11.2.4  Competitive neutrality (example)

In consultation with the Procuring Agency, competitive neutrality has been valued for inclusion in the PSC. The terms of reference for this work are:

•  identify the areas where financial advantages and disadvantages accrue to government which are not equally available to a bidder under PPP procurement. The Public Sector Comparator Guidance identifies four types of costs which may have an effect on competitive neutrality

1.  land tax;

2.  local government rates;

3.  stamp duty;

4.  payroll tax;

•  estimate the value of removing any net competitive neutrality effect; and

•  forecast all net competitive neutrality effects over the life of the reference project and include these in the PSC on a cash flow basis (not on an accruals basis).