Scientific Bulletin of Mukachevo State University. Series “Economics”

Vol. 13, No. 2, 2026 25.05.2026 open access Open access

Models for technical and economic justification of the feasibility of reconstruction in the construction industry

Oleksandr Pidodnia

DOI https://doi.org/0.52566/ msu-econ2.2026.68 Pages 68 –83 Views 2 Views

Abstract

The study aimed to develop a system of models for the technical and economic justification of the feasibility of reconstructing enterprises in the construction industry, considering technical, investment, resource and energy, life- cycle and risk parameters. As a result, normative-methodological, parametric, structural, scenario-based and calculation- integral models for evaluating refurbishment decisions were developed. It was established that the feasibility of renovation cannot be determined solely by the estimated cost or payback period, as it depends on the interplay of technical suitability, economic impact, investment performance, resource and energy sustainability, and risk exposure. The scenario-based model made it possible to compare alternatives not only in terms of initial costs, but also in terms of long-term effect, energy efficiency, life-cycle cost and risk level. A comparison of the scenarios showed that maintaining the current status quo has the lowest capital expenditure index – 0.15 – but is characterised by the lowest operational benefit – 0.05 – low energy efficiency – 0.20 – and the highest risk level – 0.78. The scenario involving comprehensive refurbishment with a digital and energy component demonstrated the highest methodological feasibility: the technical renewal index was 0.92, the operational benefit index – 0.86, the energy efficiency index – 0.89, the life-cycle cost index was 0.76, the net present value index was 0.39, and the risk load fell to 0.34. Integral ranking confirmed the superiority of this scenario, which received a reconstruction feasibility index of 0.54. This demonstrated that the most sound scenario is one in which technical modernisation is combined with digital control, energy management, reduced life-cycle costs and a managed level of risk uncertainty. The practical significance is determined by the possibility of using the proposed system of models for the preliminary selection of a feasible reconstruction scenario for enterprises in the construction industry of Ukraine 

Keywords

life-cycle cost; return on investment; risk exposure; integrated ranking; payback period

References

  1. Adekunle, S.A., Aigbavboa, C.O., Ejohwomu, O., Adekunle, E.A., & Thwala, W.D. (2021). Digital transformation in the construction industry: A bibliometric review. Journal of Engineering Design and Technology, 22(1), 130-158. doi: 10.1108/jedt-08-2021-0442.
  2. Almashhour, R., Al-Mhdawi, M., Daghfous, A., Qazi, A., & Ojiako, U. (2025). Traditional to sustainable risk management in the construction industry: A systematic literature review. International Journal of Managing Projects in Business, 18(3), 528-565. doi: 10.1108/ijmpb-01-2025-0021.
  3. Alsalem, Y., Ayadi, O., & Asfar, J.A. (2023). Techno-economic assessment of retrofitting heating, ventilation, and air conditioning system – case study. Journal of Ecological Engineering, 24(3), 153-168. doi: 10.12911/22998993/158383.
  4. Amorocho, J.A.P., & Hartmann, T. (2022). A multi-criteria decision-making framework for residential building renovation using pairwise comparison and TOPSIS methods. Journal of Building Engineering, 53, article number 104596. doi: 10.1016/j.jobe.2022.104596.
  5. Andrusiv, U., Zelinska, H., & Lagodiienko, V. (2024). Ecological modernization at construction industry enterprises as an innovative production and management technology. Ukrainian Journal of Applied Economics and Technology, 9(2), 22-27. doi: 10.36887/2415-8453-2024-2-3.
  6. Caruso, M., Buttazzoni, M., Passoni, C., Labò, S., Marini, A., & Pinho, R. (2024). An updated multi-criteria decision-making method for the sustainable renovation of buildings including environmental, economic and social life-cycle metrics. Journal of Building Engineering, 98, article number 110967. doi: 10.1016/j.jobe.2024.110967.
  7. Charef, R., & Emmitt, S. (2020). Uses of building information modelling for overcoming barriers to a circular economy. Journal of Cleaner Production, 285, article number 124854. doi: 10.1016/j.jclepro.2020.124854.
  8. Cova, S., Andrade, C., Soares, O., & Lopes, J. (2021). Evaluation of cost-optimal retrofit investment in buildings: The case of Bragança Fire Station, Portugal. International Journal of Strategic Property Management, 25(5), 369-381. doi: 10.3846/ijspm.2021.15082.
  9. Dams, B., Maskell, D., Shea, A., Allen, S., Cascione, V., & Walker, P. (2023). Upscaling bio-based construction: Challenges and opportunities. Building Research & Information, 51(7), 764-782. doi: 10.1080/09613218.2023.2204414.
  10. DBN A.2.2-3:2014. (2014). Composition and content of design documentation for construction. Retrieved from https://e-construction.gov.ua/laws_detail/3192355188719486804.
  11. DBN V.2.2-9:2018. (2018). Public buildings and structures. Basic provisions. Retrieved from https://e-construction.gov.ua/laws_detail/3199648113669179181?doc_type=2.
  12. Doukari, O., Scoditti, E., Kassem, M., & Greenwood, D. (2023). A BIM-based techno-economic framework and tool for evaluating and comparing building renovation strategies. Journal of Information Technology in Construction, 28, 246-265. doi: 10.36680/j.itcon.2023.012.
  13. DSTU EN 16247-3:2015. (2015). Energy audits. Part 3. Processes. Retrieved from https://online.budstandart.com/ua/catalog/doc-page.html?id_doc=68400.
  14. Fahlstedt, O., Rasmussen, F.N., Temeljotov-Salaj, A., Huang, L., & Bohne, R.A. (2024). Building renovations and life cycle assessment – a scoping literature review. Renewable and Sustainable Energy Reviews, 203, article number 114774. doi: 10.1016/j.rser.2024.114774.
  15. Gasparri, E., Arasteh, S., Kuru, A., Stracchi, P., & Brambilla, A. (2023). Circular economy in construction: A systematic review of knowledge gaps towards a novel research framework. Frontiers in Built Environment, 9, article number 1239757. doi: 10.3389/fbuil.2023.1239757.
  16. Gil, S.D., Pacheco, G.R., & de los Ríos, S.A. (2025). Life-cycle cost assessment in real estate decision-making processes: Scope, limits and shortages of current practices – an integrative review. Sustainability, 17(12), article number 5577. doi: 10.3390/su17125577.
  17. Gubert, M., Avesani, S., Ngoyaro, J.A., Gutierrez, M.J., Pinotti, R., & Brandolini, D. (2023). Comparative cost analysis of traditional and industrialised deep retrofit scenarios for a residential building. Journal of Facade Design and Engineering, 11(2), 145-168. doi: 10.47982/jfde.2023.2.a3.
  18. Guerra, B.C., & Leite, F. (2021). Circular economy in the construction industry: An overview of United States stakeholders’ awareness, major challenges, and enablers. Resources Conservation and Recycling, 170, article number 105617. doi: 10.1016/j.resconrec.2021.105617.
  19. Gustavsson, L., & Piccardo, C. (2022). Cost optimized building energy retrofit measures and primary energy savings under different retrofitting materials, economic scenarios, and energy supply. Energies, 15(3), article number 1009. doi: 10.3390/en15031009.
  20. ISO 14044:2006. (2006). Environmental management – life cycle assessment – requirements and guidelines. Retrieved from https://www.iso.org/ru/standard/38498.html.
  21. ISO 15686-5:2017. (2017). Buildings and constructed assets – service life planning. Part 5: Life-cycle costing. Retrieved from https://www.iso.org/ru/standard/61148.html.
  22. ISO 31000:2018. (2018). Risk management – guidelines. Retrieved from https://www.iso.org/standard/65694.html.
  23. ISO 50001:2018. (2018). Energy management systems – requirements with guidance for use. Retrieved from https://www.iso.org/ru/standard/69426.html.
  24. Jiang, S., Wang, M., & Ma, L. (2023). Gaps and requirements for applying automatic architectural design to building renovation. Automation in Construction, 147, article number 104742. doi: 10.1016/j.autcon.2023.104742.
  25. Lu, K., Deng, X., Jiang, X., Cheng, B., & Tam, V.W.Y. (2023). A review on life cycle cost analysis of buildings based on building information modeling. Journal of Civil Engineering and Management, 29(3), 268-288. doi: 10.3846/jcem.2023.18473.
  26. Macek, D., & Vitásek, S. (2024). Risk analysis in building renovations: Strategies for investors. Buildings, 14(7), article number 2219. doi: 10.3390/buildings14072219.
  27. Maia, I., Kranzl, L., & Müller, A. (2021). New step-by-step retrofitting model for delivering optimum timing. Applied Energy, 290, article number 116714. doi: 10.1016/j.apenergy.2021.116714.
  28. Malykhina, O., Ananko, E., Movseyan, A., Sargsyan, V., & Vovkovich, Y. (2023). Scientific and applied components of assessing the impact of measures on the implementation of the selected innovative strategy on the economic productivity of the operating system of a construction enterprise. Ways to Improve Construction Efficiency, 2(52), 286-306. doi: 10.32347/2707-501x.2023.52(2).286-306.
  29. Maselli, G., Ascione, F., & Nesticò, A. (2024). Life cycle costing for structural analysis and design. Procedia Structural Integrity, 64, 1743-1751. doi: 10.1016/j.prostr.2024.09.179.
  30. Order of the Ministry of Community and Territorial Development of Ukraine No. 281 “On Approval of Estimated Norms of Ukraine in Construction”. (2021, November). Retrieved from https://zakon.rada.gov.ua/rada/show/v0281914-21#Text.
  31. Palma, P., Gouveia, J.P., & Barbosa, R. (2021). How much will it cost? An energy renovation analysis for the Portuguese dwelling stock. Sustainable Cities and Society, 78, article number 103607. doi: 10.1016/j.scs.2021.103607.
  32. Papangelopoulou, M.D., Alexakis, K., & Askounis, D. (2025). Assessment methods for building energy retrofits with emphasis on financial evaluation: A systematic literature review. Buildings, 15(14), article number 2562. doi: 10.3390/buildings15142562.
  33. Sharbaf, S.A., & Schneider-Marin, P. (2024). Cost-benefit analysis of sustainable upgrades in existing buildings: A critical review. Energy and Buildings, 328, article number 115142. doi: 10.1016/j.enbuild.2024.115142.
  34. Shi, Y., Wang, R., & Chen, P. (2023). Multi-criteria decision-making approach for energy-efficient renovation strategies in hospital wards: Balancing energy, economic, and thermal comfort. Energy and Buildings, 298, article number 113575. doi: 10.1016/j.enbuild.2023.113575.
  35. Spūdys, P., Jarmalavičiūtė, D., & Klumbytė, E. (2025). Embodied carbon meets payback: Stakeholder-driven MCDM for selecting renovation scenarios. Transformations and Sustainability, 1(3), 212-224. doi: 10.63775/3ph1qs36.
  36. State Agency on Energy Efficiency and Energy Saving of Ukraine. (2025). New energy efficiency requirements for buildings have been introduced in Ukraine – the NZEB standard is now in effect. Retrieved from https://saee.gov.ua/en/news/new-energy-efficiency-requirements-for-buildings-have-been-introduced-in-ukraine-the-nzeb-standard-is-now-in-effect.
  37. Theilig, K., Vollmer, M., Lang, W., & Albus, J. (2025). Multi-criteria decision-making for energy building renovation: Comparing exterior wall structures with the AHP, ANP, utility analysis, and TOPSIS. Building and Environment, 280, article number 113075. doi: 10.1016/j.buildenv.2025.113075.
  38. Wang, F., Antwi-Afari, M.F., Anwer, S., Umer, W., & Mehmood, I. (2025). Risk management in sustainable building projects: A systematic literature review and scientometric analysis. Cleaner Production Letters, 9, article number 100111. doi: 10.1016/j.clpl.2025.100111.
  39. World Bank. (2026). Ukraine fifth rapid damage and needs assessment: February 2022 – December 2025. Retrieved from http://documents.worldbank.org/curated/en/099022026094036395.
  40. Zhang, H., Hewage, K., Prabatha, T., & Sadiq, R. (2021). Life cycle thinking-based energy retrofits evaluation framework for Canadian residences: A Pareto optimization approach. Building and Environment, 204, article number 108115. doi: 10.1016/j.buildenv.2021.108115.

Suggested citation

Pidodnia, O. (2026). Models for technical and economic justification of the feasibility of reconstruction in the construction industry. Scientific Bulletin of Mukachevo State University. Series “Economics”, 13(2), 68-83. https://doi.org/0.52566/ msu-econ2.2026.68