Why 'COST ENGINEERING " has not taken a dominant professional place in Indian Construction Industry ??

Construction Industry eventhough is an old industry, it works mostly on a secretive manner.

Large amounts are spent in it with even more unaccounted moneys. High profits, high rates of interest on finance could be reasons for not being overt.

Around 70% operations in construction work is run by non-professionals in an unorganised way, they undertake work on job/order basis. This amounts to only 10% of the value of operations.

Remaining 30% operators are professional who hold nearly 90% of the value. 

Of these only 40% of them give Cost Engineering it's right place. At the time of project proposal as well as project evaluation and constantly update requirement based on variances.

The rest 60% of the professionals undermine this study to a great extent,  they do evaluate but only through Financial Accounting but not on a cost basis.

It's because many construction houses still run on old practice where reconcillation of cost is hardly done. Once tender is over nobody bothers cost analysisof expenditure. Forthem finaloutcome is important. regular cost analysis of each & every activity would be the best technology to monitor a project. But many has a mindset that such analysis are waste of time & money. I asked many people whether you do EV analysis of your project. Surprisingly they answers what is EV (Earned Value analysis). People should be aware of cost engineering as this isone of theimportant factor for project success

I believe lack of awareness about Cost Engineering is a factor of its not taking a dominant place in Indian construction Industry.

Not only in the construction industry, various other industries ill-appreciate the value of 'cost engineering'(CE).

While many construction organizations do have separate CE function,the reason for others not having one could be(in my opinion):

1.If the contract type puts the owner /client at greater risk than the constructor, the owner is more likely to go for a CE function to avoid cost overruns.[I have seen many owners have a fairly evolved CE function]

2.Many construction organizations, with key focus on turnover, go on a project by project basis and lack holistic information on the magnitude of losses incurred in absence of a CE.Building a case for CE becomes difficult in such organizations.

3.Lack of awareness could be another reason.instead of appreciating CE as key PM,business management,CAPEX planning enabler, certain organizations view it as just a cost estimation,quantity management and PV calculating function.

cost engineering is a part of estimation and project engineering and construction and management consultancy etc ,where study of cost and time run are taken to maximum importance.

Hence cost engineering is given a dominant place. in Indian construction Industry.