Introduction

An important theoretical background to the development of discount rates to value the difference between PPP and government funded procurement processes is the difference in valuing assets and liabilities.

This guidance is based upon the presumption that in the absence of compelling social policy objectives, there is no valid reason that the state should seek a lower net return on their participation in economic projects than that sought by private sector participants in the same market. This means that when evaluating bids in a PPP process for economic infrastructure the PSC should ordinarily be developed as an asset purchase model and the decision structure based on selecting the best value investment.