21-07-2014, 02:54 PM
Project Costing and the
Construction Process
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Project Costing
Project costing is the process of
assembling and confirming the capital
costs, from project conception to project
completion. As the concept develops into
detailed plans and designs, the information
provided by quantity surveyors and other
professionals becomes clearer and more
specific.When municipal approval costs
are defined and contractors' prices are
received, the project costing process
becomes more precise. It is essential to
have reliable financial information to
successfully finance the project and
market your units.Your development
consultant, quantity surveyor, architect,
and funding agencies can help you to get
up-to-date figures.
Capital Costs
Capital costs are directly related to
property development including 'hard'
costs like land and construction and 'soft'
costs such as consulting and legal fees,
permits, and financing costs. Here is a list
of general categories and specific items
that you will need to consider for your
capital budget:
■ Land: Purchase price; taxes, fees, legal
costs related to acquisition of the
property;
■ Servicing:The costs of bringing power,
telephone, water and sewer service,
roads or sidewalks to the site;
■ Municipal Fees: Development and
building permits, levies, fees,
development cost charges; property
taxes during construction;
■ Professional Fees:Architect, structural,
mechanical and electrical engineers,
geotechnical engineer, landscape
architect; quantity surveyor;
development consultant; legal counsel
for land transfer, contract advice;
■ Construction Financing: Interest on
monies borrowed during the
construction period only, mortgage
insurance premium; lender fee;
■ Organizational Expenses: Marketing;
utilities to the site; liability and
builder's risk insurance premiums
during construction;
■ Construction, Renovation, or
Conversion Costs:All construction or
renovation materials and labour;
The Construction
Process
Knowing what to expect during the
construction phase will guide you and
your group in planning to monitor the
process and conduct organizational
activities so that the project is ready to
occupy when the construction is
complete.The actual schedule of a
construction project will vary based upon
many factors such as size and complexity
of the proposed development, site and
weather conditions, material and
contractor availability, the knowledge and
experience of those managing the
project, and the changes made to the
original contract after construction has
begun. Most construction and renovation
projects will involve the following
elements:
Conclusion
Once you know that your project is
viable the wheels can be set in motion to
build, renovate, or convert it.This is
perhaps the most intense time period,
with critical deadlines and decisions that
will have a serious impact on the end
result. It is important to make good use
of the professional consultants in your
development team to ensure accurate
cost estimates, a cost-effective design, and
a smooth building process that completes
on time