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Building Cost Management
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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Approaches
to the total cost management of construction works are now changing
rapidly. The change imposes the necessity to change how the cost of
construction work is conceived across domain. The term cost management
connotes basically two related activities in costing that is, cost
forecasting and cost control (Ashworth, Hogg and Higgs, 2013). This
understanding suggests that, to be able to exert cost control
yardsticks, the estimate of the cost implication must be known over
defined stages in the project development cycle. Cost management of
buildings were historically aimed at minimising the initial construction
costs alone. Opoku (2013) observed that the usual practice in the
construction industry was to accept the cheapest initial cost, and this
trend tend to discourage whole life cost consideration. However, during
the 1930’s, many building users began to discover that the running costs
of the buildings such as maintenance, energy, management cost, began to
impact significantly on the occupier’s budget (Opoku, 2011).
Unfortunately,
the lowest price frequently does not result in the lowest all-in cost
or total cost of acquisition, operation and disposal. The resurgence of
concern for energy consumed by buildings and the associated high
maintenance cost have highlighted the need to reconsider whole life
costing in building cost management. According to Bello, Ibrahim and
Kolo (2013), buildings have long design life-spans, as a result,
concerns dealing with the whole life of the building deserves
considerate attention.
The application of whole life costing (WLC)
technique is widely practiced in other industries; however, its use in
the construction industry is marginal. The WLC approach encourages
decision-making that takes account of the initial capital cost, running
cost, maintenance cost, refurbishment requirements and disposal cost.
However, recent government initiatives and the growing demand from the
private sector for greater predictability in the running costs of
buildings have increased the need to analyze life cycle costs from
earliest stage of a project. Several reports, including those of
“Constructing the Team†(Latham 1994) and “Rethinking Constructionâ€
(Egan 1998) have all strongly recommended the need to consider the
long-term costs and economic performance of constructed assets. The
construction industry is now recognized as an important contributor to
sustainable development; that is achieving economic and social
objectives while minimizing adverse environmental impacts (Addis and
Talbot 2001). It is therefore essential that, the concept of whole life
value is used as a criterion for procurement in the construction
industry. The Egan report recommended that design should encompass whole
life costs including cost of energy consumption and maintenance costs
(Egan 1998). However, little has been written on the extent of
application of WLC in the Nigerian construction industry. According to
Chirugwui et al. (2010) and Olubodun et al. (2010), the concepts of
whole life costing must be well understood to enhance wide application.
This study therefore examined the depth of whole life costing knowledge
in building design cost management in the Nigerian construction industry
in Akwa Ibom State.
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ABSRACT - [ Total Page(s): 1 ]Lack of in-depth knowledge of whole life costing implication in building design cost management has over the years fueled the increasing bias towards the quantity surveyors estimate. Whole life costing constitutes cost management tool that enhances better understanding of the cost implication of building design over its life cycle. This study investigated the use of whole life costing in the Nigerian construction industry with focus in Imo state. The objectives were to examine the benefits, leve ... Continue reading---
