What sensitivity analysis, if any, was undertaken on the value-for-money assessment for the Warkworth to Te Hana PPP in respect of (a) interest rates, (b) inflation, (c) construction delay, (d) refinancing costs, and (e) the proportion of transferred risk that ultimately materialises, what were the results in each case, and at what value of each variable does the PPP cease to show a net present value advantage over the Public Sector Comparator?

Answer

NZTA undertook sensitivity analysis as part of the development of the Public Sector Comparator and value-for-money assessment. In accordance with Treasury PPP Guidance, NZTA also retested project cost against the Public Sector Comparator at financial close. The specific sensitivity scenarios, assumptions, thresholds and results have been withheld as they form part of the commercially sensitive financial modelling and risk allocation assumptions underpinning the Project. Disclosure could prejudice NZTA's commercial position by revealing detailed pricing, financing and risk assessment methodologies that may affect future PPP procurements, negotiations and value-for-money outcomes for the Crown.