yes...this will consumes more time, technologies and risk.These criteria s are obviously directly proportional to cost.
By
Deepak k, Project coordinator, Al-Adrak
| 12 26 2010 11:20:30 +0000
Time is directly prpportional to the Cost. May be the project small or big, percentage of escalation will be the same for respective projects.
By
N.E.Shivha sankhara, Project Manager, Indian Green Grid Group Ltd
| 03 27 2010 07:25:12 +0000
Since Time is money and a project cost will go up every year at an average 10% on basic prices & taxes the escalation is a happening in 100% since most of projects will fall in two / more financial years.
By
anup kumar pathak, Manager QS & Planning, Amara Raja Infra Private limited
| 03 17 2010 17:03:35 +0000
Esclation will depend upon many factors, mainly market conditions during execution and delay in executions of projects. It is agreed that period of construction for bigger projects will be longer one. But it may not be always. Like Thermal Hydro Projects will have gestation period of 5-10 years. Project planners will definetly account for normal rate of inflation during execution period and it is not correct to say that a project having longer completion time will have more escalation. It is also not correct to say the projects having longer completion period will have more delays as compared to projects having shorter completion periods. Yes it is true more delay will mean more escalation as some fixed amount of expeditutre on overheads will continue to be incurred till completion of project. 2nd factor will be on rate of rise prices of materials. Sometimes prices may increase over a period of time at faster rate and sometimes prices may be steady. So escalation will depend upon many factors.
By
Er. Harnam Singh, Project Manager, CPWD
| 03 17 2010 12:59:29 +0000
Large Projects are essentially so named because of the sheer costs involved in completion of the project. Escalation will always occur when the project defers in timeline deliverables. Delays generally occur in such large projects due to ongoing market conditions. A sudden transport strike could set you back by days and hence by crores. Price escalations by companies for raw materilas could also mean a new policy decision for the project and hence a delay in the completion and hence incurring more costs. Large projects are prone and extremely sensitive to market conditions. Its natural for such projects to therefore attract bigger cost escalations!
By
Makrand Bhave, AGM - Corporate Business, E18, part of Network 18 Group
| 03 17 2010 07:50:57 +0000
The bigger projects can be handled by bigger companies or a group of smaller companies and they are always of larger tenures. So there can be a clause stating the escalation of rates in those tender documents. As the tenures are huge, the uncertainties of the various conditions also vary hugely. Considering this fact, one can easily understand that the Bigger projects attracts huge cost escalations. Usually small projects are handled by small companies and the cost escalation is also will be low. However if the small project is being handled by a big company, the cost escalation will be of a meager important as they can complete the project with in the given time.
By
Bangaru Murali Krishna, Manager - PMC, Ivrcl Infrastructures
| 03 15 2010 17:17:12 +0000
Yes, the more you pull a project the more costly it becomes. When a project is delayed it adds labour cost & additional new raw materials & time. Thus, bigger projects do have higher cost escalations.
By
Pragya Kothari, Construction-Heavy, DLF
| 03 15 2010 12:02:31 +0000
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We have always taken it for granted that the Project Cost will escalate. It is not so if estimation done with due consideration. Give more emphasis on Pre-construction activities. Must be done meticulously. Cost estimate only on financial closure. The cost escalation during scheduled tenure of the project must be inbuilt in estimate. In such situation, as dopted by western counterparts, there will not be any cost escalation.
By
Binoy Sinha, Freelancer, Freelancer
| 03 23 2010 09:48:15 +0000
Larger the project scale bigger the negotiations on rates, more the quantity less the cost(wholesale concept) and in construction this is not new......suppliers,contractors,sub-contractors all accept this due to a simple reason....they get engaged for a longer tenure....there sale of goods is fixed....again while estimation escalation is considered and then it is put in the bid.Again arge projects have more resources,work force to escalate any particular activity if required to counter a near future cost escalation,or a near future slow down.
By
Saleel Deshpande, Sr.Architectural Co-ordinator, Dar Al-Handasah(Shair and Partners)
| 03 20 2010 09:20:59 +0000
Whereas large projects would seem to imply greater cost escalations due to the longer period of time from planning through completion, the fact of the matter is time is linear. Costs over longer periods of time may be less predictible, but the longer the period the greater the opportunity to average out for fluctuations in the economy. The bottom line is that the larger the project the greater will be its economy of scale and thus the more opportunities for purchasing both labor and material with "quantity discounts". Regardless, you should have the option to protect yourself...as well as offer counter-protection to the customer/owner...against disproportionate cost escalations as a function of time through contractual measures.
By
James Hindman, Principal, The Hindquarters Group, Inc.
| 03 17 2010 18:42:04 +0000
Large projects may not necessarily be prone to cost escalation. Cost effectiveness of projects depends upon quality of project planning, management and control.
By
akshaya bhatia, Experienced IT plus Management Professional
| 03 17 2010 07:38:41 +0000
Escalation cost depends more on time frame of execution and price fluctuation of materials. I think it has less to do with in terms of size of projects except that it takes longer time.
By
Barun Jha, Civil Engineer, C&C
| 03 16 2010 10:36:19 +0000
I don't completely agree with Pragya.All big projects don't necessarily have higher cost escalations. For all project types, bigger projects do not have a larger risk of cost escalation than do smaller ones; the risk of cost escalation is high for all project sizes and types. Thus, it depends on how one utilizes the resources to overcome the cost hike.
By
Venkatesh M, Warehouse Manager, Larsen and Toubro
| 03 15 2010 13:59:56 +0000
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