Editorial

Citation

Akintoye, A. and Birnie, J. (2008), "Editorial", Journal of Financial Management of Property and Construction, Vol. 13 No. 3. https://doi.org/10.1108/jfmpc.2008.37613caa.001

Editorial

Article Type: Editorial From: Journal of Financial Management of Property and Construction, Volume 13, Issue 3

The way in which financial management of property and construction has diversified since the journal was first launched in 1996 can be seen in papers in this issue. The increasing expertise in the use of business and accounting techniques are now being applied by researchers in the various divisions of the surveying, property and construction professions.

The first paper in this issue is from Australia. Carmichael and Balatbab consider the relationship between taking on additional projects and their likely profitability under conditions of future uncertainty. In their literature review, the authors point out that whilst there is extensive work relating to single projects using present worth, annual worth and internal rate of return, there is little on multiple projects. The paper presents formulae that tests different possible scenarios with detailed explanations of calculations used for different number of projects and time scales. In addition a case study with results is given. The authors show how the conventional discounted cash flow method needs to be modified because of the increasing uncertainty pertaining to future projects. They conclude that the methodology of using probabilistic computations can allow the analyst to establish the risk more clearly than by simply using a deterministic approach. The results are also considered to be independent of project size.

Lam K.C., Wang and Lam M.C.K. in their paper investigate the behaviour procedures of building contractors in Hong Kong with regard to the capital budget planning, monitoring and control of construction projects. Contactors were classified into three groups according to their work size capacities. The results of 46 were subsequently analysed to see how attitudes had changed from previous surveys carried out in the last decade. In addition a literature review looked at findings from previous research in other countries. This looked at the size of construction firms, the period of future time for which they prepare a capital budget, the discounted techniques used and number of persons employed to monitor project outcomes. In all eight different practices were identified and these formed the basis of the questionnaire and the results of the subsequent analysis. Further statistical result findings are presented using discriminant factor analysis in order to classify firms other than by project size or capacity undertaken. This showed that one cannot equate practices used by firms based on their size alone.

The next paper deals with the potential to reduce energy consumption in domestic buildings, a subject that could not be more topical with the current escalating fuel costs and concern about carbon dioxide emissions. These currently account for almost half of the total energy consumption and one quarter of the carbon dioxide emissions of the UK. The authors McGilligan, de Wilde and Goodhew investigate the likely effect of the issue of the new government energy performance certificates (EPCs) and the resulting energy saving achieved. The research compares the results from two previous surveys by others with those obtained from their own work. The authors are particularly interested in identifying differences between proposed energy saving measures and those actually implemented by the householders. This is what they call the human factor. The results showed that the highest take up was in quick pay back time items such as loft insulation whilst double-glazing was the least popular. The authors conclude that the low uptake of the scheme suggests the existing system needs considerable reconsideration.

The greater variability in estimates and tender prices of electrical services work has long been recognised by those involved with construction projects. Reasons for this include less design and cost control, and different types of procurement used in the contracts. Babalola and Adesanya investigate the factors that influence cost estimating of electrical work in Nigeria. Following a literature review that highlights many of the limitations in the estimating process, the authors describe the questionnaire used to obtain the required data for their subsequent analysis. A total of 23 factors identified in the literature review formed the basis of their questionnaire. The questionnaire was completed by quantity surveyors, construction firms and electrical engineering firms. The returned answers were analysed using factor analysis statistics. Four main factors were found. These were estimator competence, project technicality, economic requirement and contract requirement. More detailed analysis and discussion of the results is then given.

The final paper by Andrew, Murning, Pitt and Tucker brings together their work undertaken as practitioners and academics into the outcomes and results of an examination of the investment by the Scottish Funding Council into the Further Education Estate in Scotland. The history of the acquired existing estate comprising a large variety of buildings, many over 100 years old, and catering for a huge variety of courses is described first. The approach of addressing this matter is then discussed, including details of a survey report undertaken by a consultant firm. The problems identified and the ways forward are then presented with rationale for decisions taken. Lack of strategic management expertise by individual colleges in an age of rapidly changing needs of society, employers and students (including low number of females) are highlighted. In regard to approval of new buildings, the council could only respond to projects presented for consideration. The criteria used to assess the proposals are given. The potential for further research in this topic is pointed out by authors.

Akintola Akintoye and Jim BirnieEditors