Capital Investment Planning Research Articles

Embedding net zero ambition at Dublin Airport : A world to connect and a future to protect

Irish legislation on climate change has driven transformative measures across the public sector in Ireland. For Dublin Airport, this has pushed sustainability to the forefront of how we operate our airport and the impact it has had on our ability to grow. This paper explores how Dublin Airport has adapted its capital investment plans and strategy to achieve these new climate action targets as well as its plans to invest in sustainability to achieve its ambition to facilitate the growth of passengers while also meeting its net zero target by 2050. The paper takes a deep dive into the airport’s carbon footprint, providing detail on Scope 1, 2 and 3 emissions, evaluating the current challenges of decarbonisation across each scope and the opportunities for collaboration with key stakeholders to reduce Scope 3 emissions.

The paradox of urban decline in India

Urban shrinkage has become a global challenge in the field of urban studies. Despite significant progress in understanding urban shrinkage in developed countries, further exploration is necessary to comprehend the recent emergence of urban shrinkage in developing countries. This study explores the spatial pattern of urban shrinkage and urban decline and examines the associated factors of population decline in Indian urban centers. The phenomenon of urban decline in India presents a paradox as the country witnesses a steady growth in urbanization, yet some urban centers are facing a decline in population. Results showed that every one in nine urban centers was declining, with one-fifth of them shrinking in terms of population. The urban growth rate and level of urbanization are major contributing factors to this decline, along with city-level characteristics such as small population size, low population density, low fertility, and a higher aging population. To address this rising threat, urban policymakers in India must plan for the growth and development of declining and shrinking cities through revitalization programs, capital investment, infrastructure development, and micro-regional planning. Further, encouraging inclusive development for small and larger cities can help achieve sustainable urban development in India.

Environmental stewardship in the oil and gas sector: Current practices and future directions

This paper provides an overview of the current practices and future directions in environmental stewardship within the oil and gas industry, focusing on key areas of concern and strategies for improvement. The oil and gas industry has made significant strides in environmental stewardship in recent years, driven by a combination of regulatory requirements, corporate initiatives, and stakeholder pressure. One of the primary areas of focus has been the reduction of greenhouse gas emissions associated with extraction, refining, and transportation processes. Companies have implemented technologies such as carbon capture and storage to minimize their carbon footprint, alongside investments in renewable energy sources and energy efficiency measures to transition towards cleaner energy alternatives. Furthermore, the industry has placed increasing emphasis on the responsible management of water resources, recognizing the potential environmental impacts of water extraction and usage in oil and gas operations. Strategies for water recycling, reuse, and wastewater treatment have been adopted to mitigate pollution and minimize strain on local ecosystems. Biodiversity conservation has also emerged as a critical aspect of environmental stewardship in the oil and gas sector, with companies undertaking environmental impact assessments and collaborating with conservation organizations to minimize habitat disruption and restore ecosystems affected by their operations. Community engagement and social responsibility are integral components of environmental stewardship, with companies seeking to address the social impacts of their operations through employment opportunities, infrastructure development, and social programs benefiting local communities. However, the industry continues to face challenges and limitations in its efforts to minimize environmental impact. Accidental spills, leaks, and other incidents pose significant ecological risks, highlighting the importance of stringent safety regulations and emergency response protocols. Moreover, the transition to renewable energy presents challenges for traditional oil and gas companies, requiring substantial capital investment and strategic planning. To address these challenges and advance environmental stewardship, several future directions are proposed. These include accelerating the transition to renewable energy, enhancing transparency and accountability in reporting environmental performance, strengthening environmental regulations and enforcement, investing in research and development of innovative technologies, and fostering collaboration among industry stakeholders, governments, NGOs, and local communities. Keywords: Stewardship, Oil, Gas, Sustainability, Climate, Mitigation

New transformer procurement concepts in times of high uncertainty and market instability

New and proactive strategies are required in utilities and other transformer purchasers to ensure delivery of transformer capital investment plans in the current times of market saturation and various supply chain issues. Close collaboration with suppliers and adaptative and flexible engineering and commercial initiatives need to be implemented from as early stage in the project lifecycle as definition of requirements and tendering. This paper presents the strategy adopted by SP Energy Networks, and one of their main suppliers of power transformers, Kolektor Etra, in this regard.

Sustainability and Resilience of Engineering Assets

The frequency and severity of natural or human-induced disaster events, such as floods, earthquakes, hurricanes, fires, pandemics, hazardous material spills, groundwater contamination, structural failures, explosions, etc., as well as their impacts, have greatly increased in recent decades due to population growth and extensive urbanization, among other factors. The World Bank estimates that the total cost of cities’ and communities’ vulnerability to these types of disasters could reach more than USD 300 billion per year by 2030. However, it has been argued that investment to improve the quality and resilience of engineered physical assets that are the backbone of modern societies, such as critical infrastructure, industrial facilities, and buildings, could significantly contribute to more sustainable and prosperous societies. Engineered assets are key to the delivery of essential services, such as transport, food, water, electricity supply, health and safety, etc. Some of these physical assets are integrated into asset systems and national or regional networks, with life cycles of several decades or even centuries. It is, therefore, of great importance that strategies and life cycle decisions, such as those related to short- and long-term capital investment planning, maintenance strategies, operational plans, and asset disposal, lead to the maximization of the value derived from these assets. Moreover, it is essential that the achievement of these goals is sustainable over time. Organizations dealing with engineering assets, both public and private, must, therefore, integrate sustainability and resilience concerns into everyday operations, using budgets that are often restricted, while also meeting demanding performance requirements in risky and uncertain environments. This Special Issue collates a selection of papers reporting the latest research and case studies regarding the trends and emerging strategies used to address these challenges, with contributions discussing how asset management principles and techniques can help to push the boundaries of sophistication and innovation to improve the life cycle management of engineered assets to ensure more sustainable and resilient cities and societies.

A Predictive Decision Analysis Tool for Risk Informed, Capital Investment Planning within the Department of Veterans Affairs

The Department of Veterans Affairs (VA) advances healthcare research and contributes to the Federal Response in the state of a national healthcare emergency while providing healthcare to veterans. The VA needs to maintain and improve accessible and safe healthcare infrastructure using risk-informed decision models. The VA relies on the Strategic Capital Investment Planning (SCIP) process to allocate resources but lacks predictive modeling. The Strategic Analysis and Risk Tool (START) creates a user-friendly interface to display environmental and veteran migration risk data, leveraging Power BI and Python. Our research presents a georeferenced risk assessment model that provides insights to regional and facility decision makers about these risks. This risk score helps SCIP decision makers allocate limited resources among VA facilities.

Methods and tools of a construction cost management system at the pre-project lifecycle stage of a construction facility

Introduction. The cost of construction is the most important indicator of any investment and construction project which is subject to change at every stage of its lifecycle due to the influence of many internal and external factors. Creation of an effective integrated construction cost management system, which allows controlling changes in construction costs in the process of developing a construction facility, is relevant for all participants of investment and construction processes. Certain methods and tools are applied at every lifecycle stage of a construction facility; they solve construction cost management problems. At the stage of capital investment planning and preliminary design, the main task is to determine trustworthy construction costs and possible limits of their change, taking into account any risks and uncertainties. This task turns more complex due to the lack of initial data about the facility and tight deadlines. This article is focused on the system of methods and practical tools used to determine construction costs at the stages of capex planning and preliminary design of a construction facility.
 Materials and methods. In the course of the study, current construction cost calculation methods were analyzed. Methods of analysis, synthesis, expert and comparative evaluation were applied.
 Results. As a result of the analysis the main principles of this methodological approach and a set of practical tools were developed to find reliable construction costs.
 Conclusions. The proposed methods and practical construction cost management tools can be applied in the process of implementation of investment and construction projects of any complexity.

Pandemic-Era Uncertainty

We examine several measures of uncertainty to make five points. First, equity market traders and executives at nonfinancial firms have shared similar assessments about one-year-ahead uncertainty since the pandemic struck. Both the one-year VIX and our survey-based measure of firm-level uncertainty at a one-year forecast horizon doubled at the onset of the pandemic and then fell about half-way back to pre-pandemic levels by mid-2021. Second, and in contrast, the 1-month VIX, a Twitter-based Economic Uncertainty Index, and macro forecaster disagreement all rose sharply in reaction to the pandemic but retrenched almost completely by mid-2021. Third, Categorical Policy Uncertainty Indexes highlight the changing sources of uncertainty—from healthcare and fiscal policy uncertainty in spring 2020 to elevated uncertainty around monetary policy and national security as of May 2022. Fourth, firm-level risk perceptions skewed heavily to the downside in spring 2020 but shifted rapidly to the upside from fall 2020 onwards. Perceived upside uncertainty remains highly elevated as of early 2022. Fifth, our survey evidence suggests that elevated uncertainty is exerting only mild restraint on capital investment plans for 2022 and 2023, perhaps because perceived risks are so skewed to the upside.

Develop and implement asset management strategy to create capital works programme for roads

Organisations manage assets to provide services to various customers effectively and efficiently through the development of a comprehensive asset management system. The asset management strategy is a core component of an asset management system that is defined from a different perspective in the area of asset management. An explicit definition will make it easy to comprehend, develop and implement. The development and implementation of an effective asset management strategy play a vital role in formulating a long-term capital works programme as part of capital investment planning. How to develop and implement the strategy to create an effective capital works programme is the main research question. This paper defines the asset management strategy at three levels and develops and implements the strategy to create the capital works programme for roads using a case study approach following a six-step methodology.

National development level effects on capital budgeting practices: a comparative study of nature vs nurture

Purpose This research should help determine whether development should focus on individual firms or will raising the national development level act like a rising tide and raise the performance of all corporations. Design/methodology/approach The comparative data used in this study come from 150 Australian (ASX200 index listed) firms and 150 Sri Lankan (Colombo Stock Exchange listed) firms. The research questions are answered via a quantitative research design that uses primary and secondary data. Findings The findings demonstrate that capital budgeting practices are more influenced by contingency features and sophistication in Australia and Sri Lanka. Also, Australian firms tend to use capital budget models with good-to-strong predictive power (except for ROE) and Sri Lankan firms tend to use capital-budget models with fair-to-poor predictive power. Further, the analysis of Australian firms yielded much stronger and more statistically significant results than the analysis of Sri Lankan firms. Practical implications In complex real-world situations, reconciling the outputs of a multifaceted approach to capital budgeting methods is more likely to give the depth and width of input needed to achieve an optimal capital investment plan. Originality/value The results of this study can provide rich information for stakeholders about new findings in capital budgeting (CB) practices and their contributions to firm performance in a comparative perspective.

Analysis of Finance and Accounting Measures to Mitigate the Impact of COVID-19 Pandemic among Businesses in Rwanda during and in a Post COVID Environment

Introduction: COVID-19 pandemic has not affected the health system of the country; it has had a very big impact on the business operations. COVID-19 measures such as social distancing and lockdowns have had a huge impact on the business operation across the world. Many businesses have closed their doors and others are on the brink of closing. This study analyzes the finance and accounting to adopt to mitigate the impact of COVID-19 pandemic on the business. Material and Methods: The study adopted a quantitative approach. The study population comprised of professional 256 accountants working in different sectors. Data was collected from primary sources using a questionnaire that was emailed to respondents. Descriptive and inferential statistics were used to analyze the data. Results: The findings indicated various accounting and finance measures such as frequent assessment of the going concern and fair values of the assets, frequent preparation of financial reports, adopting a zero based budgeting and activity based costing, proper management of cash flows, re-visiting the capital investment plan, risk management and the management of the cash conversion cycle should be practiced by accountants and financial managers. The results further revealed a relationship between finance and accounting measures and business survival during and in the post COVID-19 pandemic environments. Originality: The study contributed to the existing literatures by indicating the accounting and financial measures that should be practiced by accountants and financial managers to mitigate the impact of COVID-19 pandemic during and in the post COVID environment.

Projected private hospital expenditure in Ireland, 2018-2035: What role for demographics, cost, and Sláintecare?

Despite private hospitals occupying an important role in the delivery of acute hospital care in Ireland, an understanding of future spending pressures on these services is limited. Particularly, a key dimension of Ireland's ambitious roadmap for healthcare reform (Sláintecare) seeks to remove private practice from public hospitals. However, to date, there has been no examination of how this reform could impact private hospital demand and expenditure, and ultimately, the capacity to treat public patients. Using previously unavailable administrative health insurer data and a healthcare macro-simulation projection model, we project real (volume-based) and nominal expenditure on private hospital services over the medium-term (2018-2035). We develop a number of projection scenarios that vary assumptions in relation to population growth and ageing, healthy ageing, and the future cost of care delivery. Additionally, by developing profiles of private activity in public hospitals, we examine how the removal of private practice from public hospitals could impact on demand and expenditure in private hospitals over time. Findings from this analysis have implications for capital investment and workforce planning in private hospitals, and failure to meet future demand could have implications for access to care in public hospitals. Moreover, should private practice be ended in public hospitals, most complex private in-patient and emergency care is likely to remain within the public hospitals with limited capacity benefits for the public system.

Balancing the Service Benefits and Mainline Delay Disbenefits of Operating Shorter Freight Trains

Advanced train control systems enabling single-person crews or driverless trains promise to significantly reduce the fixed costs of operating a train, removing a strong incentive for longer trains. For carload freight traffic, operating a given number of railcars in shorter trains enables railroads to improve service quality and revenue through increased train frequencies or more direct trains bypassing intermediate classification yards. However, operating shorter trains increases the total number of trains on existing rail corridors, exacerbating congestion and decreasing network fluidity. Rail Traffic Controller simulation software is used to quantify the potential mainline delay impacts and relative capacity consumption of shorter trains. Different combinations of train length and train type heterogeneity are tested on representative single-track freight corridors. Results indicate that train control systems with moving blocks can mitigate some of the mainline delay impacts of shorter trains, particularly at a high traffic volume, with a mix of train types and a greater proportion of railcars traveling on short trains. Mid-siding crossovers can further boost the effectiveness of moving blocks in managing complex train conflicts caused by train type heterogeneity. Simulation results are used to perform an example railcar transit time estimation illustrating the trade-off between yard connection time benefits and mainline delay disbenefits, and the thresholds at which different operating strategies produce a net transit time benefit. Understanding the mainline delay impacts of shorter trains can assist railroad practitioners formulating long-term capital investment plans, developing future operating strategies, and improving service quality and market share through a short train philosophy.

An integrated framework for municipal capital investment planning

Resilient and sustainable municipal organisations develop long-term capital investment plans to balance capital investment needs with organisational financial capacity in the most optimum way to ensure services are provided at the acceptable level of service. Currently, capital investment planning frameworks and methodologies exist to develop the capital investment plans, but these lack a service-centric and integrated approach to identify, coordinate, prioritise and plan capital investment needs – capital projects. The development of a service-centric and integrated framework for municipal capital investment planning will address these issues. A three-step methodology is used to develop the framework, including; desktop discovery, field discovery and framework development. The paper discusses the development of the capital investment planning framework comprised of three main components; identify, coordinate and plan and manage capital projects. The paper further explains the implementation challenges and their solutions.

Future-proofing and monitoring capital investments needs throughout the life cycle of building projects

It is increasingly important justify not only the initial capital investments needed at an early stage of a building project, but also all other subsequent costs throughout the building life-cycle. These involve an understanding of the running costs in the use stage and also appropriate long-term capital investment planning of future rehabilitation investments needs. To achieve this, several research efforts have been made to increase the understanding of complex building system and subsystems degradation processes in the post-construction period and to develop life-cycle-cost databases. But there is a lack of expedite decision support tools that can assist the future-proofing of design decisions at early stage of the building life-cycle and link those to the economic life-cycle performance. This paper presents an indicator-based approach (Building Investment Index, BII), which also allows the monitoring of the economic life-cycle performance of building projects at any moment in time. BII is applied in a case study of 166 public school building constructed in Portugal since 1942 and totally refurbished in 2009. Post-construction investment costs are estimated until 2071. It is show and proven how to use BII to future-proof decisions and to monitor and optimize long-term investment plans for building systems, subsystems and elements.

Novel methodology for efficiency-based long-term investment planning in water infrastructures

Uncertainties are a key issue for long-term capital investment planning in asset intensive organizations. Amongst the sources of uncertainty are the quality and accuracy of readily available data and the assumptions underlying the several estimations involved in capital investment plans, namely those related to renewals, replacements and expansion costs and the useful lives of the assets. This article proposes a novel methodology for efficiency-based long-term investment planning in water infrastructures and discusses the effect of uncertainties in the investment strategies. An industrial water supply system of the Industrial and Logistics Zone of Sines (ILZS), installed in the Portuguese seacoast around 40 years ago, is used as a case study to demonstrate the proposed methodology. The study includes stochastic and deterministic approaches to an asset management key-performance indicator (KPI) that is currently being tested in the Portuguese water sector—the Infrastructure Value Index (IVI).

Optimal Planning and Efficient Adjustments of the Terms of Constructions

Effective planning and implementation of large capital investments, hundreds of millions of dollars can be saved. After completion of the project, it is extremely difficult to make adjustments: even the most talented plant Director, increasing labor productivity, will not be able to compensate for the costs and losses caused by the unsuccessful arrangement of equipment and irrational design of the areas. Companies often trust the choice of optimal technology and configuration to construction organizations. The article deals with the issues of effective optimization of construction scheduling. The specific methods of it mechanisms of reduction of construction time, prevention of overspending of resources, increase of economic efficiency of construction in general are offered.

Modelling investment plans at asset portfolio level using optimum plan rationalisation approaches

A new approach to modelling asset portfolio capital investment and operational plans using a rationalisation process of multiple asset life cycle cost model’s is presented. It overcomes the traditional limitations of stocastic models which do not explicitly consider deliverability issues such as scrarce resources, access in combination with an organisations objectives and finamcial imapcts.The approach builds on earlier work including the Strategic Asset Lifecycle Value Optimisation (SALVO) research and development project and rational decision making. It uses individual life cycle cost models for each asset class and programme-level constraints and multi-criteria to create an optimal plan with transparent cost/benefit/risk justification. Alternative scenarios can then be developed from this idealised plan using significance cooling and hill climbing algorithms. These explore the real-world constraints and competing objectives that might prevent such a plan from being delivered. In this way, a realistic and deliverable plan is produced, with fully quantified business impact of any constraints or programme changes that are required. Using the idealised plan as a benchmark, the rationalised variants and scenarios may be compared and a budget and resource-committed programme then selected.The approach is found to be equally applicable for capital investment, operations and maintenance activities, including the combined operational expenditures (OpEx) and capital (CapEx) plans at enterprise portfolio level. Further, its application is applicable for any industry and regulated or non-regulated asset managing organisations.

Forecasting the impact of the Planning, Land Use and Transport Outlook (PLUTO) Project – a 2040 Ireland case study

In February 2018 the Irish Government unveiled a new National Planning Framework (NPF), which underpinned ‘Project Ireland 2040’ - a national development and capital investment plan to the year 2040. The chief aim of which is to mandate and direct planning and infrastructure investment decision making over coming two decades in order to cater for projected population growth of one million people in a balanced and sustainable manner. In order to support this vision, the National Development Plan (NDP) was published alongside the NPF and sets out a €116bn public capital investment programme to cover the first decade of the NPF to 2027. Planning Land Use and Transport Outlook 2040 (PLUTO) is the Department of Transport, Tourism and Sport’s (DTTAS) response to the new NPF and NDP. The objective of PLUTO is to update the existing framework for transport investment published in 2015 to ensure alignment with Project Ireland 2040. This paper presents the transportation modelling and analysis of the schemes included in the NPF and NDP scenarios for Dublin City, which were conducted by the National Transport Authority (NTA) as part of the PLUTO project. The NTA’s modelling capabilities were utilised to highlight the transport ‘pressure zones’ in the existing Dublin City road network, in addition to identifying where new pressures, in terms of volume capacity and delay, may emerge as a result of population growth and consequential travel demand expected by 2040. This paper presents the results of this study produced from the NTA Regional Modelling System as a means of predicting and highlighting areas showing signs of stress in the urban road network in 2040, in addition to assessing the impact of introducing road, public transport and cycling schemes proposed under the NDP. This study identifies areas in the network that may require attention and warrant further investment in the next two decades in order to alleviate the forecasted pressure areas in the future road network.

Techno-economic assessment of microbial limonene production

To satisfy the growing demand for limonene, novel pathways for microbial production of limonene have been sought. A techno-economic analysis is carried out for one such process producing limonene from sugar at an industrial plant scale to assess potential economic viability. A conceptual design of the process is developed, in which a gas stripping-solvent scrubbing method is chosen for recovering limonene from bioreactors based on consideration of payback time and process operability. Minimum limonene selling prices are estimated over a range of fermentation productivity based on the calculation of net present value using discounted cash flow method. Under 45% of the maximum theoretical yield, the selling price reaches $19.9/kg, which could be competitive with established production processes when fermentation productivity is above 0.7 kg/(m3·h). Reduction of cost could be realised through improvement of microbial strains, utilisation of cheaper feedstocks, reduction in capital investment and strategic business planning.