A source of potential confusion with respect to risk quantification is how the risk estimates and efficiency estimates relate. In many business cases, an efficiency assumption has been used on capital costs, such as claiming that a DBFM will be six per cent less expensive on construction costs than traditional procurement. The guidance for establishing potential efficiencies is to hold a workshop to review the opportunities for efficiencies that the private sector can bring to a specific project. General rules of thumb are not acceptable.
The combination of risk quantification and efficiency estimates result in positive or negative value for taxpayers, and need to be looked at together in order to prevent double counting or omissions.