Construction Economics: Impact on Local Economy, Procurement Models, and Cost Benefit Analysis

This presentation discusses the impact of construction on the local economy, procurement models, and cost benefit analysis. It covers topics such as direct and indirect employment, negative impacts of construction, and the possible impact of tram extensions on the local economy. The presentation also includes information on procurement models and cost benefit analysis. Course code and college/university not mentioned.

Construction Economics

Table of contents
• Introduction
• Estimate the impact of the project on the local economy during construction phase
• In context to Business
• Negative impact of construction
• the possible impact on the local economy of the tram extension once it was opened.
• Dynamic input-output model
• Cost benefit Analysis
• various approaches to procurement
• procurement models
• Conclusion

Introduction
Economics is the study of the scarcity of resources
and their implication in the production of goods and
services by which flow of commodities can be
ensured by the firms. Construction economics is
branch of general economics as it consists of
application of the techniques and expertise of. It is
related to the construction firms and its process and
its industry.

Estimate the impact of the project on the local
economy during construction phase
Edinburgh trams is a tramway in Edinburgh, Scotland and this basically operated by Edinburgh
trams Ltd. Construction began in June 2008. After running of two years, the scheme had
achieved pre-tax profitability that is excluding maintenance and infrastructure costs. This
services is faces operating loss since 2018. On 14 March 2019, Edinburgh Council Voted to have
the approval of extension of the existing line from York Place to Newhaven.
Employment
• Direct Construction Employment
• Indirect employment
• Induced or income

In context to Business
The positive impact of the results with the provision of effective access to labour,
particularly in the health, retail and finance sector with up to 30 vacancies per year survey in
terms of the business and analysis undertaken for the scheme in the specific economic activities.
From the provision, this can have the better access to the labour, particular to labour by the tram
to the pools of labour in regeneration areas of north Edinburgh. Whereas the negative impact
would be a perception of inconvenience to customer arising for certain business through the
interruption of the car parking at their home or the out side the business premises.

Negative impact of Construction
Traffic Disruption is defined as the system which is having the disruption of an event, process,
system or it is prevented from continuing or operating in a normal way. In context to
Edinburgh Tram Systems, the negative impact of construction are given below:
• Traffic disruption over a wider areas at any point in time which is also the adverse impact
of constructions of the bridges.
• Additional road modifications in order to support the diversion routes which is also leading
to have huge construction cost.
• There is reduction in public transport accessibility due to the bus route diversions by which
it also leads to have the adverse impact in the disruption of the traffics.

Discuss the possible impact on the local economy
of the tram extension once it was opened
Edinburgh council says that the work would be operated along with the Leith Walk to
prepare it for a possible extension of trams services the they ordered a detailed business case
foe extending the line for tram to Leith. In March 2018, Colin Beattie, the MSP backed the
plan but in March 2019, Edinburgh Council approved extending their line from York Place
to Newhaven. Thus, there are various possible impact on the local economy of Tram
extensions are given below:

Dynamic input-output model
This is the model which includes the evolution of production system in time and also shows
by the effective flow of goods and services in the various sectors and also implied certain
change in their stocks of the goods. In consideration of Edinburgh tram, when the council
of Scotland set the proper development plan by which they can right route their tram in
order to have the effective consideration to the growth of the economy.

Cost Benefit Analysis
It is the process which is being used to analyse
the benefits of a decisions or taking action
minus the costs that are linked with that actions.
It also involves the measurable financial metrics
such as the revenue earned or the cost is being
saved in order to have better results to pursue a
project.

various approaches to procurement for the project
The procuring department is responsible for acquiring products and services for the venture
and this also involves construction of the infrastructure at competitive prices and also
handling all the legal procedures related to the contract by which the Scotland council can
ensure the effective utilisation of their resources wisely. There are various approaches foe the
project are given below:
• Open tending:
• Request for proposals

Procurement Model
There are two procurement models that has been considered in developing the
procurement strategy are:
Client design:
Design or build:

Conclusion
From the above PPT, it is concluded that construction economics is that branch of economics
which also deals in the betterment of the economy that also implied in having certain aspects on
the local economy during construction phase. As there are direct employment, indirect
employment which also leads to have significant impact over the overall growth of the
Edinburgh trams in order to have the advancement and the growth of the economy of Scotland.

References
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Management.
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pp.1330-1351.