Project appraisal and financial management

Infrastructure matters to people and businesses everywhere, from the roads and railways needed to transport people and goods, to energy plants and telecommunication networks to the basic human need for clean water and sanitation. Oxford Economics (2017) estimated that global infrastructure investment needs to be $94 trillion between 2016 and 2040, and a further $3.5 trillion will be required to meet the UN's Sustainable Development Goals for electricity and water. The value of infrastructure does not just mean cost, and a broader range of non-financial goals, such as wider social, economic and environmental factors, need to be considered across the full investment cycle (CIOB, 2021). The determination of demand for goods and services produced by the construction industry is complicated. There are several drivers of demand for infrastructure: demographic, environmental, technological, and the need to maintain and upgrade existing infrastructure (ICE, 2018). Rapid population growth is continuously increasing the demand for infrastructure (Merna and Al-Thani, 2018). The UN Population Division (2017) predicted that the world population will be 9.8 billion by 2050. According to the Office for National Statistics (ONS, 2021), this will be driven by a modest natural increase and positive net immigration; the UK population is expected to surpass 69.6 million by mid 2029 and reach 72 million by mid 2041. Good infrastructure supports the transformation of our society for the better, increases productivity, reduces production costs and improves quality of life.