Economic Analysis of Construction Equipment in Public Projects in Jordan

Abstract

Escalating project costs in Jordan is a great challenge for public project managers and decision-makers. This research aims to calculate the financial feasibility of owning versus renting heavy equipment. Real data were collected from 12 public construction governorates in Jordan. The data covered rental and ownership costs of construction equipment over two years 2021& 2022. Present worth analysis over a 10-year service life showed that The ownership option is found economically feasible over the year-long rental option at a monetary saving of 30,000 JD per equipment per year. The cumulative curve for the year-long rental breaks even with the equipment ownership curve in the eighth year. After eight years of life, the ownership option becomes economically favored over the year-long rental option. On the other hand, the on-call rental option is found economically feasible compared to the ownership option with over 120,000 JD savings per equipment per year. Finally, research conclusions provide insight for government decision-makers to save substantial costs from the public project budget.