5.5  Worksheet: Affordability Calculations (C (Aff))

5.5.1  Inflation Indices - For each of the revenue/cost lines in the Affordability analysis, the aggregate index defined on the input sheet (sections 5.3.5.7 and 5.3.5.8) is converted into an index time series in rows 12 to 16, 18 and 19.

5.5.2  PFI Credit Calculations - The level of PFI Credits requested is specified in worksheet 'I (Gen)' (see section 5.3.14). This section of the calculation worksheet converts this value into a series of annuity payments that will apply during the duration of the contract.

5.5.3  Affordability Calculations (Nominal) - The inflation indices outlined in section 5.5.1 are then applied to the real revenue/cost inputs defined by the user in worksheet 'I (Time)' (see sections 5.4.7 and 5.4.8). This generates the nominal revenue/cost streams that assess the cumulative affordability position of the project over the life of the contract, which is summarised in row 62.

5.5.4  Affordability Outputs - This section is a conversion of the key outputs from this worksheet into a form that feeds through into Output Summary (see section 5.6). Principally these are the Affordability Check (i.e. is there a positive cash balance at the end of the contract (cell H67)), and the year end position of the cumulative fund, given in £'million for the purposes of graphical presentation.