Q101 Mr Bacon: I should like to ask about risk. I found the chart on page 31 less than completely clear, especially compared with the one which was in the Ministry of Defence building report, which seemed a lot easier to understand. When it says the total risk is 9%, the first thing I want to ask is in the Ministry of Defence report on page 24-I know you do not have it with you-the key point is that the total risk as a percentage of the base costs was 17%. Why does the Home Office building have such a lower percentage risk. What is the analogous figure to the £311 million? In the Ministry of Defence report they talk about a net present cost of the project of £746.1 million, whereas the public sector comparator was £746.2 million. Here it says at the beginning that the net present cost of this project is £311 million. That is right, is it not? Page 1 says ". . . it will begin paying AGP a monthly charge for the building and associated services amounting to £31 million (net present cost)". I have a comparable figure to that £746.1 million, which is the net present value of the MoD building, as a public sector figure, but in this Report, it just says not available. Can you explain that? This is on page 31, down at the bottom, on the right-hand side. There is the £311 million, the cost of the PFI transaction, but it says the public sector comparator is just is not available. Underneath it says £460 million and £494 million. What actually is the net present cost of this project? Is it £311 million or is it £460 million?
Mr Gieve: The cost of the project is £460 million, that is the PFI comparator to £494 million public sector comparator.
Q102 Mr Bacon: So there is this big divergence because there is a whole load of costs you are retaining.
Mr Gieve: That is right.
Q103 Mr Bacon: What are they?
Mr Gieve: There are public sector costs and there is also a risk adjustment on the PFI, a small one.
Q104 Mr Bacon: Do you think you could study page 24 of the Report on the MoD building and produce for us a schedule which shows the public sector comparator broken down by category, with the item and its net present value, the base costs, the risk, the risk as a percentage of the base costs and then totals at the bottom? It is a much clearer way of doing it than we have seen so far. It would be very kind, if you would do that.
Mr Gieve: Yes.15
Q105 Mr Bacon: Mr Racine, why are you willing to instal the IT infrastructure but not to maintain it?
Mr Racine: I am not sure I was willing to do it: I was asked to do it.
Q106 Mr Bacon: You decided you would.
Mr Racine: It was asked of us in the bidding process.
Q107 Mr Bacon: You are a construction company.
Mr Racine: Yes.
Q108 Mr Bacon: What experience do you have of installing IT infrastructure?
Mr Racine: Quite a lot of experience of installing IT infrastructure, because it is base infrastructure; of designing an infrastructure system, not a lot, because it is not our area of expertise.
Q109 Mr Bacon: It is not your area of expertise?
Mr Racine: Designing IT systems is not.
Q110 Mr Bacon: It is not; I would not have thought it was. Nonetheless you are installing the infrastructure.
Mr Racine: Yes, which is quite normal in the construction process.