Construction Planning & Management (CE-503 (B)) - Unit 2 Short Notes

UNIT 2: CONSTRUCTION PLANNING & MANAGEMENT (CE-503 B)

Focus: Quantity Surveying, Costing & Valuation

I. FUNDAMENTALS OF ESTIMATION & COSTING

Purpose and Importance of Estimation

• Definition: Estimation is the process of calculating the probable cost of a construction project before work begins.

• Purposes:

  • To determine the financial requirement and secure funding/sanction.

  • To decide on the feasibility of the project.

  • To act as a basis for tendering and contract agreements.

  • For material planning and procurement.

  • To check the contractor's bills and for interim payments.

  • To serve as a control measure for project cost during execution.

[!TIP]

Exam Focus: Estimation is the first financial step. Always link its purpose to pre-construction decision-making and contractual control.

Data Required for Detailed Estimate

1. Drawings: Detailed plans, elevations, sections, and detailed drawings.

2. Specifications: Detailed description of materials, workmanship, and standards.

3. Rates: Current Schedule of Rates (CSOR) for materials, labor, and items of work.

4. Dimensions: Accurate measurements from drawings.

5. Standards: Relevant BIS codes and standard formulas for deductions.

6. Site Conditions: Soil report, access, water availability.

Principles of Units & Measurements (Key Examples)

Rules for Deductions (Masonry & Plastering)

• No deduction for openings < 0.1 m².

• For openings ≥ 0.1 m² but < 0.5 m²: Deduct area of opening but add back the area of one face of the jamb, sill, and lintel (i.e., net deduction = opening area - (2×jamb ht × thickness + lintel ht × thickness)).

• For openings ≥ 0.5 m²: Deduct full area of opening on all faces.

• For plastering/painting on "both sides": Deductions are made for the entire opening area on each face.

• For "one side" only: Deductions are made only on that specific face.

[!TIP]

Common Pitfall: Students often forget to add back jamb/sill area for medium openings (0.1-0.5 m²) in masonry work. For plastering "both sides", the deduction is full area on each face.

II. TYPES AND PREPARATION OF ESTIMATES

A. Rough/Preliminary Estimate

• Purpose: Quick approximate cost for initial planning/sanction.

• Methods:

  1. Plinth Area Method:

$$ \text{Estimated Cost} = \text{Plinth Area (m²)} \times \text{Plinth Area Rate (Rs./m²)} $$

    *Rate depends on building type, locality, and specification.*

2.  **Cubic Content (Volume) Method:**

$$ \text{Estimated Cost} = \text{Total Volume (m³)} \times \text{Rate per m³ (Rs./m³)} $$

    *Volume = Plinth Area × Height of all floors.*

B. Detailed Estimate (High Frequency)

• Definition: Item-wise accurate calculation of quantities and costs from detailed drawings.

• Step-by-Step Procedure:

  1. Take-off: Measure quantities for each item from drawings (e.g., excavation, brickwork).

  2. Abstract: Enter quantities in an Abstract Sheet (BOQ format) with units and rates.

  3. Calculate Cost: Multiply quantity by rate for each item.

  4. Add Ancillary Charges: Apply percentages for water supply, electrification, contingencies, etc., on the total of main items (structured cost).

  5. Total Cost: Sum of main items + ancillary charges.

• Factors to be Considered:

  • Accuracy of drawings and specifications.

  • Correctness of measurement rules.

  • Current and correct Schedule of Rates (CSOR).

  • Inclusion of all items (from foundation to finish).

  • Proper provision for wastage (materials) and contingencies.

  • Site conditions and overheads.

C. Long Wall and Short Wall Method (High Frequency)

• Application: For load-bearing walls (thickness constant).

• Concept:

  • Long Wall: Outer walls running parallel to the length of the building. Their length decreases as you go up (from foundation to superstructure).

  • Short Wall: Walls running perpendicular to the length. Their length increases as you go up.

• Formulas:

  • Long Wall Length (for a particular course): (Center to Center Length of Building) - (2 × Half Thickness of Wall) + (2 × Length of Wall Beyond Center Line)

    Simplified: = (C/C Length) - (Thickness) + (2 × Projection)

  • Short Wall Length (for a particular course): (Center to Center Breadth of Building) - (Thickness)

• Example: For a 10m x 6m room (C/C), wall thickness 0.3m.

  • Foundation Long Wall: (10 - 0.3) + (2 × 0.3) = 10.3m (if projection = 0.3m).

  • Plinth Long Wall: (10 - 0.3) = 9.7m.

  • Superstructure Long Wall: (10 - 0.3) = 9.7m (no projection).

  • Short Wall (all levels): (6 - 0.3) = 5.7m.

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Key Point: Long wall length varies (decreases from foundation to superstructure), short wall length is constant for all levels above foundation. Always calculate for each distinct level (Foundation, Plinth, Superstructure).

D. Abstract Estimate vs. Detailed Estimate

E. Revised and Supplementary Estimates (High Frequency)

III. RATE ANALYSIS AND COSTING (Very High Frequency)

Definition and Purpose

• Definition: Determining the unit rate (Rs./unit) for each item of work by analyzing its constituent costs.

• Purpose: To prepare a detailed estimate, to check contractor's rates, for material ordering, and to understand cost drivers.

Factors Affecting Rate Analysis (Very High Frequency)

1. Material Costs: Cost of cement, sand, aggregate, bricks, etc., including transportation and wastage (typically 5-10%).

2. Labour Costs: Wages of skilled/semi-skilled/unskilled labour, based on task work or daily wages.

3. Equipment/Machinery Costs: Depreciation, hire charges, fuel for mixers, pumps, etc.

4. Overhead Charges (High Frequency): Indirect expenses like:

   • Site establishment (sheds, site office).

   • Water, electricity, fuel for site.

   • Supervision charges (engineer, clerk).

   • Insurance, taxes (GST), safety measures.

   • Petty Supervision & Contingencies (often 3-5%).

5. Contractor's Profit: Typically 10-15% of total (material+labour+plant+overheads).

6. Fluctuation of Rates: Provision for future increase in material/labour rates (5% common).

7. Location & Site Conditions: Accessibility, terrain, local availability.

Preparation of Rate Analysis – Worked Example (Lime Concrete 1:2:6)

• Assumptions: For 1 m³ of lime concrete (40mm down brick ballast).

• Step 1: Material Quantities (Net)

  • Lime: 1 part

  • Surkhi: 2 parts

  • Brick Ballast: 6 parts

  • Total parts = 9.

  • Volume of 1 part = 1/9 m³ (considering 30% bulking for sand/surkhi).

  • Adjusted for wastage (5%): Multiply net quantity by 1.05.

• Step 2: Material Cost

  • Cost = (Qty × Unit Rate) for each material.

• Step 3: Labour Cost

  • Mason (1st class): 0.5 nos. @ Rs. X/day.

  • Mason (2nd class): 1.0 nos. @ Rs. Y/day.

  • Coolies: 4.0 nos. @ Rs. Z/day.

  • Total labour cost = Sum of (nos. × daily wage / productivity).

• Step 4: Plant & Machinery Cost (if any, e.g., mixer).

• Step 5: Overheads & Profit

  • Overheads (say 5% of material+labour+plant).

  • Contractor's Profit (say 10% of subtotal).

• Step 6: Total Unit Rate

$$ \text{Total Rate} = \frac{\text{Total Cost (Material+Labour+Plant+Overheads+Profit)}}{1 \ \mathrm{m}^3} $$

[!TIP]

Golden Rule: Always add wastage to material quantities and calculate overheads & profit on the subtotal (material+labour+plant), not just material.

Components of Unit Rate (Summary Formula)

For 1 unit of work:

\boxed{

\begin{aligned}

\text{Unit Rate} &= \left[ \sum (\text{Material Qty}_{\text{net}} \times (1 + \text{Wastage}%) \times \text{Rate}) \right] \

&+ \left[ \sum (\text{Labour Nos.} \times \text{Daily Wage} / \text{Productivity}) \right] \

&+ \text{Plant Cost} \

&+ \text{Overheads (%)} \

&+ \text{Contractor's Profit (%)} \

&+ \text{Fluctuation (%)} \

&+ \text{Contingencies (%)}

\end{aligned}

}

IV. VALUATION OF BUILDINGS & FINANCIAL CONCEPTS (Very High Frequency)

Purpose of Valuation & Valuer's Functions

• Purpose: To determine the market value of a property for sale/purchase, mortgage, insurance, taxation, or legal disputes.

• Functions of a Valuer:

  • Inspect property and collect data.

  • Apply appropriate valuation method.

  • Prepare detailed valuation report.

  • Provide expert testimony if required.

Key Financial Terms (Very High Frequency – Short Notes)

1. Sinking Fund (High Frequency)

   • Definition: A fund accumulated by setting aside regular periodic sums over the useful life of an asset to replace it at the end of its life.

   • Determination: Amount to be set aside annually.

$$ \text{Annual Sinking Fund } (A) = \frac{P \times i}{(1+i)^n - 1} $$

    Where, `P` = Replacement cost (Present value - Scrap value), `i` = rate of interest, `n` = years of life.

*   **Importance:** Ensures **capital replacement** without sudden burden. Used in **Dual Rate Interest** method.

2. Year's Purchase (Y.P.)

   • Definition: The present value of an annual income of Re. 1 for an infinite (or very long) period at a given rate of interest.

   • Calculation (for perpetuity):

$$ \text{Y.P.} = \frac{1}{i} $$

(where i is rate of interest in decimal).

    *Example:* If interest rate = 8%, Y.P. = 1/0.08 = 12.5.

*   **Use:** To capitalize **net annual income** into **capital value**.

$$ \text{Capital Value} = \text{Net Annual Income} \times \text{Y.P.} $$

3. Overhead Charges

   • Definition: Indirect expenses incurred for the overall management of a project or organization, not directly attributable to a single item.

   • Included Expenses: Office rent, salaries of top management, audit fees, legal charges, general insurance, municipal taxes, bank charges, etc.

   • In Rate Analysis: Added as a percentage of (Material + Labour + Plant) cost.

4. Gross Income vs. Net Income

   • Gross Income: Total actual or potential rental income from a property (before any deductions).

   • Net Income: Gross Income minus all outgoings (taxes, repairs, insurance, management charges, sinking fund). This is the income available for capitalization.

5. Scrap Value vs. Salvage Value

   • Scrap Value: Value of dismantled materials at the end of useful life (very low).

   • Salvage Value: Value of the asset as a whole if sold at the end of its useful life (higher than scrap value).

6. Market Value vs. Book Value

   • Market Value: Current open market price of a property (what a willing buyer pays).

   • Book Value: Value of an asset as shown in the accounting books (cost - depreciation). May not reflect market value.

7. Dual Rate Interest

   • Concept: Uses two different interest rates in valuation:

     • Higher rate (e.g., 9-10%): On capital cost (to cover risk, management).

     • Lower rate (e.g., 4-5%): On sinking fund (as it's a safe, guaranteed return).

   • Formula for Annual Equivalent Cost (for old buildings):

$$ \text{Annual Cost} = P \times i_1 + \frac{P - S}{(1+i_2)^n - 1} \times i_2 $$

    Where `P` = Present cost, `S` = Scrap value, `i1` = higher rate, `i2` = lower rate.

8. Standard Rent

   • Method of Fixation (as per Rent Control Acts):

     1. Calculate cost of construction (excluding land) at present-day rates.

     2. Add gross annual cost = (Cost × 9%) + (Cost × 1% for sinking fund) + (Annual repairs cost).

     3. Standard Rent = Gross Annual Cost / 12 (monthly) or Gross Annual Cost / Gross Income (percentage).

Differentiation: Value, Cost, and Price

V. EARTHWORK AND ROAD ESTIMATING (High Frequency)

Mid-Sectional Area Method (High Frequency)

• Use: For road embankments/cuttings with uniform cross-section and long length.

• Formula for Volume between two cross-sections (A₁ & A₂):

$$ V = \frac{A_1 + A_2}{2} \times L $$

Where `L` = distance between sections.

• For entire length (with multiple chainages):

$$ \text{Total Volume} = \sum \left( \frac{A_n + A_{n+1}}{2} \times L_n \right) $$

• Area of Trapezoidal Section (Embankment):

$$ A = (B + Z \cdot H) \times H $$

Where `B` = top width, `H` = depth/height, `Z` = side slope (horizontal:vertical, e.g., 2:1 means Z=2).

[!TIP]

Exam Problem: Given chainage, formation level, ground level, slopes. Calculate depth (H) at each chainage, then area (A), then apply mid-sectional formula. Always draw cross-section.

VI. MATERIAL QUANTITIES AND STATEMENTS (High Frequency)

A. Materials for 1 m³ of Concrete (Standard Proportions)

Note: 1 bag cement = 50 kg. Volumes are loose (bulked).

B. Preparation of Material Statement

• Step 1: Find total quantity of concrete required (from detailed estimate).

• Step 2: Multiply per m³ requirements by total m³.

• Step 3: Add wastage (typically 2-5% for cement, 5-7% for sand/aggregate).

• Step 4: Present in a tabular Material Statement.

Example Statement for 25 m³ M20 Concrete:

VII. PROJECT REPORTS, SCHEDULES, AND DOCUMENTATION (High Frequency)

A. Detailed Project Report (DPR) (High Frequency)

• Definition: A comprehensive document prepared for project approval and financing.

• Content:

  1. Executive Summary.

  2. Project Description: Location, objectives, scope, technical specifications.

  3. Market Analysis: Demand, supply, competition.

  4. Implementation Plan: Phasing, schedule (bar chart/PERT), methodology.

  5. Cost Estimates: Detailed cost breakdown (capital cost, operating cost), source of finance.

  6. Financial Analysis: Cash flow, IRR, NPV, sensitivity analysis.

  7. Risk Analysis & Mitigation.

  8. Social/Environmental Impact Assessment.

  9. Conclusions & Recommendations.

B. Current Schedule of Rates (CSOR) (High Frequency)

• Definition: A government/authority published document listing standardized rates for various items of work (materials, labor, plant) for a specific region and period.

• Significance:

  • Benchmark for preparing estimates and analyzing rates.

  • Ensures uniformity and transparency in public procurement.

  • Basis for payment in government contracts.

  • Helps in price escalation calculations.

  • Updated annually/bi-annually to reflect market rates.

C. Bill of Quantities (BOQ) and Abstract Sheet

• BOQ: A list of all items of work (from detailed estimate) with their quantities and units. Forms part of tender document.

• Abstract Sheet: A summary of the BOQ, grouping items into categories (e.g., Earthwork, Brickwork, Finishes) and showing total cost for each category and grand total. Used for financial appraisal.

D. Tender Notice – Components

1. Name & address of tendering authority.

2. Nature of work and location.

3. Estimated cost and earnest money.

4. Time for completion.

5. Eligibility criteria for contractors.

6. Last date & time for submission.

7. Place, date & time of opening tenders.

8. Issuing office and contact details.

E. Work Charge Establishment

• Definition: Staff and administrative setup deployed at the construction site for supervision and management of the work.

• Includes: Project Engineer, Site Engineers, Clerks, Chowkidars, etc.

• Cost: Treated as overhead or petty supervision charge (usually 1-3% of project cost).

VIII. SPECIALIZED CONSTRUCTION ESTIMATES & METHODS

A. Cost Estimates for Drainage and Electrification Works (High Frequency)

• Drainage (Surface/Sewer):

  • Items: Excavation, bedding (sand/concrete), pipe laying (HDPE, RCC, CI), manholes, junction chambers, backfilling.

  • Units: m (for pipes), each (for manholes), m³ (for excavation).

  • Key: Include testing (water test, smoke test) and connection charges.

• Electrification:

  • Items: Conduiting, wiring (circuit length in m), switchboards, MCBs, DBs, light/fan points, socket points, earthing, main/sub-main cables.

  • Units: point (for lights/fans), m (for cables/conduit), each (for boards).

  • Key: Follow IE Rules and standard load calculations. Include service connection fees.

B. Methods and Techniques in Culvert Construction (High Frequency)

• Types: Pipe culvert (RCC, HDPE), Box culvert (RCC), Arch culvert.

• Construction Stages & Estimating Items:

  1. Earthwork: Excavation for foundation and wing walls.

  2. Foundation: PCC or lean concrete bed.

  3. Sub-structure: Abutments & Wing Walls (brickwork/RCC). Key for quantity take-off.

  4. Superstructure: Pipe laying or slab casting (for box).

  5. Approaches: Embankment, pitching, slope protection.

  6. Ancillary: CBC (Cross Drainage Works), inlet/outlet structures, scour protection (aprons, pitching).

• Key Estimation Point: Quantities for wing walls (often complex geometry) and protection works are critical.

C. Task Work

• Definition: A standard output (quantity of work) that a skilled worker can complete in a normal working day (8 hours).

• Factors Affecting Task Work:

  • Nature of work: Simple vs. complex.

  • Type of material: Weight, handling ease.

  • Tools & equipment: Hand tools vs. power tools.

  • Skill & efficiency of labour.

  • Working conditions: Space, weather, supervision.

  • Local practices and union agreements.

• Use: Fundamental for labour cost calculation in rate analysis. (e.g., Task for 1st class mason = 1.2 m³ of brickwork per day).

[!TIP]

Final Exam Checklist: Be able to prepare a small detailed estimate (like the Nov 2023 question with wall), perform rate analysis for a simple item, calculate earthwork volume, and differentiate all valuation terms. Always show clear steps and units.