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Infrastructure projects can be lucrative if they’re completed without a hitch and the budgeting is on point. However, things don’t always go as planned. Plus, an infrastructural project done in one city will not always cost the same in another, since different cities have different land and wage rates.

According to a 2022 land ranking, San Francisco had the most expensive land in the United States. The 10th most expensive county to buy land was Arlington County. In this regard, if you have a construction project in San Francisco that requires you to acquire land from the locals, you’ll pay more money than if you were to buy the same land in Arlington.

Factors that affect the cost of infrastructure projects

Apart from the cost of land, infrastructural projects are also affected by other factors. Here are a few of them.

The cost of materials

If you’re importing materials, you’ll have to pay shipping and tax charges. This ends up increasing construction costs.

Site conditions 

Before you begin any construction project, you must have a site investigation done to have an accurate cost estimate. Some of the site conditions that can negatively affect the cost of your infrastructure project are: poor soil conditions, old utility lines, and the depth of the rock bed.


Inflation can be caused by rising wages, currency devaluation, and government policy. The inflation rate for the year 2021 was 7%. Therefore, to be safe, estimators need to factor in projected inflation rates during the year the project will be under construction. Failure to factor in inflation creates the risk of deficit, stalling the project.

Engineering review

Where the infrastructural project is complex, contractors may decide to have a third-party engineer review the technical specifications of the structure. This is important because it enables independent engineers to critique and review the design, which can help uncover design flaws. These design flaws can save your project millions of dollars in damages when identified early.

Other factors that affect the cost of infrastructural projects are the cost of regulatory requirements and the cost of local labor.

8 ways to cut costs on infrastructure projects 

Several strategies can be used to cut the cost of infrastructural projects. The first is using modern technology, which will make it easy for contractors to simulate a project and identify risks. ALICE is an example of a technology that can be used to identify risks and lower the cost of infrastructure projects.

As the first construction optioneering platform on the market, it’s designed to reduce risk and labor costs by more than 14%. This software offers scheduling and planning solutions for industrial, residential, and commercial building projects. Additionally, it reduces costs by creating several construction simulations for the best return on investment. 

Other than that, there are several other ways to reduce the cost of infrastructural projects.

1. Peer review your costs

Once a cost estimator creates an estimate for your project, it’s best to ensure that an independent estimator reviews the costs. An independent estimator may be able to identify expenses that have been left out. The estimator might also have a better way of factoring in externalities such as inflation. 

2. Simulate alternatives

Another way to reduce the cost of an infrastructural project is to ensure that you have simulated other alternatives. Simulating options is easy, especially when using a construction optioneering platform. 

Simulated alternatives should include the cost of implementation based on the most affordable options for project managers and contractors to choose from.

3. Identify risks and plan for them

One way to reduce the cost of implementing an infrastructural project is to identify risks when the project is still in the planning phase. Some unforeseen risks that you need to plan for are labor shortages, financing risks, and poor implementation due to lack of communication. When identifying these risks, you should have a contingency plan before they affect the project.

Identified risks should have a cost and time implication. These implications should be factored into your budget.

4. Have a skilled workforce

Project managers should only hire qualified labor. Hiring an unskilled labor force can be costly in terms of money and time. An unskilled labor force is unproductive and can misinterpret design blueprints, resulting in expensive and time-consuming rework.

5. Enhance communication

Communication should be enhanced during the initial stages of construction. All key decision-making parties (such as architects, engineers, and contractors) should be involved during the pre-construction stage. Engineers and architects will be able to solve potential design problems before money has been spent.

Enhanced communication will also help project managers source materials from suppliers based on a long-term strategy to reduce costs.

6. Have an inventory of tools

Large infrastructure projects use tools worth thousands of dollars. You risk increasing your replacement costs if you don’t have an inventory system to track down these tools. In addition to having an inventory system, you should train your employees to use the tools properly, with a proper record-keeping system to hold everyone accountable. 

7. Reduce waste

The best way to reduce costs is to reduce construction waste. Only buy materials that are required and have proper recycling policies. Instead of buying paint each time, you can mix different paints to get a unique color. You can also recycle brick and concrete to make driveway bedding.

8. Prioritize employees

Lastly, you can reduce costs by ensuring that your employees are well-taken care of. Ensure you pay them on time, and don’t hesitate to reward more productive employees. Also, try to avoid overtime work, as this costs more and workers may be unproductive during the day, even though they are getting paid.