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Total Project Cost: Costs Associated With Constructed Facilities Professional Engineering Cost Construction Costs

The document discusses the total costs associated with constructing a facility, including initial capital costs and ongoing operation and maintenance costs. It breaks down the major capital cost components such as engineering, construction, land acquisition, and financing. It also lists common operation and maintenance cost items like staffing, repairs, insurance, and utilities. Contingency costs ranging from 10-20% of the total estimated costs are recommended to account for unknown expenses.

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137 views8 pages

Total Project Cost: Costs Associated With Constructed Facilities Professional Engineering Cost Construction Costs

The document discusses the total costs associated with constructing a facility, including initial capital costs and ongoing operation and maintenance costs. It breaks down the major capital cost components such as engineering, construction, land acquisition, and financing. It also lists common operation and maintenance cost items like staffing, repairs, insurance, and utilities. Contingency costs ranging from 10-20% of the total estimated costs are recommended to account for unknown expenses.

Uploaded by

ryan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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TOTAL PROJECT COST

Costs Associated with Constructed Facilities


Professional Engineering Cost
Construction Costs
Total project cost
• A simplified model for total project cost is developed in this paper to meet the
numerous requests from decision makers for a model that can be used to
estimate the total project cost from the estimated cash flows and, more
importantly, to check the accuracy of the project cost estimates in feasibility
studies that require prudent decisions. It begins with a base cost estimate in
constant dollars and discrete cash flows with discrete inflation rates as practiced
by the construction industry. The discrete inflation rates are used to estimate
the current dollar costs of the project. The effects of inflation are estimated as
escalation during construction. Using the future value concept, interest during
construction is estimated, in a simplified approach, to estimate the total project
cost. Data from an actual feasibility study is used to highlight the strengths and
weaknesses of the simplified model. The model is extended to treat discrete
cash flows with continuous inflation rates.
• Costs Associated with Constructed Facilities
• The costs of a constructed facility to the owner include both the initial capital cost and the subsequent
operation and maintenance costs. Each of these major cost categories consists of a number of cost
components.The capital cost for a construction project includes the expenses related to the inital
establishment of the facility:
• Land acquisition, including assembly, holding and improvement
• Planning and feasibility studies
• Architectural and engineering design
• Construction, including materials, equipment and labor
• Field supervision of construction
• Construction financing
• Insurance and taxes during construction
• Owner's general office overhead
• Equipment and furnishings not included in construction
• Inspection and testing
The operation and maintenance cost in subsequent years over the project life cycle includes
the following expenses:Land rent, if applicable
• Operating staff
• Labor and material for maintenance and repairs
• Periodic renovations
• Insurance and taxes
• Financing costs
• Utilities
• Owner's other expenses
• The magnitude of each of these cost components depends on the nature, size and location
of the project as well as the management organization, among many considerations. The
owner is interested in achieving the lowest possible overall project cost that is consistent
with its investment objectives.
PROFESSIONAL ENGINEERING COST
A civil engineer is often engaged to make a study and to
render a planning report on the contemplated project
includingalternativesolutions,layouts, and locations along with initial
estimates of the propable project cost. This may involve alternative or
phase implementation schemes which add flexibility to the project.
• Professional engineering costs.
• Construction cost.
• Legal and land costs.
• Owners cost, including project administration,
staffing, financing and overhead.
• Contingency allowance for unknowns.
Construction cost
The probable total capital cost, often used to establish budgets
for a typical project, is made up of:

• To provide for intangible costs, contingencies should routinely


be added to the basic cost estimate. It is common practice to
add 20% or more to the estimated probable total project cost
at the completion of the study end report phase, reducing this
to perhaps 10% atbthe completion of the final design and
perhaps to 5% when the construction bids become known.
Larger or more coplex may require higher contingencies.
• The costs really depend on how big you want your house is. Local
homebuilders reveal that the cost of constructing a house designed for a
middle-class family in the Philippines currently ranges from Php 15,000
to Php 20,000 per square meter based on the total floor area of the
house.

• Meanwhile, according to the 2016 Construction Cost Handbook of


construction consultancy services provider Langdon & Seah Philippines
Inc., terraced houses and average standard homes (one to two
bedrooms) tend to cost between Php25,700 and Php31,000 per square
meter.
• Detached houses and high-end residences, on the other hand, the cost is
between Php 53,900 and Php 63,150 per square meter. These values, as per
Langdon & Seah, are already inclusive of the expenses for mechanical, electrical,
and plumbing services.

• Those figures are based on an aggressive estimate and are meant for budgetary
purposes. Of course, it goes without saying that the bigger your house is and the
fancier your materials are, the more expensive constructing your house would cost
you. Bear in mind that this cost estimate doesn’t even include things like lighting
fixtures, grills, a perimeter fence that has a gate, landscaping, and outright costs
such as house design fees and processing fees for building permits.

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