Construction Cash Flow and Risk S-Curves Development Approach, and Area Method Analysis at the Preconstruction Stage From Client Perspective in the United Arab Emirates

Purpose – Understanding construction cash flow estimation is crucial for project success. Experts are concerned about project’s cash-flow and risk estimation and control. Latest construction studies concentrated on modelling and estimating construction costs and risks. Methodology – This article aims to approach pure quantitative mathematical modelling to develop the S-Curves (i.e., cash-flow and risks) and to develop the cash-flow simple area method. This research referred to the mathematical definitions of construction cash-flow and risks, integrating a clear systematic approach to develop the s-curves and to build the simple-area-method. Findings – This research paper reviled that construction cash-flow and risk s-curves can be developed at the preconstruction stage, mathematically, without the need for having cost historical data of similar completed projects. In addition, this article has provided a simple area method approach mathematically, for construction cash flow analysis, using the basic developed cash-flow s-curve and the actual cost data of, at least, 2 completed similar projects. The simple area method is proved effective to provide a better understanding of cash-flow behaviour of the analysed projects’ type. However, the s-curves development can be generalised to cover construction cost and risk simple s-curves, while the area method is restricted with the projects’ characteristics (i.e., type, size, location, etc.) used in developing the simple area. Unique contribution to theory, practice and policy – The significance of this study is to provide an S-Curve development approach for both cashflow and risk percentages from client perspective at the preconstruction stage, using solely the tender contract value. And to provide a simpler stochastic area method approach for project management professionals/researchers, who do not have large amount of historical similar projects’ cost data. Originality, theoretical-implications, practical-implications, and limitations are presented in the conclusion for future research.