3.9 The comparison covers a 35-year period so there are inevitable uncertainties in forecasting the future, for example, costs of construction and service provision and changes in design or service requirements. These uncertainties are common to all such financial comparisons involving forecasting future costs. The estimates of the value of risks transferred under the deal are also subject to uncertainties and involve elements of judgement. Such judgement is necessary to estimate the likelihood of an uncertain risk event occurring over the life of the deal in order to estimate a money value for the risk transferred.
3.10 The Trust carried out sensitivity analysis to compare the effects on both PFI and PSC calculations of changing a number of the key financial variables, such as capital expenditure and operating costs (Appendix 2).