4.6  Third-party revenue and the PSC

Expected third-party revenue over the life of the Reference Project reduces the net cost to government and should be deducted from total operating costs in the Raw PSC. Third-party revenue may be generated where:

•  third-party demand exists for the infrastructure or related services;

•  service capacity exists above government requirements; and

•  government allows third-party utilisation.

When forecasting likely third-party revenue, regard must be given to government and community requirements over the life of the Reference Project. Equally the costs and risks associated with third-party revenue need to be considered.

The expected third-party revenue should be adjusted in the Transferred Risk component by cash flow deductions that equate to the probability that third-party receipts may be different from the level forecast in the Raw PSC.

The time and resources employed should reflect the materiality and reliability of the amounts involved. Consideration should also be given to the following sources:

•  applicable government policy, or guidance relating to fees and charges payable by third-party users; and

•  historical demand and prices charged for the same, or similar services.