Developing A Life Cycle Costing Analytical Framework For The Building And Construction Industry In Tanzania

This study intends to develop a life cycle costing analytical framework for the buildings and construction industry in Tanzania. Life-cycle costing (LCC) analysis is a method used to evaluate the cost effectiveness of designs and materials alternatives of major project cost variables including initial costs, operating costs, maintenance and disposal costs over its entire life (Stanford University, 2005).LCC analysis is used for selection of optimal building designs based on assumed inflation rates and the time-value of money but discounted back to a fixed date (Amelio and VanGeem, 2000).Aoudad (2001; page 134) stresses the need to apply LCC in construction projects to reduce the occupancy costs which represent up to 70% of buildings total costs. An LCC analysis involves establishing objectives, determining the criteria for evaluating alternatives, identifying and developing design alternatives, gathering cost information and developing LCC for each alternative (Stanford University, 2005). 50% of the twenty fastest growing economies in the world are from Africa and this is inclusive of Tanzania which had a growth rate of 6.90 %and 7%in 2012 and 2013 respectively and therefore making it the fastest growing economy among the East African Community Partner States (World Bank, 2013).Construction sector which had a growth rate of 8.6% in 2013 is one of the fastest growing economic sectors in Tanzania (FB Attorneys, 2014).The Contractor’s Registration Board (2012) revealed that in 2010 building works in Tanzania accounted for 50% of the annual turnover of all the projects. Despite such a large contribution of the construction sector to the country’s economy, Tanzania is yet to develop an LCC analytical framework for its construction industry, and thus denying it the opportunity to enjoy the benefits of LCC including basic cost concepts, identifying the key cost drivers and providing cost plans and budgeting (Ministry of Works, 2003).