Value engineering

About: Value engineering is a research topic. Over the lifetime, 1231 publications have been published within this topic receiving 10882 citations. The topic is also known as: VE.

Urban rail investments and property value gains in Athens: a case for alternative funding sources

Abstract: In many local contexts there exists evidence that urban rail investments induce around stations distinct property value gains. The main aim of the paper is to investigate the existence and magnitude of such premiums in the case of the new Athens LRT system, operating since the 2004 Summer Olympics and covering the southern suburbs of the agglomeration. The focus is on the city line section connecting the coast with the city centre. The market segmentation refers to residential as well as commercial properties. The comparison pertains to the 1.5-year periods before and after the LRT opening. The pooled data comprise 719 real asked prices for sale of properties close to LRT stops. Note that for tax evasion reasons, the nominal contractual prices seriously underestimate the market prices achieved by successful transactions. Offers are adjusted to consider the mean 2003-to-2005 property price changes in the southern suburbs due to factors other than rail accessibility. Note that in Athens, owners dominate the occupation of residential properties to 79% and of commercial ones to 53%. Several specifications of a price gradient have been tested as functions of the proximity to the nearest LRT stop. The chosen decay function predicts for residential properties an 8% premium within 250m from a LRT stop and a 2% premium within the range of 250 to 500m. Commercial properties display a 13% premium and a 1% discount respectively. Aggregated property value gains have been compared with model-estimated travel time savings from/to the 250m zone, the latter capitalised with the Value-of-Time figures of the multi-modal Metro Development Study conducted by ATTIKO METRO. The resulting positive difference may be ascribed to wider benefits beyond the direct accessibility savings.The paper examines further new ways of funding an LRT extension to Piraeus and the western suburbs through the conversion of property value gains into additional revenue generating opportunities. Revenue mechanisms based on land value gains are investigated in depth. Value recapture taxes applied on beneficiaries of public investments in urban rail infrastructure internalize some of the external benefits to private parties. A fair surplus portion corresponding to the unique contribution of the rail investment on the property value is suggested, given a mix of tax instruments. The allocation problem of an efficient taxation of relevant stakeholders is introduced. The instruments considered refer to (a) location benefit taxes paid on a recurring basis by property owners within 250m of LRT stops. It is calculated as a percentage increase on property ownership tax and is justifiable in terms of improved accessibility to employment or shopping opportunities, (b) business taxes paid on a recurring basis by larger commercial occupiers of properties within 250 m of LRT stops. It is calculated as an increment on business income tax and is defendable in view of an improved accessibility for employees, customers and visitors, (c) planning gains as one-off charge paid by property owners or developers in case of a hand-over or of granting planning permissions around LRT stops. A scaled fee is set in relation to the value of the transaction or of the project to be developed. The methodology and the results are considered to be of wider interest for planning agencies, transit authorities and policy makers. For the covering abstract see ITRD E137145.

Option and non-use values and rail project appraisal

Abstract: Option and non-use values have received a significant amount of attentionin the field of environmental economics, but to date their application within the transport economics field, and transport appraisal in particular,has been scarce. In fact to date we are unaware of a transport appraisal that included monetised option and non-use values. Advocates of public transport argue that this exclusion biases the appraisal process against public transport provision whether that is introducing evening bus services oropening or closing a rail line. The purpose of this paper therefore is toreview the role of option and non-use values in rail project appraisal, review international evidence on their scale and through the use of case studies identify the impact that option and non-use values may have on a schemes appraisal as well as to set out the difficulties associated with including them within an appraisal. Finally, future research needs are identified. Option and non-use values exist because under certain conditions the value individuals and businesses place upon the availability of a transport service exceeds the benefit that they expect to receive from using it. Option values reflect the additional amount people may be willing to pay toreduce the risk that there is no service available when they need it. Theservice may hold a stand-by value for when their main mode of transport is suddenly unavailable or if they were forced to seek work in a nearby town or city, to which they cannot easily commute by another mode. Economic theory indicates that option values are always additional to the economic benefits included in a cost benefit analysis. Individuals may hold non-use values for a number of reasons - the benefit of other people using the service to visit them, reduced congestion and environmental costs, increased house prices. Non-use values may - depending on the motive giving rise to the value double count elements of benefit already included in the appraisal. Indirect evidence for the existence of such values may be given by a willingness of people to vote for local taxes for the provision of public transport, or to pay more for housing close to public transport, if these values exceed expected use values. Direct evidence on option and non use values is restricted to six exploratory studies, five in Europe and one in the US. These studies identify a very substantial range of values from US$56 to 190 per household per annum. However, once the studies are adjusted to a common price base the range narrows. Additionally, the range can be qualitatively rationalised in terms of mode of transport, transport quality,whether the values represent household or individual valuations and whether the values are incremental values against other services or are absolute values. The different studies therefore give each other a degree of qualified support and lend some confidence in determining the likely range in which option and non-use values lie. Three case studies of changes in local rail services in the UK and the Netherlands will be presented. The case studies clearly identify the necessary assumptions regarding population affected, incremental values between different packages of public transport and treatment of growth over time. The contribution of option and non-use values to the present value of benefits over the lifetime of the project is very sensitive to these assumptions and also to the split between optionand non-use values. The main contribution of the case studies, however, is to illustrate the relevance of including option and non-use values in practical appraisal, including the types of schemes for which they form a significant element of the benefits/costs. For the covering abstract see ITRD E137145.

Value of Research on Safety Effects of Actions

Abstract: Money should be spent on research that promises the most value for the dollar, but how does one estimate the value of research? This paper suggests a logical and quantitative approach for estimating the dollar value of a class of proposed road safety research projects that aim to estimate the safety effects of various actions. The purpose of such research is to improve the ability to predict the safety effects of future actions because more accurate predictions would result in fewer incorrect decisions. With more correct decisions, investment is more cost-effective. This final outcome is what gives such research its value. The task of assigning a dollar value to proposed research is doable. The logic and the computations are described. The estimated dollar value, when coupled with the cost of research, can be used to prioritize proposed research projects.

Investigating the Use of Value Analysis and Value Engineering as Cost Saving Techniques among Selected Manufacturing Companies in Kano State Nigeria

Abstract: The study investigated the concepts value analysis and value engineering, and their relationship with cost savings among selected manufacturing companies that specialize in the manufacture of plastic, steel, metal products, and soft drink manufacturers in Kano state, North west Nigeria. The study employed the use of primary data where one hundred and ten questionnaires were distributed randomly to employees of nine (9) selected companies at Tokarawa, Sharada, Bompai and Zaria Road all within the metropolis in Kano state. Purposive sampling technique was used to select employees in the production, design, maintenance and engineering, marketing, supply and warehouse departments who have worked for their companies for a period of three years. Secondary data from books and journals were employed to review literature. The study found that at 95% level of significance, sig value (0.173) ? ?=0.05 this reveals an insignificant relationship between value analysis, value engineering and cost savings among the selected companies in Kano state North west Nigeria, leading to the acceptance of the null hypothesis of no significant relationship between the independent and the dependent variable. The study also found very low levels of awareness about the two concepts among manufacturers in Kano state, North West, Nigeria. The paper concluded that the concepts if properly applied would enhance cost savings in manufacturing companies and recommends the adoption of the two concepts by local manufacturers in their efforts to reduce cost(s) and remain competitive in the volatile business environment especially with the challenges of the global economic meltdown.

Development of Pre-workshop Phase for the VE application at the Early Planning Stage of the Mega Project

Abstract: In Korea, many mixed-used development projects(MXD) in mega project size are currently active. As these mega projects require long-term construction and execution and involve by different subjects in different fields, their completion breeds various problems, such as conflicts among project participants due to their complicated interest relationships and inaccuracy in predicting the economic performance of the projects due to inappropriate facility capacity planning. To solve these problems, it is essential to apply value engineering (VE) at the planning phase of the project, which can result in the best possible cost reduction and improvement of project performance. However, not many projects are actually implementing VE because of the lack of available information, as well as the limitations due to uncertainty in the early period of project execution. Therefore, this study aimed at proposing VE Team Building, Quality Model Performance Indexes, Space Model so as to resolve common mega project problems and overcome VE application limitations at planning stage. The result of this study is expected that the data can be utilized as basic data to apply VE at the planning phase of the large complex projects.