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TOTAL COST CONTROL ON CONSTRUCTION PROJECTS

TOTAL COST CONTROL ON CONSTRUCTION PROJECTS. A presentation at 2019 ENGINEERING CONFERENCE. A presentation by QS F red Chiweza (MRICS, MSIM, MSc, BSc QS) September, 2019. OVERVIEW. Construction projects incur cost overruns which impact on project success.

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TOTAL COST CONTROL ON CONSTRUCTION PROJECTS

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  1. TOTAL COST CONTROL ON CONSTRUCTION PROJECTS A presentation at 2019 ENGINEERING CONFERENCE A presentation by QS Fred Chiweza (MRICS, MSIM, MSc, BSc QS) September, 2019

  2. OVERVIEW • Construction projects incur cost overruns which impact on project success. • This presentation is a discussion on how these overruns can be prevented. • Initially we are looking at why we need cost control and later we look at cost control techniques. • In conclusion we advocate for a great commitment to cost control issues as a way to project success.

  3. WHY COST CONTROL • Project objectives • Project failure or success

  4. CAUSES OF COST OVERRUNS

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  6. EFFECTS OF COST OVERRUNS • To the Client • To the end user • To project consultants • To contractors • To the construction industry • To the country

  7. TOOLS AND TECHNIQUES FOR COST CONTROL • Developer’s budget • Cost planning • Cash flow • Cost reporting • Cost Control

  8. DEVELOPER’S BUDGET • Fittings and furnishings • Disposal costs • Value added tax • Financing costs • Operational costs • Cost of land • Legal costs • Land preparation • Building costs • Consultants fees

  9. COST PLANNING “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, This person began to build and wasn’t able to finish.” Luke 14:28-30

  10. CASH FLOW • Cash flow is the movement of income into and expenditure out of a business over time. • Cash flow is important in order to ensure that an appropriate level of funding is in the place and that suitable draw-down facilities are available.

  11. COST REPORTING • Cost reporting is a process used to inform a client about the magnitude of a construction project predicted or actual cost. • Cost reporting must include ; • Established project cost to date • Anticipated final cost • Future cash flow • Ongoing risks to costs • Potential savings

  12. TOTAL COST CONTROL Total cost control will require the following actions to be taken; • Change management process • Updating cost reports • Information management • Actual expenditure versus projected expenditure • Design decisions • Project Team • Updating cost plan • Updating cash flow plan • Reviewing contingency

  13. CONCLUSIONS AND RECOMMENDATION • To eliminate cost overruns the following should be adhered to all time; • The consultants should apply project management tools in their project delivery. • The client, the consultants and the contractors should strictly work within the scope originally planned for the project

  14. Projects should be planned properly before execution starts • Only contractors with adequate experience and financial ability to handle construction projects should be awarded contracts. • Communication gaps should not exist between the stake holders of the building construction projects • A commitment should be made to cost control followed by clear actions.

  15. THANK YOU

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