Assumption Confidence in Risks of Incorrect Mitigation Measures Assumption Assumption Interest rate stability High Shortfall in income Loans through LGFA projections costs spread through Council activities Construction cost Low Price curves are Continue to monitor rises inadequate. contract prices, pre- Increase in order where possible. depreciation costs Seek efficiencies forcing rates through design & increase. contract tendering Shortfall in capital budget plans Insurance costs Low Increased costs, Improved predictions reduced cover, construction increased risk standards. Improved management costs risk awareness and mitigation. Optimised insurance management Table 16 Assumptions Included in the Financial Forecasts Replacement of reticulation pipework will be with modern materials – PVC, polyethylene, ductile iron, steel or reinforced concrete. All plant and equipment will be replaced by their modern equivalent. The rates are an average across all ground conditions and depths and include for trench support and de-watering. Reticulation pipework below a nominal diameter of 75 mm is assumed to be predominantly installed in non-carriageway locations and with a proportion of low-dig installation techniques. Assumptions on pipe life expectancy have been described above. Valves, hydrants, air valves and other fittings are included in the pipeline rate and assumed to have the same life expectancy as the pipe. Service lines are valued separately at connection fee rate. An adjustment is made if meters are included in the rate and the meters valued separately. Page 81