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
| Apr 13, 2012
CSI webinar: Green Construction Codes Are Here -- Now What?
This seminar will trace the origins of green codes, how they compare and differ from the rating systems that have been used, and examine some of their main features.
| Apr 5, 2012
Retailers, banks among most affected by new ADA rules
On March 15, the most significant changes to the Americans with Disabilities Act (ADA) since it became law in 1991 went into effect.
| Apr 5, 2012
Florida ranks first in hurricane building codes and enforcement
Florida ranks highest among 18 hurricane-region states for building codes and their enforcement, according to the Insurance Institute for Business & Home Safety.
| Apr 5, 2012
New IgCC green building code is a ‘game changer,’ AIA official says
An AIA official calls the new International Green Construction Code (IgCC) a “game changer” for sustainable construction.
| Apr 5, 2012
Model energy codes add thousands to cost of new apartment construction, study says
New energy codes could add thousands of dollars to the construction costs of each individual apartment residence in a multifamily building, according to new research commissioned by the National Multi-Housing Council and the National Apartment Association.
| Apr 5, 2012
LEED 2012 will include new requirements for data centers
The U.S. Green Building Council’s updated LEED 2012 standards will require two systems to be modeled for each project in order to show power utilization effectiveness.
| Mar 30, 2012
CSI webinar: Durable & energy efficient building envelope design, April 24
This seminar will review recent changes in North America energy codes, examples of building enclosure wall assemblies being considered for code compliance, potential moisture management and durability challenges, and design tools that could be used to assess and minimize potential problems.
| Mar 30, 2012
Improved construction that followed seismic codes helped avert loss of life in Mexico temblor
A magnitude-7.4 earthquake that shook Mexico from Mexico City to Acapulco damaged hundreds of homes and sent thousands fleeing from swaying office buildings, yet no one was killed, according to early reports.
