8.1.3.2 PSC Affordability Benchmark

Guidance note: Procuring Agencies must consult the Department of Treasury and Finance on the level of disclosure of the PSC including the PSC Affordability Benchmark components.

Table 13 (PSC Affordability Benchmark) and Table 14 (Key PSC Assumptions) are to be populated with Project-specific information.

Table 14 (Key PSC Assumptions) is to include the key assumptions used to formulate the PSC. Examples have been included but should be updated to include Project-specific PSC assumptions including, for example, the Health Price Index (HPI) and Gross Floor Area (GFA).

The components of the PSC Affordability Benchmark (i.e. excluding State retained risks), in nominal (for capital costs only) and NPC terms, are detailed in Table 13 (PSC Affordability Benchmark) below:

Table 13: PSC Affordability Benchmark

Risk Adjusted PSC	NPC ($'000)	Nominal ($'000)
[Raw capital cost]
[Raw lifecycle cost]
[Raw FM costs]
Total Raw PSC
[Transferred risk]
PSC Affordability Benchmark

Whilst the State has disclosed the capital and recurrent costs separately for information purposes, Respondents should note that the total PSC Affordability Benchmark is used as the basis to ascertain if a Proposal represents value for money.

Respondents should form their own view regarding the most appropriate balance between capital and recurrent cost elements, having regard to the specifications in the PSDR, the Services Specification and the requirement to deliver value for money.

The assumptions used to formulate the PSC include the assumptions set out in Table 14 (Key PSC Assumptions) below.

Table 14: Key PSC Assumptions

Risk Description	Assumption
Risk free discount rate	As disclosed in Table 12 (Discount Rates) above.
NPC base date	[insert date]
Construction cost escalation at CPI	Assumed to be [#]% p.a.
Lifecycle cost escalation at CPI	Assumed to be [#]% p.a.
Asset management cost escalation using a mixture of WPI and CPI	WPI assumed to be [#]% p.a. CPI assumed to be [#]% p.a.
[Insert additional Project-specific assumptions]

The NPC of retained risk (as costed in the risk-adjusted PSC) will not be disclosed to Respondents. These risks reflect the specific risk profile of the Project, having regard to the nature of the [#Site / #Sites], the scope of the Project and the State's experience in delivering similar projects to the Project.