When they started building the Channel Tunnel in 1988, engineers couldn’t know that they were creating one of the seven wonders of the modern world. But they should have known that it would cost £4.6 billion. They didn’t. Due to an 80% forecast error, their engineering masterpiece became the most over-budget construction project in the world.
With the globalisation of the construction industry, the impact of inaccurate project cost assessment has become even more significant. Different approaches to construction cost measurement can vary by as much as 25-30% due to inconsistent methodology and standards. An issue raised by international organizations such as the World Bank Group, the International Monetary Fund, various regional development banks, NGOs and the United Nations.
That’s why RICS alongside the ICMS coalition is introducing the International Construction Measurement Standards (ICMS), an accurate and reliable global cost classification system.
International benchmark for construction costs
Set by an independent Standards Setting Committee made of technical experts from 16 countries, the ICMS take into account 47 different market practices in classifying, defining, measuring, analysing and presenting construction costs. None of the existing standards has been considered suitable for international adoption, therefore the need to create a shared international benchmark for presenting entire construction costs.
Broadly, ICMS allows:
- construction costs to be consistently and transparently benchmarked;
- the causes of differences in costs between projects to be identified;
- more informed decision-making about the design and location of construction projects;
- data to be used with confidence for construction financing and investment, decision-making, and related purposes.
This first edition of ICMS focuses on capital costs; however, future editions of ICMS may incorporate other matters such as costs-in-use.
Become an ICMS leader
As the professional body promoting and enforcing the highest standards, RICS asks its professionals to become early supporters of the new standard by signing-up as ICMS partners.
Please download the form on the right side of this page and return it completed to firstname.lastname@example.org. Your name will be listed on www.icms-coalition.org.
RICS is working to make the compliance with ICMS a compulsory requirement for all RICS professionals dealing with construction projects.
In the meantime, we will liaise with local governments and other key stakeholders to raise the awareness of the benefits of an international benchmark for construction costs and ensure wide adoption.
The European Commission is actively supporting the development of ICMS and the standards are part of the Construction2020 strategy informing the EU’s forthcoming construction policies. Access to finance for construction projects, as well as cooperation in standards is the main focus of the EU’s construction policy, while ICMS are particularly relevant for the international perspective of the strategy. We will stay engaged with policy-makers to explores linkages to procurement rules and the consistent statistical reporting of national and European construction activity.
Within the ICMS coalition, RICS will listen closely to the global construction cost management community to ensure necessary updates are implemented for continued improvement.
For more information, please contact:
Alessandra De Lisio
RICS Standards Adoption Manager, Europe
t +32 2 739 42 28; e email@example.com
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