This section determines the extent of flexibility of the base public sector Comparator Model and the PPP base reference model towards changes in the assumptions on which the model is developed.
The concerned Federal Entity shall test the main variables sensitivity in order to determine its impact on the value for money and the possibility of implementing the project. This matter aims at checking whether the value for money will continue to be present if any of the main variables changed (for example, if the inflation rate or the Operational Costs is higher than assumed)
The main variables may include the following:
• Inflation rate.
• Discount rate.
• Demand for service.
• Operational Costs.
• Revenues.
• Any other costs or assumptions have been developed.
The best example for the sensitivity analysis of PPP reference model is when the upper and lower values of discount rates are checked. If both values of discount rates support or reject the project's value for money, the presumed or estimated values may be considered reflective of the changes. If not, the project shall be further examined.