Life Cycle Costing

Life Cycle Costing -> Lifecycle Cost Analysis

Lifecycle Cost Analysis is a method of assessing which asset option, will be the most economical over an extended period of time.

International Infrastructure Management Manual

The International Infrastructure Management Manual defines Lifecycle Cost Analysis as any technique which allows assessment of a given solution, or choice from among alternative solutions, on the basis of all relevant economic consequences over the service life of the asset.


  • To calculate the Lifecycle Cost of an asset all cashflows, both positive (inflows) and negative (outflows) need to be identified for each year of the useful life of the asset.
  • Cashflows should be stated in actual cash terms, that is all costs and incomes are at the levels expected in that year. No allowance should be made for inflation.


There are probably 4 main outflows to consider:

The above costs will vary greatly depending on the type of asset being considered.

The table below shows typical annual maintenance & operational costs expressed as a percentage of the capital cost of a range of asset types.

Type of Asset Average Annual Maintenance Cost Average Annual Operational Cost
Bridges 0.1% - 0.5% *
Major Culverts
Pedestrian Bridges
Road Bridges
Buildings 0.7% - 4% * 0.3%
Administration Buildings
Aquatic Centres 1.1% 13.9%
Museums 0.6% 9.7%
Sports Pavilions
Theatres 0.2% 10.5%
Toilet Blocks
Car Parks 0.2%-2.5% 5%
Drainage 0.10% - 0.4% * 1%
Retention Basins
Stormwater Drains 0.8%
WSUD Assets 0.5%-20%
Footpaths 0.1% - 1% *
Asphalt Footpaths
Concrete Footpaths
Parks and Open Space 5%-10% * 4%
Barbecues 22.5% 22.5%
Roads 0.5%-0.6% * 0.7%
Rural Sealed Roads
Urban Sealed Roads
Unsealed Roads


  1. For the moment the table is based on very limited data and should be referred to with caution, but it could eventually become a good starting point for anyone looking at lifecycle costs for the first time, provided a few councils start contributing data to it.
  2. Annual building maintenance & operational costs may be a function of a building's NABERS rating.

Related Pages


The following people have indicated (via the Local Government Collaboration Topics Survey) that they have an interest and/or expertise in the topic of 'Lifecycle Cost Analysis' and are willing to collaborate with their peers at other councils to identify challenges and resources relating to the topic and to look for ways to work together to overcome any challenges that are identified.


The following site members have contributed to this page:

External Links & References

  1. Google Search (Lifecycle Cost Analysis)
  2. Google Search (Life Cycle Costing)
  3. Australian National Audit Office
  4. Alaska Department of Education & Early Development Life Cycle Costing Handbook
  5. Whole Building Design Guide
  6. NSW Treasury
  7. Sustainable Long Term Capital Planning and Lifecycle Costs
  8. Life Cycle Cost Calculator
  9. University of Washington Road Lifecycle Cost Analysis Notes
  10. Asset Life Cycle Cost Modelling
  11. Reliability
  13. Whitestone Research
  14. IPWEA Life Cycle Cost Analysis Discussion
  15. Fundamentals of Asset Management (EPA)
  16. Estimating future maintenance and operational costs associated with new assets (IPWEA)
  17. Life Cycle Costing Template
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