In this part of the P3 business case, the project sponsor should:
• Present base project costs for both the PSC and the Shadow Bid on a whole of life basis, which include the expected hard construction costs, soft construction costs, facilities management costs, maintenance and/or operating costs ("O&M Costs") and lifecycle costs. (Base costs are typically assumed to be the same for both the PSC and the Shadow Bid.);
• Outline and justify any efficiency gains and risk premiums applied to the Shadow Bid and PSC. Any major differences in efficiency gains and risk premium assumptions should be justified. (In certain cases, private sector efficiencies (or negative efficiencies) can be assumed exclusively for the Shadow Bid. Any assumptions to this effect should be clearly disclosed and justified by the sponsor);
• Outline the ancillary costs to be incurred by the public sector under both the P3 and traditional scenarios. Ancillary costs are only those costs borne by the public sector related to up-front procurement costs (including fees to any procurement agency); procurement costs over the O&M (in the case of the PSC); legal, technical, and financial advisory fees; project management costs during construction; and contract management costs over the life of the project); and
• Identify and explain the timing of these costs.