Life cycle costing of mechanical and electrical services for private finance initiatives projects in Malaysia

Abstract

Mechanical and Electrical (M&E) services costs contribute to major percentage of total construction costs of a building as they comprise of significant operation and maintenance costs. Consequently, they have prominent impact towards building under Private Finance Initiatives (PFI) scheme as Special Purpose Vehicle (SPV) is required to operate and maintain the building throughout long concession period. If M&E services fail to operate, it would render adverse impact to the entire quality of the building. It is therefore compulsory for Life Cycle Costing (LCC) of M&E services that consider not only initial costs but also other associated costs including operation costs, maintenance costs, replacement costs and disposal costs to be determined so as to ensure that operation and maintainance of the services are appropriately planned as well as equipped with sufficient fund. However, in Malaysia, there is need for a more vigorous mechanism to determine LCC. In fact, Malaysia is lacking of a standard of LCC particularly for M&E services for PFI projects to provide guideline for standardized method of LCC determination. Therefore, the paper presents the significance to establish a standard of LCC of M&E services for PFI projects in Malaysia based on semi-structured interview with Principal Assistant Director and Senior Assistant Director from Technical Section of Public Private Partnerships Unit (UKAS), Department of Prime Minister Malaysia (JPM). Also, the paper identifies seven parameters that are appropriate to be adopted towards the development of a framework of LCC of M&E services for PFI projects in Malaysia based on qualitative analysis towards four established standards of LCC, ASTM E917-13, NIST Handbook 135, AS/NZS 4536:1999 and BS ISO 15686-5:2008 that can act as a basis for the development of real standard.