Construction Planning & Management (CE-503 (B)) - Unit 4 Short Notes

UNIT 4: CONSTRUCTION PLANNING & MANAGEMENT (CE-503 B)

Focus: Quantity Surveying & Costing (Based on Past Papers)

1.0 FUNDAMENTALS OF ESTIMATION & COSTING

1.1 Purpose and Importance of Estimation

• Purpose: To ascertain the probable cost of a project before commencement. It is the basis for:

  • Financial planning and budget approval.

  • Inviting tenders and comparing bids.

  • Controlling expenditure during execution.

  • Valuing property for sale/purchase/rent.

• Importance: Provides a quantified financial commitment, prevents cost overruns, and is a legal document for contract agreements.

1.2 Data Required for Detailed Estimate

1. Drawings: Detailed plans, sections, elevations.

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

3. Rates: Current Schedule of Rates (CSR) or market rates for materials, labor, and equipment.

4. Dimensions: Exact measurements from drawings.

5. Bye-laws: Local municipal regulations, bylaws.

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

1.3 Principle of Units for Various Items

1.4 Factors Affecting Cost Percentages in Building Projects

Approximate distribution of total project cost (excluding land):

1.5 Concepts: Value, Cost, and Price; Functions of a Valuer

• Cost: Total expenditure incurred in production (materials, labor, overheads).

• Price: Amount asked or offered in the market (Cost + Profit).

• Value: Utility or benefit derived by a user. Subjective. (e.g., Market Value, Investment Value).

• Valuer's Functions:

  1. Ascertain Market Value for sale/purchase.

  2. Fix Standard Rent.

  3. Determine Mortgage Value.

  4. Assess Depreciation.

  5. Provide expert evidence in legal disputes.

2.0 TYPES & CLASSIFICATION OF ESTIMATES

2.1 Approximate/Rough Estimate

• Purpose: Quick preliminary cost assessment for feasibility/planning.

• 2.1.1 Plinth Area Method:

  • Formula:

$$\text{Estimated Cost} = \text{Plinth Area} \times \text{Plinth Rate}$$

*   **Plinth Rate:** Cost per m² of built-up area (includes all construction costs up to superstructure).

*   **Ancillary Charges:** Added as % of **structured cost** (cost from plinth area method).

    *   Water supply & Sanitary: 5-8%

    *   Electrification: 6-8%

    *   Fluctuation of rates: 3-5%

    *   Contingencies & Petty supervision: 3-5%

    *   Contractor's Profit: 10%

*   **Total Cost = Structured Cost + Σ(Ancillary Charges)**

• 2.1.2 Cubical Content Method:

  • Formula:

$$\text{Estimated Cost} = \text{Volume (Cubical Content)} \times \text{Rate per m³}$$

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

*   More accurate than plinth area as it considers height.

2.2 Detailed Estimate (Item-wise)

• 2.2.1 Procedure:

  1. Take off dimensions from drawings.

  2. Calculate quantities for each item (using appropriate method: long wall-short wall, centerline).

  3. Multiply quantity by unit rate (from CSR/market).

  4. Prepare Abstract Sheet (summary of quantities & costs).

  5. Prepare Bill of Quantities (BOQ) (detailed item-wise list for tender).

• 2.2.2 Factors to be Considered:

  • Material specifications & wastage.

  • Labor productivity & task work rates.

  • Equipment/machinery required.

  • Site conditions & overheads.

  • Profit & contingencies.

• 2.2.3 Abstract Sheet & BOQ:

  • Abstract Sheet: Summary showing item no., description, quantity, rate, amount. Used for total cost calculation.

  • BOQ: Detailed list given to contractors for bidding. Includes specifications, quantities, and blank columns for contractor's rates.

2.3 Abstract Estimate vs. Detailed Estimate

2.4 Revised Estimate & Supplementary Estimate

2.5 Preliminary Estimates for Specific Services

• 2.5.1 Cost Estimates for Drainage:

  • Based on plinth area or number of outlets.

  • Rate per outlet or per m² of plinth area (includes pipes, traps, inspection chambers).

  • Separate from main building estimate.

• 2.5.2 Cost Estimates for Electrification:

  • Based on number of points (lights, fans, sockets).

  • Rate per point (includes wiring, switches, fixtures, distribution board).

  • Often calculated as % of building cost (6-8%).

3.0 ESTIMATION METHODS FOR BUILDINGS

3.1 Long Wall and Short Wall Method

• Procedure:

  1. Identify: Outer walls along the length of the building are long walls. Walls along the width are short walls.

  2. Length Calculation:

     • Long Wall Length (at a level) = Center-to-Center length of building + ½ thickness of wall on both sides.

     • Short Wall Length (at a level) = Center-to-Center length of building - ½ thickness of wall on both sides.

  3. For Multi-storey: Length of long/short walls varies per floor (decreases for long walls, increases for short walls as you go up).

  4. Quantity = (Length at each level × Height of that level × Thickness) summed for all walls.

• 3.1.2 Deduction Rules for Openings:

  • Masonry: Deduct full area of openings for doors, windows, lintels.

  • Plastering/Painting: Deduct only once for openings (area not plastered). No deduction for openings < 0.5 m².

  • For Holes in Masonry: If opening area > 0.1 m², deduct half the area from masonry (as reinforcement is provided).

Example: For a 10m x 6m building with 230mm walls:

• Long wall (at plinth) = 10 + 0.23 = 10.23 m (each)

• Short wall (at plinth) = 6 - 0.23 = 5.77 m (each)

3.2 Centerline Method (Brief)

• Total centerline length of all walls (including inner walls) × Average height × Thickness.

• Simpler but less accurate for buildings with many inner walls or irregular layouts. Used for single-storey buildings.

3.3 Estimation of Materials for R.C.C. Work

• 3.3.1 Material Statement for 1 m³ of Concrete (M20, 1:2:4):

  • Total Parts = 1+2+4 = 7 parts.

  • Dry Volume = 1.54 × Wet Volume (to account for voids, wastage).

  • Cement: $$\displaystyle \frac{1}{7} \times 1.54 = 0.22 $$ m³ → Bags = $$\displaystyle \frac{0.22}{0.0347} \approx 6.4 $$ bags.

  • Sand: $$\displaystyle \frac{2}{7} \times 1.54 = 0.44 $$ m³.

  • Aggregate: $$\displaystyle \frac{4}{7} \times 1.54 = 0.88 $$ m³.

  • Water-Cement Ratio for M20 ≈ 0.5 → Water = 0.5 × 6.4 × 50 kg = 160 liters.

• 3.3.2 Quantities for Given Volume (e.g., 25 m³):

  • Multiply 1 m³ quantities by 25.

  • Cement = 6.4 × 25 = 160 bags.

  • Sand = 0.44 × 25 = 11 m³.

  • Aggregate = 0.88 × 25 = 22 m³.

4.0 ESTIMATION FOR INFRASTRUCTURE WORKS

4.1 Earthwork Quantification for Roads

• 4.1.1 Mid-Sectional Area / Mean Area Method:

  • Used for long, uniform sections (roads, canals).

  • Volume between two cross-sections = $$\displaystyle \frac{A_1 + A_2}{2} \times L $$

    • $$\displaystyle A_1, A_2 $$ = Areas of two cross-sections.

    • $L$ = Distance between them.

  • Procedure:

    1. Calculate area of each cross-section (considering side slopes).

    2. Apply formula for each pair of consecutive sections.

    3. Sum all volumes for total earthwork.

• 4.1.2 Calculation in Embankment/Cutting:

  • Cross-section Area (for embankment with side slope m:1):

$$A = (B + mH) \times H$$

    *   $B$ = Top width (formation width).

    *   $H$ = Height of embankment/depth of cutting.

    *   $m$ = Slope ratio (e.g., 2:1 → m=2).

*   **Volume** = Mean area × Length.

Example (from Dec 2024): Given chainage levels, gradient, find volume using mean area method at each chainage interval.

4.2 Estimation for Culverts

• 4.2.1 Methods & Techniques of Culvert Construction:

  • Causeway: Low-level, submerged during floods.

  • Pipe Culvert: RCC/Hume pipes in trench.

  • Box Culvert: RCC box (rectangular) for larger spans.

  • Slab Culvert: RCC slab supported on abutments.

  • Arch Culvert: Masonry/RCC arch.

• 4.2.2 Item-wise Estimation from Cross-section:

  1. Earthwork: Excavation volume (L x B x D).

  2. Concrete: Volume in foundation, base slab, walls, top slab (from dimensions).

  3. Brickwork/RCC in Abutments & Wing Walls: Volume.

  4. Pitching/Protection Works: Area (slope protection).

  5. Capping/Protection Layer: Area/Volume.

4.3 Valuation of Buildings

• 4.3.1 Purpose of Valuation:

  • To determine Market Value for sale/purchase.

  • To fix Standard Rent.

  • For mortgage/loan purposes.

  • For insurance.

  • For compensation in acquisition.

• 4.3.2 Methods of Valuation:

  | Method | Principle | Use | | :--- | :--- | :--- | | Rental Method (Income Approach) | Value = $$\displaystyle \frac{\text{Net Annual Income}}{\text{Yr's Purchase}} $$ | Let-out properties, income-generating | | Direct Comparison Method | Compare with similar recent sales in locality. | Residential plots, standard buildings | | Development Method (Residual) | Value = (Sale value of developed property) - (Cost of development + Profit) | Land with development potential | | Cost Method | Value = (Replacement Cost New) - (Accumulated Depreciation) | Specialized properties, no market data |

5.0 COST ANALYSIS & RATE ANALYSIS

5.1 Definition & Objective

• Rate Analysis: Breaking down the unit rate of an item into its constituent costs (material, labor, equipment, overheads, profit).

• Objective: To determine fair and economical unit rates for items of work, essential for preparing detailed estimates and evaluating tenders.

5.2 Factors Affecting Rate Analysis

• Material & labor availability & cost.

• Site location & accessibility.

• Scale of project (economy of scale).

• Technology & equipment used.

• Seasonal variations.

• Contractor's overheads & profit margin.

• Specifications & quality standards.

5.3 Components of Unit Rate

Formula:

$$\text{Unit Rate} = \frac{\text{Total Cost for 1 unit}}{\text{1 unit}}$$

Where Total Cost = Material Cost + Labour Cost + Equipment Cost + Overheads + Profit + Contingencies.

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

1. Material for 1 m³:

   • Lime = $$\displaystyle \frac{1}{9} \times 1.54 = 0.171 $$ m³ (Lime slurry, not dry lime).

   • Sand = $$\displaystyle \frac{2}{9} \times 1.54 = 0.342 $$ m³.

   • Aggregate (40mm) = $$\displaystyle \frac{6}{9} \times 1.54 = 1.027 $$ m³.

2. Cost of Materials: Multiply quantities by respective rates (include wastage).

3. Labour: 1 mason + 2 labourers for 1 m³/day.

4. Overheads & Profit: Apply percentages sequentially.

5.5 Fluctuation of Rates

• Provision (3-5%) added in abstract estimate to cover increase in material/labor rates between estimate preparation and actual procurement.

• Not part of rate analysis for a specific item (which uses current rates).

6.0 FINANCIAL CONCEPTS IN VALUATION & COSTING

6.1 Sinking Fund

• Definition: Amount set aside periodically so that with accumulated interest, it equals the replacement cost of a building at the end of its useful life.

• Importance: Ensures funds are available for future reconstruction without burdening the owner.

• Determination:

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

*   $i$ = rate of interest (on sinking fund).

*   $n$ = life of building in years.

*   **Replacement Cost** = Present Cost New - Scrap Value.

6.2 Year's Purchase (Y.P.)

• Concept: Capital sum required to yield Re. 1 per year indefinitely at a given rate of interest.

• Formula:

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

*   $i$ = **rate of interest** (as decimal).

• For Sinking Fund Included: If annual income is used to pay interest and build sinking fund:

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

*   $s$ = **sinking fund rate** (as decimal).

• Numerical (from Nov 2023): Life=15 yrs, Interest=7%, Sinking Fund Rate=4%.

  • Y.P. = $$\displaystyle \frac{1}{0.07 + 0.04} = \frac{1}{0.11} = 9.09 $$.

  • \boxed{\text{Y.P.} = 9.09}

6.3 Dual Rate Interest

• Concept: Different interest rates applied to:

  1. Capital Cost (Land/Building): Higher rate (e.g., 7-9%) - reflects risk.

  2. Sinking Fund: Lower rate (e.g., 3-4%) - reflects safe investment.

• Application in Valuation: Used in Rental Method to find Annual Value:

$$\text{Annual Value} = (\text{Capital Value} \times \text{High Rate}) + (\text{Sinking Fund} \times \text{Low Rate})$$

Or directly: 

$$\text{Capital Value} = \frac{\text{Net Annual Income}}{\text{Y.P. (dual rate)}}$$

6.4 Depreciation Concepts

6.5 Standard Rent Fixation (Methodology)

1. Determine Gross Annual Value (GAV):

   • Based on market rent of similar properties.

   • Or: GAV = (Cost of Land + Construction) × Fair Rate of Return (e.g., 6-8%).

2. Deduct Outgoings:

   • Municipal taxes, repairs (5% of cost), insurance, management charges (1-2% of GAV).

   • Net Annual Value (NAV) = GAV - Outgoings.

3. Apply Rent Control Act: NAV is often taken as Standard Rent (subject to legal limits).

7.0 PROJECT DOCUMENTATION & SCHEDULES

7.1 Detailed Project Report (DPR)

• What is DPR? Comprehensive document for project approval & financing. Contains all technical, financial, and managerial details.

• Content:

  1. Executive Summary.

  2. Project Background & Objectives.

  3. Market Analysis & Demand.

  4. Technical Feasibility: Site details, planning, architecture, structural design, construction methodology, detailed cost estimate.

  5. Financial Analysis: Project cost, sources of finance, projected cash flows, profitability, loan repayment schedule.

  6. Implementation Schedule (PERT/CPM).

  7. Risk Analysis & Mitigation.

  8. Social/Environmental Impact.

7.2 Current Schedule of Rates (CSR)

• Explanation: Official publication (by PWD, CPWD, etc.) listing standard rates for various items of work (material, labor, equipment) for a specific region and time period.

• Significance:

  • Basis for preparing estimates and rate analysis.

  • Ensures uniformity in public works.

  • Reference for settling disputes.

• Components:

  • Material Rates: At site (including lead, wastage).

  • Labour Rates: Skilled, semi-skilled, unskilled (with task work outputs).

  • Equipment Rates: Hire charges, running costs.

  • Additional Items: Extra percentages for special conditions.

7.3 Work Charge Establishment

• Concept: Dedicated temporary staff (engineers, clerks, supervisors) deployed at the construction site for execution and supervision.

• Cost: Treated as direct project cost (part of overheads in estimate). Includes salaries, allowances, site office expenses.

• Distinguished from: Head Office Establishment (indirect overheads).

7.4 Tender Notice (Essential Elements)

1. Name & address of employer and tendering authority.

2. Nature of work and location.

3. Estimated cost and earnest money.

4. Time allowed for completion.

5. Eligibility criteria for contractors.

6. Last date & time for submission.

7. Place, date, time of opening tenders.

8. Security deposit and retention money terms.

9. Penalty clauses for delays.

10. Issue of tender documents (cost, where to obtain).

7.5 Gross Income vs. Net Income (Valuation Context)

• Gross Income (Gross Rent): Total potential rental income from property (if fully let).

• Net Income (Net Annual Value): Actual income after deducting all outgoings (taxes, repairs, insurance, management).

$$\text{Net Income} = \text{Gross Income} - \text{Outgoings}$$

• Used in: Rental Method of Valuation (Capital Value = Net Income / Y.P.).

8.0 SPECIALIZED TOPICS & APPLICATION

8.1 Fixation of Standard Rent (Detailed Process)

1. Calculate Cost of Construction (Replacement Cost):

   • Use current CSR rates to estimate cost of building as new today.

   • Add cost of land (market value).

   • Total Cost = Land Cost + Construction Cost.

2. Apply Fair Rate of Return (ROR):

   • Standard ROR (e.g., 6-8% based on investment risk).

   • Gross Annual Value (GAV) = Total Cost × ROR.

3. Deduct Annual Outgoings:

   • Municipal Taxes (property tax).

   • Repairs & Maintenance (5% of construction cost).

   • Insurance (0.5% of construction cost).

   • Management Charges (1-2% of GAV).

   • Total Outgoings = Σ above.

4. Net Annual Value (NAV) = GAV - Outgoings.

5. Standard Rent per month = NAV / 12.

6. Check against Rent Control Act: Ensure it doesn't exceed prescribed limits.

8.2 Key Construction Stages & Approximate Cost Percentages

For a typical residential/commercial building (excluding land):

8.3 Material Statement Preparation (General Procedure)

1. Identify Item: e.g., "1 m³ of M25 concrete".

2. Find Mix Ratio: e.g., 1:1.5:3.

3. Calculate Total Parts: 1+1.5+3 = 5.5.

4. Use Dry Volume: 1.54 × Wet Volume (for 1 m³).

5. Compute Material Quantities:

   • Cement = $$\displaystyle \frac{1}{5.5} \times 1.54 $$ m³ → convert to bags.

   • Sand = $$\displaystyle \frac{1.5}{5.5} \times 1.54 $$ m³.

   • Aggregate = $$\displaystyle \frac{3}{5.5} \times 1.54 $$ m³.

6. Apply Wastage: Add wastage % to dry quantities.

7. Tabulate: Item, quantity, unit, rate, amount.

8.4 Methods & Techniques in Culvert Construction

Common Items in Culvert Estimate: Earthwork, PCC, RCC (in various members), brickwork in abutments, pitching, DPC, joints, bearings.

\boxed{\text{This document strictly covers Unit 4 topics from the provided CE-503(B) blueprint and past exam papers.}}