Case Study

Comparison of Design Alternatives Based on Lifecycle

Costing: Case of an Irrigation Project in Turkey
Önder Ökmen, Ph.D. 1

Abstract: Design alternatives in construction projects are compared with concurrently taking various criteria into consideration, such as
costs, functionality, and constructability. This case study introduces a comparison process based on lifecycle costing (LCC) between two
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design alternatives in an irrigation project, the Seyhan River Yedigöze İmamoğlu Irrigation Project, being implemented in the southern region
of Turkey. Decisions related to irrigation projects in Turkey are important because of their effect on the agricultural development and because
of the high amounts allocated from the national budget for their implementation. In this regard, comparing the design alternatives properly
during the design development stage is critical to exploring the superior design. The aim of this case study is to show how considering only the
facility initial construction costs, while ignoring LCC, may lead to wrong decisions, through the example case of an irrigation project under-
taken in Turkey. Comparison of two different design alternatives has revealed that Design Alternative 2 (pipe network and concrete covered
open main channel of 15.812 km) is superior to Design Alternative 1 (pipe network and concrete covered open main channel of 57.562 km)
from the perspective of LCC and such technical criteria as constructability, operation easiness, and water saving. DOI: 10.1061/(ASCE)ME
.1943-5479.0000351. © 2014 American Society of Civil Engineers.
Author keywords: Construction management; Life cycles; Case studies; Irrigation; Turkey; Design.

Introduction costing (LCC) in the Seyhan River Yedigöze İmamoğlu Irrigation

Irrigation projects implemented in Turkey are completely financed
by the state through internal funds or foreign credits. Private con-
struction companies carry out these projects under the management
of the State Hydraulic Works [Devlet Su İşleri (DSİ in Turkish acro-
nym)], which is a state foundation responsible for managing the
country’s water resources. With 78 Mha (million hectares) of area
in total, Turkey possesses 8.5 Mha of economically irrigable agri-
cultural land. Presently, 5.6 Mha of the 8.5 Mha economically irri-
gable lands have been equipped with irrigation facilities (DSİ
2013b). While Turkey continues making major investment in the
irrigation infrastructure by opening new irrigation areas, there is
an equal focus on increasing water use efficiency for saving water
through system improvement and managerial interventions. In or-
der to achieve this objective, there has been since 2003 a shift from
the construction of open channels to piped conveyance system.
Moreover, DSİ has recently started to renew old, damaged facilities
consisting of concrete covered open channels and canalettes (pre-
fabricated concrete canals standing on concrete legs), through
which irrigation has been implemented by primitive techniques
such as unpressurised surface irrigation. The new strategy of DSİ
in irrigation is to realize projects with buried pipe networks and to
enable farmers to apply modern irrigation techniques such as pres-
surized sprinkler or drip irrigation (Gündoğdu 2013).
Design alternatives in construction projects are compared by
concurrently taking various criteria into consideration, such as
costs, functionality, and constructability. This case study introduces
a comparison between two design alternatives based on life cycle
1
General Directorate of State Hydraulic Works, Design and Construc-
tion Dept., Devlet Mah., Inönü Bulvari, No: 16, Çankaya, Ankara 06100,
Turkey. E-mail: onderok@dsi.gov.tr
Note. This manuscript was submitted on April 8, 2013; approved on
October 22, 2014; published online on December 1, 2014. Discussion per-
iod open until May 1, 2015; separate discussions must be submitted for
individual papers. This paper is part of the Journal of Management in
Engineering, © ASCE, ISSN 0742-597X/05014028(8)/$25.00.
Project being implemented under the direction of DSİ in the
southern region of Turkey. Due to the importance of irrigation proj-
ects for the agricultural sector of Turkey, proper comparison of the
design alternatives during the design development stage is critical
to exploring the superior design. The aim of this case study is to
show how considering only the facility initial construction costs
and ignoring the LCC may lead to wrong decisions in construction
projects through the case of the Seyhan River Yedigöze İmamoğlu
Irrigation Project in Turkey. The results have been evaluated with
respect to economical and technical criteria along with operation
easiness and water saving.
The study consists of four major parts: a brief description of
LCC, an introduction to the economic evaluation procedures of
public construction projects in Turkey and the DSİ practice, infor-
mation on the Seyhan River Yedigöze İmamoğlu Irrigation Project,
and a comparison of design alternatives.
Life Cycle Costing
LCC is a methodology for calculating the whole cost of a system
from inception to disposal. In other words, LCC of a facility begins
with the initial design concept and ends with the decommissioning
of the facility (Dunston and Williamson 1999). LCC generally in-
cludes the costs of research and development, production, modifi-
cation, transportation, introduction into inventory, construction,
operation, support, maintenance, disposal, salvage revenue, and
any other cost of ownership (Blank and Tarquin 1989). The system
may vary from industry to industry. For instance, it may be a build-
ing, a ship, a weapon system, or a power station. Whatever the sys-
tem, the LCC technique is basically the same, i.e., the major items
of cost must be defined through its life. The items may be further
subdivided until the cost of each element can be defined as a math-
ematical equation. At a simple level, this may be the number of
man-hours multiplied by a cost rate. The elements of cost are then

© ASCE 05014028-1 J. Manage. Eng.

J. Manage. Eng.
 added together to give the total cost for each item and a grand total
for the system through its full life.
LCC is the most frequently used economic model that considers
all cost elements and related factors throughout the service life of
the alternatives being considered (Ammar et al. 2012). Decisions
related to alternatives should be based on evaluations of life-cycle
considerations and costs, preferably made early in the life of a
project or system, because these evaluations influence the entire
useful life of the facility and determine its true total cost to the
public (Novick 1990).
Flanagan and Norman (1993) define LCC as an economic evalu-
ation technique that concerns the assessment of the total cost of an
asset over its operating life, including initial capital costs, mainte-
nance costs, operating costs, and the cost or benefit of the eventual
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disposal of the asset at the end of its life. LCC is a decision-making
tool, a management tool, and a maintenance guide. It is a decision-
making tool in the sense that it could be used to select among
alternative projects, designs, or building components. It is a man-
agement tool in the sense that it could be used to estimate the costs
that will incur during a building’s life. It is a maintenance guide in
the sense that it could be used to forecast the maintenance and op-
erating tasks that will incur at each year of a project’s life (Kirk and
Dell’Isola 1995; Bakis et al. 2003)
LCC is widely used to compare project alternatives. The pur-
pose of such an evaluation is to critically cost-out each alternative
for its entire life and select the one with the minimum cost
(Isograph 2013). For instance, Nystrom et al. (2003) compared
the costs of fiber-reinforced polymer and reinforced concrete
bridges for the standard short-span bridge market through LCC.
Kuprenas and Nasr (2007) presented the results of a cost-comparison
study of 18 completed public sector municipal facilities design
and construction projects—a portion of which delivered using a
traditional design-bid-build approach and a portion of which deliv-
ered using a negotiated contracts with in-house construction forces.
The study compared costs for all phases of all the projects (design,
construction, and total project cost) across both methods of project
procurement. However, expansion of the study through LCC has
been recommended by Kuprenas and Nasr (2007) to reach at more
robust results.
Some researchers have developed new methods based on
LCC to be used for decision-making in specific circumstances.
For instance, Ochs et al. (2014) proposed a method for analyzing
infrastructure investment decisions involving rapidly evolving tech-
nology and illustrated the utility of the proposed method through
a case study in which the replacement of existing high-pressure
sodium streetlights on 64 United States Air Force installations with
light-emitting diode streetlights is evaluated. Cruz and Marques
(2014) have proposed a methodology based on LCC that allows
decision-makers to decide whether a project should be developed
in one of the two different procurement methods: public-private
partnership model or a traditional public work contracting method.
LCC has also been utilized in different aspects in various stud-
ies. For instance, Wang (2014) conducted a correlation analysis to
identify the validity of the acceptation that “higher initial capital
costs result in a lower long-term life cycle replacement cost for
private financial initiative projects in practice.” Contrary to the ac-
cepted negative relationship, a positive correlation has been found
between the two variables. Dunston and Williamson (1999) put an
emphasis on the necessity of not only considering the construction
costs of a facility for making decisions during the design and con-
struction phases, but also taking the maintenance costs during the
life cycle into account. Garza et al. (1994) proposes concurrent
engineering as a philosophy conducive to true LCC of a facility.
The relationship between concurrent engineering and LCC has
© ASCE 05014028-2
J. Manage. Eng.
been argued through explaining the function of concurrent
engineering as “bringing together, from project inception, multiple
individuals to address all angles of a project and enabling the
accumulation of knowledge and information so as to reduce down-
stream risks and anticipate constructability, operability, and main-
tainability expectations.” Ottoman et al. (1999) describes and
compares 18 available maintenance and repair budgeting models
used to estimate maintenance and repair funding requirements of
facilities. LCC of systems and components of facilities have been
one of the bases outlined in the study for budget-level estimating.
Economic Evaluation of Public Construction
Projects in Turkey and the DSİ Practice
The state foundations in Turkey responsible for realizing public
infrastructure projects utilize four basic methods to perform eco-
nomic evaluation on projects. These are net present value (NPV),
internal rate of return (IRR), benefit/cost ratio (B/C), and net
benefit/cost ratio (NB/C) methods (Öziş et al. 1990). Although
the values of some important parameters may vary in calculations,
the application procedures associated with these methods are sim-
ilar in different foundations. The general trend among the state
foundations is to utilize the method(s) appropriate for the projects
they realize instead of using all of them concurrently in a compar-
ative manner. Since DSİ utilized the NPV method to evaluate the
Seyhan River Yedigöze İmamoğlu Irrigation Project from the eco-
nomic perspective during the decision-making process, this study
introduces the real application performed through the NPV method
just as the case experienced officially in DSİ.
Before proceeding to the description of the irrigation project ex-
amined in the case study and disclosing the relevant calculations,
some important issues regarding the practice in DSİ associated with
the economic evaluation of projects are clarified and some contro-
versial points are discussed in the following:
• Social discount rates used in public construction projects’ eco-
nomic evaluation in Turkey are officially determined and de-
clared by the State Planning Organization [Devlet Planlama
Teşkilatı (DPT in the Turkish acronym)], which is the state foun-
dation that plans and guides Turkey’s development process in a
macro approach and focuses on the coordination of policies and
strategy development. The social discount rate declared by DPT
is currently 5%. DPT determines the social discount rate with
respect to the up-to-date real discount rate. Real discount rate
can be considered as the inflation-free discount rate. The reason
of using the real or inflation-free discount rate as the social dis-
count rate is the usage of constant costs throughout the life cycle
of a project under the assumption that the costs do not escalate
due to inflation during the project’s economic life (Değirmenci
2010). The annual inflation rate was approximately 10% and the
annual loan interest rate was approximately 15% by the end of
2011, when this case study was experienced in DSİ. Depending
on this, 5% of social discount rate calculated by Eq. (1), which
the DPT has also declared in advance, was used in NPV calcu-
lations based on LCC in this case study. Eq. (1) is given below
(DPT 1998)
i ¼ ½ð1 þ kÞ=ð1 þ PÞ − 1 ð1Þ
where i, k, and P designate the social discount rate, the annual
loan interest rate, and the inflation rate, respectively.
However, this logic is rational as far as the macroeconomic bal-
ances in Turkey follow a stabilized course during the assumed eco-
nomic analysis period. The annual inflation rate in Turkey has
changed between 6 and 18%, and was 9.3% on average during
J. Manage. Eng.
 the last decade, which can be considered as low and steady with
respect to the worse times experienced between 1993 and 2002,
during which the inflation rate was 70.4% in average.
• DSİ assumes 50 years of economic life for water resources de-
velopment projects. Therefore, LCC is performed for a period of
50 years in DSİ’s projects (Karataban 1976; Değirmenci 2010).
Due to this formal acceptation, NPV calculations have been im-
plemented by considering the analysis period as 50 years for the
project examined in this case study.
• Cost data used in the estimation of construction costs to be uti-
lized in the economic evaluation is obtained from the unit prices
published by DSİ and other public institutions. If required, mar-
ket search is also carried out. Because DSİ has been servicing
water resource development projects in Turkey since the 1950s,
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calculate the future value of the investment cost through apply-
ing interest rate on the project expense value throughout the
construction period. Future value of investment cost at the
end of construction period is utilized to calculate the annual de-
preciation expense throughout the 50 years of economic life.
However, the annual operation and maintenance and replace-
ment expenses are calculated by using the construction cost.
• Some coefficients or factors are used to determine the annual
operation and maintenance, replacement, and depreciation ex-
penses utilized in the economic evaluation of irrigation projects
in DSİ. The parameters used in the assessment of these factors
are the renewal periods of project compounds (concrete covered
open channel —35 years, pipes—45 years), renewal rates of
project compounds (concrete covered open channel—0.0113,

data records belonging to the previous completed projects are pipes—0.0038), social discount rate for irrigation projects
sufficiently abounding within DSİ and also within the private (5%), and economic life of irrigation projects (50 years). Eqs. (2)
construction companies functioning in this area. and (3) given below are used to calculate the depreciation and
• DSİ applies a 15% contingency rate on the estimated costs in replacement factors in the DSİ practice, respectively (Karataban
order to allow a cost margin for the unforeseen costs caused 1976; Değirmenci 2010)
by various risks that may affect the projects. This is an official
procedural assumption (Karataban 1976; Değirmenci 2010). ið1 þ iÞN
Therefore, the estimated construction cost of the project exam- D¼ ð2Þ
ð1 þ iÞN − 1
ined in the case study is increased by 15%, and this increased
value, which is called the construction cost, has been used in
where D, i, and N designate the depreciation factor, social dis-
the total investment cost and the present value calcula-
count rate, and life cycle period, respectively. Eq. (2) is also
tions. However, this assumption is a disputable issue among
called the capital-recovery factor in the literature
authorities. Quantitative risk analysis methods are suggested
to be used in reflecting the risk effect on the estimated costs
i×c
instead of directly applying a standard 15% of contingency rate R¼ ð3Þ
(Değirmenci 2010). ð1 þ iÞn − 1
• Investigation, design, and control expenses are added to the
construction cost and this new value is called the project where R, i, c, and n designate the replacement factor, social dis-
expense in the DSİ practice. Project expense value is used to count rate, renewal rate, and renewal period, respectively. If the

Table 1. Estimated Construction Costs of Design Alternatives

Cost (TL)
S1-concrete covered
Design title open main channel S1A main pipe S1B-1 main pipe S1B-2 main pipe Pipe network Total
Design alternative 1 114,893,315 — — — 108,359,586 223,252,901
Design alternative 2 46,840,676 60,939,985 78,003,012 1,434,813 98,609,714 285,828,200

Table 2. Investment Cost Calculations of Design Alternatives and Project Realized by Saved Water
Construction
Investigation, period for
Estimated Contingency design and Project interest
construction (rate: 0.15) Construction control expense application Investment
cost (TL) (TL) cost (TL) expense (TL) (TL) (year) Interest factor cost (TL)
Design title Work item 1 2 ¼ 1 × 0.15 3¼1þ2 4 ¼ 3 × 0.15 5¼3þ4 n 6 ¼ ð1 þ fÞn−1 a 7¼5×6
Design S1—main channel 114,893,315 17,233,997 132,127,312 19,819,097 151,946,409 3 11,025 167,520,916
alternative 1 (57.562 km)
Pipe network 108,359,586 16,253,938 124,613,524 18,692,029 143,305,552 5 12,155 174,188,795
Total 223,252,901 33,487,935 256,740,836 38,511,125 295,251,962 — — 341,709,711
Design S1—main channel 46,480,676 7,026,101 53,866,777 8,080,017 61,946,794 3 11,025 68,296,340
alternative 2 (15.812 km)
Main pipes 140,377,810 21,056,672 161,434,482 24,215,172 185,649,654 5 12,155 225,658,314
(S1A,S1B-1,S1B-2)
Pipe network 98,609,715 14,791,457 113,401,172 17,010,176 130,411,348 5 12,155 158,515,809
Total 285,828,201 42,874,230 328,702,431 49,305,365 378,007,796 — — 452,470,463
Project Pipe network 118,272,000 17,740,800 136,012,800 20,401,920 156,414,720 5 12,155 190,123,070
realized by Total 118,272,000 17,740,800 136,012,800 20,401,920 156,414,720 — — 190,123,070
saved water
a
f: interest rate = 0.05.

© ASCE 05014028-3 J. Manage. Eng.

J. Manage. Eng.
 9¼6þ7þ8
expense (TL)
renewal rate, c, is ignored, Eq. (3) turns into the sinking-fund

Total annual

11,835,884
10,168,108
22,003,992
4,825,353
13,172,593
9,253,212
27,251,158
11,098,255
11,098,255
factor, as it is called in the literature.
• DSİ assumes the operation and maintenance expense factors as
2% and 0.5% for the concrete covered open channels and buried
pipeline networks, respectively (Karataban 1976; Değirmenci
2010). Due to this formal acceptation, these factors have been

expense (TL)
Replacement

8¼1×5
utilized to calculate the annual operation and maintenance

16,542
2,978
19,521
6,744
3,858
2,710
13,312
3,250
3,250
expense of the project examined in this case study.

Seyhan River Yedigöze İmamoğlu Irrigation Project

expense (TL)
Depreciation

9,176,795
9,542,062
18,718,857
3,741,273
12,361,562
8,683,496
24,786,331
10,414,941
10,414,941
7¼2×4
The 6th Regional Directorate of DSİ carried out the tender of
Seyhan River Yedigöze İmamoğlu Irrigation Project—S1 Irrigation
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Area Design Job on October 10, 2011. The Design Company,

which won the tender, signed the contract on October 17, 2011,

Operation and
and started the job officially by October 21, 2011. In the contract,

expense (TL)
maintenance

2,642,546

3,265,614
1,077,335

2,451,513
623,067

807,172
567,005

680,064
680,064
6¼1×3
the aim of the job is emphasized as follows (DSİ 2013a):
The aim of the Seyhan River Yedigöze İmamoğlu Irrigation
Project—S1 Irrigation Area Design Job is to prepare the design
drawings, calculations, technical reports, and quantity survey
and estimate documents of the project that will convey irrigation

1.252 × 10−4
0.239 × 10−4

1.252 × 10−4
0.239 × 10−4
0.239 × 10−4

0.239 × 10−4
Replacement
water to the S1 irrigation area of 35,633 hectares (ha) (the whole

expense
factor
area has been divided into two parts: S1 and S2) in the towns of

—
5
İmamoğlu, Kozan, and Ceyhan of Adana (a city in the Mediterra-
nean region) near the Seyhan River, with a pipe network and a con-
crete-lined main open channel, and which will drain the excess
irrigation water with drainage channels. Depreciation

0.05478
0.05478

0.05478
0.05478
0.05478

0.05478
Brief information about the Seyhan River Yedigöze İmamoğlu expense
factor

—
4
Irrigation Project—S1 Irrigation Area Design Job extracted
from the contract documents is listed in the following (DSİ
2013a). This data has been transferred into the contract from the
expense factor
Operation and

planning report, which is the main guide prepared by DSİ before

Table 3. Annual Expense Calculations of Design Alternatives and Project Realized by Saved Water

maintenance

the design tender and submitted to the design company as a tender

0.005

0.005
0.005

0.005
0.02

0.02
—

—
3

document.
• Location: Adana (a coastal city in the southern region of
Turkey);
• Water resource: Reservoir of Yedigöze Hydroelectric
167,520,916
174,188,795
341,709,711
68,296,340
225,658,314
158,515,809
452,470,463
190,123,070
190,123,070
Investment

Power Dam;
cost (TL)

• Irrigation method: medium-pressurized surface irrigation

2

by pipes;
• Irrigation area: 35,633 ha (gross);
• Length of main open channel: 57,562 km;
Construction

132,127,312
124,613,524
256,740,836
53,866,777
161,434,482
113,401,172
328,702,431
136,012,800
136,012,800

• Initial discharge of system: 85.00 m3 =s;

cost (TL)

• Water conveying method: concrete-lined main open channel and

1

pipe network;
• Drainage water conveying method: unlined open channels; and
• Irrigation module: 1.10 l=s=ha.
Main pipes (S1A,S1B-1,S1B-2)

The Seyhan River Yedigöze İmamoğlu Irrigation Project con-

S1—main channel (15.812 km)
S1-main channel (57.562 km)

sists of two adjacent irrigation areas, named S1 and S2, which

are 35,633 ha and 34,633 ha, respectively. DSİ conducted the ten-
Pipe network

Pipe network

Pipe network

ders of these two adjacent areas separately. This paper deals with
Work item

Total

Total

Total

only the S1 irrigation area design job.

The irrigation module, which is an important parameter used in
irrigation projects, shows the discharge amount in liter per second
(l=s) that one hectare (ha) of land requires in the month during
which the requirement of crops to irrigation water reaches to maxi-
mum. The month in which the irrigation water requirement reaches
to maximum is usually July or August, in the summer season. The
Project realized
by saved water

irrigation module is used to calculate discharge requirements, canal

alternative 1

alternative 2

capacities, and pipe diameters. The irrigation module of irrigation

Design title

projects by which unpressurised surface irrigation is implemented

Design

Design

through open channels is higher than the irrigation module of irri-

gation projects by which pressurized sprinkler or drip irrigation is

© ASCE 05014028-4 J. Manage. Eng.

J. Manage. Eng.
 applied through pipes. As the irrigation module decreases, less • Irrigation module (as written in the planning report):
water is consumed and more water is saved. 1.10 l=s=ha.
2. Design Alternative 2
• Irrigation area: 35,601 ha (gross);
Comparison of Design Alternatives • Irrigation method: high-pressurized sprinkler and drip
irrigation by pipes;
The design company has worked on two design alternatives, named
• Water conveying method: pipe network and concrete-
Design Alternative 1 and Design Alternative 2. In the design de-
covered open main channel of 15.812 km;
velopment report (also called as preliminary report) submitted to
• Length of S1 main open channel: 15.812 km (concrete-
DSİ by the design company, Design Alternative 1 is proposed
covered trapezoidal);
as the best design. In the following sections, a comparison imple-
• Annual irrigation water requirement per hectare (recalcu-
mented by the design company is explained first, and subsequently
lated): 6,036.64 m3 =ha;
a comparison conducted by DSİ based on LCC is introduced.
• Annual irrigation water requirement (recalculated):
215 million m3 ; and
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Comparison Based on Estimated Construction Costs
Basic information about Design Alternatives 1 and 2 is given in the
following (Özdemir 2013):
1. Design Alternative 1
• Irrigation area: 35,633 ha (gross);
• Irrigation method: medium-pressurized surface irrigation
by pipes;
• Water conveying method: pipe network and concrete-
covered open main channel of 57.562 km;
• Length of S1 main open channel: 57,562 km (concrete-
covered trapezoidal);
• Annual irrigation water requirement per hectare (as written
in the planning report): 8,901.16 m3 =ha;
• Annual irrigation water requirement (as written in the
planning report): 317.4 million m3 ; and
• Irrigation module (recalculated): 0.74 l=s=ha.
The design company used the data of the planning report in the
case of Design Alternative 1. However, important data such as ir-
rigation module and annual irrigation water requirement per hectare
has been recalculated in the case of Design Alternative 2, because
the irrigation method and water conveying method applied in De-
sign Alternative 2 are different from the proposed methods in the
planning report. Such data regarding the water consumption rate
along with the irrigation method and water conveying method de-
termine the canal or pipe capacities and the amount of saved water.
Table 1 contains the estimated construction costs of Design
Alternatives 1 and 2. The design company proposed Design Alter-
native 1 against Design Alternative 2 as the best design, taking the
estimated costs into account. The estimated construction cost val-
ues show that construction cost of Design Alternative 1 is cheaper

Table 4. Present Value Calculations of LCC of Design Alternatives

Operation and Total Present
Investment Replacement maintenance Depreciation expense value of total
expense (TL) expense (TL) expense (TL) expense (TL) (TL) expense (TL)
Year
Design title (n) 1 2 3 4 5¼1þ2þ3þ4 6 ¼ 5=ð1 þ f a Þn−1
Design 1 68,341,942 — — — 68,341,942 68,341,942
alternative 1 2 68,341,942 — — — 68,341,942 65,087,564
3 68,341,942 — — — 68,341,942 61,988,156
4 68,341,942 — — — 68,341,942 59,036,339
5 68,341,942 — — — 68,341,942 56,225,085
6 — 19,521 3,265,614 18,718,858 22,003,992 17,240,703
7 — 19,521 3,265,614 18,718,858 22,003,992 16,419,718
8 — 19,521 3,265,614 18,718,858 22,003,992 15,637,826
- — — — — — —
- — — — — — —
53 — 19,521 3,265,614 18,718,858 22,003,992 1,740,435
54 — 19,521 3,265,614 18,718,858 22,003,992 1,657,558
55 — 19,521 3,265,614 18,718,858 22,003,992 1,578,626
Total 341,709,711 976,030 163,280,693 935,942,898 1,441,909,332 641,161,333
Design 1 90,494,093 — — — 90,494,093 90,494,093
alternative 2 2 90,494,093 — — — 90,494,093 86,184,850
3 90,494,093 — — — 90,494,093 82,080,810
4 90,494,093 — — — 90,494,093 78,172,200
5 90,494,093 — — — 90,494,093 74,449,714
6 — 13,313 2,451,514 24,786,332 27,251,158 21,351,995
7 — 13,313 2,451,514 24,786,332 27,251,158 20,335,234
8 — 13,313 2,451,514 24,786,332 27,251,158 19,366,889
— — — — — — —
— — — — — — —
53 — 13,313 2,451,514 24,786,332 27,251,158 2,155,467
54 — 13,313 2,451,514 24,786,332 27,251,158 2,052,826
55 — 13,313 2,451,514 24,786,332 27,251,158 1,955,072
Total 452,470,463 665,635 122,575,691 1,239,316,599 1,815,028,388 820,672,125
a
f = social discount rate = 0.05.

© ASCE 05014028-5 J. Manage. Eng.

J. Manage. Eng.
 of expense and

−395; 058; 980

−29; 627; 271
−28; 216; 452
−26; 872; 812
Present value

income (TL)

−2; 990; 851

−2; 848; 429
−2; 712; 789
than the construction cost of Design Alternative 2. The cost values

38,024,614
36,213,918
34,489,446
32,847,091
31,282,944
9¼6þ8
in Table 1 are all in Turkish liras (TL). All of the cost calculations

—
—
throughout the paper are carried out in TL by using the unit costs of
the year 2011. US$1 was equal to 1.81 TL on the March 14, 2013.

Comparison Based on Life Cycle Costing

8 ¼ 7==ð1 þ f a Þn−1

−38; 323; 048

−36; 498; 141
−34; 760; 135

−3; 868; 682

−3; 684; 459
−3; 509; 008
−734; 603; 849
Comparison based on LCC was performed by DSİ in order to de-

Present value
of income
termine the best design based on LCC along with the other tech-

(TL)

—
—
—
—
—

—
—
nical criteria. The comparison process started with calculating the
investment cost of Design Alternative 1. The details and results of
the investment cost calculation of Design Alternative 1 are pre-
sented in Table 2. DSİ applies a contingency rate of 15% for
the unforeseen costs. The same rate is applied to the construction
Downloaded from ascelibrary.org by Cambridge University on 05/29/15. Copyright ASCE. For personal use only; all rights reserved.

cost to find the investigation, design, and control expenses. The

−48; 911; 000

−48; 911; 000
−48; 911; 000

−48; 911; 000

−48; 911; 000
−48; 911; 000
−2; 445; 550; 000
durations of the open-channel construction and the pipe network

Income
were determined as 3 and 5 years, respectively. Using these dura-

(TL)

—
—
—
—
—

—
—
7
tions, an interest calculation was performed using an annual interest
rate of 5%. Finally, the investment cost of Design Alternative 1 was
calculated as 341,709,711 TL (Table 2).
After calculating the investment cost of Design Alternative 1,
annual expenses were calculated. The details and results of the an-

6 ¼ 5=ð1 þ f a Þn−1
nual expense calculation of Design Alternative 1 are presented in

expense (TL)
Present value

38,024,614
36,213,918
34,489,446
32,847,091
31,282,944
8,695,777
8,281,689
7,887,323

339,544,870
877,831
836,030
796,219
Table 3. The factors operation and maintenance expense factor and

of total
replacement factor were applied to the construction cost of Design

—
—
Alternative 1 calculated in Table 2 in order to find the annual op-
eration and maintenance and replacement expenses. However,
depreciation expense factor was applied to the investment cost
of Design Alternative 1 calculated in Table 2 in order to find
the annual depreciation expenses. These expense factors have been
determined by using the Eqs. (2) and (3) along with following the 5¼1þ2þ3þ4
38,024,614
38,024,614
38,024,614
38,024,614
38,024,614
11,098,255
11,098,255
11,098,255

11,098,255
11,098,255
11,098,255
745,035,820
issues described in the previous section where the DSİ practice in
expense
Total

(TL)

evaluating the public projects is described.

—
—
Using the annual expense values of Design Alternative 1 in
Table 3, present values of LCC of Design Alternative 1 were cal-
culated as shown in Table 4. The life cycle of the project was
accepted as 50 years after the construction is completed within
5 years. The total investment cost of Design Alternative 1 calcu-
expense (TL)
Depreciation

10,414,941
10,414,941
10,414,941

10,414,941
10,414,941
10,414,941
520,747,050
Table 5. Present Value Calculation of LCC of a Project Realized by Saved Water

lated in Table 2 was utilized to find the annual investment expense

of Design Alternative 1 during the five years of the construction
—
—
—
—
—

—
—
4

period (Table 4). A 5% annual discount rate was used in calcula-

tions regarding the present values of expenses. The present value
of total expenses of Design Alternative 1 was computed as
641,161,333 TL (refer to Table 4). This value is sufficiently greater
Operation and

expense (TL)

than the design company’s estimated construction cost value for

maintenance

34,003,200
680,064
680,064
680,064

680,064
680,064
680,064

Design Alternative 1, i.e., 223,252,901 TL (refer to Table 1).

—
—
—
—
—

—
—
3

Next, the same calculations were performed for the Design

Alternative 2. Tables 2–4 contain the total investment, annual ex-
pense and LCC results of Design Alternative 2, respectively.
Present value of total expenses of Design Alternative 2 was
computed as 820.672.125 TL as shown in Table 4. This value is
expense (TL)
Replacement

3,250
3,250
3,250

3,250
3,250
3,250
162,500

sufficiently greater than the Design Company’s estimated construc-

—
—
—
—
—

—
—

tion cost value for Design Alternative 2, i.e. 285,828,200 TL (refer

2

to Table 1).
f = social discount rate = 0.05.

Considering the present values of the LCC of Design Alterna-

tives 1 and 2, which are 641,161,333 TL and 820.672.125 TL, re-
spectively, one may claim that Design Alternative 1 is still more
38,024,614
38,024,614
38,024,614
38,024,614
38,024,614

190,123,070
Investment

economical than Design Alternative 2. However, the situation is

expense
(TL)

—
—
—
—
—
—
—
—

not as such. This is explained in the next section.

1

Consideration of Saved Water in Calculations

The irrigation method of Design Alternative 1 is surface irrigation.
Total
Year
(n)

—
—
53
54
55

Additionally, water is conveyed through an open channel of

1
2
3
4
5
6
7
8

© ASCE 05014028-6 J. Manage. Eng.

J. Manage. Eng.
 Table 6. Comparison of Design Alternatives
Compared item Design alternative 1 Design alternative 2
Investment cost (TL) 341,709,711 452,470,463
Annual total expense (TL) 22,003,992 27,251,158
Net present value of total 641,161,333 820,672,125
expense (TL)
Net present value of loss 395,058,980 —
due to saved water (TL)
Net present value of total cost 1,036,220,313 820,672,125
during project life cycle (TL)
Water saving High water losses due to seepage and Water loss is minimized because almost the
evaporation in open main channel, and whole project is constituted by pipes
due to human intervention
Operation easiness Automatic gates on the main channel must be protected Operation and maintenance is easier because
Downloaded from ascelibrary.org by Cambridge University on 05/29/15. Copyright ASCE. For personal use only; all rights reserved.

from human intervention and their operation, and almost the whole project is constituted by pipes
maintenance should be performed properly
Required hydraulic structures Galleries, siphons, highway passages, automatic gates, Only one filter station and a pressure lowering
filter stations, pressure lowering valves valve at the beginning of the pipe system

57.562 km length. The irrigation module is 1.10 l=s=ha, and the
annual irrigation water requirement is 317.4 million m3 . These ir-
rigation values and the methods utilized lead to excessive water
consumption. In contrast, the irrigation method of Design
Alternative 2 is pressurized sprinkler and drip irrigation. Water
is conveyed with an open channel of 15.812 km length, and the
rest of the system is constituted by pipes. The irrigation module
is 0.74 l=s=ha and the annual irrigation water requirement is
215 million m3 ; both are less than the values used in case of Design
Alternative 1. These irrigation values and the methods utilized en-
able to save a considerable amount of water, i.e., 102.4 million m3 ,
in Design Alternative 2 with respect to Design Alternative 1. Addi-
tional lands can be irrigated with using the saved water. In other
words, ignoring the saved water in LCC would lead to wrong
results. For this reason, additional calculations were performed
in order to incorporate the economic gains of a fictional project
realized with saved water.
Calculations have shown that 16,896 ha (gross) of additional
land can be irrigated by using the 102.4 million m3 of saved water.
Furthermore, construction cost and net annual income of such a
project were estimated as 118,272,000 TL and 48,911,000 TL, re-
spectively. Using these values, total investment, annual expense,
and LCC calculations of a project realized by saved water were
carried out. Tables 2, 3, and 5 contain the results of the calculations,
respectively. Expenses and incomes are designated by positive and
negative signs, respectively, in Table 5. The last column of Table 5
contains the present values of incomes and expenses together. At
the end of 55 years (construction period and life cycle), present
value of total expense and income is −395,058,980 TL. In other
words, an income of 395,058,980 TL would have been obtained
with a project realized by saved water. This gain must be consid-
ered as a loss for Design Alternative 1 in order to make an accurate
comparison between the alternatives. Table 6 contains the basic re-
sults obtained at the end of the comparison process. Results have
revealed that Design Alternative 2 (pipe network and concrete
covered open main channel of 15.812 km) is superior to Design
Alternative 1 (pipe network and concrete covered open main chan-
nel of 57.562 km) from the perspective of LCC and technical cri-
teria such as operation easiness, water saving, and constructability.
Net present values of total cost during project life cycle were found
as 1,036,220,980 and 820.672.125 for Design Alternatives 1 and 2,
respectively (refer to Table 6). In other words, Design Alternative 2
is cheaper than Design Alternative 1 with respect to LCC. This re-
sult shows how considering only the facility construction costs and
ignoring the LCC may lead to wrong decisions. For instance, the
Design Company has proposed Design Alternative 1 as the best
design in the Design Development Report submitted to DSİ. How-
ever, DSİ has decided to apply Design Alternative 2 after compar-
ing the alternatives based on LCC as described in this paper.
Conclusions
Exploring the optimum design for a construction project is a chal-
lenging process. Various technical, social, and economic criteria
should be verified concurrently. Determination of the best design
among different alternatives at the beginning of the design period
before construction tender gain more importance in huge construc-
tion projects such as highway, dam and irrigation projects. In this
context, this study presents the case of the Seyhan River Yedigöze
İmamoğlu Irrigation Project—S1 Irrigation Area Design Job being
implemented in Turkey. Two different design alternatives, Design
Alternatives 1 and 2, have been examined. The design company
proposed the implementation of Design Alternative 1 depending
on the comparison made with respect to estimated construction
costs. However, DSİ, as the owner, envisaged the necessity of con-
ducting LCC on the design alternatives proposed by the Design
Company. The comparison process that based on LCC over a
project life cycle of 50 years and consideration of the technical cri-
teria specific to irrigation projects has revealed that Design Alter-
native 2 (pipe network and concrete-covered open main channel of
15.812 km) is superior to Design Alternative 1 (pipe network and
concrete-covered open main channel of 57.562 km). This result has
shown that considering only the facility construction costs and
ignoring the LCC may lead to wrong decisions, as in the case
of the design company’s proposal regarding Design Alternative 1.
Cost estimation and present value calculation based on LCC
implemented in DSİ, which is illustrated on an example project
in this study, is a deterministic procedure. However, various kinds
of risks affect construction projects. Depending on this, construc-
tion projects are realized under uncertainty. The uncertainty effects
taken into account in cost estimation and LCC during the feasibility
or design development phases of projects provide more rational re-
sults due to the fact that the cost risk analysis methods are capable
of modelling the real life situations more realistically. In this regard,
an integrated construction cost–LCC risk analysis model can be
developed in order to enable taking risks and uncertainty into
account during the evaluation and comparison of different design

© ASCE 05014028-7 J. Manage. Eng.

J. Manage. Eng.
 alternatives at the feasibility or design development project phases.
This is recommended as a future work.
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