Life Cycle Cost Analysis and Value Engineering and their Usage in the United Arab Emirates: A Case Study of Residential Buildings in Al Ain

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The British University in Dubai
Anxiety of succeeding a business is uncertainty to any stakeholder. Therefore appropriate strategical planning based on financial assessment is essential, strictly speaking for long-term planning. Accordingly, life cycle cost analysis is a proper financial technique to evaluate all pertinent costs to a project during its lifetime. Whereas value engineering allows project managers to look over new designs to select the best design that fulfils performance over function. The aim of this research is to compute the life cycle cost and apply the concept of VE on residential buildings in Al Ain, UAE over life cycle of 35 years. An explanatory mixed method was followed through collecting data for new and old residential buildings in Al Ain. New buildings have less than 10 years old and was constructed using new appliances and finishes. Old buildings that have more than 10 years old and constructed poor quality and non-energy saving appliances. Old buildings’ data was collected from a survey conducted by asking property owners. After that a quick comparison between buildings in Al Ain and in the UK was conducted. LCCA was computed from cradle to grave, which includes three main phases: initial phase, operation phase and demolition phase. Initial phase contains design and construction costs. Operation phase consists of electricity, water, maintenance and replacement costs. Demolition phase includes only the cost of demolition and any associated cost. All costs were collected now except initial cost. Therefore, initial cost was uplifted to current value. Interviews were conducted to evaluate how the concept of value engineering was improved and applied efficiently at the market. Results show that initial cost for new buildings in Al Ain is more than initial cost for old buildings due to the change in requirements and regulations and the change in raw materials prices. Results found that initial cost for buildings in Al Ain and the UK are so close. In addition, initial cost is the most sensitive value to change in input. Interest rate came at the second place in the sensitivity analysis. Moreover, it has been recommended applying value engineering to save in electricity cost, the main contributor in operation cost.
life cycle cost, United Arab Emirates (UAE), residential buildings, Al Ain