CONSTRUCTION CASH FLOW AND RISK S-CURVES DEVELOPMENT APPROACH, AND AREA METHOD ANALYSIS AT THE PRECONSTRUCTION STAGE FROM CLIENT PERSPECTIVE IN THE UNITED ARAB EMIRATES

Ahmed Sadek ()

Journal of Entrepreneurship and Project Management, 2021, vol. 6, issue 2, 1 - 37

Abstract: Purpose - Understanding construction cash flow estimation is crucial for project success. Experts are concerned about project's cash-flow and risk estimation and control. Latest construction studies concentrated on modelling and estimating construction costs and risks. Methodology - This article aims to approach pure quantitative mathematical modelling to develop the S-Curves (i.e., cash-flow and risks) and to develop the cash-flow simple area method. This research referred to the mathematical definitions of construction cash-flow and risks, integrating a clear systematic approach to develop the s-curves and to build the simple-area-method. Findings - This research paper reviled that construction cash-flow and risk s-curves can be developed at the preconstruction stage, mathematically, without the need for having cost historical data of similar completed projects. In addition, this article has provided a simple area method approach mathematically, for construction cash flow analysis, using the basic developed cash-flow s-curve and the actual cost data of, at least, 2 completed similar projects. The simple area method is proved effective to provide a better understanding of cash-flow behaviour of the analysed projects' type. However, the s-curves development can be generalised to cover construction cost and risk simple s-curves, while the area method is restricted with the projects' characteristics (i.e., type, size, location, etc.) used in developing the simple area. Unique contribution to theory, practice and policy - The significance of this study is to provide an S-Curve development approach for both cashflow and risk percentages from client perspective at the preconstruction stage, using solely the tender contract value. And to provide a simpler stochastic area method approach for project management professionals/researchers, who do not have large amount of historical similar projects' cost data. Originality, theoretical-implications, practical-implications, and limitations are presented in the conclusion for future research.

Date: 2021
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