International Construction Cost Comparison

by Jeffrey C Kadlowec, Registered Architect

The rapid growth of city centers around the world are creating new challenges for engineers and infrastructures. Increased pollution, urban flooding and water scarcity have become apparent over the past decades. Low impact development (LID), best management practices (BMPs), sustainable urban drainage (SuDS), and water sensitive urban design (WSUD) have emerged as the prominent strategies to control urban runoff [Zhu 2022]. Bio-retention, green roofs, grassed swales, and permeable pavement are essential measures of a Sponge City (SC) to provide and maintain natural ecosystems.

Life cycle assessment (LCA) and life cycle costing (LCC) measure and compare the environmental impact of urban development through four steps: 1) goal & scope definition, 2) inventory analysis, 3) impact assessment, and 4) result interpolation [Zhu 2022]. By quantifying life cycle inventory (LCI), designers and developers can analyze consumption, transport and emissions along with effects, cost and benefits (see Fig 1). Results conclude that residential areas have higher impact and benefits than campuses, are more complicated with lower cost-benefit ratio than campuses, and both provide a payback time of less than thirteen years with residential areas around 12.5 years and campuses about 6 years.


Figure 1. The framework of LCA combined with LCC method [Zhu 2022]

Growing economies and urbanization require infrastructure development further increasing the importance of construction industries. Delays and cost overruns often arise during implementation, potentially resulting in project failure, reduced profits, and loss of trust [Le-Hoai 2008]. Though time and price increases can occur at any phase, the major problems usually happen during construction. Research data ranks poor site management and supervision, poor project management assistance, financial difficulties of owner or contractors, design changes, unforeseen conditions, slow payment, and inaccurate estimates as the leading causes.

Purchasing power parity (PPP) is used to convert money amounts from various countries into a common currency. This method provides a baseline measurement for construction costs [Best 2012]. Understanding these difference both in material costs and labor prices is an essential part of accurate cost estimating. The basket of construction component (BOCC) approach breaks down into three levels: 1) project, entire building or facility; 2) system, structural, exterior, mechanical, etc; and 3) component, combinations of material or equipment [Walsh 2006]. Spatial cost comparisons rank income production and economic activity to determine standard of living and identify poverty levels.

The construction industry contributes 30% to global CO2 emissions and consumes 40% of total energy worldwide. According to studies and comparison of the two tallest buildings in the two most polluting countries, the Shanghai Tower produces over 2.5 times the carbon emissions as One World Trade Center [Nematchoua 2017]. Though recent environmental trends recommend zero-energy buildings (ZEB) and green buildings (GB), statistical cost models show no significant differences over conventional buildings (CB) [Hu 2018]. These higher initial costs of ZEB remain as a barrier to implementation.

Public projects are funded by tax dollars and must be managed efficiently due to the higher level of accountability. This typically comes at additional cost to ensure successful outcomes in terms of quality and schedules. The following equations determine overall project performance, usually as a positive value, with 0 (zero) being on budget and without delay.

A third metric for quality can be assigned using the Likert scale ranging from 1 = Very unsatisfactory through 3 = Neutral to 5 = Very satisfactory [Ling 2018]. Comparison of data collected from public projects in Beijing, Hong Kong, Singapore and Sydney resulted in Singapore having the lowest cost overruns and Hong Kong projects the highest. Projects in Beijing had the lowest schedule overruns and those in Hong Kong again the highest. The highest quality appeared in Sydney, with the lowest in Beijing. It can be agreed upon by most team members and project managers that focus should by towards delivering projects to the highest level of quality when working in the public sector.

References
Best, Rick. (2012). International comparison of cost and productivity in construction: a bad example. Australasian Journal of Construction Economics and Building. 12(3): 82-88.
Hu, Ming. (2019). Does zero energy building cost more? An empirical comparison of the construction costs for zero energy education building in United States. Sustainable Cities and Society. 45: 324-334. doi.org/10.1016/j.scs.2018.11.026.
Le-Hoai, Long; Lee, Young Dai & Lee, Jun Yong. (2008). Delay and Cost Overruns in Vietnam Large Construction Projects: A Comparison with Other Selected Countries. KSCE Journal of Civil Engineering. 12(6): 367-377. DOI 10.1007/s12206-008-0367-7.
Ling, Florence. (2018). International comparison of performance of public projects. Built Environment Project and Asset Management. 8(3): 281-292. DOI 10.1108/BEPAM-08-2017-0069.
Nematchoua, M; Asadi, S & Reiter, S. (2021). Estimation, analysis and comparison of carbon emissions and construction cost of the two tallest buildings located in United States and China. International Journal of Environmental Science and Technology. 19: 9313-9328.
Walsh, Kenneth; Sawhney, Anil & Vachris, Michelle. (2006). Improving inter-spatial comparison of construction costs. Engineering, Construction and Architectural Management. 13(2): 123-135. DOI 10.1108/09699980610659599.
Zhu, Yifei; Xu, Changqing; Yin, Dingkun; Xu, Jiaxin; Wu, Yuqi & Jia, Haifeng. (2022). Environmental and economic cost-benefit comparison of sponge city construction in different urban functional regions. Journal of Environmental Management. doi.org/10.1016/j.jenvman.2021.114230.