Budget is the most important part of any type of work for smooth and timely completion. Similarly, pre budgeting is important before starting any kind of building project. In other words, we can say it is important to estimate your building project. This article is suitable for those people who are going to start up a building project in near future and those who want to estimate the construction budget accurately before starting the project.
In this article, we are considering that you have bought a suitable piece of land for your building project. If you have not yet done that part and want to buy a suitable piece of land for a residential project, please read my article "How to choose a residential plot in nepal"
After this article, you will know:
- Project design cost
- Government tax and municipal processing costs
- Project administration cost
- Construction cost
- Contingency
- Our suggestion
Terms to understand
Architectural drawing: An architectural drawing is simply the technical drawing of a house, a building, or any kind of structure. They consist of floor plans, elevations, sections, etc.
Structural drawing: A structural drawing is a type of engineering drawing which is a plan or set of plans and details for how a building or other structure will be built. In the case of RCC buildings, they consist of drawings and details of how reinforcement bars will be built at the site.
Electrical drawing: An electrical drawing is a type of technical drawing that shows information about power, lighting, and communication for an engineering or architectural project.
Bill of quantities: A bill of quantities is a document used in tendering in the construction industry in which materials, parts, and labor (and their costs) are itemized.
Built-up area: Built-up area is the gross area of the property. In simple language, we can say that the built-up area is the sum of the area of all the floors shown in the architectural drawing.
Project cost: Project cost is the total funds needed to complete the project or work that consist of direct cost and indirect cost.
Construction management: Construction management is a professional service that uses specialized techniques to oversee the planning, design, and construction of a project, from its beginning to its end.
Construction supervision: Construction supervision is a continuous oversight, inspection, and coordination of the work in a timely, professional, competent manner to ensure compliance with the approved construction documents, contract documents, applicable regulations, project schedule, and all other applicable requirements.
Bidding: Bidding is construction is the process of submitting a proposal (tender) to undertake or manage the undertaking of a construction project.
Project design cost
There are various methods for the calculation of project design costs. During the design phase Architect may provide you with architectural drawings, structural drawings, electrical drawings, building estimates, Bill of quantity, interior design and drawing, etc on the basis of the nature of the project and the fee he/she charges. In simple language, we can say that the cost includes all designs and drawings. The design cost may be calculated in different forms in the market on the basis of the service required by the client. Following are some of the frequently used methods.
Rs per sq. ft: In this method, the total built-up area of the building is calculated on the basis of the architectural drawings prepared. Thus calculated built-up area is then multiplied by the rate per square foot.
Lump-sum method: In this method cost of design is calculated on the lumpsum basis as per the size and scale of the project.
Percent of total project cost: In this type of method total project cost is calculated on the basis of the market rate of the time. The percentage of project cost thus calculated is considered a fee for project design. The percentage may vary on the basis of type of services, type of project, and location of projects.
Government tax and municipal processing costs
Municipal permission is required before the construction of buildings. During this, all the designs and drawings including receipts of related property tax should be produced. Building permit fee should also be paid on the basis of "Rate per sq. ft method". Rate may differ from one municipality to another municipality and can be downloaded from website of respective municipality.
Project administration cost
After the completion of the above two steps construction of a building starts. But for the smooth and timely completion of the building and on a budget, good project administration is required. The project management is done either by the owner itself or by consulting firms.
Previously, construction administration was done by the owner itself. This produced a lot of technical errors with an unnecessary increase in construction cost. As a result, owners got a weak building in a huge construction expense. To get out of this situation owners are now hiring consulting firms to make stronger buildings with low construction budgets.
Basically, there are two ways for construction administration. The first one is a construction management and the second one is construction supervision. The fee for project administration differs on the basis of the method chosen. Project administration types should be carefully chosen. It should be on the basis of the scale of the project and the types of services required from consultants. Generally, construction management costs more than construction supervision. It is suitable for large and mega projects while construction supervision is suitable for smaller projects.
Construction cost
Another important part of your project is constructed. It is the most important portion of your project. Construction costs can make your dream project either a pleasant reality or a disastrous memory. It is necessary to take the help of Architects and engineers in this part of the project. It will help you to make your dream project into a pleasant dream.
There are two ways to estimate your construction cost. In the first one construction cost is estimated by consultant while in the second one rule of thumb is used.
Construction estimation by the consultant: In this method, the estimation of the project is done by a consultant. On the basis of designs and details of the project, the consultant finds out the construction cost. During this process, the market rate and bidding by the owner are considered.
Rule of thumb: In this method, the current market rate of construction (material + labor) is considered by the client. The rate of construction is used to find out cost using "Rate per sq. ft" method. While using this method 25% of the total cost is considered as labor cost and the remaining 75% of the total cost is considered as material cost.
Contingency
It is very important to consider the contingency cost while estimating your building project. The contingency cost will include all the unforeseen cost that is brought by unforeseen conditions. For example, the cost of material may raise due to some reason or there might be a need for a redo of some work. Such cost cannot be predicted perfectly even by experts. Considering a contingency in your project will help you to be ready in such situations. Generally, contingency is considered as 10% to 15% of the total project cost.
Our suggestion
Following are my suggestion as an architect. You need to follow if you want your budget estimation to be accurate. I have listed my suggestion on the basis of the above article.
- Building project cost is the sum of project design cost, project administration cost, government tax, and contingency cost
- "Rupees per sq. ft" and "lump-sum method" are suitable for small projects but for big projects and mega projects "percentage of total project cost" method is suitable while estimating project design cost.
- Construction administration type should be chosen on the basis of the scale of the project and the types of service required from the consultant.
- The construction supervision method for project administration is suggested for small-scale projects.
- Construction costs must be estimated by concerned experts if you want your project budget to be estimated perfectly.
- There should be a place for contingency costs if you don't want to be in a panic situation.
I hope after reading the article you have an idea of estiamtion of building project.Our suggestion is to hire an expert for this project
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