by Malcolm Horner
The Construction Management Research Unit, in the Division of Civil Engineering, recently visited Zagreb to explain the Private Finance Initiative, its advantages and pitfalls to the Croatian Ministry of Public Works.
The team led a workshop on 23 May in Zagreb hosted by the Croatian Minister of Public Works attended by representatives from Croatian Ministries.
Developing countries are always short of money to build infrastructure - roads, hospitals and schools that they need. One way of addressing this problem is to use the PFI route.
Malcolm Horner and his team in the CMRU are currently completing a £0.75 million project sponsored by the European Physical Sciences Research Council and six industrial partners to develop a highly structured, novel approach to estimating the whole life cost of construction projects.
In the past, when engineers have designed projects, they have only taken into account the first cost (capital cost) of construction. However, PFI projects require companies to take responsibility not only for designing and building projects, but operating and maintaining them too. Since operation and maintenance costs can be twice as much as capital costs, PFI requires estimates of the costs and plans to minimise the whole life costs of the project. This often means trading off capital costs against operating and maintenance costs. The CMRU has developed technology and the software for this purpose and presented it to the Croatian government.