Establishing Cost Management System For Nuclear Power Construction Project

China is experiencing a period of accelerated development in nuclear energy. The brightest ever prospect of nuclear power construction market has been attracting more and more contractors, both local and international. In the mean time, the fierce competition has led to down-going contract prices while talented employees keep demanding higher salaries. Being squeezed in between, the contractors have tried numerous ways to get the construction costs reduced. Unfortunately, it has been proved time and again that those isolated, un-systemized measures can not ensure a balanced control over the total costs. Therefore, it becomes imperative that contractors design and install a comprehensive cost management system (CMS) for nuclear power construction projects so as to sharpen their competitive edges and develop sustainable growth abilities.Based on the civil works construction project of a nuclear power plant, this paper depicts the whole process of establishing a CMS as a complete value chain composed of five steps---R&D, Design, Implement, Maintain and Upgrade, asserting that neglect on any one of the steps could cause the final failure of the total establishment effort. To give a clear description of the complexity relating to CMS establishment, this paper looks from two different perspectives, i.e., the internal structure and the external appearance of a CMS, to analyze in detail the critical difficulties involved in the Design step. When analyzing the internal structure of CMS, the emphasis is placed on building up a general framework for the design of Cost Measuring sub-system and Cost Forecasting sub-system, as well as on stressing the importance of aligning the two sub-systems with each other; when analyzing the external appearance of CMS, the emphasis is placed on explaining the basic requirements for the design of Cost Management Rules and Cost Management Software, as well as on highlighting the importance of adapting mutually the Software and the underlying Rules.A real-world case study is made to show the potential traps and prevention methods at the Implement step on the value chain. The case is about one of the most famous domestic contractors, China National Nuclear Industry HuaXing Construction Company (HXCC), who employed French cost control experts to help establish a CMS during the period HXCC carried out the civil works construction project of Guangdong LingAo nuclear power plant.The focus of this paper is on searching for the root causes of and basic strategies to avoid the difficulties a nuclear civil works contractor might confront while trying to apply cost management theories to practical uses. However, this paper is NOT aimed at presenting a detailed and complete solution with immediate practicability for CMS establishment. In any way, that kind of job is far beyond the effort of a single person within just a few months and thus not attempted in this paper. Considering the fact that a close relation exists between the efficiency of a CMS and the atmosphere of both project management and corporate management, three suggestions are given at the end of the paper concerning subjects of related further research.