Independent cost inspection provides transparency to the budgeting of the Helsinki Airport expansion project
The expansion and renovation of Helsinki Airport Terminal 2 is carried out in an extensive alliance project. The independent cost inspection performed by Sweco analysed the reliability of the cost estimate with the Monte Carlo method.
The Terminal 2 expansion is a part of Finavia’s development programme of over a billion euros, initiated in 2013. “The objective is to increase capacity and facilities for the growing passenger volumes,” explains Finavia’s Project Manager Tuomo Lindstedt. The development programme aims to achieve sustainable growth and provide a growing number of passengers with a world-class service and customer experience.
The Terminal 2 expansion project of about EUR 400 million will be carried out in the middle of an operating airport. “Helsinki Airport is probably one of the most challenging building plots in Finland,” states Timo Nurro, cost control specialist from Sweco. “The location is logistically challenging and the safety requirements are exceptionally tight.”
The Terminal 2 extension will house new departure and arrival lobbies, security control areas and a parking facility. Furthermore, the existing terminal will be renovated and a new connection to the Kehärata railway will be created. “The growth of long-distance passenger volumes is also reflected in the number of Schengen passengers, which is why this project will expand the current T2 Schengen areas,” Lindstedt says.
Unbiased inspection provides transparency to the costs
Sweco’s cost control specialists carried out an independent cost inspection of the alliance project. “We already had a framework agreement with Sweco and positive previous experiences,” Lindstedt says. “We wanted to make sure that we would again receive accurate cost data concerning our unique construction project.”
As independent inspectors, Sweco’s specialists were not involved in the work of the alliance group. “We only inspected the costs and provided our comments and coaching,” Nurro sums up. The inspection aims to ensure the transparency of the cost estimate. “We make sure that the cost estimate is appropriate, reliable and openly available to all.”
Finavia’s Tuomo Lindstedt also emphasises the importance of credible calculations. “A reliable cost estimate promotes decision-making and creates understanding between operational activities and decision-makers. A neutral cost report also provides everyone with an equal footing and something to lean on.”
Uncertainty analysis carried out with the Monte Carlo method
The uncertainties and risks of the project’s cost estimate were analysed with the Monte Carlo method that is the most common simulation method used in the construction industry.
“In alliance projects, cost risks are shared, which is why it is important to reach an understanding on the size of those risks,” states method specialist Charlott Hurmerinta from Sweco. This method means that the cost estimate is analysed together with the key people of the alliance group. “When everyone understands the risks included in the project, the risks can be managed better.”
Lindstedt is happy with the risk assessment of the cost estimate. “We did not have to go with our gut feeling, but could instead agree on the variation range and risk class of different calculation rows together.”
This versatile method is not only used in alliance projects. “Monte Carlo can be useful in the comparison of industrial investment alternatives, for example, where the uncertainty of the final costs needs to be established,” Hurmerinta says. She has developed the method in Finland for over five years now. “Public operators, in particular, are increasingly willing to improve the reliability of cost estimates with Monte Carlo.”
Picture: Finavia Oyj