• He also designs and delivers of training material for the above, to senior staff in many
government Entities.
• He has a PhD in comparative efficiency from Warwick Business School (UK), and a
Masters’ degree (with Distinction) in Economics from the University of London. He also
has degrees in Engineering from Cambridge and London, and is a Chartered Engineer
(senior grade). He is qualified as a PMP and is a Fellow of the Royal Institution of
Chartered Surveyors.

4. Public Investment Management (PIM) Framework
Strategic Planning
• National Spatial Strategy
• National Integrated
Infrastructure Strategic
Plan
Budgeting
• Medium-term budget
framework
• Cash-flow forecasts
• Whole life costs (opex +
capex)
Execution
• Stage Gate process
• Performance monitoring
and feedback
Project Portfolio Planning

5. Portfolio Management Process (1)

6. Portfolio Management Process (2)

7. Portfolio Management Process (3)

8. Focus on Phase C: Screening of Initial Portfolio
- Task C1: Strategic Assessment
- Task C2: Risk Potential Assessment
- Task C3: Project Cross-Sector
- Task C4: Strategic Outline
Business Case - SOC
- Task C5: Project Prioritization
Phase C involves five primary tasks:
No
YesPRIVATE ?
National
Center for
Privatization
(NCP)
Procedure 2a:
Project Strategic Assessment
Procedure 2b:
Project Risk Potential Assessment
Procedure 3:
Project Cross Sector Integration
Procedure 4:
Strategic Outline Case
Procedure 5:
(Public) Project Prioritization

9. Based on Standard Methods
The Five Case (Business) Model:
• Developed in UK Ministry of Finance
• Worldwide adoption, including GCC
Supported by the UK ‘Green Book’
Gateway Review:
– Developed in UK
– Worldwide adoption
Risk Potential Assessment:
• developed in UK
• Worldwide adoption

10. Task C1: Strategic Assessment
Standard approach includes:
• Review of organizational policies and strategies
• Workshop for undertaking the strategic assessment:
– project team, key stakeholders, senior management team, subject matter
experts
• Completion of a Template for the project to act as mandate
• Used as a basis for the Risk Potential Assessment.
These tasks comprise Action 1
Key Reference:
 Entity Strategic Assessment Procedure (ENT-S00-PR-000004)

11. Task C2: Risk Potential Assessment
The Risk Potential Assessment has two dimensions:
• Consequential Impact and Complexity Assessment, combined into a single measure:
Key Reference:
 Entity Risk Potential Assessment Procedure (ENT-S00-PR-000005)
Table C
Risk Potential Assessment
Plot overall summary assessments from Table A (line A6) and Table B (line B5) and mark with an X in grid below
Overall Consequential
Impact
Assessment
(Table A summary)
Very High
High
Medium
Low
Very Low
Very Low Low Medium High Very High
Overall Complexity Assessment
(Table B summary)
High Attention
Medium
Attention
Low Attention

12. Initial Use of Gateway Review Process
Portfolio Management Gateways
Gateway 0: Strategic Assessment
• Used for Preliminary Screening
• Independent view
Independence of Gateway Reviewer
is essential
Governance will need clarification:
• Reviewer as policeman or doctor?
• Can an adverse review stop a project?
Procedure 2a:
Project Strategic Assessment
Procedure 2b:
Project Risk Potential
Assessment
YesNo

13. Task C3: Cross-Sector Integration
• Selected projects checked for cross-
sectoral integration
• An interim solution pending the updated
National Spatial Plan
• Ensures projects are:
• Based on common assumptions
• Well coordinated
• Mutually optimized
Key Reference:
 Entity Cross-Sector Integration Procedure (ENT-S00-PR-000002)

14. Overview of the Five Case Model of Project Appraisal
Compelling case for
change – strategic fit
& business needs
Preferred option
optimizes value for
money
Commercially
viableAffordable within
Available funding
Achievable and
can be
successfully
delivered 5. Management
4. Financial 3. Commercial
2. Economic
1. Strategic

15. Task C4: Strategic Outline Case
After revisiting Action 1, Strategic Assessment,
making the Case for Change:
– Action 2: Agree strategic context
– Action 3: Spending objectives, existing
arrangements and business needs
– Action 4: Define potential scope and service
requirements
– Action 5: Determine benefits, risks, constraints and
dependencies
Key Reference:
 Entity Strategic Outline Case Procedure (ENT-S00-PR-000005)
Strategic
Action 6: Agree Critical Success
Factors
Action 7: Long List and SWOT analysis
• Create Long List
• Apply Options Framework
• Produce Short List
Action 8: Recommend a Preferred
Way Forward

16. Critical Success Factors used for Option Analysis
Critical Success
Factors
Generic/ Default Descriptions
How well the option…
Strategic Fit &
Business Needs
 Meets the agreed investment objectives, related business needs and
service requirements, and
 Integrates with other strategies, programmes and projects.
Potential Value for
Money
 Optimises value for money from both the perspective of the organisation
and society, and
 Minimises associated risks.
Service Provider
Capacity & Capability
 Matches the ability of potential service providers to deliver, and
 Appeals to providers.
Potential
Affordability
 Can be met from likely available funding, and
 Matches other funding constraints.
Potential
Achievability
 Is likely to be delivered given the organisation’s ability to respond to the
changes required, and
 Matches the level of available skills required for successful delivery.
16
Strategic

17. Options Framework
• Scale, scope and location (what)
• Service solution (how)
• Service delivery (who)
• Implementation (when)
• Funding (how to fund)
Funding
Implementation
options
Delivery options for best
Solution(s)
Solution option that meet Scope
Identify option for Scope
Strategic

18. Task C4: Economic Case
• Economic Case based upon Cost Benefit Analysis (CBA) and Cost Effectiveness Analysis
CEA)
• Standard international technique, primary text:
• UK Treasury ‘Green Book 2018’, international reference, 132 pg
• Secondary text (more accessible for novice):
• New Zealand Treasury ‘Guide to Social Cost Benefit Analysis’, 78 pg
• Major practical issue is quantifying social & environmental benefits, e.g. time savings,
pollution
• Most entities will need to rely upon an Economic Consultant for expertise
CBA must be consistent for projects within an Entity and for an Asset Class
Economic

19. Three remaining cases…
Commercial
Financial
Management
3. Commercial case
• Outline the likely attractiveness to potential
service providers
4. Financial case
• Determine rough order costs and potential
funding sources
5. Management Case
• Outline how the project is intended to be
delivered

20. Summary of Five Cases in Strategic Outline Case
5. Management
4. Financial 3. Commercial
2. Economic
1. Strategic






21. Further Use of Gateway Review Process
Portfolio Management Gateways
Gateway 1:
Business Justification
(examines Strategic Outline Business Case)
Independence of Gateway Reviewer from
Entity is essential.
Role focused on quality control:
Ensure business case must withstand external
scrutiny
Procedure 3:
Project Cross Sector Integration
Procedure 4:
Strategic Outline Case
YesNo

22. Task C5: (Public) Project Prioritization
Arrange chosen (public) projects into a 5-Year Plan:
• General principle:
– More attractive projects have higher priority
– Key factor is Benefit Cost Ratio from Cost Benefit Analysis (CBA)
• Add in Merit Factors, for additional influences:
– Social & Environmental Index for factors without shadow prices
– Mandatory or National Security impact
– Regional Equity or Spatial Plan conformity
– Quick Win
• Assign weights to Merit Factors
Key Reference:
 Entity Portfolio Prioritization Procedure (ENT-S00-PR-000003)

23. Phase C: Summary and Output
• First step eliminates misfit projects
• Cross-sector check ensures wider alignment
• Strategic Outline Case undertakes option analysis and economic review
• Key Deliverable is the Strategic Outline Case
• Prioritization provides five year delivery plan to maximize value of
portfolio
Draft Portfolio
for Phase D

24. Stage Gate and Budgetary Approval Process

25. Project Execution Supported by “White Book”

26. Summary
Vision 2030 is now supported by:
• A Public Investment Management framework
• A Project Portfolio Planning process
• An international business case method
• A Stage Gate process linked to budgetary approval
• A “White Book” defining best practice.
What could possibly go wrong?