- C1: Appraisal and authorisation
- C2: Authorisation limits and process
- C3: Project proposal form and request for authority form
- C4: Revised request for authority
- C5: Post project appraisal and evaluation
- C6: Type of post project appraisal
- C7: Role of the committees
- C7.1: VCEG
- C7.2: Infrastructure Coordination Group
- C7.3: Infrastructure Strategy Group
- C7.4: Council
- C7.5: Project Coordination Group
- C8: Procurement
- C9: University and College strategic goals
- C10: Self funded schemes
- C11: Key deliverables
- C12: Implementation costs and income
- C13: Operational costs and income
- C14: Inflation
- C15: Discount rates and expected rates of return
- C16: Reviewing alternatives
- C17: Appraisal narrative
- C18: Risk mitigation and avoidance
- C19: Project team competencies
C13: Operational costs and income
All projected cash flows arising as a result of the Option appraisal modelling need to be included. Many of these cash flows will be incorporated within implementation costs and incomes; all others are included here.
Non-implementation cash flows need to be included on the Option Appraisal form under the respective option. All cash inflows should be included under the “income” column and all cash outflows under the “spend” column. Cash flows must not be netted off.
Items which do not lead to real, actual cash flows should not be included, (ie depreciation).
The impact of taxation should be included in costs and revenues, the most relevant tax cost is expected to be VAT. Unless strong information to the contrary exists it should be assumed that current taxation legislation, regulations and rates will remain constant.
With respect to inflation the normal basis of calculation of operational costs and income is to do all calculations at today’s prices. Exceptions to this are noted in the inflation section.
A particular difficulty with operational cost and income is the length of time these costs and revenues may be incurred, potentially over 20 or 30 years.
Where costs and income are expected to experience a period of growth and then remain static, the period of growth should be identified and, using best judgement and historic experience, the costs and income should be included within the Option Appraisal form under the appropriate heading.
Some costs and income are erratic in nature, for example lifecycle costs linked to the maintenance of a building or specialist items of equipment. In such cases, where the amounts involved may be material (where material is defined as where not allowing for the inflation differential may lead to an incorrect decision to approve a project that should otherwise have been rejected, or conversely a project that should have been approved being rejected) best judgement and historic experience should be used to reflect when these costs and income may crystallise and what their value will be at that point. The estimated amount should be included within the Investment Appraisal form under the correct heading and point in time. Care needs to be taken not to double count costs already included on the Optiona Appraisal form.