• Include input costs for capital, lifecycle and FM costs. These may reflect the costs included within the CPAM but adjusted to reflect likely private sector delivery out-turns, any efficiencies and the likely private sector view of risk and return.
• reflect market based financing and taxation assumptions as well as encompass bid development and delivery costs, management & insurance overheads and private sector returns. Procuring Authorities who wish to benchmark financing assumptions against previous NPD projects should contact the SFT to discuss banked rates and interest rate buffers in commercial confidence.
• an element of risk quantification and Optimism Bias would be applied to the shadow bid, especially at the earlier stages of project development (particularly if CPAM costs are included within it). See section 5 for further information.
The inputs of the NPD shadow bid model should not seek to forecast refinancing gains. It is not essential that NPD bids are refinanceable and given the lack of certainty around the timing and amounts involved in refinancing it is not appropriate to evaluate this issue in quantitative terms for affordability or VfM assessments (unlike the evaluation of surpluses as discussed later). If the ability to refinance is a key consideration for the Procuring Authority it should be evaluated in qualitative terms only.
At Stage 3 Procurement Level, the inputs to the shadow bid model can be used to benchmark and evaluate the actual bid submissions (e.g. financing approach, private sector returns etc).