4.4.2  Capital receipts

Where the Reference Project involves the disposal of assets, the present value of the income, less any disposal cost, must be deducted from the Raw PSC (but only where the same opportunity is given to bidders).

Where ownership of the assets remains with government and the asset has a useful life longer than the term of the Reference Project, government may either dispose, or retain the assets. The PSC must, therefore, include a residual value of any assets that are not fully amortised over the term of the Reference Project.

The residual value calculation should have regard to the nature of the asset, historic residual value estimates, the expected market for the assets and the expected monetary benefit (or cost) to government if the underlying asset is retained.