There is no prescribed format for a PSC, as the scope of the PSC will vary considerably depending upon the complexity of the project. As guide, the PSC should as a minimum contain the following information:
1. An overview of the project, providing:
■ the identified service needs that will be met by the project;
■ the essential terms of the output specification, including performance standards where applicable; and
■ the expected cost of the project if delivered by the public sector.
2. An estimation of basic procurement costs including:
■ the required capital investment, capturing all costs such as purchase, construction, project management, consultants' costs and all other costs associated with bringing the asset to a fit-for-purpose standard; and
■ estimated operating costs of the project over its expected life.
3. A summary of the expected asset values on transfer, disposal and termination of the contract.
4. A summary of the major risks, the likelihood of occurrence and the financial impact of the risks if realised.
5. A summary of potential third party revenues or alternate use of the asset.
6. A discounted cash flow analysis showing the timing of costs (capital investment, operating costs and residual values) discounted to yield an overall net present value of costs of the project, presented in summary form.
7. Sensitivity analyses showing the consequences of varying key assumptions.
8. Supporting documentation or appendixes as required.
The main components of the PSC are discussed in detail below.