What are respondents' views on an approach that capped equity returns or that provided for public sector sharing in returns achieved above a specified level?  What impact would this be expected to have on investor appetite and pricing and on project performance?  At what level should any cap or sharing threshold be set? 

As discussed in Q2, Scotland employs the NPD and hub models both of which have a regulated, or capped return structure. Market appetite has been strong for projects procured under this model with recent OJEU advertisements attracting competitive fields of potential bidders. 

Caps and sharing thresholds have been set through the competitive process and their value brought in to evaluation through a quantification of the value of surpluses to the public sector procurer, albeit at a higher discount rate than unitary charge payments recognising their uncertainty. On recent procurements in the hub programme, bidders have tendered sharing and cap thresholds at levels highly competitive compared to the history of the PFI marketplace.