Super-Project Investment Budget For The Study

As an important part of project construction in early stages, either investment decision or design activities play significant role in construction cost management. Nevertheless, construction practitioners fail to recognise such kind of important role. For instance, considerable construction projects are started without any detailed investigation, leading to cost overrun, posing more difficulty onto financial management, and resulting in capital management inefficiency.This study aims to examine the issues of cost management in early phases of project construction. Three research questions are therefore raised, namely,①what are problems with cost management in current construction practice?②how can these problems be resolved? and③how to guide cost management in practice based on the solutions?Emphasis of the study is placed on the argument over multiple capital sources, and ways of capital loaning in early phases of construction project. Methods of computing capital utilisation cost are proposed for analysing capital structure of construction firm. To well assist construction firms in predicting project futures, as well as to mitigate possible construction risks, the study furthermore proposes a capital scheme which favours the lowest comprehensive capital cost. Dynamic investment pay-back period, net present value, and internal rate of return are emphasised in project economic appraisal. It is suggested that time value should be taken into more consideration to attain an integrated project feasibility study, and provide more information for project managers and decision-makers to understand the feature of projects construction.Value management (VM) has been widely considered an effective tool in optimising project design schemes. VM helps to strike a balance between economy and technical requirement for a particular project. The approach of design under quota is good for managing construction cost. Through limiting the design not beyond the budget, this approach facilitates the target of cost control in the design phase of project, encourages more innovation, and combining design idea with construction cost. This study finally argues the benefit and weaknesses of this approach, and solutions are addressed to promote its effectiveness.