Professional bodies launch global cost-comparison tool
July 24, 2017 – A global coalition of 45 organisations has launched a new system designed to reduce construction risk by improving the comparison of project costs.
The new International Construction Measurement Standards (ICMS) are aimed at slashing infrastructure investment risk. The work has been produced by a coalition of organisations including the Royal Institution of Chartered Surveyors (RICS) the Chartered Institution of Civil Engineering Surveyors (ICES), the Indian Institute of Quantity Surveyors and the International Cost Engineering Council.
Arup, Arcadis, Network Rail, Gardiner and Theobold, Faithful+Gould, Turner & Townsend and Gleeds are among those committing to its future use in the UK.
Faithful+Gould regional director Simon Longstaffe said: “The lack of a uniform approach can lead to confusion and the inability to compare schemes and assets within schemes on a like-for-like basis. ICMS achieves uniformity by standardising the high level presentation of costs on projects by providing global consistency in classifying, defining, analysing and presenting construction costs at a project, regional, state, national or international level.”
Arcadis director Julie De La Cruz, who is also chair and founder of the Philippines Institute of Certified Quantity Surveyors and chair and founder of Philippine Institute of Built Environment (PIBE) addded: “Arcadis operates in over 40 countries and we have projects in over 70 countries. In the Middle East alone we operate in five countries so you can imagine that we convert costs between different standards. ICMS as a universal standard approach will solve problems of inconsistency. It will help us deliver better value for money, consistency of approach and providing meaningful benchmark information.”
Infrastructure projects across the globe categorise and forecast construction costs differently, making investment risky, said RICS. The new standard harmonises cost, classification and benchmarking definitions to enhance comparability and consistency of capital projects.
The standardised system is intended to simplify investment decisions and break down barriers to investment as well as enabling better global construction project benchmarking. RICS said that it will, for the first time, enable better comparison between projects to improve investor confidence and attract private sector funding.
ICMS is designed to allow a consistent method for presenting costs, aligning national standards with one universal framework for defining, analysing and classifying construction costs. Other benefits that have been identified include bringing greater consistency to global construction markets, allowing the causes of differences in costs between projects to be identified and enabling more informed decision-making about the design and location of construction projects. There will also be standardised, BIM-friendly classifications for cost data collection to inform subsequent cost prediction.
Ken Creighton chair of the ICMS Coalition and director of professional standards at RICS said: “It is the duty of professional bodies and associations to lead advances in standards which improve our ability to manage risk. As a new international standard ICMS provides an enabling framework which promises to inspire our profession and add direct value to the public.”
He added: “ICMS will benefit all stakeholders with an interest in buildings and civil engineering construction, including developers, owners, occupiers, managers and investors by creating a common language for construction investment and enabling better benchmarking.”
RICS said that the new standard comes at a time where, according to its UK Construction & Infrastructure Market Survey released last week, financial constraints are by far the most significant impediment to building activity.
Varughese Mathew, global president of the Indian Institute of Quantity Surveyors said: “The world has become a global village and professionals travel from one country to another. Companies also move from one country to another to take different jobs so it’s important for people involved in construction projects to have standards they are familiar with. In this respect, ICMS will be an excellent tool.”
Construction is a large contributor to national economies and governments worldwide spend vast sums of public money on essential infrastructure, said RICS. It pointed to a report that found that inconsistent information causes poor cost prediction which impedes investment and can cause nine out of 10 mega projects to run over budget. Overall, close to £60 trillion needs to be spent globally between 2014 and 2025 on infrastructure and the ICMS Coalition saw the need to de-risk these projects for public and private sector investors.
Antonio Paparella of the Construction Unit at the European Commission said: “ICMS will contribute towards governments having a common approach for investment for transnational projects.”
See Lian Ong, chair of the ICMS standards setting committee and chair of Commission 10 the International Federation of Surveyors, said: “We are delighted to launch this new standard. With increasing levels of public private, cross-border financing and construction investment funds underpinning our pension schemes, it is vital to make sure costs can be assessed in a transparent way. The ICMS framework will improve ways of working and this collaborative project is an example of the global construction profession uniting to improve ways of working for the public interest.”
The new International Construction Measurement Standards is available from www.icms-coalition.org