A PSC can be defined as an estimate of the hypothetical risk adjusted cost (using net present value), if a project were to be financed, owned and implemented by government (i.e. the full and true cost to government for meeting the output specification under a traditional procurement delivery method).
Wherever possible, the costing for the PSC is based on previous infrastructure projects. Alberta Infrastructure and Transportation can provide benchmark costing that may help in identifying the costs. These costs should include the internal cost of undertaking the project. The PSC is used to establish the full and true cost of providing a facility and/or a service under a traditional procurement model. It will serve as a "benchmark" to evaluate the P3 alternative and to examine the impacts of changing key project parameters and assumptions such as output specifications and risk allocation.