Constructing and justifying the cost of physical assets such as a manufacturing plant is much more difficult than it was decades ago, according to a report by Steffen Fuchs, senior partner with McKinsey & Company.
Inflation, rigorous sustainability requirements, and rapid changes in technology and regulations all complicate investment in new construction projects, the report says. “Adding to the complexity, the next generation of assets needs to be “set and forget”: the high cost of building them must be offset by lower operating costs,” Fuchs writes.
Improvements in construction processes and project delivery are especially necessary given that a new wave of “once-in-a-lifetime” capital spending on physical assets will take place between now and 2027. Roughly $130 trillion will pour into projects to decarbonize and renew critical infrastructure, Fuchs writes.
Project leaders typically rely on practices that aim to optimize individual investments, such as a nuclear power plant, an oil refinery, or a pipeline. Cost overruns are typical and costly using this approach. New decarbonization and sustainability investments where groups of similar projects (such as wind farms and solar parks) are delivered repeatedly over a long period of time require much better performance, Fuchs says.
Related Stories
| Aug 11, 2010
Walmart establishes sustainable product index to evaluate 'greeness' of products
Walmart today announced plans to develop a worldwide sustainable product index during a meeting with 1,500 of its suppliers, associates and sustainability leaders at its home office. The index will establish a single source of data for evaluating the sustainability of products.
| Aug 11, 2010
Guggenheim to host live online discussion of Frank Lloyd Wright exhibition
The Solomon R. Guggenheim Museum launches the Guggenheim Forum, a new series of moderated online discussions among experts from a variety of fields that will occur in conjunction with major museum exhibitions.
| Aug 11, 2010
Manitoba Hydro Place, Tornado Tower among world's 'best tall buildings,' according to the Council on Tall Buildings and Urban Habitat
The Council on Tall Buildings and Urban Habitat last week announced the winners of its annual “Best Tall Building” awards for 2009, recognizing one outstanding tall building from each of four geographical regions: Americas, Asia & Australia, Europe, and Middle East & Africa. This year’s winners are: Manitoba Hydro Place, Winnipeg, Canada; Linked Hybrid, Beijing, China; The Broadgate Tower, London, UK; Tornado Tower, Doha, Qatar.
| Aug 11, 2010
Clark Group, Mortenson among nation's busiest state/local government contractors, according to BD+C's Giants 300 report
A ranking of the Top 40 State/Local Government Contractors based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit /giants
| Aug 11, 2010
Marks 175 Bio biometric fingerprint reader with leverset
The New 175 BIO is a Hi-Tech fingerprint recognition system that eliminates the risk of replication or unauthorized use.
| Aug 11, 2010
Vytec Yukon Board premium insulated siding offers new design, accessories
Yukon Board Premium Insulated Siding from CertainTeed Corporation’s Vytec brand of vinyl siding products, welcomes a new updated design.
| Aug 11, 2010
Metl-span panels add strength to fitness center
The new Centegra Health Bridge Fitness Center is located on the 40-acre Centegra Health Campus in Huntley, IL. The 120,000 sq. ft. facility presents a high-tech exterior look that features a “running bond” panel pattern plus random placement of two different silver colors of Metl-Span panels. The running bond pattern creates a distinctive appearance by staggering the vertical joints between panels.
| Aug 11, 2010
Nation's first multi-story green industrial facility opens in Brooklyn
The $25 million Perry Avenue Building at Brooklyn Navy Yard is the nation's first multi-level green industrial facility and the first building in New York City to incorporate building-mounted wind turbines. The wind turbines, along with rooftop solar panels, will provide electricity for the building's lobby and common areas.
