To estimate a project’s whole-of-life cost from the owner’s perspective, work out what it will cost to build, operate and finance. • Break the project into packages. List the work you’ll buy: design, earthworks, concrete, structure, services and so on. Define what each package includes so you can check for gaps and double counting. • Prepare an early estimate. Use costs from similar projects, adjusted for size and scope. For example, multiply the building’s floor area by a suitable historical cost per square metre. Get indicative supplier prices where you lack good data. • Replace allowances with detailed prices. As the design develops, measure quantities and send drawings and scopes to contractors and suppliers for quotes. Compare their inclusions and exclusions, then allow for work or risks their prices leave with you. • Add the owner’s costs. Include land, approvals and project management. For costs such as project staff, multiply the monthly cost by the expected duration. Add allowances for identified risks and uncertainty. • Estimate ownership costs. If you’ll retain the asset, price its operation and maintenance using comparable assets or service-provider quotes. Allow for equipment replacements over its life and eventual removal where required. • Calculate funding needs. Put those costs and expected income on a timeline. Identify the cash shortfall and include the cost of financing it. • Review and set the budget. Test the assumptions, update the estimate as information improves, then organise the approved costs into packages the delivery team can track. Record what each figure is based on, what it includes and how certain it is. Watch the full explanation: https://youtu.be/3lhwUrXTgPI