Construction Cost Benefit Analysis



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A COST-BENEFIT ANALYSIS (CBA) OF CONSTRUCTION HEALTH AND SAFETY MANAGEMENT: A THEORETICAL DISCUSSION Elias Ikpe1, Felix Hammond, David Proverbs School of Engineering and the Built Environment, University of Wolverhampton, Wolverhampton, WV1 1SB.. HSE (2005) developed on-line interactive tools for contractors to assess the cost of accidents to their organisations These costs as identified by HSE are: lost time sick pay damage or loss of product and raw materials repairs to plant and equipment extra wages, overtime working and temporary labour production delays investigation time fines loss of contracts legal costs and loss of business reputation sickness absence overtime payments lost production missed deadlines cost of recruiting and retraining of staff.. policy Contractor (Small, medium H S Policy H S measures • • • • • • n n 1= 0 i−0 ∑ Y1 − ∑ X 1 = Impa ct Benefits Indirect First aid Promotion PPE Training Direct Productivity improvement Reduction in sick pay etc • • Costs (X1) Indirect Direct Accidents reduction Reduction in medical • • .Medical expenses Litigation cost etc.. • • Sick pay Production loss H S f Y = Benefits, X = Costs, n = number Constru ction If Margin +ve Y X = Desirable If Margin –ve X Y = Undesirable Figure 1: CBA Construction Health and Safety Framework COSTS Accidents in the construction industry represent a substantial ongoing cost to the employers, workers and society (Haslam, et al 2004).. They are classified by HSE as those costs incurred by the diversion of time to deal with the consequences of an accident, which also can affect productivity and these, include: cleaning up hire costs of temporary equipment waste disposal temporary labour costs of advising and consulting experts lost time, sick pay, overtime working and temporary labour and loss of business reputation (Everatt et al., 1996, HSE, 2006, Oxenburg and Marlow, 2005, Tang et al., 2004 and Mossink, 2002)..




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