Once all the cost components and adjustments are determined, the total costs associated with each delivery model can be calculated, and expressed at the same point in time, as the ASB and the PSC. Separate cash flow models are prepared for the ASB and the PSC, reflecting the different cost components allocated to each model and when they will be incurred.
The PSC model would include the base costs, notional public financing costs (in a BF), risks retained under traditional delivery, competitive neutrality adjustment (where applicable), and ancillary costs. The ASB model would typically include base costs (along with the private sector premium), financing costs, risks retained by public sector under alternative financing and procurement, and ancillary costs.
Once the adjusted shadow bid and the public sector comparator are calculated, the positive difference between the PSC and ASB represents the estimated value for money proposition of using AFP. Since the risk components in the models are expressed as a statistical mean, the VFM proposition can also be expressed as a statistical mean of a range of savings.