10.1 Hospital project PSC - Executive summary
Guidance notes - Executive summary The executive summary of the report on constructing the Public Sector Comparator should be drafted as a stand-alone document that can be appended to government submissions. At a minimum, the executive summary should document the following: • purpose of the PSC • sources of the cost information • process for refining and finalising the PSC (as appropriate) • key results from the PSC financial modelling undertaken. (Note that guidance notes in each section of this example executive summary are also provided in the relevant in Part Two.) Please also note that the figures, for example the percentage of risk transferred etc., are for illustrative purposes only. In practice, these percentages differ from project to project. When to use the simple technique, or the advanced technique for evaluating project risks is discussed in detail in Chapter 16. In the worked example executive summary both methods are given, although in practice one or the other method will be used. |
Executive summary (worked example)
This report presents the compilation and calculation of the Public Sector Comparator for a hospital project (the project). It documents, in particular:
• the compilation and calculation of the Raw PSC and the risk-adjusted PSC;
• the project's material risks, both quantifiable and unquantifiable;
• the methodology for the quantification of project risks; and
• the results of the financial analysis.
All of these factors have been prepared according to the Public Sector Comparator Guidance.
The purpose of the PSC is to:
1 provide a benchmark against which government can compare private sector bids; and
2 assist in determining whether government is receiving value for money from the delivery of the project by the private sector.
The PSC estimates the risk-adjusted cost if the project were to be financed, owned and implemented by government. The cost information for the PSC was prepared by [insert sources of information]. The costs reflect the reference project, the payment mechanism and risk allocation as outlined in the project agreement released with the RFP, and the most efficient, likely, achievable form and means of government delivery.
It should be noted that, under a PPP, the PSC can be refined and finalised during the procurement of the project up to receipt of the submissions in response to the RFP. In general, refinement during the evaluation of submissions should only occur if the scope of the project changes, or it becomes apparent that a significant component has been mispriced or omitted.