33 Estimating London Underground's infrastructure costs over a 30-year period is an inherently difficult exercise. There is inevitable uncertainty resulting, for example, from the unpredictability of asset lives and the possibility of changes in the performance required from those assets. Furthermore, the performance specification requires an innovative approach to estimating costs since London Underground has not traditionally estimated costs to meet a defined performance specification, so its historic records may not provide an ideal basis for estimating costs over the next 30 years.
34 It is difficult to model strategic options available to public sector entities in the future. For example:
■ the Comparators assume a persistent level of overrun in infrastructure investment projects over the 30 year period. It is perhaps unlikely that London Underground's managers and owners would tolerate persistent failure without decisive action. But it is difficult to define in a model exactly what action would be taken and when.
■ it can also be difficult to capture in a model the value of public sector flexibility to reflect changing priorities, or the opposite risk that a public sector entity repeatedly revises its targets and incurs excess transitional costs as a result.