Rehabilitation costs represent the investment incurred on an ongoing and/or periodic basis during the course of the concession period to maintain assets according to agreed upon standards. Examples of rehabilitation activities include roof or window replacement for buildings, and bridge deck and road resurfacing for highways. Rehabilitation costs may also be referred to as life cycle costs or recapitalization costs, depending on the sector.
The analysis of rehabilitation costs during the business case stage is preliminary in nature; however, there is generally sufficient information available to establish an estimate of these costs for a project. The amount and frequency of rehabilitation investment for a particular project needs to be determined since optimum life cycles differ based on asset classes. The costs associated with these estimates are typically provided by client engineers and/or external QS experts, and can be based on available data from past projects. These estimates form part of the initial construction cost estimate and assumed asset condition requirements that form part of the project agreement.