The partnership model is set up to test value for money by running a series of sensitivity and scenario analyses on key assumptions. The partnership model must therefore be capable of running sensitivities and scenarios around the following value drivers:
Value driver | Suggested partnership model variable |
Risk allocation | ■ All cost assumptions ■ Return on equity (if applicable) ■ Margins ■ Discount rates |
Whole-of-life costing | ■ Capital cost ■ Operating and maintenance costs ■ Major refurbishment costs ■ Inflation |
Innovation | ■ Capital cost ■ Operating and maintenance costs ■ Major refurbishment costs |
Asset exploitation | ■ All costs to reflect additional services ■ Third party income |
Economies of scale | ■ Capital cost ■ Operating and maintenance costs |