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The level at which risk is priced and the magnitude of risks transferred to the private sector will have a significant impact on the cost of the public–private partnership (PPP) deals as well as on the value for money analysis and on the section of the optimum investment options. The price of risk associated with PPP schemes is complex, dynamic and continuous throughout the concession agreement. Risk allocation needs to be re-evaluated to ensure the optimum outcome of the PPP contract.

This paper provides a coherent theoretical framework for dealing with scenarios of potential gain and loss from retaining or transferring risks.

The outcome indicates that using the proposed framework will provide innovative ways of deriving risk prices in PPP projects using several risk determinants strategies.

In costing risks, analysts have to take into consideration the balance between the cost of risk transfer and the cost of losses if risk is retained.

This paper contributes to the PPP literature and practice by proposing a framework which is consistent with a risk allocation approach in PPP projects, where the key proposition is that risk pricing can overload project debt leading to loss of value.

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

To show how we can turn cost management practices around and look forward, concentrate on managing risks and costs before they occur.

The paper expands my PhD work, which was a synthesis of three major ideas (life‐cycle costing, activity‐based costing and Monte Carlo methods), design of an approach and testing the approach in many real‐life cases. This paper is to show how this method adds utility in strategic cost management.

My research so far shows that the approach adds the intended value in cost management in general and in strategic cost management in particular.

Since the method has been tested in many settings and rests on well‐tested theory serious limitations are avoided. However, future research should focus on how the method can be simplified and applied in budgeting, i.e. become more operational/tactical.

The main practical implication is that cost management practices need to become less historically oriented and more forward looking so that costs can be eliminated and not just reported. How this can be achieved is shown in practical application.

Both researchers and practitioners can benefit from this paper in that they can see how the merger of Monte Carlo methods, life‐cycle costing and activity‐based costing reduce the need for accurate numbers and improve the quality of cost management in general.

Banks are often smug about their management of risk. Smugness may well be justified for market and credit risks, but banks can learn much from industry about managing operational risk. In order to manage operational risk, industry has evolved enterprise risk/reward management systems which coordinate an internal market for risk with variations to capital charges. Industry has at least three lessons to teach banks: use activity‐based costing variances to quantify operational risk; link operational risk to external prices via an enterprise risk/reward management system; and establish measures to govern an enterprise risk/reward unit.

Adversarial contracting methods are used for most public infrastructure procurement and timely delivery on budget remains a problem. In the past 20 years, OECD countries have adopted a number of alternative procurement methods that are based on collaborative principles including public private partnerships, long-term outsourcing arrangements and relationship/alliance contracts. We review the theoretical principles that operate for both adversarial and collaborative contracting methods. We identify the characteristics of non-adversarial contracting methods such as the output specification, qualitative selection criteria, the alignment of incentives, discrete allocation of residual control rights, life cycle costing, and risk-weighted value for money measurement that are delivering better procurement outcomes for government.

Integrated project delivery (IPD) is highly recommended to be utilised with building information management (BIM), specifically with BIM level-3 implementation process. Extant literature highlights the financial management challenges facing the proposed integration. These challenges are mainly related to the IPD compensation and the conventional cost control approaches that are not consistent with IPD principles. As such, this paper presents an integration of several methods to support automating risk/reward sharing amongst project parties thus enhancing IPD core team members’ relationship.

The literature review was used to highlight the challenges that face the IPD-based cost management practices such as the risk sharing/reward sharing amongst IPD core team members and potential methods to bridge the revealed IPD gap. A framework was developed by integrating the activity-based costing (ABC) – as a method to analyse the cost structure – and earned value management (EVM) to develop mathematical models that can determine the three main IPD financial transactions (i.e. …) fairly. To demonstrate the applicability of the developed system, a real-life case study was used, in which, promising results were collected in regard to visualising the cost control data and understanding of the accumulative status of the project cost and schedule for team members.

A centralised cost management system (CCMS) for IPD is developed to enable the IPD cost structure as well as automating the risk-sharing/reward-sharing calculations. This system is linked with a web-based management system to display the output of proposed risk-sharing/reward-sharing models. Moreover, a novel grid is developed to show the project status graphically and to respect the diversity in core team members backgrounds. In addition, the case study showed that the proposed integration of different methods (ABC, EVM, BIM and web-based management system) is interoperable and applicable.

This research presents a comprehensive solution to the most revealed challenges in cost management practices in IPD implementation. The outcome of this research contributes to the body of knowledge through presenting new extensions of the EVM to be used with the IPD approach to calculate risk/reward. Moreover, the implementation of the proposed tools such as centralised cost management system (CCMS) and CCMS for IPD web system will enhance/foster the implementation of the IPD in conjunction with BIM process.

The main purpose of this paper is the incorporation of life-cycle costs (LCC) and whole-life costing (WLC) method and the taxation environment into the investment appraisal procedure for commercial real property projects.

The paper initially presents the methodologies of LCC and WLC together with the NPV measure for the evaluation of real estate investments. These methods are incorporated into a decision-making model using mathematical approaches. The model is applied to a typical commercial property project (office building) in order to explore the significance of impacts from changes in structured variables and the taxation environment by introducing direct, indirect and property taxes in the evaluation of commercial real estate projects.

Testing of the methodology on the Greek economic environment revealed that time, cost, the tax regime, the financial variables of funding and the monetary and fiscal environment in a commercial real property project are the main variables of net present value (NPV) of the investment.

From the calibration of any impact from affected variables, decision-making aiding tools can be extracted for controlling the project throughout its entire life-cycle.

An integrated WLC mathematical model for the investment appraisal of commercial property projects is introduced. The herein proposed methodology contributes to taxation policy and real estate theory in general and assists industry professionals in effective commercial property management and decision-making.

The purpose of this paper is to provide an analysis of the key issues to be addressed in developing a framework for the eco‐costing of construction waste.

Based on an analysis of the literature, original thinking and the use of a case study, the key issues to be included in an eco‐costing framework in the construction industry are discussed.

The relationship between process, policy, technology, impact and cost is discussed. The relationship between environmental cost and construction site activities is introduced. A mathematical model for eco‐costing wastes from construction site activities is also presented.

This paper provides a first attempt to conceptualise eco‐costing issues in relation to waste from building site activities, and also provides practical modelling for implementing an integrated strategy for the eco‐costing of construction waste.

The purpose of this paper is to examine the usability and potential of incorporating quality costs into an electronic adverse incident recording system within a healthcare sector.

The paper is a general review and a discussion of an electronic adverse incident‐recording system into the potential benefits and restrictions was undertaken. Articles containing both information systems and quality costs were reviewed in order to explore the potential of linking information against patient safety issues.

The paper finds that quality costs is a valid and useful approach for measuring the impact of individual adverse incidents or trends in order to support managers and clinicians to develop appropriate action plans to reduce levels of patient harm and thereby improve patient safety. The paper also shows that quality costs can be used to support managers and clinicians and are commercially designed to improve the detection, investigation and action planning to improve service quality and patient safety.

Quality costs can be used as a driver for identifying potential high impact quality and patient safety projects within a healthcare setting.

This paper provides useful information for designers of electronic adverse incident‐reporting systems to support managers and clinicians to utilise the benefits of quality costing in order to strengthen and re‐focus patient safety issues in healthcare.

The net-present-value (NPV) method is well-known for its drawbacks. To overcome some of these NPV weaknesses this paper aims to provide a methodology to determine an optimal concession period that treats risk and time separately. The purpose of this paper is to apply the notion of risk-adjusted decoupled net present value (risk-adjusted DNPV) to determine a conception period taken into consideration synthetic insurance premiums as compensation for risks.

This paper conducts theoretical and empirical analysis and provides an integrated model for deriving concession periods of any PPP projects. The model is able to capture several contractual issues such risks costing and other contractual scenarios. Methodologically, the paper addressees both the issues of risk-based cost–benefit analysis and cash flow analysis bearing an emphasis of risk-adjusted DNPV to compute an optimum concession period.

The results show that using DNPV will produce a shorter concession period comparatively to NPV. The consequence of this is that the public sector will gain financially from an earlier transfer of the concession.

This paper contributes to the PPP literature by combing DNPV and risk to determine the PPP concession period for the mutual benefits both the private and public sectors. The decoupling of risk from traditional NPV computation will allow for risk pricing and tradability through insurance and allocation.

The attempt to decouple time and risk in the computation of NPV is the added value to the body of knowledge.