Steps in the National PPP Guidelines Methodology

Step 1: Identify the systematic risks.

[Step 2: Are predominantly all the systematic risks borne by the public sector? (This is unlikely) - If so, discount bids at the risk free rate.]

Step 3: Identify the project risk premium.

[Step 4: Are predominantly all the systematic risks borne by the private sector? (This is unlikely) - If so, discount the bids at the project rate.]

Step 5: Evaluate the proportion of the systematic risks transferred to the private sector and include a corresponding proportion of the project risk premium in the discount rate used for assessing bids.

Determining the bid evaluation rate

Figure 3