The allocation of risks was similar to other PFI contracts of this nature

2.25  The Service assessed and evaluated the PFI bids against the following key areas of risk: construction risks; force majeure/uninsured events/terrorist incidents; changes in legislation; and compensation payments required by the bidder in the event of termination of the concession. The remainder of the risk profile and miscellaneous items were bundled into one category and examined as a whole. The Service considered that Consul offered the best approach to risk transfer. Among other things, the Service's advisers noted that:

  Consul adopted an approach to construction risks which was highly favourable to the Service by agreeing to accept the risk of adverse ground conditions (including archaeological finds), the obtaining of statutory consents and rights of way and the risk of pollution occurring during works;

  during the construction period Consul would accept the risk of all changes in the general law (but not 'discriminatory' legislation). During the operating period, Consul's proposal for the risk of changes in law was in line with solutions adopted on healthcare PFI/PPP projects elsewhere. It would accept the risk of changes in general legislation up to a threshold of 2% above the original works cost; thereafter, increased costs would be on a shared basis;

  in the event of termination of the concession due to force majeure or terrorist incident, Consul sought the return of its original investment, but not any profit which would have been earned on it.

2.26  The Service was satisfied that it achieved a high degree of risk transfer, while retaining a balanced contract which provided a workable basis for a long-term relationship with Consul. Appendix 3 details the agreed allocation of risk following the conclusion of negotiations.