4.1 When considered on a NPV basis, the cost variance between the Pilot PPP Schools Bundle and the Conventional Schools is variable, with CAPEX for the Pilot PPP Schools Bundle being 21% lower due to the timing of the expenditure, OPEX being 52% higher and the residual value and TPI being 27% higher. On an NPV basis, the difference in cost is not considered material; however as noted herein, financing costs were not included in this analysis and these costs can make considerable differences to the actual NPV cost of the schemes over the concession period. Risk costs, which are weighed against the cost of finance in the PPP model are also excluded, as, unlike later PPP Schools Bundles, there was no PSB prepared for the Pilot PPP Schools Bundle.
4.2 OPEX costs for Pilot PPP Schools Bundle are 52% higher than for the Conventional Schools, but this is a result of lower spend on maintenance and lifecycle costs for the latter. This Review also found that although the lifecycle costs for Pilot PPP Schools were almost double that of the Conventional Schools (90%), the level of works undertaken to the Pilot PPP Schools was significantly greater and, as such, the maintenance issues were less likely to appear soon, saving significant amounts of further investment.
4.3 Backlog Maintenance requirements for the Conventional Schools are nearly 131% higher than those of Pilot PPP Schools Bundle (p. 2.92), which further demonstrates that additional OPEX costs for the latter present good and justifiable VfM in maintaining assets.
4.4 Although the costs of FM Service Delivery vary greatly between the two types of institutions (Pilot PPP Schools Bundle's spend is 137% higher), this was balanced by the excellent standards of maintenance and ability to demonstrate full Statutory Compliance.
4.5 This Review has demonstrated that the Pilot PPP Schools outperform the Conventional Schools on several non-financial analysis elements. The Pilot PPP Schools are in better condition, were designed to a higher standard overall, designed consistently, perform to higher energy ratings, and are fully compliant with statutory health and safety requirements.
4.6 While higher costs are incurred at the project setup, they are likely to provide some attributable value in the longer term, including financial and time savings. The spend on Pilot PPP Schools throughout their lifecycle (DBFO) requires higher initial investment and incurs more significant maintenance costs overall, but this comes at a lower input of staff and Principals' time, which in turn releases their time to focus on teaching- and management-related activities.