published_or_final_version / Civil and Structural Engineering / Master / Master of Philosophy

M.Ing. (Engineering Management) / Capital intensive engineering projects involve the flow of large sums of money over the project life. During the pretender phase of the project, estimates of the forecast cash flow and associate return on investment are made based on certain assumptions which at the time are, at best, only informed guesses. As the project progresses, the uncertainty surrounding the magnitude and the timing of these cash flows and rate of return, diminishes. By recognising the time value of money and the importance of the synthesis of time and cash flow as well as the interdependence of project activities, it is desirable to obtain an estimate of the PROBABLE outcome of the return on investment~ should the bid be accepted. This outcome can only be 'guessed' at by means of a probabilistic analysis of the parameters that go to make up the nett cash flow. This study is an attempt to find a model suitable for use in the construction industry which accurately describes the construction process, and presents an overall analysis of the variation in the rate of return as a result of the probabilistic nature of the original parameters. Various models were investigated. All were found suitable under limited conditions.

Submitted in fulfilment of the academic requirements for the Degree of Magister Technologiae: Civil Engineering, Department of Civil Engineering and Surveying, Faculty of Engineering and the Built Environment, Durban University of Technology, 2009. / Infrastructure project costs are being scrutinised more closely and with greater skill and accuracy as projects have become larger, more complex and more expensive, and clients have become more exacting in their requirements. These and other factors compel engineers to design with greater care and in more detail. However, public planners spend very little time generating alternative project options, often presenting decision-makers with only a few poorly differentiated alternatives borrowed ad hoc from other projects. Even more disturbing is that they often devote the greatest amount of decision making resources to the development of a single decision rather than a variety of options. A systematic and iterative analysis of the cost consequences of different design solutions is commonly suggested for infrastructure projects, but rarely happens. There is a growing need to integrate design and costs. This study concentrates on the issue of cost optimisation of infrastructure projects (particularly at the design stage of the project) and applies construction economics, cost planning, cost optimisation and value engineering techniques to the design of such projects. The methodology proposed in this study for the optimisation of cost and design planning is the Infrastructure Cost Planning Model. This model divides the planning of a project into four stages and utilises twelve Cost Report Forms across these stages. The Cost Report Forms define in a comprehensive, precise and verifiable manner the essential characteristics of a deliverable component. They are used to measure, quantify, verify and audit the different design options. By means of the Cost Report Forms, the Infrastructure Cost Planning Model enables the client to select a combination of alternatives and evaluate a number of possible design options – with their cost implications – at each stage of the design process. This i promotes transparency and accountability, and enables consultants and clients to have greater control over the planning process and overall costs. Two case studies on infrastructure related projects were conducted and confirm that the Infrastructure Cost Planning Model can reduce costs. This study demonstrates that it is possible to overcome the problem of over expenditure by introducing cost effective design decisions prior to the infrastructure design approval process. The Infrastructure Cost Planning Model can improve infrastructure standards and procure design in a cost effective, equitable, competitive and transparent manner. This study contributes to the underdeveloped area of cost planning and forecasting of infrastructure projects. The findings are relevant to the South African government's infrastructure service delivery programme and the general issue of affordable infrastructure services.

Submitted in fulfilment of the academic requirements for the Degree of Magister Technologiae: Civil Engineering, Department of Civil Engineering and Surveying, Faculty of Engineering and the Built Environment, Durban University of Technology, 2009. / Infrastructure project costs are being scrutinised more closely and with greater skill and accuracy as projects have become larger, more complex and more expensive, and clients have become more exacting in their requirements. These and other factors compel engineers to design with greater care and in more detail. However, public planners spend very little time generating alternative project options, often presenting decision-makers with only a few poorly differentiated alternatives borrowed ad hoc from other projects. Even more disturbing is that they often devote the greatest amount of decision making resources to the development of a single decision rather than a variety of options. A systematic and iterative analysis of the cost consequences of different design solutions is commonly suggested for infrastructure projects, but rarely happens. There is a growing need to integrate design and costs. This study concentrates on the issue of cost optimisation of infrastructure projects (particularly at the design stage of the project) and applies construction economics, cost planning, cost optimisation and value engineering techniques to the design of such projects. The methodology proposed in this study for the optimisation of cost and design planning is the Infrastructure Cost Planning Model. This model divides the planning of a project into four stages and utilises twelve Cost Report Forms across these stages. The Cost Report Forms define in a comprehensive, precise and verifiable manner the essential characteristics of a deliverable component. They are used to measure, quantify, verify and audit the different design options. By means of the Cost Report Forms, the Infrastructure Cost Planning Model enables the client to select a combination of alternatives and evaluate a number of possible design options – with their cost implications – at each stage of the design process. This i promotes transparency and accountability, and enables consultants and clients to have greater control over the planning process and overall costs. Two case studies on infrastructure related projects were conducted and confirm that the Infrastructure Cost Planning Model can reduce costs. This study demonstrates that it is possible to overcome the problem of over expenditure by introducing cost effective design decisions prior to the infrastructure design approval process. The Infrastructure Cost Planning Model can improve infrastructure standards and procure design in a cost effective, equitable, competitive and transparent manner. This study contributes to the underdeveloped area of cost planning and forecasting of infrastructure projects. The findings are relevant to the South African government's infrastructure service delivery programme and the general issue of affordable infrastructure services.