Estimating service lives using the factor method for use in whole life costing

Construction projects have traditionally been costed on the basis of the initial capital cost. The privatisation of many infrastructure providers, the use of private equity to finance construction projects for the public sector and ever-tighter constraints on public spending have generated demands in the UK to predict the overall cost of a project over its whole working life. This concern extends to demands for predictable building service lives and costs of ownership. Until very recently there have been no standard methodologies for approaching this problem. This paper explores the concepts included in whole life costing, in particular that of factored estimates of service life, and reports on the current commercial and practical issues driving adoption of whole life cost procurement of construction works.