1. This is sometimes claimed where a change to the facilities involves new structural work which increases the risk of a latent defect occurring. Contract managers should not accept this cost as an automatic mark-up. For high value changes this risk premium may be appropriate for some construction based variations e.g. where there is new construction. However, authorities should be careful to protect risk transfer agreed in the original deal whereby the contractor will be taking risk on latent defects on the original facilities i.e. those handed over at service commencement. Where the benchmarking/independent technical adviser option is taken authorities should seek advice from the technical adviser. Where the competitive tendering option for high value changes is adopted, contract managers should review the tender documentation to identify whether this is to be priced (e.g. is this passed to the sub contractor?) to make sure that there is no double charging. If the sub contractor is responsible for managing both the Capex and the Opex, then there is no justification.