Effectiveness of Cost Elements Used

Once the organization has decided on the most appropriate capital works, it then need to consider whether or not these works are being carried out at the lowest capital cost.

There are two key methods to assess the organization's cost effectiveness and efficiencies:

• By benchmarking the current costs for different asset creation or rehabilitation activities
• By reviewing the processes they follow and the degree of exposure to competition given to the works.

Benchmarking can indicate the current best practice in general unit cost activities.

The differences in costs may be justified by different levels in service, standards or environment and operating conditions.

It is better to assess the organization's current performance to identify areas where costs could be further reduced.