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Possibleaddedvalue
Pre-project Project Operation
Decidewhat you
want
Designand
construction
Earning
Opportunity
Costof late
change
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V a l u e m a n a g e m e n t
V a l u e p l a n n i n g
V a l u
e e n g i n e e r i n g
V a l u e r e v i e w
P r e - i n v e s t m e
n t p h a s e
U n b u d g e t e d
B u d g e t e d p r o j e c t s
I n v e s t m e n t p h a s e
I m p l e m e n t a t i o n
O p e r a t i o n
E n d
o f a s s e t s
C o n c e p t
P r e - f e a s i b i l i t y
F e a s i b i l i t y
A p
p r a i s a l
P r o c u r e m e n t
t r a i n i n g
O p e r a t i o n
D e c o m m i s s i o n i n g
C l o s e o u t
D e f i n e
p r o j e c t
D e f i n e p r o j e c t
a p p r o a c h
D e v e l o p
a p p r o a c h / d e s i g n
F e e d b a c k
D
e v e l o p
d
e t a i l e d
a p p r o a c h
P r o c u r e m e n t
a n d t r a i n i n g
H a n d o v e r / p o s t p r o j e c t e v a l u a t i o
n
N e x t p r o j e c t
S t r a t e g y : C o r p o r a t e , B u s i n e s s & P r o j e c t
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P R O J E C T A P P R A I S A L
P R O J E C T I M P L E M E N T A T I O N
O P E R A
T I O N
O F T H E A S S E T
INITIATION
P R O J E C T A C C O U N T B A L A N C E
M O N E Y
T I M E
D E F I N I T I O N
C O N C E P T
D E S I G N
C O N S T R U C T I O N C
O M
Regulatory approval
Planning
approval
Contract award
– +
SANCTION
COMPLETION
C o s t
C o s t a n d b e n e f i t
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P o s s i b i l i
t i e s o f
r e d u c i n g
c o s t
P e r c e n t a g e c o s t
I n v e s t m e n t
d e c i s i o n
A c c u m u l a
t e d a m o u n t
o f i n v e s t m
e n t
D e c i s i o n s t e
p s
A P P R A I S A L
I M P L E M E N T A T I O N
P r e p l a n n i n g
P l a n n i n g
D e s i g n a n d
c o n s t r u c t
e q u i p
m e n t
I n s t a l l a t i o
n o f e q u i p m e n t
T i m e
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Maximum A
Most likely B
Minimum C E s t i m a t e d r a n g e o f c o s t s ( £ m )
Actualcost
Feasibility studyDesign
TenderConstruction Claims
settlement
A
B
C A
B
C
Feasibilitystudy
Tender SettlementA B C
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THE PRESENTSITUATION
THE OBJECTIVE
Estimated cost
Actual cost
Achievable cost
Realistic estimate ofprobable costshowing tolerance
Apparent cost overrun
Actual cost overrun due to: • Inefficiency • Lack of resources • Inadequate investigation
• Lack of funds etc. caused by unrealistic estimate
Lowside tolerance
Most probable estimate
Highside tolerance
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