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Alexander Jan, Director, Transaction Advice at Arup, offers an economist’s point-of-view on whole life costing.
How can contractors best communicate the fact that spending a little more now will produce long-term savings in maintenance?
Communicating that spending more now can save in the long term requires a combination of things. The construction industry needs to take a broad-based perspective in order to demonstrate that investment will generate dividends across the spectrum. Of course there is the hard numbers aspect – in present value terms does the solution demonstrate value for money? Is it a good whole life cost solution? But crucially, you also have to consider user experience – does a more upfront ‘fit and forget’ solution reduce the number of road closures? There may be safety and environmental benefits – a reduction in exposing contractors to risk, and a decrease in road accidents or in carbon, for example.
As an industry, we must continue to make the case to many stakeholders that expenditure on quality solutions is good value. If we can spell out the arguments and rationale, then that will create pressure and enthusiasm for change.
We have to build on existing success with the Highways Agency, devolved administrations and local authorities. They are rightly asking for us to be able to demonstrate value for money and provide a compelling narrative on wider benefits.
If we can focus on how renewing our roads with the best quality technical solutions can help support growth, employment and competitiveness, that would be very powerful.
"Expenditure on quality solutions is good value."
Alexander Jan, Director, Transaction Advice at Arup
More insight online www.arup.com
First published in Performance Magazine Issue 1 2014