8.4  The materiality of Retained Risk in the PSC

All material Retained Risks should be included and valued to provide a comprehensive measure of the full cost to government under a PSC. Where a material risk is difficult to quantify objectively, a reasonable subjective assessment may need to be made. Again, valuing the PSC needs to be flexible and appropriate for each project.

If Retained Risks are not expected to be significant and the level of risk transfer is expected to be the same between the bidders and the PSC, a specific valuation of Retained Risk may not be necessary.