REASONS FOR VARIATION FROM ESTIMATED COST TO ACTUAL COST

– The major reason being that in the span of the construction period specified in the contract signed agreement, the Basic rates of materials or raw materials can increase. This will lead to an escalation in cost. In this scenario, the Client has to pay the contractor the differential cost.

– The Building Contractors or labour contractor Hired for the construction work will have hidden charges/works not mentioned in the initial contract agreement.

– Not having proper coordination between the owner and his contractor will lead to many delays and might come across a couple of redo works on the construction site, which will surely increase the budget.

– Not Hiring Professional Architects/Engineers to do the house plans and supervise the project on a timely basis in coordination with the building constructor and owner.

– Not having BOQ’s (Bill of Quantities) prepared for the project will lead to further cost variation.

 ARCHITECTS ROLE IN AVOIDING CONSTRUCTION COST ESCALATIONS:

– As an Architectural firm, we must first finalize the concept plans and required 3D elevations for the proposed project. After which, we prepare 20% working drawings in Architectural and Structural drawings with detailed BOQ’s which will be handed over to the interested Building contractors who can Bid for the project.

We first scrutinize the contractors to ensure that they have no hidden charges, covering all works specified and making sure they are capable of delivering the best construction quality. We also inform the Client to withheld 3% to 5% on every bill released, So that the retention amount can be given back after 3 to 6 months after completion of the work.

-As you know, before you start construction of your dream house, your contractor, or as an architect, we will provide you with an estimate. The estimate normally consists of details like material cost, labor cost, overheads and so on. But in reality, it is found that there is considerable variation between estimated cost and construction cost.


Few Reasons Construction cost for Buildings and Reason for variations in costs / Cost escalation

PRELIMINARY EXPENDITURE:

To secure the approval of your house plans or house designs, you will have to prepare four sets of plans and submit them to the city corporation like BBMP/BDA/BMRDA plan sanction along with other documents. For this purpose, you will have to pay fees to the architect who has prepared the plan and pay statutory charges to the city corporation. All these will depend on the floor space mentioned in the house plan.

TOTAL BUILT-UP AREA:

During the execution of the work, you may suggest certain changes in the plan. For example, you may suggest the construction of some additional rooms or larger space in the kitchen or living room and so on. All these will add to the total built-up area, which in turn escalates the cost.

MATERIAL AND LABOUR COST:

In Bangalore, costs of construction materials like sand, steel, cement, wood keeps fluctuating. For example, sand will cost Rs. 30,000 for 350 cft (medium size lorry load) in the normal course. There are instances; it had shot up to Rs.60,000! Normally, such variation will add to the construction cost. Apart from this, there are instances of the government imposing higher taxes on materials like steel, cement, etc. Naturally, this will cause a huge variation between the estimated and the actual construction cost.

UN-FORESEEN CONDITION DURING CONSTRUCTION:

In certain areas, the builders will excavate to higher depth because of soil conditions. In such cases, the unit cost for the foundation would escalate, and naturally, this will impact the overall construction cost. Experienced contractors in Bangalore say one of the main reasons for the variation in the estimated and construction cost is the chosen elements.

For example, you may prefer to have granite stone for the flooring against glazed or vitreous tiles suggested by the architect or contractor. Similarly, you may prefer to have wood panelling for the wall, which was not envisaged in the estimate.

FEES AND OTHER DEPOSITS:

If you have employed an architect, then you will have to pay 3% to 5% of the estimated value as his consultation fee. Of course, the architect will have to make a periodical inspection of the site and ensure that construction is planned. You will have to pay road cutting charges and other statutory deposits to statutory agencies like the BWSSB and BESCOM towards water, sanitary and electricity connection.

As experienced architects, we have calculated the current construction cost of a house in the city of Bangalore will cost you from Rs.1,50,000 to 2,00,000 per square (measuring 10’ X 10’) or say Rs 1500 to Rs 1900 / sq ft. This includes construction cost, deposits, architect fee, fixtures like taps, fans, wardrobe, air conditioner, etc. Further, it is also said the escalation in cost between the estimated cost and the final construction cost will be about 15%.