5.3.2  Treatment of regulation

Competitive Neutrality inclusions may also arise where the Reference Project is exempt from complying with legislation, regulation or other material requirements, which the bidders must satisfy (e.g. building permits). The inclusion is measured as the costs of compliance to the same standard as required by the bidders. A similar valuation process is used where a government business activity faces additional material regulatory requirements (e.g. reporting) to which the bidders are not subjected. In this case, the Competitive Neutrality adjustment is a deduction to the PSC, not an addition.