Faculty of Civil Engineering and Built Environment

ENGINEERING ECONOMICS (BFC44602)

Semester
Semester IIIISession
Session 2023/2024
2022/2023

Group Project Instructions

As a part of the assigned work for this course, you are required to complete a project by following
guidelines.

Assessment Marks: 20% of total marks

Due Date: End of Week 13 (refer to due date/time in Author)

Groups Members: 4-5 students/group (mix gender, races & nationality is highly advised).

Assessment Format: Project report in pdf format and 5 minutes video for project presentation.

Project Description:

A construction company is considering to construct a new multi-purpose development in Iskandar

Malaysia. Iskandar Malaysia is a smart city which endorsed by the Prime Minister of Malaysia on
1st November 2014, at the 2nd inter session Global Science and Innovation Advisory Council
(GSIAC) meeting in Kuala Lumpur. Smart City Iskandar Malaysia is an added-value-enabler, and
an initiative aimed at providing ease of doing business, as well as to improving living quality, in
Iskandar Malaysia. The framework focuses on 3 areas namely Economy, Environment and Social
and promotes 6 dimensions namely Smart Economy, Smart Governance, Smart Environment,
Smart Mobility, Smart People and Smart Living.
The company will purchase a land from local owner and state government costing about RM 40
million. The construction cost is estimated to be RM 3200m2 and services will cost 2000m2 with
yearly maintenance about RM 4 million. The company will sell some construction equipment at
the end of the construction period at the market value of RM 20 million. In addition, revenues
received through the direct and indirect businesses will be RM 15 million, and fees collected by
the local and state authorities of RM 6 million. As a project manager, your team is required to
propose the proposal of analysis with the required assumption depending on your proposed design
and characteristics, whether the company should proceed with this project or not, from the
engineering economic analysis.

In this project, you are required to:

I. To apply the Benefit-Cost Ratio Method for the project economic evaluation. State all
assumptions required in your analysis, such as the period and interest rate per year
(C3_Chapter 5).
II. To analyze the company performance from your Company Financial Report to determine
either your company have enough money to proceed with the project. You may refer to the
latest Annual Report from ANY company related to Civil Engineering and summarized the
project financing such as Balance Sheet, Cash Flow and Income Statement (C4_Chapter
6).
III. To justify the project from economic evaluation vs company performance, either the
project will proceed or not. Based on your justification, identify ANY issue that may occur
and solve it using Principal Engineering Economy (C5_Chapter 1).
Report Guidelines:

1. Introduction (Company Profile)

2. Analysis on Benefit Cost Ratio Method for project economic evaluation.
3. Analysis on the company performance from company financing.
4. Justify the project status with problem-solving using Principal Engineering Economy.
5. Conclusions
6. References
7. Appendix (1-Minute of Meeting, 2-Video Presentation Link, 3-Project Assessment Rubric)

Project Assessment:
Cognitive Skills: 5%
Psychomotor Skills: 7.5%
Affective Skills: 7.5%
Total: 20%