LIFE CYCLE COSTING PRACTICES IN GHANAIAN PUBLIC UNIVERSITIES: CASE STUDY OF UEW

ABSTRACT
Due to the ever-increasing quest for tertiary education in the country, there have been annual increments in enrolments in the various public universities in Ghana over time, leading to pressure on the limited academic facilities. At a high cost of expanding their infrastructural bases, focus has primarily been centered on the cost of construction much to the neglect of overall life span costs of projects. Using a mixed methodology approach, the study aimed at exploring the use of Life Cycle Costing (LCC) practices in GPUs by assessing the level of understanding of practitioners on the technique, documenting existing practices and barriers effective application as well as identifying pre-requisites for effective implementation of the tool. Through a thorough literature review, a questionnaire was developed and administered to 40 practitioners in the built environment (Architects, Engineers, Quantity Surveyors, Project Managers, Estate Officers and Procurement Officers). The study revealed that there is general knowledge and awareness of the LCC tool though rarely applied consciously in practice as confirmed from literature. The study further identified that the involvement of maintenance personnel at the early stage of projects was the most practiced LCC technique and major barriers to the practice have been with bureaucratic structures in administrative procedures as well as poor maintenance culture. Other factors identified included the difficulty in assessing reliable data for analysis, the unavailability of an abridged standardized LCC approach for local practice, insufficient expertise of professionals, the ever-growing challenge of balancing and satisfactorily meeting multiple institutional stakeholders’ needs as well as the effects of inflation on forecasted figures among others. Identified measures for effective implementation of the tool in GPUs are the need to develop institutional design and maintenance standard manuals as well as training of practitioners to gain workable knowledge in the application of the tool. Serving as an eye-opener to the exploration of LCC practices in Ghana, this research will be useful for management of GPUs and professionals in the Ghanaian Construction Industry (GCI). The study further recommends that future researchers can explore the perception of built environment professionals on the use of LCC within the GCI.

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In Ghana, the desire for achieving academic qualifications has been on the rise over the years. Educational institutions at all levels are therefore into expanding infrastructure to create the enabling environment for meeting the teaming demands. These infrastructural expansions encompass the construction of halls of residences, lecture halls, office blocks, commercial and recreational facilities as well as road networks. These physical projects require strategic planning and implementation of best practices to achieve the desired results. According to Yale Facilities Construction & Renovation (2005), universities engage in these physical projects in order to achieve their strategic goals and upgrade the quality of their infrastructure of which considerable funds are committed.

Due to the highly capital-intensive requirements on these projects, innovative capital financing methods have been sought after over the years, with even higher demands placed on better fiscal management practices for the achievement of best value. Managers and users are into finding the very best practices that provide economic advantages over the life span of projects. With the adoption of sustainable principles in the construction industry, the concept of life cycle costing has become necessary in decision making. Stakeholders therefore require professionals to adopt processes that include life cycle costing in the long-term planning of physical projects (U.S. Department of Energy, 2014).

With the launch of the Sustainable Development Goals (SDGs), more emphasis have been placed on moving away from the over-concentration on short-term effects of decisions taken for developmental projects. Sustainability as a principle involves creating and maintaining conditions for humans and nature co-habit in productive harmony. As construction feeds on nature for the bulk of its material resource inputs, the recent alarm of resource depletion is of great concern for all and sundry within the built environment. This new trend has led to the conscious consideration of sustainable technology, sustainable development and sustainable built environment principles which also incorporates the necessity of conducting life cycle studies on proposed developments as part of value-for-money assessments (Ametepey & Aigbavboa, 2015; Djokoto et al, 2014; ThiĆ©bat, 2013; Davis Langdon, 2007).

Life cycle costing (LCC) as a principle is applicable in many spheres of human endeavour for optimum resource allocation and achievement of best value for money. It involves identifying and detailing the initial capital cost and future costs of owning a facility over its lifetime (Rum & Akasah, 2012). Flanagan & Jewell (2005) describe the term to have evolved from cost-in-use, whiles in other settings it is also referred to as Whole Life Costing (WLC) and Whole Life Appraisal.

The terms LCC and WLC have most often than not been used interchangeably. However, whilst LCC concerns the costs related directly to the construction and operation of a facility, WLC includes other costs associated but indirectly related to the acquisition and use of the facility such as land costs, procurement costs and even revenues obtained from commercially-run facilities. Irrespective of the terminology assigned to the practice, the focus remains on the importance of considering all costs associated with the development and use of capital projects within the built environment (Willmott Dixon, 2010).



1.2 STATEMENT OF THE PROBLEM
Ghanaian Public Universities (GPUs) offer a wide range of academic programmes. As the annual turn-out of graduates from the senior high schools increase coupled with the backlog of hopeful applicants and additional academic programmes that are constantly being developed to meet industry requirements, universities are focusing on expanding academic facilities to strategically position them to meet this demand. These infrastructural developments come at a high cost with funding balanced between the government, donor agencies and internal funds.

To ensure that these costs are well managed, these universities have established technical departments- Estate/Works and Physical Development Offices as well as Procurement Units- that handle the development, construction and management-in-use of their facilities. These departments work together to ensure that all capital projects are managed to the highest standards for capital optimization in these institutions. Though the services of these departments bring a lot of relief, the focus has mostly been on the initial costs (Ametepey & Aigbavboa, 2015; Djokoto et al., 2014).

Research has shown that the running cost of some facilities rise as high as 40% of capital cost or even more (Rum & Akasah, 2012). Coupled with the continuously less funding for capital projects (Pearce et al., 2009), the government and Council of the various public universities may have to reconsider their priorities. There must be a paradigm shift from the traditional award of contracts based primarily on the initial construction cost (University of California, 2014) into more proactive requirements and standards for selection. The perspective should be expanded to include the costs of operation, maintenance and replacements to the initial acquisition costs to enable effective value-for-money assessment of projects. This is possible with the use of LCC and related practices to ensure that projects are well assessed for decision making.

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Item Type: Ghanaian Project Material  |  Attribute: 80 pages  |  Chapters: 1-5
Format: MS Word  |  Price: GH50  |  Delivery: Within 30Mins.
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