Status Assessment of Life Cycle Costing in Baitadi Town Water Supply and Sanitation Project, Nepal

Abstract

Value Management (VM) practice and Life Cycle Costing (LCC) technique is considerably new subject for Nepal. The main objective of this study is to find out the Value Management practices in Nepal studying the Baitadi Town Water Supply and Sanitation Projects on Life Cycle Costing perspective. The study was done with detailed field study of the project area with necessary secondary document related with the project. For the analysis, the Final Detailed Design Report of the project was compared with the common procedure used in world for the application of Value Management and Life Cycle Costing techniques. The status of Life Cycle Costing in Baitadi Town Water Supply and Sanitation Project the result obtained from the analysis of desk study was used. Value Management was not applied on Life Cycle Costing in Baitadi Town Water Supply and Sanitation Project, but risk management of the project was taken Value Management by the professionals, which is also not done appropriately as a result of which there were many risks in the construction phase and time overruns and cost overruns in the project. The project also has financially critical stage there were no significant difference between financial Opportunity cost of Capital and financial internal rate of return due to not selection of the best option of the project alternatives.