CHAPTER ONE 1.0INTRODUCTION 1.1       Background of the Study

The economic evaluation of construction projects has been predominantly based on the initial capital cost. Cuellar-Franca and Azapagic (2013) discovered that, the initial cost of the UK housing stock constitute only about 35% of their cradle-to-grave cost. The remaining 65% is accounted for by the occupancy and disposal costs. This signifies that, by basing evaluation of building investments on initial cost only, the potential for cost savings at the operating stage is neglected thereby depriving clients Value For Money (VFM)

According to Owen and Merna (1997), the persistent need for infrastructural facilities, coupled with limited financial resources invoked the proliferation of new procurement methods in the form of Public Private Partnership (PPP). Some varieties of PPP scheme like Private Finance Initiative (PFI) and Build Operate and Transfer Options (BOT) require proposed projects to pass the VFM test. In conducting the VFM test the use of Whole Life Cost (WLC) cannot be avoided as forecast of both cost and income of an asset over its operating life are required.

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