How to plan for construction cost escalations??

A person should do a proper planning before going for a construction project/work. He should allocate different resources in a proper & optimal way so that it doesn't add extra cost. He should also have a good idea about the raw materials available in the market & the best prices they are available.

Moreover, he should approach a good contractor or builder who can do his job in a cost effective way & produce better results.

Anjali has a common man as target.What he will plan is only to first plan one time square meal,then education for his or her children,health,small saving.So if a common man has to have one house, he should  possess a shrewd mind.He should begin planning early before reaching 30 years of age.But the money saving will not help much.He should start allocating small saving on small plots at a far away places and wait for future development and sell the plot.The income so earned can be re channelized to purchase the house.Otherwise,increasing prices of cement and steel will eat up his savings.

i think one should purchase steel and cement .....from the whole amount he received from mobilization advance, bcoz cost mostly rises never come down

the increase in codt of cement and steel can b off set by going for economic flooring, doors and windows etc

Before taking up any house constructionplan as under

Have a budget .thatis how much maximum i can  spend taking all eventualities into account

.Once the budget is fixed examine how the flow of money occurs

.is it self financingor through part loan etc

.the type of construction viz flat/house on existing site/site plus house etc.

firm up your plan  /type of property.

If it is a flat select preferably ready to occupy flat or almost completed flat

If it is a property on own site select a architect and get the drawings ready .

Engage labour contractor if you can manage construction and supervision yourself.

.workout major or high value material requirement fix up competetive rates for such items.

This only an example and there are many ways of saving in costs.Basic requrement is planning.We should remember that an ideal planning is one where we need to sharpen the axe perfectly and take little time to cut rather than take little time to sharpen and more time to cut.

g.n.yoganarasimhan be(civil)mie,fiv,pgdv

basically i have seen developers launch a project huridly only as there are bothered about the fluctuations in the market price of real estates. so before they hurry i feel they have to plan the project meticulously like calling for the shop drawings for all the services , co-ordinating the services, finalising all the main finishing items and trying not to deviate from them, only deviation should be whn its not available but go for the simmilar tem wrt cost, quality tc.and ofcurse trying to complete the project within the stipulated date by offering incentives to the contractor it will help in minimising the escalation. though i know due to various factors there is always a price rise btut this could atleast minimise the escalation and the end buyer may not have to bear the extra expenses

Land cost is a major component in over all costing of any construction project. Identification of land which can easily be connected vigorously growing area will have major impact on cost. For example, many suburbs arround Mumbai are growing on this line. Land may be purchased arround these areas.

One should not scamper with the thoughts that is developed as the site goes on. He shouldbe clear to what he wants in the initial phae, else there is deviation from initial planning and he is in deep waters

In fact ,we do not esimate the cost project seriously. we access the cost of projecton current rate but not consider period of completion.if a project is to be completed in 5 year than exclation on the basis of preceding year incease in cost must be added.That will give realistic value of the project upto some extend.

there are many factors which can help to keep the coet low.

1. Realistic time of completion must be fixed that will reduce labour cost and inrease in cost of material with time passed.

2.Finace planning is necessary to make the adiquate fund  fund availble viv-a -vis requirement.

3. If it is big project then do in segments subject to possibility.

3.Poper design- economical design must be used, keeping in view durability of structure.

4.Alternative cheaper material innovate and use without loosing its srength.

5 In construction industries, bricks,cement aggregateand steels are main components which cost is hiking day by day like any things.So there is need to think over new innovative economical alternate.

6.Cost of the land is bigger factor which is due to rapidly in incease of urbanisation.There must be some policy to develope villages and small towns with the scope of employment of the local area. Mobilisation of popultion to big cities is due to more earning uppertunity which are not available at small places.

plan the construction in meticulous way. so that the purchase of materials can be lined up when it is necessary. regarding the concrete use the proper design mix . what i mean adding a flyash can reduce the cement cost by 30%.usage of flysash brciks a;lso likely to reduce the cost.

to  make construction in low budget & build fast ,its better to use ready made cement pillers ,its save time & money

As the price escalation can not be predetermined accurately, so proper project planning should be in place. Also better logistics should be looked upon with proactive approach for the project funding.

TO UNDERSTAND THE FLUCTUATION IN PRICE

1. BASE PRICE SHALL BE QUOTED FOR ALL CONTRACTS.

2. VARIATION IN PRCE SHALL BE CHARGED EXTRA

3. IN CASE OF FLUCTUATION IN MID OF PROJECT,

FINANCIAL ADVANCE TO BE RELEASED FOR PROCUREMENT, ALTHOUGH IT INCREASES THE FINANCE COST, BUT VARIANCE IN COST INCREASED AND FINANCE COST TO BE CONSIDERED, OR CLIENT SHALL BE ASKED TO RELEASE ADVANCE IF POSSIBLE.

4.VALIDITY OF QUOTE TILL FINANCIAL YEAR SHALL BE DONE.

5. DISCOUNT/ADD UP COST SHALL BE ACCOUNTED IN CONTRACTS.

6. EQUIVALENT QUOTE FOR ORDERING TIME/ DELIVERY TIME WITHIN TOAL TIME  FRAME OF THE PROJECT SHALL BE NEGOTIATED IF POSSIBLE.