Estimating the cost of capital projects: an empirical study of accuracy levels for municipal government projects

2002 ◽  
Vol 29 (5) ◽  
pp. 653-661 ◽  
Author(s):  
S M AbouRizk ◽  
G M Babey ◽  
G Karumanasseri
Keyword(s):  
Construction Projects ◽  
Municipal Government ◽  
Construction Costs ◽  
Cost Estimates ◽  
Capital Projects ◽  
Building Projects ◽  
Capital Costs ◽  
Project Completion ◽  
Design Maturity ◽  
Four Levels

This paper highlights the findings of a study undertaken to assess the accuracy of cost estimates for construction projects at various levels of design maturity. Specifically, this paper addresses the accuracy of cost estimates for major types of municipal works including drainage, roadways, and building projects over a span of 3 years. Over 200 projects were statistically evaluated in the study at four levels of the design, namely, concept, preliminary, detailed, and award. Those estimates were then compared with actual incurred cost at project completion. In general, it was found that estimates are not as accurate as generally believed. It was also confirmed that cost estimates for rehabilitation work were less accurate than those for new work. In the absence of major changes to the design and estimation processes, more tempered accuracy limits were derived and proposed.Key words: estimating, budgeting, construction costs, variability in capital costs.

scholarly journals ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI WAKTU TUNGGU PENGADAAN MATERIAL KONSTRUKSI PADA PROYEK GEDUNG DI KABUPATEN BADUNG

2016 ◽  
Vol 4 (2) ◽  
Author(s):  
Putera Kumarayasa Mudita ◽  
I K. Sudarsana ◽  
Mayun Nadiasa
Keyword(s):  
Lead Time ◽  
Construction Projects ◽  
Large Scale ◽  
Construction Material ◽  
Dominant Factor ◽  
Building Projects ◽  
Project Completion ◽  
Factor I ◽  
Material Procurement ◽  
Material Transportation

Abstract :When undertaking construction projects, the smoothflow of materials to the project site must be maintained.Waiting for material, which frequently happens, will have a big impact, especially for large-scale projects that use a lot of labor. If the arrival of the materials is not in accordance with the schedule of material procurement planning, the workers will have nothing to do and the project cost will blow out and there will be delays in project completion time. This research investigates the factors which influence the lead time of construction material procurement in the Badung Regency. Data was obtained by distributing a questionnaire to 50 respondents. A research sample was obtained by purposive sampling aimed at the experts who work on building projects in the Badung regency. Before being used as a research instrument, the questionnaire was tested for the validity of data by using the Pearson Product-Moment correlation and its reliability was tested using the Cronbach alpha method. Processing and data analysis was conducted by Factor Analysis. The research results show there are twenty four variables identified that influence the lead time of construction material procurement on building projects in the Badung regency. All variables can be grouped into seven factors (Factor I, II, III, IV, V, VI, VII). The most dominant factor reviewed based on the percent of variance is Factor I which is formed by six variables being the material production process at the suppliers, the relationships between contractors and suppliers, a lack of material stock at the suppliers, the availability of material transportation, access to the project, and extreme topography.

scholarly journals On the Search of Models for Early Cost Estimates of Bridges: An SVM-Based Approach

Buildings ◽  
2019 ◽  
Vol 10 (1) ◽  
pp. 2 ◽  
Author(s):  
Michał Juszczyk
Keyword(s):  
Machine Learning ◽  
Construction Projects ◽  
Early Stage ◽  
Real Life ◽  
Percentage Error ◽  
Support Vector ◽  
Bridge Construction ◽  
Construction Costs ◽  
Cost Estimates ◽  
Comparable Performance

The completion of a bridge construction project within budget is one of the project’s key factors of success. This prerequisite is more likely to be achieved if the cost estimates, especially those provided in the early stage of a project, are realistic and close to the actual costs. The paper presents the research results on the development of a cost prediction model based on machine learning, namely the support vector machines (SVM) method, for which the input represents basic information and parameters of bridges, available in the early stage of projects. Several SVM-based regression models were investigated with the use of data collected for a number of bridge construction projects completed in Poland. Having finished the machine learning and testing processes, five of the models, of satisfying knowledge generalization ability and comparable performance, were preselected. The final selection of the best model was based on the comparison and analysis ability to predict bridge construction costs with accuracy appropriate for the early stage of projects. The general testing metrics of the finally selected model, named BCCPMSVR2, were as follows: root mean square error: 1.111; correlation coefficient of real-life bridge construction costs and costs predicted by the model: 0.980; and mean absolute percentage error: 10.94%. The research resulted in the development and introduction of an original model capable of providing early estimates of bridge construction costs with satisfactory accuracy.

Cost of Speed: Analysis of Capital Cost Estimates for High-Speed Ground Transportation Systems

1997 ◽  
Vol 1584 (1) ◽  
pp. 17-21
Author(s):  
John A. Harrison
Keyword(s):  
Los Angeles ◽  
High Speed ◽  
Capital Cost ◽  
Travel Times ◽  
Department Of Transportation ◽  
High Speed Rail ◽  
Cost Estimates ◽  
Capital Costs ◽  
Trip Time ◽  
Wide Range

The Intermodal Surface Transportation Efficiency Act of 1991 required the U.S. Department of Transportation to evaluate the commercial feasibility of high-speed ground transportation—a family of technologies ranging from incremental rail improvements to high-speed rail and magnetic levitation (Maglev) systems—in selected urban corridors. The evaluation involved estimating travel times, capital costs, operation and maintenance costs, and ridership for proposed service frequencies and then computing the potential return on investment from fares and other potential revenues. The results are documented in a U.S. Department of Transportation report generally referred to as the commercial feasibility study (CFS). Two elements of the CFS are addressed here: travel times and capital costs in four illustrative corridors—Chicago to St. Louis; Los Angeles to San Francisco; Eugene, Oreg., to Vancouver, B.C.; and Miami to Tampa via Orlando. Analysis of the results reveals common cost trends: for average speeds up to about 200 km/hr (125 mph), the initial investment required is generally in the range $1.6 to $3 million per route-kilometer ($2.6 to 4.8 million per route-mile). Above this speed regime (which varies by corridor), the initial investment increases steadily with speed, generally reaching $10 to $12 million per route-km ($16 to $19 million per route-mi) for very-high-speed rail systems and from $14 to $19 million per route-km ($23 to $31 million per route-mi) for Maglev systems. Analysis of the capital cost estimates reveals that despite the wide range of initial costs for the high-speed options, the cost per minute of trip time saved is remarkably consistent in corridors of similar length and with similar terrains. Cost-effectiveness plots are provided, allowing the reader to compare the performance of each of the four corridors in terms of trip time savings and cost per route-kilometer.

FAKTOR PENANGULANGAN TERJADINYA WASTE PADA PROYEK KONSTRUKSI DI SURABAYA

EXTRAPOLASI ◽  
2020 ◽  
Vol 17 (2) ◽  
pp. 1-10
Author(s):  
Michella Beatrix ◽  
Nurul Rochmah ◽  
Gede Sarya ◽  
Pebru Dwijayanto
Keyword(s):  
Waste Management ◽  
Construction Projects ◽  
Positive Impact ◽  
Scale Construction ◽  
Small Scale ◽  
Construction Costs ◽  
Warehouse Storage ◽  
The Right ◽  
The Impact ◽  
Material Requirements

AbstractLarge and small scale construction projects have waste that cannot be predicted in advance, even the amount cannot be predicted directly, whether it is in large or small amounts. The existence of waste can have a significant impact that can affect construction costs. Waste can have both negative and positive impacts. Good waste management will have a positive impact on the company in terms of cost, even time, and quality, but if the waste that occurs cannot be handled or managed properly it will harm the company in terms of cost, time, and even in terms of quality. In this case, the party that always gets the impact of the waste is the contractor.This study focuses on mitigating the occurrence of waste that is how to minimize it. Thisstudy uses the distribution of questionnaires to the contractor in Surabaya. The results of this study are 5 item indicators on how to minimize the highest ranking. The 5 items are Updating material requirements, Mixing, transporting, and placing concrete at the right time, Increasing the competence and expertise of labor, Provision of good and adequate material/warehouse storage facilities, and accurate material measurement.  Abstrak Proyek konstruksi dalam skala besar maupun kecil, memiliki waste yang tidak dapat diprediksi sebelumnya, bahkan jumlahnya pun tidak dapat diprediksi secara langsung, apakah itu dalam jumlah besar ataupun jumlah yang kecil. Adanya waste dapat memberikan dampak yang signifikan yang dapat mempengaruhi biaya konstruksi. Pada dasarnya waste dapat memberikan dampak negatif maupun positif. Pengelolaan waste yang baik akan memberikan dampak positif bagi perusahaan dalam segi biaya, bahkan waktu dan mutu, namun apabila waste yang terjadi tidak dapat diatasi atau dikelola dengan baik maka akan memberikan dampak negatif bagi perusahaan dalam segi biaya, waktu bahkan dalam hal mutu. Dalam hal ini pihak yang selalu mendapatkan dampak dari adanya waste adalah pihak kontraktorPenelitian ini memfokuskan pada faktor penanggulangan terjadinya waste yaitu cara meminimalisirnya. Penelitian ini menggunakan penyebaran kuisioner kepada pihak kontraktor di Surabaya. Hasil dari penelitian ini adalah 5 item indicator cara meminimalisir yang memiliki ranking tertinggi. 5 item tersebut adalah Updating kebutuhan material, Mencampur, mengangkut dan menempatkan beton pada waktu yang tepat, Meningkatkan kompetensi dan keahlian tenaga kerja, Penyediaan fasilitas penyimpanan material/gudang yang baik dan memadai, dan Pengukuran bahan yang akurat.

scholarly journals SUBCONTRACTOR SELECTION USING THE INTEGRATION OF THE AHP AND PROMRTHEE METHODS

2015 ◽  
Vol 22 (8) ◽  
pp. 1042-1054 ◽  
Author(s):  
Gul POLAT
Keyword(s):  
Construction Projects ◽  
Selection Process ◽  
Selection Problem ◽  
Preference Ranking ◽  
Analytic Hierarchy ◽  
Building Projects ◽  
Bid Price ◽  
Perform Sensitivity Analysis ◽  
Complete Ranking ◽  
The Right

On many construction projects, especially building projects, 80–90% of the tasks are performed by subcontractors. Since the success of the project highly depends on the performances of the subcontractors, selecting the right subcontractor for the right job is critical. Main contractors generally tend to select the subcontractors that offer the lowest bid price. However, working with unqualified and insufficiently financed subcontractors may result in inefficiencies and failures. Thus, a combination of several compromising and conflicting criteria underpinning financial capacity and competencies of the subcontractors should be considered during the subcontractor selection process. This paper proposes an integrated decision approach, which employs analytic hierarchy process (AHP) and preference ranking organization method for enrichment evaluations (PROMETHEE) together, for the subcontractor selection problem. In the proposed approach, AHP is used to analyze the structure of the subcontractor selection problem and to determine the weights of the criteria, and PROMETHEE is employed to obtain complete ranking and perform sensitivity analysis by changing the weights of criteria. The proposed approach is applied to a problem of selecting the most appropriate subcontractor to be worked with in an international construction project. Company management found the proposed decision approach satisfactory and implementable in future subcontractor selection problems.

scholarly journals UTILIZING SITE CHARACTERISTICS IN NEURAL NETWORK MODELLING OF PERCENTAGE COST-TIME OVERRUN OF BUILDING PROJECTS

2017 ◽  
Vol 8 (1) ◽  
pp. 1-15
Author(s):  
A. O. Ujene ◽  
A. A. Umoh
Keyword(s):  
Neural Network ◽  
Cost Overrun ◽  
Construction Costs ◽  
Network Modelling ◽  
Building Projects ◽  
The Neural Network ◽  
Site Characteristics ◽  
Neural Network Prediction ◽  
The Cost ◽  
Prediction Approach

This study evaluated the site characteristics influencing the time and cost delivery of building projects, determined the range of percentage cost and time overrun and developed a neural network model for predicting the percentage cost and time overrun using the site characteristics of building projects. The study evaluated twelve site characteristics and two performance indicators obtained from records of construction costs, contract documents, and valuation reports of 126 purposively sampled building projects spread across several cities in Nigeria. Analyses were with descriptive and artificial neural network. It was concluded that with fairly favourable site characteristics, cost overrun range reached 77.95% with a mean variation of 44.36%, while time overrun range reached 51.23% with a mean variation of 26.77%. It was found that the accuracy performance levels of 91.93% and 91.43% for the cost and time overrun predictions respectively were very high for the optimum models. Building projects have eight significant site characteristics which can be used to reliably predict the percentage overrun, among which the ground water level, level of available infrastructure and labour proximity around the site are the most important predictors of cost and time overrun. The study recommended that project owners, consultants, contractors and other stakeholders should always use the eight identified site characteristics in predicting percentage cost and time overrun, with more priority on the first three characteristics. The study also recommended the neural network prediction approach due to its prediction accuracy.

scholarly journals PENGARUH CHANGE ORDER TERHADAP BIAYA, MUTU, DAN WAKTU PADA PROYEK KONSTRUKSI GEDUNG BERTINGKAT

2020 ◽  
Vol 3 (4) ◽  
pp. 1349
Author(s):  
Hendy Eka Putra ◽  
Hendrik Sulistio
Keyword(s):  
Construction Projects ◽  
Building Construction ◽  
Time Analysis ◽  
Volume Changes ◽  
Change Orders ◽  
Project Completion ◽  
Work Volume ◽  
Design Changes ◽  
Change Order ◽  
Storey Building

The implementation of the construction project caused miscommunication, this made the contract became a reference during implementation. In the implementation of construction projects, there are often changes that not according to contract, for example: work volume changes, specifications changes, type or method of work changes, schedules changes , design changes, and others. These changes are commonly known as change orders. There are several things that cause a change order, for example: incompletable contract, design does not fit in the field, unsupportive weather, and others. This research is to determine the effect of change order in the aspects of cost, quality, and time in multi-storey building construction projects. Researchers used data from the responses of respondents consisting of contractors, consultants, and owners. The questionnaire made proposes several aspects of change orders and their effects on cost, quality, and time. Analysis of research data was carried out with the help of the SmartPLS 3.0 application program. The influence of change orders on costs is the lack of costs due to the addition of work items, while on quality is the quality decrease due to additional work volume, and on time is the delay in project completion due to changes in completed work.ABSTRAKPelaksanaan proyek konstruksi menyebabkan terjadi perbedaan pendapat yang disebabkan oleh pihak yang terlibat, hal ini membuat kontrak menjadi sangat penting dan menjadi acuan selama pelaksanaan. Pada pelaksanaan proyek konstruksi sering terjadi perubahan-perubahan yang akhirnya tidak sesuai dengan kontrak sebelumnya contohnya seperti: perubahan volume pekerjaan, perubahan spesifikasi, perubahan jenis atau metode pekerjaan, perubahan jadwal, perubahan design, dan lain-lain. Perubahan ini umum sekali terjadi dalam proyek konstruksi dan lebih sering dikenal sebagai change order.  Ada beberapa hal yang menyebabkan perlunya dilakukan change order, misalnya: kontrak yang dibuat tidak lengkap, design yang ada tidak sesuai dengan kondisi lapangan, cuaca yang tidak mendukung, dan lain-lain. Penelitian ini dilakukan untuk mengetahui besar pengaruh change order dalam aspek biaya, mutu, dan waktu dalam proyek konstruksi gedung bertingkat. Peneliti menggunakan data dari hasil tanggapan responden yang terdiri dari kontraktor, konsultan, dan pemilik. Kuesioner yang dibuat mengajukan beberapa aspek mengenai change order serta pengaruhnya terhadap biaya, mutu, dan waktu. Analisis data penelitian dilakukan dengan bantuan program aplikasi SmartPLS 3.0. Pengaruh change order terhadap biaya adalah kurangnya biaya akibat penambahan item pekerjaan, sedangkan terhadap mutu adalah menurunnya kualitas bangunan akibat penambahan volume pekerjaan, dan terhadap waktu adalah terjadinya keterlambatan penyelesaian proyek akibat perubahan pekerjaan yang telah selesai.

scholarly journals ASSESSING THE FACTORS CAUSING PROJECT COMPLETION DELAYS IN THE CONSTRUCTION SECTOR OF OMAN USING SEM-PLS

2020 ◽  
Vol 8 (3) ◽  
pp. 900-912 ◽  
Author(s):  
Iman Suleiman Al Maktoumi ◽  
Firdouse Rahman Khan ◽  
Ahmed Rashid Suwied Al Maktoumi
Keyword(s):  
Structural Equation ◽  
Construction Projects ◽  
Goodness Of Fit ◽  
Raw Materials ◽  
Equation Modeling ◽  
Related Factors ◽  
Formative Measurement ◽  
Project Completion ◽  
Measurement Models ◽  
Process Allocation

Purpose: The objectives of the study were to investigate the causes of the delays to analyze the factors causing the construction delay in Oman and to investigate the effects of such delays. Design/methodology/approach: To carry out this study 210 samples were collected through a well-defined questionnaire from the construction stakeholders viz. the consultants, contractors, and the clients who were selected on a random sampling basis. Smart PLS for Structural Equation Modeling (SEM) technique was used to analyze the data to obtain the formative measurement models, the structured model, and the goodness of fit. Findings: The results of the study reveal that the client-related factors, equipment-related factors, and material related factors have a significant impact on the completion delay in construction projects. The findings of the study also revealed that the Client related factors were – Delay in providing services, Delayed decision-making process, Allocation of insufficient time. Equipment related factors were – Existing low productive equipment, Unskillful Equipment operator, Breakdown of equipment and Outdated equipment; Material related factors were – Delay in supply of raw materials, Non-availability of materials, Change of materials during construction, Non-availability of accessories and Damaged materials. Research limitations/Implications: The present study covers the stakeholders of the construction projects from selected regions only. The future studies can be extended to other projects and other regions as well. Social implications: The study suggested that the clients’ cooperation especially in providing the contractors with the necessary equipment, facilities, and sufficient time will avoid such delays of the construction projects in Oman. Originality/Value: Only very few have examined the completion delay of the construction projects in Oman using SEM-PLS and it is a first-hand study of its kind and the results will be useful to the stakeholders.

scholarly journals Factors Determining the Success of HSR Building Projects

2020 ◽  
Vol 6 (2) ◽  
pp. 5-19
Author(s):  
Elena M. Volkova
Keyword(s):  
Construction Projects ◽  
High Speed ◽  
Success Factors ◽  
Economic Effects ◽  
Scientific Result ◽  
High Speed Rail ◽  
Building Projects ◽  
The World ◽  
The Russian Federation ◽  
The Impact

The article reviews the world experience in the construction and operation of high-speed railways in terms of factors that determine the success or failure of such projects. Since the construction of HSR is often considered as a part of national projects on a broader scale, it is proposed to use as criteria for success not only commercial indicators, but also various socio-economic effects arising from their implementation. The author classifies externalities that reflect the impact of HSR on the development of regions and cities and presents the results of foreign research on their quantitative and qualitative analysis. Special attention is paid to the experience of China, since this country significantly differs from the rest of the world in terms of development of high-speed rail traffic. In this regard, the largest amount of representative data that allows us to identify the success factors of HSR projects can be found for Chinese projects. The main scientific result of this article is a generalization of the existing experience of HSR construction projects and justification of the prospects for implementing such projects in the Russian Federation.

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