Extending life-cycle costing (LCC) analysis for sustainability considerations in road infrastructure projects

Sustainable development is about making societal investments. These investments should be in synchronization with the natural environment, trends of social development, as well as organisational and local economies over a long time span. Traditionally in the eyes of clients, project development will need to produce the required profit margins, with some degrees of consideration for other impacts. This is being changed as all citizens of our society are becoming more aware of concepts and challenges such as the climate change, greenhouse footprints, and social dimensions of sustainability, and will in turn demand answers to these issues in built facilities. A large number of R&D projects have focused on the technical advancement and environmental assessment of products and built facilities. It is equally important address the cost/benefit issue, as developers in the world would not want to loose money by investing in built assets. For infrastructure projects, due to its significant cost of development and lengthy delivery time, presenting the full money story of going green is of vital importance. Traditional views of life-cycle costing tend to focus on the pure economics of a construction project. Sustainability concepts are not broadly integrated with the current LCCA in the construction sector. To rectify this problem, this paper reports on the progress to date of developing and extending contemporary LCCA models in the evaluation of road infrastructure sustainability. The suggested new model development is based on sustainability indicators identified through previous research, and incorporating industry verified cost elements of sustainability measures. The on-going project aims to design and a working model for sustainability life-cycle costing analysis for this type of infrastructure projects.

Life cycle costing procurement guide (interim).

"July 1970"--Cover.

Activity-based life cycle costing model for cost estimation and monitoring – Case: manned and autonomous dry bulk carrier

Recent developments in automation, robotics and artificial intelligence have given a push to a wider usage of these technologies in recent years, and nowadays, driverless transport systems are already state-of-the-art on certain legs of transportation. This has given a push for the maritime industry to join the advancement. The case organisation, AAWA initiative, is a joint industry-academia research consortium with the objective of developing readiness for the first commercial autonomous solutions, exploiting state-of-the-art autonomous and remote technology. The initiative develops both autonomous and remote operation technology for navigation, machinery, and all on-board operating systems. The aim of this study is to develop a model with which to estimate and forecast the operational costs, and thus enable comparisons between manned and autonomous cargo vessels. The building process of the model is also described and discussed. Furthermore, the model’s aim is to track and identify the critical success factors of the chosen ship design, and to enable monitoring and tracking of the incurred operational costs as the life cycle of the vessel progresses. The study adopts the constructive research approach, as the aim is to develop a construct to meet the needs of a case organisation. Data has been collected through discussions and meeting with consortium members and researchers, as well as through written and internal communications material. The model itself is built using activity-based life cycle costing, which enables both realistic cost estimation and forecasting, as well as the identification of critical success factors due to the process-orientation adopted from activity-based costing and the statistical nature of Monte Carlo simulation techniques. As the model was able to meet the multiple aims set for it, and the case organisation was satisfied with it, it could be argued that activity-based life cycle costing is the method with which to conduct cost estimation and forecasting in the case of autonomous cargo vessels. The model was able to perform the cost analysis and forecasting, as well as to trace the critical success factors. Later on, it also enabled, albeit hypothetically, monitoring and tracking of the incurred costs. By collecting costs this way, it was argued that the activity-based LCC model is able facilitate learning from and continuous improvement of the autonomous vessel. As with the building process of the model, an individual approach was chosen, while still using the implementation and model building steps presented in existing literature. This was due to two factors: the nature of the model and – perhaps even more importantly – the nature of the case organisation. Furthermore, the loosely organised network structure means that knowing the case organisation and its aims is of great importance when conducting a constructive research.

Risk assessment in life-cycle costing for road asset management

Queensland Department of Main Roads, Australia, spends approximately A$ 1 billion annually for road infrastructure asset management. To effectively manage road infrastructure, firstly road agencies not only need to optimise the expenditure for data collection, but at the same time, not jeopardise the reliability in using the optimised data to predict maintenance and rehabilitation costs. Secondly, road agencies need to accurately predict the deterioration rates of infrastructures to reflect local conditions so that the budget estimates could be accurately estimated. And finally, the prediction of budgets for maintenance and rehabilitation must provide a certain degree of reliability. This paper presents the results of case studies in using the probability-based method for an integrated approach (i.e. assessing optimal costs of pavement strength data collection; calibrating deterioration prediction models that suit local condition and assessing risk-adjusted budget estimates for road maintenance and rehabilitation for assessing life-cycle budget estimates). The probability concept is opening the path to having the means to predict life-cycle maintenance and rehabilitation budget estimates that have a known probability of success (e.g. produce budget estimates for a project life-cycle cost with 5% probability of exceeding). The paper also presents a conceptual decision-making framework in the form of risk mapping in which the life-cycle budget/cost investment could be considered in conjunction with social, environmental and political issues.

Developing a life-cycle costing analysis model for sustainability enhancement in road infrastructure project

With increasing pressure to provide environmentally responsible infrastructure products and services, stakeholders are putting significant foci on the early identification of financial viability and outcome of infrastructure projects. Traditionally, there has been an imbalance between sustainable measures and project budget. On one hand, the industry tends to employ the first-cost mentality and approach to developing infrastructure projects. On the other, environmental experts and technology innovators often push for the ultimately green products and systems without much of a concern for cost. This situation is being quickly changed as the industry is under pressure to continue to return profit, while better adapting to current and emerging global issues of sustainability. For the infrastructure sector to contribute to sustainable development, it will need to increase value and efficiency. Thus, there is a great need for tools that will enable decision makers evaluate competing initiatives and identify the most sustainable approaches to procuring infrastructure projects. In order to ensure that these objectives are achieved, the concept of life-cycle costing analysis (LCCA) will play significant roles in the economics of an infrastructure project. Recently, a few research initiatives have applied the LCCA models for road infrastructure that focused on the traditional economics of a project. There is little coverage of life-cycle costing as a method to evaluate the criteria and assess the economic implications of pursuing sustainability in road infrastructure projects. To rectify this problem, this paper reviews the theoretical basis of previous LCCA models before discussing their inability to determinate the sustainability indicators in road infrastructure project. It then introduces an on-going research aimed at developing a new model to integrate the various new cost elements based on the sustainability indicators with the traditional and proven LCCA approach. It is expected that the research will generate a working model for sustainability based life-cycle cost analysis.

EduBuilding: material selection from life cycle costing sensitivity

Life Cycle Cost Analysis provides a form of synopsis of the initial and consequential costs of building related decisions. These cost figures may be implemented to justify higher investments, for example, in the quality or flexibility of building solutions through a long term cost reduction. The emerging discipline of asset mnagement is a promising approach to this problem, because it can do things that techniques such as balanced scorecards and total quantity cannot. Decisions must be made about operating and maintaining infrastructure assets. An injudicious sensitivity of life cycle costing is that the longer something lasts, the less it costs over time. A life cycle cost analysis will be used as an economic evaluation tool and collaborate with various numbers of analyses. LCCA quantifies incurring costs commonly overlooked (by property and asset managers and designs) as replacement and maintenance costs. The purpose of this research is to examine the Life Cycle Cost Analysis on building floor materials. By implementing the life cycle cost analysis, the true cost of each material will be computed projecting 60 years as the building service life and 5.4% as the inflation rate percentage to classify and appreciate the different among the materials. The analysis results showed the high impact in selecting the floor materials according to the potential of service life cycle cost next.

Whole life cycle costing for Malaysia residential property development : the cultural environment

As knowledge of the residential development costing impact on resource and budgeting use increase, developers are moving towards more sustainable solution by implementing whole life cycle costing. Property management requires an understanding of infrastructure management, service life planning and quality management. Today, people are beginning to realize that effective property management in high-rise residential property can sustain the property value and maintain high returns on their investment. The continuous growth of high-rise residential properties indicates that there is a need for an effective property management system to provide a sustainable high-rise residential property development. For such reasons, this paper attempts to study the culture that have been applied due the residential property development in Malaysia as to improve to the best and sustainable practice in providing the best cost effectiveness management system in residential property development.

Whole life cycle costing for Malaysia high-rise residential building : a needs?

The continuous growth of high-rise residential properties indicates that there is a need for an effective property management system to provide a sustainable high-rise residential property development. As intensive as these studies are, they do not attempt to investigate the correlation between property management systems with the trends of Malaysia high-rise residential property development. By examining the trends and scenario of Malaysia high-rise residential property development, this paper aims to gain an understanding of impacts from the effectiveness of property management in this scope area. Findings from this scoping paper will assist in providing a greater understanding and possible solutions for the current Malaysian property management systems for the expanding high-rise residential unit market.

An exploratory review of whole life cycle costing for Malaysia property development

The demand of implementing Whole Life Cycle Costing (WLCC) towards property development has increased since the launch of Value Management Circular 3/2009 by the Economic Planning Unit Malaysia. The circular made compulsory for all public construction projects and programme including property development estimated more than RM 50 Million to conduct WLCC. However, a knowledge gap on WLCC approach still exists and become a barrier among the practitioner in Malaysia particularly in property development industry. The main focus of this paper is to discuss the WLCC approach and introduce the indicator that need to be considered in Malaysia property development.

Ironmongeries life cycle costing and quality satisfaction

Most commonly, residents are always arguing about the satisfaction of sustainability and quality of their high rise residential property. This paper aim is to maintain the best quality satisfaction of the door hardware by introducing the whole life cycle costing approach to the property manager of the public housing in Johor. This paper looks into the current situation of ironmongeries (door hardware) of 2 public housings in Johor, Malaysia and testing the whole life cycle costing approach towards them. The calculation and the literature review are conducted. The questionnaire surveys of 2 public housings were conducted to make clear the occupants’ evaluation about the actual quality conditions of the ironmongeries in their house. As a result, the quality of door hardware based on the whole life cycle costing approach is one of the best among their previous decision making tool that have been applied. Practitioners can benefit from this paper as it provides information on calculating the whole life costing and making the decisions about ironmongeries selection of their properties.

Whole life cycle costing and quality satisfaction : public housing floor material

Most commonly, residents are always arguing about the satisfaction of sustainability and quality of their high rise residential property. This paper aim is to maintain the best quality satisfaction of the floor materials by introducing the whole life cycle costing approach to the property manager of the public housing in Johor. This paper looks into the current situation of floor material of two public housings in Johor, Malaysia and testing the whole life cycle costing approach towards them. The cost figures may be implemented to justify higher investments, for examples, in the quality or flexibility of building solutions through a long-term cost reduction. The calculation and the literature review are conducted. The questionnaire surveys of two public housings were conducted to make clear the occupants’ evaluation about the actual quality conditions of the floor material in their house. As a result, the quality of floor material based on the whole life cycle costing approach is one of the best among their previous decision making tool that was applied. Practitioners can benefit from this paper as it provides information on calculating the whole life costing and making the decisions for floor material selection for their properties.

Framework of whole life cycle costing for Malaysian high rise residential property development

This project was an initial stage in formulating and management of the optimum budget allocation during the operational, maintenance and rehabilitation phases in high rise residential property development in Malaysia. The principal objective of this project is to develop a framework of Whole Life Cycle Costing for high rise residential property development that will enhance the quality and cost effectiveness of this building type in Malaysia. The researcher investigated 13 building components from 6 high rise residential property developments in Johor, Malaysia to determine the affect and economic impact of component initial cost and quality by applying them to a Whole Life Cycle Cost model approach. The results provide valuable data in respect to the overall cost of specific components over the whole life of a large high rise building. In addition, Dr. Mat Noor also determined the impact and satisfaction of quality of building components through WLCC.