The Implementation of Life Cycle Costing towards Private Client’s Investment: The Case of Malaysian Construction Projects

Norhanim Zakaria, Azlan Shah Ali, Umi Kalsum Zolkafli


Life-cycle Costing (LCC) is a technique used to estimate the total cost of ownership. It allows comparative cost assessments to be made over a specific period of time, taking into account relevant economic factors both in terms of initial capital costs and future operational and asset replacement cost. The implementation of LCC in construction industry is rapidly increasing. However, in the Malaysian construction industry, LCC has not been implemented extensively. This paper explored LCC implementation in construction projects in Malaysia from the client’s perspective as well as benefits and barriers to implementing LCC. A quantitative approach involving questionnaire survey distributed to private clients in the Malaysian construction industry. More than half of the surveyed respondents indicated they were ready to invest in future costs and about 37% were currently implementing LCC or a similar costing principle. The inability of LCC to meet expectations of organisation in managing costs, lack of familiarity with LCC and the market not requiring the use of LCC were the main reason why organisations who had used LCC in the past discontinued the use of LCC. Influencing future costs in the design stage, greater emphasis on achieving a better ‘value for money’ in projects and improving awareness of total cost of projects were the three major benefits of implementing LCC while lack of a procurement and contract award incentives to use LCC, lack of a standard method of LCC, and clients’ unwillingness to pay for LCC were identified as the main barriers to implementing LCC. Correlation analysis demonstrated that implementation of LCC during ‘investment planning’, ‘scheme/concept design’, ‘detail/final design’, ‘construction and commission’, and ‘operation and maintenance’ stages had statistically significant relationship with ‘quality performance’, while implementing LCC ‘investment planning’, ‘scheme/concept design’, ‘detail/final design’, and ‘operation and maintenance’ stages significantly correlated with ‘overall project performance’. The importance of LCC in various project stages, the study concludes by emphasizing the need to create more awareness and implementation methodology to promote the adoption of LCC in the Malaysian construction industry.


client, construction industry, life cycle costing, Malaysia

Full Text:



Anthony, H., Chris, F. and Howard, J. (2015). Life cycle costing: evaluating its use in UK practice. Structural Survey, Vol. 33 Iss 1 pp. 73 – 87.

Ahmed, S.M. and Kangari, R. (1995) Analysis of client-satisfaction factors in construction industry. Journal Management in Engineering 11 (2): 36–44.

Alex O. (2013). The application of whole Life Costing in the UK Construction Industry: Benefits and Barriers, International Journal of Architecture, Engineering and Construction, Vol. 2, No.1, pp. 35-42.

Al-Hajj, A. and Aouad, G. (1999). The development of an integrated life cycle costing model using object oriented and VR technologies: An integrated life cycle costing model. Durability of Building Materials and Components, Rotterdam, Netherlands, National Research Council Canada.

Aouad, G., Bakis, N., Amaratunga, D., Osbaldiston, S., Sun, M., Kishk, M., . . . Pollock, R. (2001). An integrated life cycle costing database: a conceptual framework. Proceedings of the 17th ARCOM Conference, Salford University, Salford, September, Vol. 2.

Ashworth, A. (1996). Estimating the life expectancies of building components in life‐cycle costing calculations. Structural Survey, Vol. 14 Issue: 2, pp.4-8

Andy, G. (2005). Establishing Standard For ‘Life Cycle Costing’ , Special Material for QS News Faithful+Gould, 2005.

Bakis, N., Kagiouglou, M., Aouad, G., Amaratunga, D., Kishk, M. and Al-Hajj, A. (2003). An integrated environment for life cycle costing in construction. Proceedings of the CIB W78’s 20th International Conference on Construction IT, Construction IT Bridging the Distance, CIB Report 284, Waiheke Island, 23-25 April.

Blanchard, B.S.(1978) Design and Manage to Life-Cycle Cost, Forest Grove, OR, MA Press.

Bull, J.W. (1993) The Way Ahead for Life Cycle Costing in the Construction Industry. In: Bull, J.W., Ed., Life Cycle Costing for Construction, Blackie Academic & Professional, Glasgow.

BS 3843 (1992). Guide to Terotechnology (the Economic Management of Assets, British Standards Institution, UK

CBPP, (1998). Business benefits for whole life costing. Retrieved from Word_docs/Whole_Life_Costing_Business_Benefits.doc.

Chinyio, E.A., Olomolaiye, P. O. and Corbett, P. (1998) Evaluation of the project needs of UK building clients”, International Journal of Project Management, 16 (6), 385-391.

Clift, M. and Bourke, K. (1999) Study on whole life costing, BRE Report 367, CRC.

Cole, R. J., & Sterner, E. (2000). Reconciling theory and practice of life-cycle costing. Building Research & Information, 28(5-6), 368-375.

Dell’Isola, A. & Kirk, S. (1981) Life Cycle Costing for Design Professionals, McGraw-Hill, New York.

Department of Energy (DOE) (1995). Retrieved from, posted 4/12/1995.

Egbu, C.O. (1994). Management education and training for refurbishment work within the construction industry, PhD thesis, Department of Civil Engineering, University of Salford, Salford. United Kingdom.

Fabrycky, W.J., Blanchard, B.S. (1991). Life-Cycle Cost and Economic Analysis, Prentice-Hall, Englewood Cliffs, NJ.

Fortune, C., & Cox, O. (2005). Current practices in building project contract price forecasting in the UK. Engineering, Construction and Architectural Management, 12(5), 446-457.

Higham, A., Fortune, C., & James, H. (2015). Life cycle costing: evaluating its use in UK practice. Structural Survey, 33(1), 73-87.

John, W.B. (2014). Life Cycle Costing for Construction, Routledge, New York USA.

Egbu, C.O. (1994). Management education and training for refurbishment work within the construction industry, PhD thesis, Department of Civil Engineering, University of Salford, Salford. United Kingdom.

Fabrycky, W.J., Blanchard, B.S. (1991). Life-Cycle Cost and Economic Analysis, Prentice-Hall, Englewood Cliffs, NJ.

John, W.B. (2014). Life Cycle Costing for Construction, Routledge, New York USA.

Klaus, L.W. (1986) Life Cycle Costing for Construction Projects, Long Range Planning, Vol.19, No.4, pp.87 – 97.

Kenji, O. (2001). Life cycle costing - An approach to life cycle cost management: A consideration from historical development. Asia Pacifìc Management Review, 6(3), 317-341.

Kishk, M. (2001) An Integrated fuzzy approach to whole life costing based decision making. Unpublished PhD Thesis, Scott Sutherland School, The Robert Gordon University.

Krejcie, R.V., & Morgan, D.W. (1970). Determining Sample Size for Research Activities. Educational and Psychological Measurement, 30, 607-610

Lindholm, A. and Suomala, P. (2007). Learning by costing: Sharpening cost image through life cycle costing? International Journal of Productivity and Performance Management, Vol. 56 Issue: 8, pp.651-672

Ling, F., & Leong, E. (2002). Performance of design-build projects in terms of cost, quality and time: views of clients, architects and contractors in Singapore. Construction Economics and Building, 2(1), 37-46.

Luay N., Dwaikata, K. & Ali, N. (2018). Green Buildings Life Cycle Cost Analysis and Life Cycle Budget Development: Practical Applications. Journal of Building Engineering 18, 303-311

Mazlan, Muhammad Zuhry Mohd. (2010). Application of life cycle costing for construction projects in Malaysia government-linked companies.

Mohamed, Othman, Karim, Saipol Bari Abd, Nor, Fadhillah Mohd, & Kho, M. Y. (2007). The Practice of Life Cycle Costing (LCC) in the Malaysian Construction Industry - Application During Design Stages. Paper presented at the Management in Construction and Researchers Association.

Mohd Fairullazi, Ayob, & Khairuddin Abdul, Rashid. (2011). A Literature Review on the State and Practice of Life Cycle Cost (LCC) in Malaysia. Paper presented at the International Building and Infrastructure Technology Conference, Universiti Sains Malaysia.

Nor-Azizah, M.R. and Zainal, A.A. (2012). Implementing Life Cycle Costing in Malaysian Construction Industry: A Review. Journal of Civil Engineering and Architecture, Vol.6, No.9, pp. 1202-1209.

NSA (1991). Pay Now or Pay Later: Controlling Cost of Ownership from Design Throughout the Service Life of Public Buildings,, The National Academy of Sciences, National Academy Press, Washington, D.C.

Olubodun, F., Kangwa, J., Oladapo, A., & Thompson, J. (2010). An appraisal of the level of application of life cycle costing within the construction industry in the UK. Structural Survey, 28(4), 254-265.

Picken, D.H. (1989) An investigation into the development and practice of life cycle costing for construction. MSc Thesis, Department of Civil Engineering, University of Salford.

Renata, S.H. (2013). Life cycle cost analysis in public procurement, Central Europe towards sustainable building 2013-Decision support tools and assessment methods

Renata, S. H. (2017). Life cycle costing as an important contribution to feasibility study in construction projects. Procedia Engineering 196, 565 – 570, Creative Construction Conference 2017, CCC 2017, 19-22 June 2017, Primosten, Croatia.

Richard, J.K. (2005). Reengineering the whole life cycle costing process, Construction Management and Economics, Volume 23, Issue 1, 2005.

Royal Institution of Chartered Surveyors (RICS). (2016). Life cycle costing RICS guidance note, UK 1st edition.

Saridaki, M., & Haugbølle, K. (2019, May). Identifying Contradictions of Integrating Life-Cycle Costing in Design Practices. In 10th Nordic Conference on Construction Economics and Organization (pp. 33-39). Emerald Publishing Limited.

Schade, J. (2007). Life cycle cost calculation models for buildings, Proceedings of 4th Nordic Conference on Construction Economics and Organisation: Development Processes in Construction Management, Lulea, 14-15 June

Shaomin, W., Derek Clements-Croome, Vic, F., Bob, A., Jogi, S.D. and Desmond, K.N. (2006). Reliability in the whole life cycle of building systems. Engineering, Construction and Architectural Management, Vol. 13(2) pp. 136 - 153

Sterner, E. (2000) Life-cycle costing and its use in the Swedish building sector, Building Research & Information, 28 (5/6), 387-393.

White, G.E. & Ostwald, P.F. (1976) Life cycle costing. Management Accounting, January, 39-2.

Wilkinson, S. (1996) Barriers to LCC Use in the New Zeal and Construction Industry. Proceedings of the 7th International Symposium on Economic Management of Innovation, Productivity and Quality in Construction, Zagreb, 447-456.

Woodward, D.G. (1997) Life cycle costing: theory, information acquisition and application. International Journal of Project Management, 15 (6), 335-344


  • There are currently no refbacks.