Hon Ken Travers asks about the WA Treasury's use of the Australian Institute of Quantity Surveyors (AIQS) Construction Cost Index Forecast (CCIF) for escalating construction project costs. The Treasurer confirms its use where appropriate, detailing the forecast escalation rate and methodology for years beyond the forecast period.

AnsweredQoN 784Legislative Council
Asked
14 August 2014
Portfolio
minister representing the Treasurer

QuestionView source ↗

AUSTRALIAN
INSTITUTE OF QUANTITY SURVEYORS WA'S CONSTRUCTION COST INDEX FORECAST
784. Hon KEN TRAVERS to the
minister representing the Treasurer:
(1) Does
Treasury still use the Australian Institute of Quantity Surveyors WA's
construction cost index forecast for escalating the base cost of major
construction projects?
(2) If yes to (1), what is the current escalation rate in
each year of the forecast?
(3) What
escalation figure does Treasury use to calculate the escalation cost on
projects for years that are beyond the years forecast by the CCIF, and how is
this determined?
(4) If no to (1), why not and what is currently used?

AnswerView source ↗

I thank the member for some notice of this question.
(1) Where appropriate.
(2) It is 3.5 per cent for each year to December 2017; that
is the extent of current CCIF forecasts.
(3) Treasury
uses the most appropriate available forecast from the specialised cost planner
for each project. Where the AIQS forecasts are adopted and the project duration
extends beyond the forecast period, typically, the escalation calculation is
extended by extrapolation of the last AIQS annual forecast figure.
(4) Not applicable.

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