2.1.2  Are Discount Rates the same for the Public and Private Sector?

When carrying out initial investment appraisals, to ensure efficient use of resources, Public Sector projects should use the same Discount Rate as the Private Sector for assets of the same risk characteristics.

In the context of procurement decisions within a PPP framework, as the Methodology will show, a different Discount Rate may be used for the PSC and to evaluate competing Private Sector bids to reflect differences in Systematic Risk allocations between the Public and Private Sectors.