School of Engineering and Technology, (SET)

Cost is a very important factor in project management. This course impacts the skills needed to estimate, plan and control project costs on large infrastructure projects. The course is designed in three self-contained modules corresponding to different requirements in the infrastructure cost management process. Upon completion of this course, students are able to develop project feasibility study, to estimate project cost and to manage the financial and cost issues of construction projects.

Project feasibility assessment, Effects of depreciation, taxation, inflation on project feasibility. Design cost estimating. Construction cost estimates. Risk and contingency in estimates. Cost control. Financial management for projects. Bidding and pricing. Budgeting and budgetary control.


I.            Project Feasibility Assessment
1.     Requirement for project feasibility assessment
2.     The Common methods for feasibility assessment: Payback period, Return on investment, Present Worth, Future Worth, Internal Rate of Return, Benefit cost analysis
3.     The effect of depreciation on project feasibility
4.     The effect of taxation on project feasibility
5.     The effect of inflation on project feasibility
6.     Risk and sensitivity analysis for projects
7.     Rationing capital to competing projects

II.         Estimating Project Costs
1.     Design Cost Estimating Methods: Unit methods, Floor area method, Regression method, Factor and Percentage methods, Parameter estimating, Cost-capacity ratios, Cost significant estimating.
2.     Construction Cost Estimates: A generalised procedure. Estimating costs for specific project elements
3.     Making adjustments to cost estimates: Cost indices, location factors, etc.
4.     Whole life cycle costing (WLCC) of projects
5.     The allocation and appropriation of project contingencies
III.     Cost and Financial Management
1.     Project cost accounting and control
2.     Budgeting and budgetary control
3.     Bidding strategy and project pricing
4.     Financial management of projects and implications for companies
5.     Managing risk and returns

Lecture notes, chapters from the reference books below and relevant journal articles.

Blank, L. and Tarquin, A. (2000): Engineering Economy , 5th Edition. New York : McGraw Hill.
Peurifoy, R. L., and Oberlender, G. D. (2002): Estimating Construction Costs , 5th Edition. New York : McGraw Hill. Damordaran, A. (1996): Investment Valuation: Tools and Techniques for Determining the Value of Any Assets : University Edition, John Wiley and Sons, Inc.
Harris, F. and McCaffer, R. (2001): Modern Construction Management , 5th Edition. London : Blackwell.
Thuessen, J. G. and Fabrycky, W. J. (2001): Engineering Economy , Prentice Hall
Halpin, D. W. (1985): Financial and Cost Concepts for Construction , John Wiley & Sons

Construction Management and Economics

Engineering, Construction and Architectural Management

Cost Engineering

International Journal of Project Management

Journal of Financial management of Property and Construction

The grading system may change (without prior notice).  The Instructor will inform the grading system in the first day of the class