Slashing infrastructure investment risk

Written by RICS • Online since 5.09.2017 • Filed under Advertorial • From Issue 6 - September 2017 - February 2018 page(s) 52
Slashing infrastructure investment risk

Until now, despite rapid globalisation with investment funds flowing across borders and money pouring into constructed assets, the construction profession has lacked a common framework for classifying and reporting construction costs.

Launched in July this year, the new International Construction Measurement Standards (ICMS), a universal system that enables global comparison of construction projects, will revolutionise the global construction industry by improving cost prediction in infrastructure projects.

‘Financing desperately-needed buildings and infrastructure, including railways, bridges, schools and hospitals, can often be risky because infrastructure projects across the globe categorise and forecast construction costs differently,’ explains TC Chetty, RICS country manager for South Africa.

Tackling these problems head on, a group of influential sector players formed the ICMS Coalition during a meeting at the International Monetary Fund in June 2015.

Construction is a large contributor to national economies, and governments worldwide need to spend vast sums of public money on essential infrastructure. Inconsistent information causes poor cost prediction that impedes investment and can cause mega projects to run over budget. Overall, close to $78 trillion needs to be spent globally between 2014 and 2025 on infrastructure. The ICMS Coalition saw the need to derisk these projects for public and private sector investors.

The new ICMS standard enables better comparison to improve investor confidence and attract more private sector funding. A number of leading organisations have publicly announced their support for ICMS by registering as ICMS partners, committing to its future use.

The ICMS Coalition believes that financially constrained governments should be able to better understand information to make the right construction investment decisions and attract more private funding to help improve return on investment. For more information, visit www.rics.org.

Issue 6 - September 2017 - February 2018

Issue 6 - September 2017 - February 2018

This article was featured on page 52 of SABI Magazine Issue 6 - September 2017 - February 2018 .

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