Cost Comparison Study – A Case for Steel

by Michael Drennan and Dr Hennie De Clercq

Steel structures can be more cost effective than concrete structures for office buildings in South Africa.This may be such an unbelievable statement to most people involved in buildings in this country, even people within the steel industry, that it bears repeating, this time more carefully. In a thorough academic study we found that, once all aspects were taken into account, a four-story office building in South Africa can be built more cost-effectively with a steel structure rather than a concrete structure (The full study can be found on www.sunscholar.co.za and searching the author’s names).

The motivation behind this study was because we found it interesting that so few office buildings in South Africa are built using steel structures whereas in other parts of the world, for example, the USA and UK, the majority of such buildings are built with steel. Furthermore, if one looks globally, it is striking that in some countries concrete reigns supreme, while in others it’s steel. This despite similar economies and availability of materials. One cannot help but wonder: what is behind these customs and preferences?

At issue is whether people make purely rational decisions, based on financial considerations when deciding which material to use for a project. For many projects in South Africa, proper comparisons of alternative options may well have been done, but our efforts to find previous studies comparing steel and concrete structures in this country yielded no results. We therefore decided to look into the question by comparing the costs of a building constructed using various structural alternatives.

As we wanted to do a generic study rather than one for a specific building, the challenge we faced was to find a building representative of an important class of structure. We decided on a low-rise office building of up to four storeys in height, such as one would frequently find in an office park or suburban setting. Since these buildings often have to accommodate parking on the ground floor, they tend to have a fairly typical column layout. The finishes are often neat but not stylish, while air conditioning consists of window units rather than centralised systems. The building configurations were developed through discussions with various professionals in the building industry. The floor layouts and cross sections of the buildings used for the cost comparison are shown in Figure 1 and 2, the only difference between the two structures being the presence or absence of internal columns.

Figure 1 – Short span building configuration

Figure 2 – Long span building configuration

Four different structural alternatives were considered for the purposes of the comparison (Note the abbreviated names to be used from here on out):

  1. Steel structure with composite concrete floors on metal deck sheeting (Steel metal deck).
  2. Steel structure supporting precast hollow-core concrete floors acting compositely with the steel beams (Steel hollow-core).
  3. Reinforced concrete flat slab (RC flat slab)
  4. Post-tensioned concrete flat slab (PT flat slab)

For the steel structures, the option of column-free floors (i.e. ‘long span’ layout shown in Figure 2) was also investigated. The design of each structure represented a careful, professional design such as would generally be considered a sound design, but without any innovative cost-saving measures. The steel structures also had to meet the requirements for floor vibrations and fire resistance, which were considered to be met automatically by the concrete structures. All structures were considered to have the same lightweight steel roof.

Outstanding support was obtained from various highly experienced and regarded people within the building industry including a consulting engineer, a quantity surveyor, a building contractor, a project manager, a steelwork contractor and a fireproofing consultant. As the following list will make clear, literally every aspect of each building was considered in the cost comparison: acquisition of the land, local authority and promotion costs, site preparation and earthworks, lead-in times, foundations, structural frames, all non-structural aspects of the building including walls, finishes, HVAC and plumbing, professional fees, a roof, a lift, electrical system, external parking, P&G costs, interest and income.

Detailed construction programmes were compiled, which showed that the steel structures could be completed one month faster than the concrete structures (7 months vs 8 months). The cost implications associated with these differences in construction time were considered when developing the cost comparison.

The important figures obtained during the study are shown in Table 1. Comparing the frame cost clearly shows where the perception of steel being expensive comes from: the steel metal deck frame costs, for example, some 44 % more than the PT flat slab frame. The steel structures have slightly cheaper foundations because of their lower self-weight. The non-structural components of the building, which constitute the construction cost of the entire building minus the structural frame, foundations and P&G costs, were assumed to be the same for all the options considered. Following the advice of the quantity surveyor, the P&G costs were taken as 10 % of the construction cost for the steel options and 12,5 % for concrete options, the difference being attributed to the reduced construction time of the former and a less site intensive construction process. When the land cost and professional fees are added, the concrete options are still attractive, but now the differences are quite small.

Table 1 – Cost comparison for various structural alternatives

It was surprising to learn that there doesn’t seem to be a standard method for considering different construction times when comparing the cost of different structures. It was therefore decided to make the completion day of the slowest method (i.e. 8 months after the start date) the point of reference and to compare the total expenditure for each option at that time. This means that the steel options benefit from one month of rental income, although the interest payable to fund them is higher, because of the earlier expenditure and higher capital cost associated with them. Adding everything up yields the total expenditure for each project, and now, somewhat surprisingly, the steel hollow-core structure is the winner.

The net expenditure vs time is graphically illustrated in Figure 3.

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