Economic-based Modules for MSc Construction Economics & Management BENVGCM3: Construction Booms and Slumps BENVGCM4: Construction

clients and the market for contracts BENVGCM5: Economics of appraisal of construction projects: leading issues BENVGCM6: The economics of speculative construction development BENVGCMD: Construction industry development BENVGCM3: Construction Booms and Slumps (tba) This module investigates the causes and some of the effects of the recurrent and relatively strong fluctuations (booms and slumps) that occur in construction and property markets, placing particular emphasis upon the inter-relationships between property and construction markets. Students are introduced to the possibilities and problems of forecasting demand changes. Lecture titles: What are business cycles, building cycles and property cycles? Why does each of these cycles occur? Why do they vary in strength over periods of time and between countries? How do economic actions in the construction and property development processes behave so as to generate cycles and how do they respond to such cycles? Can we forecast construction and property cycles? BENVGCM4: Construction clients and the market for contracts (Dr Chen-Yu Chang) This module aims to help students understand contemporary theories relevant to construction procurement. Transaction cost theory and game-theoretical thinking will be heavily relied upon. This course will start with the introduction of the institutional aspects of procurement systems, including traditional system, design-build, management system and PFI. To bring the key issues to the foreground, PFI will be taken as an example to illustrate the complexity of this process. According to the sequence of their occurrence in the procurement process, four issues are identified: selection of an appropriate procurement system selection of a preferred bidder determination of contractual terms project implementation

Apart from the introductory lecture in the first week, the following four weeks will go through the above four issues from a theoretical angle. Students are expected to master these theoretical tools and apply them to exploring practical problems. BENVGCM5: Economics of appraisal of construction projects: leading issues (Dr Chen-Yu Chang) This module develops and explores some realistic models of investment decision making by public sector clients specifically, and in particular deals with recent changes (the Private Finance Initiative; DBFO contracts) in the way investment in formerly-public sector-type projects is undertaken, both in advanced and less developed economies. Lecture titles: The range and boundary of public services. Public services provided using private or public assets? Selecting projects and choosing mode of provision of projects: NPV and discount rate. Economic theory and PFI: incentives, innovation and transaction costs PFI in practice: (a) the case of prisons (Dr Andrew Edkins); (b) future prospects and developments in PPP market (Dr Kai Rintala, KPMG) Value-for-money studies of PFI: the audit evidence

BENVGCM6: The economics of speculative construction development (tba) This module focuses upon one of the most significant of clients, namely the speculative property developer. It shows students how property developers operate. This embraces strategic decision making, land acquisition, raising finance, predicting demand and managing risk. Students will learn how to undertake investment project financial appraisals, sensitivity analyses and scenarios. Lecture titles: Introduction: types of speculative developer; actors, roles and relationships in the development process; simple methods of calculating investment returns and residual land valuations Project investment appraisal using net present value (NPV). Risk and uncertainty. Where do positive NPVs come from? Are property markets efficient? Required return under risk: market risk, CAPM and beta Managing risk and uncertainty: financial risk, unique risk and market risk. Group presentations case studies of firms and projects. BENVGCMD: Construction industry development (John Kelsey) This module is about the problems of and prospects for the construction industry in lower/middle income countries defined in terms of GNI per head (those countries comprising 80% of the worlds population which are not in the World Banks high income category), but are divided in terms of their rate of economic growth and social structure. There are newly-industrialising countries (or NICs), slower-growing, partly industrialised economies (including transition economies) and slow-growing, non-industrialised economies. Many problems in the construction industry in such countries are primarily economic in origin. Therefore the first part of the module deals with relevant economic issues common to these countries. The last three lectures deal with management and educational issues as well as economic ones. The interaction and effect of such issues can best be seen in the context of individual economies. Therefore we have chosen three as representative of the range and the rest of the module presently focuses on Malaysia, Ghana and India. However, students from other developing countries should find the teaching relevant to their own experience and perhaps use that experience to challenge what is being taught. Interested students from all countries are welcome on this module. Models of economic growth and fixed capital formation Industrialisation, urbanisation, infrastructure and the construction sector The economic evaluation of projects and appropriate technology South-East Asia with special reference to Malaysia and Singapore Sub-Saharan Africa with special reference to Ghana South Asia with special reference to India and comparison with China

For any further information please contact CEM Programme Director: John Kelsey j.kelsey@ucl.ac.uk