The PSC must consider the project as if the public sector were to deliver it using the same scope, service levels, time lines and build quality required of the private sector. The PPP procurement structure will require a fixed price deal delivered within a defined period with various operating risks being retained by the private sector. The PSC must therefore include an assessment of the cost of these risks to the public sector, for example, cost overruns or time delays based on previous public sector experience.
While difficult to do, the PSC will involve the development of a risk register that identifies all of the project risks involved. Ideally, each risk for each element of the project over the entire life of the project should be identified. In turn, each of these individual risks should be considered, valued and designated for transfer to the private sector under the PPP structure or for retention by the public sector. Either way, they should be included in the PSC.