INTRODUCTION

PROJECTBUDGETING:-A project budget is a detailed estimate of all the cost required to

complete a task .It is much more detailed than a high level budget developed at initial stages. A
Project budget is the total amount of authorized financial resources allocated for particular
purpose period of time. It is primary financial document that constitutes the necessary funds for
implementing the project and producing the deliverables. The goal of budget management is to
control project cost within the approved budget and deliver the expected project goals. Project
budgets are similar top resource plans, are a reflection of project work and timing of work. It
consists of series of task and steps designed to help manage the cost of project.

Defining the budget.

Executing the budget.
Controlling the budget.
Updating the budget

PROJECT BUDGETING IN CONSTRUCTION COMPANY

A-PRECONSTRUCTION STAGE

1 (DESIGN STAGE) In this stage planning is done before making a construction project. Hence
drawings are laid down as per the client requirement and following steps are involved

Conducting design coordination meetings with consultant along with the client.
Collection of all the drawings and review the drawings.
Value engineering
a) Review by relevant expert.
b) Study on construction ability and feasibility.
c) Suggestion on sourcing and alternative material and agency
d) Foresee the real requirement of details proactively.
e) Optimization of cost and time.
Collection of technical specification and BOQ with estimate from the entire consultant.
Reviewing and making consolidated budget and get it approved from the client.
Preparation of tender document and get it approved from the client.

2 TENDERING STAGE:- Tendering is a process by which bids are invited from interested
contractors to carry out specific packages of construction works. Following are the steps
involved in the tendering process

Short listing of vendors from various works.

Issue of tender document to vendors.
Conducting pre bid meetings with consultant on the queries raised by the vendors.: Collecting
filled document and making comparative document and making comparative statements.
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 3 CONTRACT AWARD STAGE:-contract awarding is method used during procurement in
order to evaluate the proposal taking part and award the relevant contract. Usually at this stage
the eligibility of the proposal has been concluded

Preparing contract document along with drawing and get it approved from client.
Collecting all the necessary documents like project schedule ,cash flow statements , labor
license etc.

4 DESIGN, SITE DEVLOPEMENT AND MUNCIPAL APPROVALS:- The architect will

design drawings to conform to the housing and servicing program for the future residents and
comply with building codes and municipal planning byelaws. Once planning approval is secured
and funding/ financing in place, the project is ready to proceed to full working drawings,
tendering and building permit process. These areas are covered in separate fact sheets.

B- CONSTRUCTION STAGE:- The final phase of construction process is known as the

completion stage and it readies the building for occupancy.It consist of administration processes
and completion of any related work

1:Collection all as built drawings from vendors and consultant approved by the architect.

2:Collection of warranty manuals, maintenance manuals.

3:Certification of the bills.

4: Preparing detailed statement of all the vendors detail with contact of key person for
approaching client for any kind of defects created during defect liability period.

5: Preparation of completion certificate based on all documents and drawings.

6: Resolving the conflicts arising between the clients.

PARTIES INVOLVED:
CLIENT PRESTIGE HITECH PROJECTS
CONTACTOR (K2K INFRASTRUCTURE PRIVATE LIMITED)
SUBCONTRACTOR
NMR ( NON MUSTAR ROLL)

PRW (PIECE RATE WORK)

B2B (BACK TO BACK)

COMPANY PROFILE

K2K INFRASTRUCTURE INDIA PRIVATE LIMITED:-K2K infrastructure India private

limited is a private incorporated on 19 June 2007.It is classified as non government company and

2
is registered at registrar of companies (HYDERABAD) .Its authorized share capital
isRs48,000,000 and its paid up capital is Rs14, 968,800 .It is involved in building of complete
construction of part there of: civil engineering.

K2K Infrastructure India private limited annual general meeting was last held on 20 September
2016 and as per records from ministry of corporate affairs .its balance sheet was last filed on 31
March 2016.

Directors of K2K Infrastructure India private limited are (MR RANGANATH PANGAL
NAYAK),

VISION Endeavoring total solutions for turnkey projects for all in house and for customer.

Developing talent within by fostering knowledge, through experience system, merchandising and
maximum utilization of resources.

Complete projects in time, safety and qualityto the satisfaction of customers throughout pan
India.

Ensuring growthbeyond market and profits to all the stakeholder of the company.

MISSION-
K2K Infrastructure private limited walks towards customer satisfaction at the highest level
and continual improvement towards growth.

QUALITY POLICY

COMMITED to quality construction services, innovative engineering and upholding a tradition

of passion for excellence and team work.

To build and develop professionally managed team committed. The company expects all its
employees to maintain high standards of behavior which at work. All employees are required to
observe the disciplinary norms of the company meticulously. Violation of the norms will be
construed as an act of misconduct and can result in disciplinary action.

3
 Willful insubordination, or disobedience, whether alone or in combination with another or
others, to any lawful and reasonable order of the superior.

Personal integrity is of paramount importance.

Shall not disclose company personal information outside the office.

-The company depends for its survival on its customers. The company believes that everyone can
contribute to customer satisfaction.

Figure 1 vision and mission of company

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CHAPTER 2

5
REVIEW OF LITERARTURE
According to (January 1997), Peurifoy, R.L., (1970) Construction Planning Equipment and
Method the projects planning and budgeting is how to combine the different activities in order to
obtain the cost of the project and that usually calculated through the length of the task and the
different resources allocated to the project.

According to. K.K. Chit Kara, (1998), Construction Project Management, Planning Projects
planning is how to use the different types of planning process and techniques to construct and
execute a full project with minimum variations and valid time, these techniques are resource
planning, control planning, and cost planning.

According to Planning is the first step of Construction Planning and Project Management which
involves in identifying the basic scope of the project when an Institution/Sector is considering to
build a new facility or to renovate an existing one. This step also include steps such as feasibility
studies, master planning, creation of a planning team, etc

According to K.K. Chit Kara, (1998), Construction Project Management, Planning concluded
that the budgeting is the second stage which involves/covers the development and evolution of
the project budget within budget formulation process. This phase is concurrent with the planning
phase as it informs and is informed by those activities.

In the words of Turner (1999), a project is an endeavour in which human, financial and material
resources areorganized in a novel way to undertake a unique scope of work, of given
specification, within constraints of cost and time, so as to achieve beneficial change defined by
quantitative and qualitative objectives.

As defined in A Guide to the Project Management Body of Knowledge (PMI, PMBOK Guide,
2000), a project is atemporary endeavor undertaken to create a unique product or service.
Temporary means that every project has a definite beginning and a definite end. Unique means
that the product or service is different in some distinguishing way from all other projects or
services.

According to Declerck et al., (1983, 1997), illustrate the political perspective of projects in this
way: "a project is a whole of actions limited in time and space, inserted in, and in interaction
with a politico-socio-economic environment, aimed at and tended towards a goal progressively
redefined by the dialectic between the thought (the project plan) and the reality.

According to Gittinger (1972) defines projects as a whole complex of activities involved in using
resources to gain benefits and explains that generally projects form a clear and distinct portion of
a larger, less precisely identified program. The whole program might possibly be analyzed as a
single project, but by and large it is better to keep projects rather small, close to the minimum
size that is economically, technically, and administratively feasible.

6
CHAPTER 3

7
RESEARCH METHODOLGY
RESEARCH METHODOLOGY CONDUCTED FOR SILVER CREST:-
Methodology adopted for construction of silver crest project keeping in view the construction
schedule, the compatibility of the construction equipment to site conditions and the quantities
as well as utilization factor of equipment within scheduled construction period. Number of
machines required for construction projects has been worked out and the total requirement for
each type and size of machine for project as whole.
Mechanized construction has been planned for almost all types of construction jobs so as to
achieve consistent quality at faster rate and also to minimize requirement of skilled manpower.

CONSIDERATION OF FOLLOWING:-
Construction material sources.
Basic considerations.
Scheduled working hours.
Construction period.
Construction equipments
Deployment schedule
Total requirement of major construction equipments
Organizational setup
Year wise allocation of cost.
Contract estimates

TYPE OF ESTIMATES WHEN WHY ACCURACY

Rough estimates Pre proposal Get quick idea of Low

project cost. -25% +75%
Contract estimate Initiation phase RPF responses and Medium
donor negotiations -10%+25%
Definitive estimate Planning phase Monitor actual cost High
and purchase -5%to 10%

RESESARCH PROCEDURE FOLLOWED FOR THE PROJECT SILVER CREST:-

TENDERING

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TENDER DRAWING AND SPECIFICATION(BOQ)

RATE QUOTATION

ANALYSIS

CIVIL BACK END WORKING

RATE ANALYSIS:-

HIGH RATE WITH HIGH PROFIT

AVERAGE RATE WITH MEDIUM PROFIT
LOW RATE WITH EQUAL PROFIT

QUOTATION ARE MADE

CLIENT COMPARISON OF QUOTATIONS WITH OTHER

COMPANIES.

9
 DECLARATION OF BOQ TO COMPANY
(K2K INFRASTRUCTURE PRIVATE LIMITED)

PLANNING FOR PROJECT IS UNDERTAKEN AND MATERAILARE

PROCURED.

Figure 2 PROCESS FLOW CHART OF APARTMENT

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OBJECTIVES OF THE STUDY
Ensuring total client satisfaction.
Procedural framework of budgeting.
Fulfillment of all requirement.
Management of deviations.
Ascertaining the profitability of concern.

RESEARCH DESIGN:
In preparing of this project the information collected from following sources

SECONDARY DATA
He data has been collected with personal interaction with finance manager Rajesh chandran as
well as QS head for collection of BOQ from BCM department. Finanacial statements of last 3
years as well as work order descriptions were the main sources of information.

The research design refers to overall strategy that choose to integrate the different component of
study in coherent and logical way thereby ensuring you will effectively address the researcher
problem it constitutes the blueprint for the collection, measurement and analysis of data.

DESCRIPTIVE RESEARCH
Descriptive research is used to describe the characteristic of a population or phenomenon being
studied. It does not answer question about how/when/why the characteristics occurred. It cannot
be used for causal relationship when one factor affects the other.
Sources of information- ANNUAL REPORT of last 3 years, Work order description, BOQ
software

Significance of the Study

The study is valuable as it provides the different project management processes such as the discipline
of planning, organizing, and managing resources to bring about the successful completion of specific
project goals and objectives. It is often closely related to and sometimes conflated with program
management
A project is a temporary endeavor, having a defined beginning and end (usually constrained by date,
but can be by funding or deliverables), undertaken to meet particular goals and objectives, usually to
bring about beneficial change or added value. The temporary nature of projects stands in contrast to
business as usual (or operations), which are repetitive, permanent or semi-permanent functional work
to produce products or services. In practice, the management of these two systems is often found to
be quite different, and as such requires the development of distinct technical skills and the adoption
of separate management.

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 The primary challenge of project management is to achieve all of the project goals and objectives
while honoring the preconceived project constraints. Typical constraints are scope, time, and budget.
The secondaryand more ambitiouschallenge is to optimize the allocation and integration of
inputs necessary to meet pre-defined objectives.

SCOPE OF STUDY
To study the effect of planning and budgeting management for construction project and determining
the needs of these components in any project in initial stage or during construction, a clear scope
should be prepare in order to achieve the objective of this study as follow:

Collect all the information require for this type of study starting from defining the different terms in
planning and budgeting management in any organization and also determining the main components
of planning and budgeting management.

Collect clear information from the experts in this field, either by interview or questioners.
Investigate the citizen needs and how they are dealing with the different government sectors to study
their requirements.

Collect information from previous study.

Analyze of all informations received.

LIMITATION OF STUDY
1. During projects business owners often ask for assurance that the projects remain within budget
and timeline.
2. Uncertainty, assumptions and inaccuracy.
3. Time loss.
4. Misrepresentation of project status.
5. Price changes in future.

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SWOT ANALYSIS
Information about the project environment, together with knowledge of the projects
possibilities, enable a team to determine the critical success factors that will satisfy the demands
of end product buyers. The analysis, as a rule, includes the team _firm_ managing the
construction. Using the analysis, the so-called strategic holes should be discovered and a clear
plan for filling them in should be adopted

SWOT ANALYSIS FROM THE CONTRACTORS POINT OF VIEW

Examples provided for the SWOT analysis are from the SILVER CRESTconstruction project. Using the
software package BOQ_an application for risk assessment and analysis_, influence and risk factors on the
SILVER CREST project were measured during the entire lifespan of the project. Factors that influenced
project costs were subjectively evaluated. A detailed mathematical analysis of the risk and the results of
the evaluation are given in the article Application of the risk analysis software package BOQ when
managing a construction project. The risk analysis for each of the registered contractors can be based on
the purchasers risk analysis, if it is included in the documentation. The better the analysis, the lower the
contractors price, because there are fewer unknowns. In this case, the risk analysis had to determine
whether the contractor could meet the demand, but it also had to give the right balance: whether the
contractors quote would be accepted and the risk if the money was accepted and the contract happened to
have a loss.

Strengths from the Contractors Point of View-

A construction company strength comes from different investment avenues. Construction is a
industry where efficiency and staying in schedule is highly prized, so having strong project
management skills is a strength so its exclusive brand name given to construction to be
expensive field to enter.

Advanced Project Management

While working on this project, we used an advanced system of project management with direct
communication between the construction site and the head office of the contractors firm. On this
project, the contractor had the opportunity to hire experienced engineers and foremen and made
excellent
use of all employees on the project.

Workforce Stimulation
On this project, workers wages were increased and equalized with respect to earlier projects.
The wages of the highranking workers _craftsmen and specialized workers_ wereDuring the hard
summer months, the contractor offered a bonus to the best craftsmen and all participants in the
project who had higher-level responsibilities.

Knowledge of the Subcontractor

On previous projects, the contractor had done business with many subcontracting firms and had
established good relations with them. When the contractor knows what to expect of the
subcontractors, it makes project planning go much easier.

Modern Technology

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Modern materials and work automation have contributed to rapid advancements in construction.
This is a strength of the contractor and was reflected in the effective and efficient organization on
the SILVER CREST project.

Use of Modern Machinery

The contractor rented modern machinery for use while managing the construction of the
building. Use of PERI Trio Prefabricated Formwork Trio formwork enables rapid progress
during construction. Apart from that, the reasons to choose the Trio system were exploitation
load, minimal working time on a site, and
minimal labor expenses. The principal considerations were the agreed-upon quality of work and
the schedule.

Skillful Work Team

This was an additional contractor strength. It was specified that workers who had already worked
on the construction of residential and business projects of similar size and similar heights would
participate in the construction of this building.

Good Relationship with Material Suppliers

This contractor had been cooperating with the same material suppliers and the same concrete
factory for a long time, so he was familiar with their working methods, and the risk factors
regarding shipment delays and other problems were significantly reduced.

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Figure 2 SWOT ANALSIS

Weaknesses from the Contractors Point of View

If too much of construction company business is with one client in any geographic area than it
may bring them slowdown .If a company is lacking with key staff and managerial skills it put the
company to a comparative disadvantages position.

Inexperienced Workers
The workers may need some time to adopt a method for working with the PERI Trio formwork.
This, in turn, could influence the scheduled deadlines. The workers need to be trained at the
beginning of the project and then supervised and assisted as needed.

Resistance to New Methods of Working

Some senior and more experienced workers may find it difficult to adopt new techniques and
strategies. To help the workforce accept modern technology, offer training and, if possible,
monetary bonuses for meeting deadlines. Supervisors should demonstrate patience and respect
during the learning period.

Lack of Coordination

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This weakness means that a problem related to coordinating the workers can arise within the
organization. The use of a modern formwork system and new materials positively influences
coordination among workers.

Possibility of Injury at Work

Because the workers are not accustomed to working with new construction technology, there is an
increased possibility of injury at work
.
Undeveloped Relationship with the Subcontractor
Unlike the concrete manufacturer, the contractor worked with new vendors for both the locksmith and
plastic work Signed contracts should stipulate high penalties for missed deadlines.

Opportunities from the Contractors Point of View

Many companies find that adding new division and leveraging the excisting operations can leave
them in position of more work in addition opportunity can emerge by using the business
expertise to know the emerging trend

Favorable Contract Terms

Contract terms should realistically allow the contractor to finish the project within the anticipated
time limit. It is very important for the contractor to study the contract and carefully examine his
responsibilities, as well as the investors rights and responsibilities. Only with the knowledge of
these rights and responsibilities, as well as the risk he is undertaking, can the contractor set prices
and schedules. The contractor produces the budget for the specific project when he gets
a formal inquiry from the investor. Replying to inquiries entails considerable expense, which
only the investor bears the risk for. A thorough evaluation of expenses should result
in a competitive price _estimated expenses plus profit_, which is usually an excellent criterion
for obtaining the job and for the contractors success on the project. Underestimated expenses
always result in business losses, while overestimated expenses can be a cause for losing the
business.

Reliable Investor
Former cooperative and positive experiences with a specific investor represent another very
favorable circumstance and an opportunity to respect any deadlines for the estimate.

The Possibility of Working on Future Projects

When the contractor wins the investors trust, he will be more likely to partner on new projects in
the future.

Favorable Financing Arrangements

The contractor needs to receive sufficient advance funding to do all necessary and planned
activities until the next agreed upon payment. Mutually agreed-upon financial arrangements
represent an opportunity for a favorable project outcome.

Possibility of Developing a Well-Coordinated Project Team and Project Management

Strategy for Future Projects
The contractor has an opportunity to put together a functional and coordinated project team for
managing the project and to implement a standardized project management system.

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Threats from the Contractors Point of View
For construction company going beyond your control such as industry slowdown caused by
difficult economic times . other external threats may impose on external weaknesses . changing
market preferences can also be a threat
High Level of Groundwater
This threat originates from the beginning of construction in the period of concreting the bed plate
.
Small Area for Storage and Manipulation on the Construction Site
The large gross area of the buildings coupled with tenants moving into the buildings brings the
possibility of problems related to lack of space. The problem can be solved by using a
neighboring parcel of land without any reimbursement of expenses
.
Supervisory Board with an Interest in the Project
A supervisory board _a group of individuals chosen by the stockholders of a company to
promote their interests through the governance of the company and to hire and supervise the
executive directors and CEO_ for the construction cannot be objective, because it has a conflict
of interest in the project. This often happens among the participants of a project.
.
Repeated Changes in Allocation of Space
The investors repeated changes in the allocation of space inside the building present difficulties
for the contractor, who must deal with frequent improvisation and changes to the plan.

CONCLUSION
Mutual risk identification and SWOT analyses by both investor and contractor are desirable so
that both sides can be informed about the risks. The investor has to be ready to make a
distinction between good and bad quality and honesty. Bad quality and dishonesty can displace
good qualityand an honest approach. The investor can approach this problem by demanding
transparent risk prices in estimates or by demanding that estimates include plans for handling the
risk. This way, the differences between honest and dishonest estimates can be seen. In practice,
bidders with experience in handling risk can show goodwill toward bearing the risk and give
lower prices than the competition, which increases their strength in the marketplace.

17
CHAPTER4

18
OBSERVATION AND DISCUSSIONS
Budgeting can be done by various ways and the criteria which is followed for project silver crest
can be summed up in various steps which are as follows
CRITERIA FOR SETTING UP A BUDGET FOR A PROPOSAL:-

1: The TOP DOWN APPROACH is for when a client comes to you and says, can you do this
project for $X? You have to decide whether to take the project but first you need to decide all the
cost involved to understand what profit there is in it for you.

2: The BOTTOM UP APPROACH is for when a client ask how much you charge for a
project,so you have to put all the elements together to work out for the project rate.

3: ANALOGOUS: This estimate technique uses actual cost of a previous, similar project for
basis for estimating the cost of the current project. This method is generally less costly than
others, takes less time but is less accurate.Analogousestimates are most reliable when a previous
project is similar in the objective and activities to the current one. Additionally people preparing
the estimate must have required expertise to determine if certain activities will be more or less
expensive on new project.

4: PARAMETRIC: Estimate use standardized parameters that define the cost of an activity or
task specific rate or output. Parameter may include the type of location, length of training.
Parametric model is quite popular in construction projects. Cost can be estimated based on
square meters of construction to arrive at total cost for a building. The accuracy of this model
depends on data available and whether or not model can be scalable to different conditions.

STEP 1:THE TOP-DOWN ESTIMATES

1: DIRECT LABOR COST-

Direct labor cost covers the cost of hiring other freelancersbut dont forget to include your cost
too.ypu will need to research the rates and time involved in hiring other freelancers so that you
can estimate it accurately.

2: MATERIALS-

Cost of material may include software or hardware cost .it may include cost of paper and ink for
printing, procurements of all the material that are required even the cost of updating your
existing computing equipments.

3: TRAVEL-

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 Do you need to travel the meetings with the client,or pay for travel to subcontractor? Do you
have mileage rate? You need to estimate the travel cost at the start and be clear who is paying for
them.

4: DIRECT COST EXPENSES-

Increase or decrease in finished goods ,hire charges, material purchase, bore well drilling
charges ,Earth excavation charges ,labor charges, labor food expenses ,painting.
LEGAL CHARGES
BROKERAGE CHARGE
CAPITAL COST:-Capital cost are directly related to construction including HARD COST like
plant and machinery and SOFT COST like such as consultancy fess, financial expenses, legal
cost etc.
1) LAND: It include purchase price, taxes, legal cost related to acquisition of property.
2) SERVICING: Cost of bringing telephone services, water or sewer services to sidewalks of site.
3) MUNICIPAL FEES: Development and building permits levis fees, development cost charges
and property taxes
4) PROFFESIONAL FEES: Architect, structural and mechanical and electrical engineer,
geotechnical engineer and quantity server.
5) ORGANISATIONAL EXPENSES: Marketing utility to site, builders risk, insurance premium
etc.
6) Good and service tax: If applicable GST applies to your project. SILVER CREST

CLIENT WORK ORDER IS RECEIVED FIRST- work order contain all the description of
units of commodity and price to be paid by the client of respective work. Client will give its
work order and then further processing is done.

PRESTIGE HITECH PROJECTS

NO1, The Falcon House, Main Guard Cross Road, Bangalore
PHONE: 08025591080
PROJECT : Prestige Silver crest
SUB PROJECT : Silver crest
K2K INFRASTRUCTURE PRIVATE LTD
#83, 4th Floor,
Prestige Copper Arch,
Infantry Road
Bangalore-5000050

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 Dear Sir,
Work Order for Civil Works at Prestige Silver crest, KADUBEESANAHALLI ring road ,
Bangalore. We are happy to confirm our order with you

Table 1 work order amendmends

PARTICULARS AMENDMEND NO 5 AMENDMEND NO 6

Amount in RS Amount in RS

Previous work order amount 26,13,16,228 26,77,73,066

Amendment Amount 64,56,838 54,42,106
Present work order Amount 26,77,73,066 27,32,15,172
VAT-14.5% CONTRACTOR ELIGIBLE 3,14,69,408 3,22,21,563
ST-4.944( CONSTRUCTION ON 100%) 1,46,93,195 1,46,93,195
SERVICE TAX@4.944% ON 100% 7,45,356 7,45,356
SERVICE TAX -6% ON 100% 4,44,624
TOTAL AMOUNT 31,46,81,025 32,13,19,910

BUDGETED DIRECT EXPENES ARE AS FOLLOWS:-

Table 2 Budgeted direct expenses

SL No Description Unit Quantity Avg Rate Amount

1 Earth Work Excavation Cum 20,165 200 40,32,996
2 Hard Rock Excavation Sqm 17,424 320 55,75,680
3 Back Filling Cum 5,405 120 6,48,584
4 Concreting Cum 12,650 5,100 6,45,13,888
5 Shuttering Sqm 3,19,473 165 5,27,13,120
6 Steel Bar bending MT 1,106 52,650 5,82,23,493
7 Structural Steel MT 10 82,000 8,20,000
8 Water proofing Sqm 11,983 620 74,29,571
9 Size Stone Masonry Cum 1,225 3,200 39,20,000
10 Block Work Sqm 26,187 720 1,88,54,427
11 Plastering Sqm 57,498 310 1,78,24,431
12 Flooring Sqm 24,672 820 2,02,31,296
13 PAINTING Sqm 71,215 126 89,73,129
14 GLAZING Ls 193 8,201 15,79,033
15 BUTCH WORK Sqm 897 620 5,56,289
16 Maintenance & Operation 32,61,233

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 17 Hire Charges 1,10,90,623
18 Security Charges 14,26,772
19 Electrical & Power Charges 14,10,619
20 C Class & Tools 46,31,371
21 Labour Accommodation 21,42,835
TOTAL 28,98,59,388

STEP 2:-INDIRECT EXPENSES

SANCTION EXPENSES:-
1. DEVLOPMENT CHARGES
2. NA EXPENSES
3. ULC EXPENSES
4. MUNCIPAL TAXES
5. HARDSHIP CHARGES
PLOT DEVLOPEMENT:-
1. PLOT CLEANING AND LEVELLING.
2. EXCAVATION , ROCK CUTTING
3. MURUM AND DEBRIS FILLING
4. APPROACH ROAD TO PLOT
5. HOARDING BOARDS ,TREE GUARDS
6. NALLA/ OTHER DEVLOPMENTS
SITE DEVLOPMENT:-
1. INITIAL SITE DEVLOPMENT.
2. COMPUND WALL AND FENCING
3. INTERNAL ROAD/APPROACH ROAD
4. U.G.M.T PUMP HOUSE AND BOREWELL.
5. SWIMMING POOL AND HEALTH CLUBS.
6. GARDEN AND PLAYGROUND EQUIPMENTS.
7. WATER LINE, DRAINAGE LINE AND SPECTIC TANKS.
8. STREET LIGHTS.
CONSULTANCY EXPENSES:-
1. ARCHITECT
2. STRCTURAL CONSULTANT
3. PLUMBING AND SANCTION CONSULTANT
4. ROAD CONSULTANT
5. LANDSCAPE DESIGNER
6. MODEL/PRESPECTIVE MAKER
7. OTHER CONSULTANTS
SUPERVISION EXPENSES:-
1. EXPENSES OF ENGINEERING DEPARTMENT.
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2. SITE STAFF REMENURATION
3. SECURITY EXPENSES
4. RESIDENT ARCHITECT EXPENSES

INDIRECT COST-Estimation of the project indirect cost like office space rent, furniture,
equipment cost and then and factor them in your budget.

1:OFFICE COST If the project takes a number of weeks, it is worth considering the ongoing
cost of office rental, especially if this is not already included in the hourly rate.

2: EQUIPMENT-It may be on the part of wear and tear of the machinery, repairs of the
machinery, maintenance of the machinery and calibration expenses.

3: ADMINSTRATION COST-It include cost of administrative assistant. Although they are not
the part of overhead cost but if you are hiring an admin assistant you need to include it in labor
cost.

BUDGETED INDIRECT EXPENSES ARE AS FOLLOWS:

Table 3 Budgeted indirect expenses

Amount
SL No Description Unit

1 Water Charges LS 12,16,439

2 Repair & Maintenance LS 1,67,054

3 Freight & Forwarding LS 1,29,042

4 Staff Salary LS 56,25,109

5 Insurance LS 1,57,611

6 Telephone Expenses LS 79,149

7 Printing & Stationaries LS 82,373

8 House Keeping LS 2,00,000

9 Financial Expenses LS 5,92,794

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 Total 82,49,570

STEP3: BOQ-A bill of quantity is a document used in tendering in the construction,

industry/suppliers in which material part and labor(their cost) are itemized. It also details the
terms and condition of the construction or repairs contract and itemize all work to enable the
contractor to price the work for which he or she is bidding.BOQ is prepared by the quantities
server and building estimators. A BOQ does in fact consider all the cost and is transparent in
relation to the cost. It covers all the aspect of the work and includes all works and material and
any cost related aspects supplied by the contractor.

OBJECTIVES OF BOQ: The objectives of BOQ is to provide is to provide sufficient

information on quantities of work to be performed to enable bids to be prepared efficiently and
accurately, and when contract has been entered and to provide a priced Bills of Quantities for
use in periodic valuation of works executed.

AN OVERVIEW OF BILL OF QUANTITIES: The BOQ is usually indicated by items of

work, units of measurement, quantities of work, rate for doing the work and the total value for
work. An example is shown below.
Table 4 sample of BOQ

SNO DESCRIPTION UNIT QUANTIT MATERIA LABOU SUB TOTAL AMT

S Y L R CONTRACT
OR
Reinforced cement
concrete work in
grade
beams(attaining
compressive
strength of 3000
psi in 28 days
with the leanest
permissible mix
1 2:3:6 with cum 1785 3240 - - 3240 534000
down grade
crushed stone as
coarse aggregate
and coarse sand
with an FM not
less than 2.7 as
fine aggregate.

24
 Usually, the contractor goes through the BOQ and would quote his /her rate as a percentage
above or below the rates indicated.

Even thought the quantity server employed by the owner provides a detailed estimate for the
project, sometimes the rate and total amount to do work may not be shown in Bills of Quantities.
In that case, the bidder provides the rate of the items at which she/he is capable to do the work.

Pricing of different items of work are done on the basis of the cost of material, equipment, labor
and overheads as well as profit.

MATERIALS: The material cost is calculated by examining the material quotation received from
suppliers, applying appropriate wastages factors and delivery charges.
EQUIPMENTS: Cost and equipment is calculated usually as a percentage of cost of material.
Depending on whether the equipment is owned or rented, this percentage will vary.
LABOR: The most difficult element to price is labor cost. Most of the time, it is not sufficient to
rely on published standard rate. Allowance for absences due to sickness, loss of time due to
inclement weather, overtime, etc. Rate of productivity is also a prominent factor in fixing labor
prices.
OVERHEADS AND PROFIT: Once the cost of material, equipment and labor has been added
up, a percentage for overhead and profit is added to the item rate. This percentage may vary from
project depending on how well the document has been prepared by the QS and also on market
condition. It ranges from 2.5 to 25%.
Once the pricing of all individual items for all trades is completed, the amounts are carried to a
summary page to indicate the total bid price.
STEP4: TRACKING OF BILLS Bills will rise as per the budget and accounting of bills will
be done as per activities of the budget. Preparation of the bill as per item of civil works.

PROCEDURE FOR TRACKING BILLS:

(TENDER DOCUMENT) Collection of tender document with technical

specifications/Drawings/BOQ
Distributing copies of collected tender /Drawings/BOQ TO M&E/SIPL/SGML/EXTERNAL
vendors and requested for the quotes.
Distribute copies of tender pages to finance and request EMD, IT clearance certificate.
Distributing tender specifications for providing rates for material to purchase.
Distributing copies of collected tenders/drawings/BOQ to M&E/SIPL/SIGML/EXTERNAL
VENDORS.
(QUOTATION AND MATERIAL RATES)
Preparations of civil and finishes BOQ including analysis for all the rates as per drawing and
specifications.

25
 Checking the collected documents, Quotations/ drawings and specification.
(RATE ANALYSIS) proposing obtaining approvals OF margin from CEO/MD/ED/ based on
basic cost including preliminary and taxes if applicable.
(BILLS OF QUANTITES) consolidating all the BOQ and tender documents.
Submitting the tender /completed bid offer to the clients consultant including preliminary
schedule along with required pre-qualifications documents as specified.
SUCCESSFUL IF (NO)
ARCHIVE DOCUMENTS
II IF (YES)

Revision of the bid offered based on negotiation until finalization of contract value.

STEP 5:ESTIMATION OF RISK-

1-ESCALATION: changes in the cost or price of specified item over period of time.

2-CONSTRUCTIONCONTIGENCIES- a markup applied to base cost estimate to account for

uncertainties in the quantities,unit cost,and minor risk events related to quantities and work
elements.

3-QUALITATIVE RISK ANALYSIS-addresses the objectives and guidelines for the risk
assessment,likelihood of identified risk .

4-REPETITIVE ERRORS-When drawings are revised .tender drawings before starting GOOD
FOR CONSTRUCTION DRAWINGS and if any error occurs then the area will be changed.

5-APPROVAL FROMBANGLOREDEVLOPMENTAUTHORITY-if any area of the proposed

building is taken up by the BDA then we cannot raise any objection to the government and it
create loss to the client.

6-OTHER RISK-Accidental risk, weather risk, legal constraints, landscape risk etc. hence
necessary steps are taken to overcome the conflicts or hence the project is delayed to about 6
months to 1 year.

7-EXTERNAL RISK- includes natural forces, inflation and interest rate, fiscal policy, political
controls.

8-INCIDENTAL RISK-Includes unclear or unattainable project objectives ,poor scoping, poor

estimation , budget based on incomplete data, contract problems, insurance problems, delays,
quality concern and insufficient time for testing.

9-REPETITIVE ERROR IN CONSTRUCTION-Cost overruns from estimating errors are an

unfortunate fact of life of life in construction. Estimated error drive up cost beyond the estimate

26
 or bid price. That means someone need to come up with additional money at end of job. Either
the contractor makes less profit or you have to come up with extra cost. The main types of
estimating errors are:-

1) OMISSIONS- These are items accidently left out estimates-either soft cost (permits, fees, etc) or
hard construction cost. Omissions may be due to items missing from the plans and specs that
were, therefore not included in estimate or bid.
2) WRONG ASSUMPTION- These is items that you assumed were covered under a contractor or
subcontractors bid but not.
3) INADEQUATE ALLOWANCES-You may get an estimate from a contractor or subcontractor
with a material allowance thats too low , a very common problem
4) PRICE CHANGES-Material cost or labor cost may rise between the estimate and the project.

NOVEL MATERIALS/TECHINIQUES-Every new material or building technique has a

learning curve. Even allowing a little extra time you may find that it takes a lot longer than
planned.

5) UNCLEAR OR INCOMPLETE PLANS AND SPECIFICATIONS-The absence of clear plan

leaves much room for disagreement about what, exactly was bid on. This can lead to change
orders and extra cost for extra work.
6) CONSTRUCTION DESIGN ERROR-If you build something wrong .have to tear it and build it
again, you may be able to get someone else to pay- the architect, a sub, a supplier but most
likely youll end up paying twice.

STEP 6: UNDERSTANDING ROLES AND RESPONSIBILITES:-

1 : ROLE OF ARCHITECTS:

To understand the requirement of project at site.

Preparations of initial sketches and drawings for approvals.
Submitting plans and receiving NOC from Municipal Corporation.
Compiling all the drawings and preparing a detailed working drawing which is totally self
explanatory in all the respect.
Visit the site to inspect and certify quality and workmanship of each and every construction
activity.
2: STRUCTURAL CONSULTANT:-
Periodic site visiting and checking of strata footings, reinforcement as being placed at site and
issuing certificates for the proceeding rectification of the work.
Readjustment of RCC design as per the revised requirement of the client as when it is required.
Visit to the site to check the quality of the concrete laid.
Estimate the total requirement of the structural steel for completion of RCC work.

3: PLUMBING CONSULTANT:-
27
 To coordinate the activities of the plumbing work with ongoing construction works.
To carry out the levelingwork, decide the final levels of the proposed roads and buildings plinth.
To maintain quality of work in progress.
To collect NOC from proper authorities of the completed work.
Approval of selection of the plumbing contractor.

4: ROAD WORK CONSULTANT:

Mark alignment of the roads and layout drawings.

Suggest the type of road to be constructed with respect to the soil strata and other geographical
conditions.

Study the topography and contour survey of the project and deciding the levels of the road.
Discussing with site engineers the practical problems that arise during site construction work.
Correspond with government authority for the approach of roads.
OUTPUT:-
1. Cost estimate of activity.
2. The project budget.
3. Budget variance report
INPUT PROCESSES OUTPUT
RESOURCE PLAN-Define and estimate Project Budget Baseline
REQUIREMENTS the resource requirement
and develop budget.
COST ESTIMATES DO-Obtain approval and Budget variance report
publish budget, authorize
expenses
HISTORICAL CHECK-Budget control and Budget updates
INFORMATION performance analysis.
MARKET CONDITIONS ADAPT-Update budget, set
corrective actions
POLICIES

STEP7); INTERNAL BUDGETING AND ERP-

Internal budgeting deals with finalization of respective BOQ and then making a analysis of DC
and IDC expenses and that budget to be provided to all departments to track the actual expenses
incurred on monthly basis
PROCEDURE AS FOLLOWS:-
1. Collected finalized BOQ /PO for civil and finishes work.
2. PREPRATION OF PRELIMINARY BUDGETS:-
Prepare detailed analysis of material and labor cost for activities in the BOQ/PO
Prepare detailed analysis of cost for mobilization , staff salaries, operating expenses, safety,
medical, tools, plants ,water ,electricity etc

28
3.PREPRATION OF ACTIVITES BUDGET:-
Prepare a comprehensive internal budget for preliminaries and activities.
Send the copy of the internal budget to cost audit department and enter the same in ERP.
Update the internal budgets periodically based on the revised drawings, site feedbacks, RA bills
etc.
Send the copies of updated budget to COST AUDITdept amend the estimate in ERP and monitor
the same.
Budget updating and ERP monitoring to continue till completion.

STEP 8:TERMS AND CONDITION OF CONTRACT(with reference to budgeting)

Terms and condition plays a vital role in any of contract of construction which is as follows:-
Employer means PRESTIGE HITECH PROJECTS LIMITED represented by head of contracts.
Contractor shall mean k2k infrastructure private ltd.
Contract means the contract agreement, the Letter of acceptance, the letter of tender and the
specifications of drawing.
Payments:-
1: MOBILIZATION AWARENESS: Mobilization advance to extend of 5% of the contract value
will be paid in two equal installments. Half of this advance will be paid on acceptance of the
work order. The second half should be paid as soon as all the required construction machineries,
staging, shuttering materials and other agreed mobilization are completed as approved by the
engineer. Recovery of mobilization advance will be on pro rata basis.
2: PAYMENTS:-The contractor shall submit RA bill by 5th of every month. The same will be
checked and verified by the engineer within 10 days. The contractor shall accept the certification
by the engineer before it is forwarded to employers for payments .The employer may releasing
up to 75% of certified work with all the relevant documents.(within14 days )on submission of the
bill after verification of works done balance amount shall be paid within 30 days of bill
certification. Bills shall be submitted along with supporting documents to support the milestone
payment.
FINAL BILL: - The final bill shall be submitted within 60 days of completion of work with all
the relevant document including reconciliation statements of material, as built drawing etc and
shall be cleared within 90 days from dates of submission of bill.
RETENTION MONEY:-Retention money will be deducted@5%of RA bill. The contractor shall
be entitled to claim refund of retention money @2.5% after issue of Substantial completion
certificate of work and acceptance of final bill and measurement. The balance of 2.5% will be
retained by the employer as security for rectification of defects liability period.
TERMINATION OF THE CONTRACT:-
TERMINATION OF DEFAULT-The employer may send the notice by registered post or
recorded delivery or e-mail to the contractor forthwith determines the contactor.
Has abandoned the contract.
Has without reasonable cause failed to commence work in accordance to contract.

29
 If contactor becomes bankrupt or makes any composition of arrangement with his creditor or has
a winding up order made or (except for purpose of reconstruction) a resolution for voluntary
winding up passed or receiver or manager of his business or undertaking is duly appointed or
possession is taken by or on behalf of creditor or any property the subject of charge.
In the event of the employer determining the employment of the contractor as aforesaid, the
contractor shall immediately vacate and give possession of the site of the works to the engineer,
leaving all the construction equipment and unfixed materials upon the site, other than those
which the contractor may be specifically directed in writing by the engineer to remove. The
employer must give notice within 28 days.
TERMINATION WITHOUT DEFAULT: The employer is entitled to terminate the contract at
any time for the employers convenience by giving notice prior 28 days earlier. The termination
shall take effect 28 days after later of dates on which contractor receives this notice.
VARIATIONS:Variation means any change in employers requirement which makes the
necessary the alterations or modification of the design or quantity of the works described by or
referred to employers requirement of the contracts proposal.
On variations ordered by the engineer shall include a requirement for the contractor shall
prepare and submit within 14 days of the contractor receiving the variation order, a quotation in
writing for complying with the order on following principles:-
Cost of labor, materials, hire charges of any special equipment required to execute plus 10% to
cover overheads and profit plus applicable taxes.
The engineer shall determine the sum which in his opinion shall be added to or deducted from
the contract price as a result of variation order.
TAXES AND DUTIES:-The contractor hereby affirms that total cost as contained herein before
is inclusive of all prevailing taxes, duties, excluding VAT, service taxes and labor cuss.
The contractor sum shall be adjusted in case of any variation upward or downward in the rate of
value added and service taxes. The contract price is also adjusted in case these two taxes are
replaced with GST. Introduction of any new taxes/cess/levies shall be considered for adjustment.
The contractor shall furnish all the necessary tax calculation to the employer.
The contractor hereby agrees that any saving as tax relief benefits with respect to duties, levies
and taxes as a result of the granting of tax incentives and concession.
POWER /WATER/AND SITE FACILITES:- The contractor shall arrange water and power
required for the works at his own cost with due permission from authority. The contractor shall
also arrange distribution of power and water at his own cost. Penalty charges in case of any delay
in payment of temporary power supply/other reason with authorities shall be borne by contractor.
The contractor shall make adequate arrangements for storage and pumping of water at site.
The contractor shall construct site offices, conference hall,laboratory and stores.
LIQUIDITY DAMAGES:-The contractor shall pay damages to the employer at rate of 0.5% of
the price per week maximum of 5% of contract price, if fails to complete work according to
contact.

30
 CONTRACT DOCUMENT AND DRAWINGS:-The contract price is deemed to include all cost
required for construction and no additional cost will be entertained.
SECURED ADVANCE:-The contractor may request for secured advance against reinforcement
steel brought by him to site to work up to 75% of its verified tax invoice value, limited to
maximum two months requirement of such materials. This advance is recoverable from the
subsequent interim payment certificate based on actual consumption of materials.
All the material and machinery for which the employer has paid secured advances shall remain
property of employer who reserves the rights to utilize the same for the contract work in the
manner he desires if the situation so warrants until such advances are recovered and the
machinery and material are released by the employer in writing.
BILL INSTRUCTION:-All the bills shall be submitted in the Performa approved by the
engineer.All the R.A. BILLS shall be subjected to technical check and audit and corrections
suggested shall be carried out
Any deviation in the format shall not be considered.
Each bill shall be submitted in lever arch file with the following.
Project name
WO Number and date
WO value
CONTRACT NAME
BILL NO
DATE
COMPLIANCE OF LABOUR REGULATIONS:- The contractor shall comply with labor law
including but not limited to minimum wages act, provident fund, employees state insurance act,
MONTHLY MONITORING AND REPORTING:- MONTHLY REPORTS INCORPORATE
THE FOLLOWING:
Milestone summary
Planning/progress
Sector program indicating the progress of respective trade and project progress for next 30, 60
and 90 days
Material quality plan
Method statement
Section 9: HEALTH AND SAFETY.
Summary statement.
Labor camps
Construction sites
Sec 10 Protection of work.
SEC 11 Cash flow projections.
Sec 12 Site progress photographs.

31
FINAL PAYMENT CERTIFICATE:- means the certificate issued by the engineer once the
contractor submits the final statement which represent full and final statements of all money due
to the contractor under or in connection with the contract.

Cost of dewatering system to keep the site free from accumulation of water by any means.
Contractor shall get acquainted with site conditions , nature of soil and adopt suitable appropriate
dewatering system as deemed fit for the nature of soil and prevailing water collected by run off
or rain to get the surface reasonably dry.

QUALITY OF CONSTRUCTION:- All plant and material will be of good quality and respective
kind as described in contract. All works shall be carried out in good and workmanlike manner.
Contractor to provide everything necessary for examining , measuring and testing any material
good or workmanship and shall supply samples of materials good or workmanship .

PROFIT&LOSS OF SILVER CREST

Table 5 Profit and loss account

SNO PROJECT VALUES AS PER AS PER %WISE REMARK

BUDGET ACTUAL VARIANC S
E
A ORIGINAL 28,54,57,39 IF positive
ODER (RO) 2 order value
REVISED decrease
ORDER (R3) -7% impact will
26,77,73,09 be on IDC
6
B BILLING
NON
TENDRED 3,16,81,841
ITEM percentage
TOTAL: 299,454,937 289,859,38 289,284,67 of work
8 0 done
C EXPENSES
DIRECT 289,859,38 289,284,67
COST%WIS 8 0
E (97%) (96.6%)

INDIRECT 8,249,570 1,20,11,719

COST (3%) (4%)

TOTAL 298,108,95 301,296,39

COST 8 0
( DC+IDC) (99.55%) (100.6%)

32
 F NET PROFIT 1,345,979 (1,841,453) (0.16%)
AS PER P $L 0.45% (0.61%)

STEP 9: ANALYSIS OF PROFIT AND LOSS STATEMENT OF CLIENT/BUDGETED

AND ACTUAL as on 31 December 2016:

SILVER CREST ANALYSIS BRIEF DETAIL:-

Budgeted amount is arrived as per silver crest working and number arrived on pro rata basis.
As per actual is based on basis of subcontractor billing.
CAUSES FOR LOSSES IN SILVER CREST AS FOLLOWS:-
VARIATION IN DIRECT COST:-

Sometimes, when the amount of excavation work is decided the company may charge expenses
keeping in mind that soil may be soft soil and if at construction site it is hard soil then the
company has to incur expenses from its own pocket for bearing those losses

VARIATION IN INDIRECT COST:-

Suppose the project is facing losses and the company decide to postpone or delay in project for
some months then it has to bear the expenses of staff salary or else if the staff expenses need to
be saved, then further when the project will again restart then the company has to bear additional
expenses of recruitment.
COMPANY

a) Decide to continue project even at losses.

b) It builds the strength of company.
c) REASON FOR DELAY:-
VARIATION IN THE MATERIAL RATES EVERY YEAR
EXCESSIVE ESCALATION CHARGES
PROJECT DURATION
REASON FOR LOSS:-
During earthwork escalation if we find area of hard rock, it extend the work duration as well as
loss of other linked activities of construction.
Due to DRAWING revision.
Samples approval from the consultant.
Vendor management.

33
 Legal approvals for construction.
Design approval.
Extra civil non tendered activities.
Customer modification
Failure in the design (physically)
CORRECTIVE ACTION:-
Discussing with client regarding acute losses and receiving compensation for it.
Preparing quarter-wise profit and loss statement and try to eradicate minor losses.
Try to solve particular activity leading to losses.

STEP 10) ACTUAL EXPENSES AS FOLLOWS:-

Table 6 Actual expenses

YEAR 2012-13 2013-14 2014-15 2015-16

DIRECT 1,84,00,660 12,77,24,884 9,43,47,948 28,92,84,678
EXPENESES
INDIRECT 8,53,984 34,29,312 43,42,248.80 1,20,11,718.66
EXPENSES
SELLING AND
ADMINSTRATIVE 22,032 2,47,147 2,01,742 6,22,788.66
EXPENSES

EMPLOYEE COST 8,15,502 30,46,738 40,35,947 1,10,89,535

FINANCIAL 16,450 1,35,427 1,04,559.80 2,99,395

EXPENSES

TOTAL 19,254,644 131,154,196 98,690,196.8 301,296.396.66

(DC+IDC)

STEP 11:-DETAIL OF ALL EXPENSES ACTUALLY INCURRED ON 31 DEC 2016 AS

FOLLOWS:-
Table 7 direct expenses as per tally

COST CENTRE :11 SILVER CREST

K2K INFRASTRUCTURE PRIVATE (1-APRIL 2011 TO 31-DECEMBER
LIMITED FROM ( 1 -4-2011 TO 31-12- 2016) CLOSING BALANCES AS
2017) UNDER:

34
DIRECT EXPENSES AS FOLLOWS:- AMOUNT
HIRE CHARGES OF PLANT AND 1,04,62,730
MACHINERY
HIRE CHARGES SHUTTERING 26,31,256
MATERIALS 1,30,93,986
TOTAL OF HIRE CHARGES:
MATERIAL PURCHASES STEEL 5,67,67,941
AGGREGRATES 58,94,247
BALLIES(CASURINA POLES) 1,08,600
BINDING WIRE 77,887
CEMENT 2,91,89,075
CONCRETE BLOCKS 42,66,274
CONSUMBALE MATERIAL 64,79,409
DUST 10,18,823
ELECTRICAL CONSUMBALE ITEMS 10,24,279
FUEL AND LUBRICANT GAS 22,08,065
HARDWARE MATERIAL 1,73,166
KERB STONE 1,02,200
PLUMBING MATERIAL 76,269
PLYWOOD AND WOOD MATERIAL 13,44,808
RMC 95,05,110
SAFETY MATERIALS 6,70,910
SAND 1,65,62,987
SOLID BLOCKS 49,24,707
TILES,GRANITE AND MARBLE 62,31,222
TOOLS AND TACKLES 1,648
TOTAL OF MATERIAL PURCHASE: 14,66,27,627
MATERIAL TESTING 29,700
BOREWELL DRILLING CHARGES 2,32,390
DIESEL 15,76,804
EARTH EXCAVATION WORK 75,16,686
ELECTRICAL EXPENSES 1,07,889
ELECTRICITY CHARGES 23,05,365
FABRICATION WORK CHARGES 37,57,593
LABOR CHARGES 8,88,71,665
LABOR COLONY EXPENSES 1,54,055
LABOR FOOD EXPENSES 22,180
MESS EXPENSES 7,85,904
PAINTING CHARGES 96,37,834
PROVISION FOR PENDING BILL 5,71,658
PVC ITEMS 5,80,197
RENT LABOR COLONY 12,16,510
REPAIRS AND MAINTENCE DIRECT 8,270
SECURITY CHARGES 24,99,499

35
SITE EXPENSES 1,20,785
SWACH BHARAT CESS-2015-16 6,209
SWACH BHARAT CESS-2016-17 3,779
TRANSPORTATION CHARGES 31,517
TRANSPORTATION AND WEIGHMENT 93,139
CHARGES
WATER CHARGES 37,84,254
WATERPROOFING CHARGES 56,48,925
WEIGHTMENT CHARGES 250
GRAND TOTAL OF ALL DIRECT 289,284,670
EXPENSES

INDIRECT EXPENSES AS FOLLOWS:-

Table 8 Indirect expenses as per tally

INDIRECT EXPENSES AS ON 1 APRIL 2011 TO AMOUNT IN RS

31 DECEMBER 2016
COMPUTER MAINTENCE AND PERIPHERAL 527
CHARGES
INSURANCE PLANT AND MACHINERY 11,922
INSURANCE WORKMEN COMPENSATION 79,819
TRAVELLING EXPENSES AND LOCAL 89,236
CONVEYANCE
BANK CHARGES 12,839
CALIBRATION CHARGES 13,644
MISCELLENIOUS CHARGES 1000
OFFICE EXPENSES 2328
POOJA EXPENSES 455
PRINTING AND STATIONARY 63,080
PROVISION FOR PENDING BILL-INDIRECT NIL
RATES AND TAXES 60,550
REPAIRS AND MAINTAINENCE INDIRECT 1,62,835
ROUND OFF NIL
TELEPHONE,MOBILE $ INTERNET CHARGES 1,20.413.66
VEHICLE MAINTENCE 4,4140
a) GRAND TOTAL OF ADMINSTRATIVE 6278866
SELLING AND DISTRIBUTION EXPENSES
EMPLOYEE SALARIES 8740023
EMPLOYER PROVIDENT FUND-Lb 607701
EMPLOYER PROVIDENT FUND 498893
ESIC-EMPLOYEE AND EMPLOYER 95537
INSURANCE-MEDICLAIM 104587
MEDICAL EXPENSES 73724
RENT STAFF QUARTERS 677049

36
STAFF GUEST HOUSE EXPENSES 1300
STAFF QUARTERS-ELECTRICITY AND WATER 59519
CHARGES
STAFF QUARTER EXPENSES 9452
STAFF WELFARE EXPENSES 187280
b) GRAND TOTAL OF EMPLOYEE COST 11089535
COMMISSION CHARGES BG 16450
ICD- INTREST PAID 6575
INTREST ON PLANT AND MACHINERY 276371
c) GRAND TOTAL OF FINANCIAL 299395
EXPENSES
GRAND TOTAL OF ALL IDC EXPENSES 12011720
TOTAL OF DC +IDC+FINANCIAL EXPENSES 289,284,670+12,011,720=(301,296,390)
AS PER TALLY

STEP 12:-COMPARING THE ACTUAL AND BUDGETED EXPENDITURE AS ON 31

DECEMEBER 2016

ORIGINAL ORDER-285457392

REVISED ORDER- 267773096

BILLED VALUE-299454937

Table 9 amount budgeted and actual expenses

-TOTAL OF AMOUNT AMOUNT VARIATION

EXPENSES BUDGETED ACTUALLY
INCURRED
TOTAL OF DIRECT
COST 289,859,388 289,284,670 574,718

TOTAL OF
INDIRECT COST 8,249,570 12,011,719 (3,762,149)
TOTAL OF
(DC+IDC+FINANCIAL 298,108,958 301,296,390 (3,187,432)
EXPENSES)

37
 So, we conclude that overall project DC is incurring profit but in IDC there are some losses
because the project was not completed within the time line. Hence while preparing the
budget some items of IDC are mentioned in DC so, a detailed analysis is prepared and
segregation is done accordingly which is as follows:-
Table 10 comparison of budget , BOQ, actual and variances

BOQ Budget Actual Variance

Sl
Description Unit
no. Avg Avg
Qty Amt Qty Rate Amount Amount %
Rate Rate
A Direct Cost

Earth Work
1 Cum 20,165 265 (13,10,724) -33%
Excavation 200 40,32,996 20,165 265 53,43,720

Hard Rock
2 Sqm 17,424 400 (13,93,920) -25%
Excavation 320 55,75,680 17,424 400 69,69,600

3 Back Filling Cum 5,405 121 (5,405) -1%

120 6,48,584 5,405 121 6,53,989

4 Concreting Cum 12,650 5,000 12,64,978 2%

5,100 6,45,13,888 12,650 5,210 6,32,48,909

5 Shuttering Sqm 3,19,473 185 (63,89,469) -12%

165 5,27,13,120 3,19,473 185 5,91,02,589

Steel
6 MT 1,106 52,65 47,010 62,37,046 11%
Barbending 5,82,23,493 1,106 47,010 5,19,86,446
0

7 Structural Steel MT 10 82,00 79,100 29,000 4%

8,20,000 10 79,100 7,91,000
0

8 Water proofing Sqm 11,983 623 (35,950) 0%

620 74,29,571 11,983 623 74,65,521

Size Stone
9 Cum 1,225 2,980 2,69,500 7%
Masonry 3,200 39,20,000 1,225 2,980 36,50,500

10 Block Work Sqm 26,187 600 31,42,404 17%

720 1,88,54,427 26,187 600 1,57,12,022

11 Plastering Sqm 57,498 320 (5,74,982) -3%

310 1,78,24,431 57,498 320 1,83,99,412

12 Flooring Sqm 24,672 819 24,672 0%

820 2,02,31,296 24,672 819 2,02,06,624

38
13 PAINTING Sqm 71,215 168 (29,91,043) -33%
126 89,73,129 71,215 168 1,19,64,172

14 GLAZING Ls 193 7,400 1,54,226 10%

8,201 15,79,033 193 7,400 14,24,807

BUTCH
15 Sqm 897 689 (61,910) -11%
WORK 620 5,56,289 897 689 6,18,198

Maintenance & -
16 (33,61,918)
Operation 32,61,233 66,23,150 103%

17 Hire Charges 11,18,629 10%

1,10,90,623 99,71,994

Security
18 (4,00,000) -28%
Charges 14,26,772 18,26,772

Electrical &
19 49,778 4%
Power Charges 14,10,619 13,60,841

C Class &
20 40,59,713 88%
Tools 46,31,371 5,71,658

Labour
21 7,50,090 35%
Accomidation 21,42,835 13,92,745

TOTAL - 28,92,84,670 5,74,718 0%

28,98,59,388

96.80% 96.60%

IDC - for
B
Direct Cost

1 Water Charges Ls (3,50,026) -29%

12,16,439 15,66,465

Repair &
2 Ls 4,219 3%
Maintenance 1,67,054 1,62,835

Freight &
3 Ls 79,042 61%
Forwarding 1,29,042 50,000

4 Staff Salary (32,37,990) -58%

56,25,109 88,63,099

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5 Insurance 65,870 42%
1,57,611 91,741

Telephone
6 (70,852) -90%
Expenses 79,149 1,50,001

Printing &
7 (42,633) -52%
Stationaries 82,373 1,25,006

8 House Keeping (1,09,779) -55%

2,00,000 3,09,779

Financial
9 (1,00,000) -17%
Expenses 5,92,794 6,92,794

Total of IDC 1,20,11,720 (37,62,149) -46%

82,49,570

Total Expenses
30,12,96,390 (31,87,432) -1%
(DC +IDC ) 29,81,08,958

Total Billing 29,94,54,937

29,94,54,937

Profit/(Loss)
13,45,979 (18,41,452)

0.45% -0.61%

A GLIMPSE OF SILVER CREST:-

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Figure 3 tower1 elevation

Figure 4 tower 6 elevation

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Figure 5 entrance of silver crest

Figure 6 tower 5,4,3,2,1 rear elevation

42
Figure 7 tower 8 elevation

Figure 8 tower 7 elevation

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Figure 9 tower5, 4,3,2,1 front elevation

Figure 10 gym

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 CONCLUSION:-

Hence the variation of direct cost between the actual and budgeted amount depicts a positive
variance while in indirect cost it depicts a negative variation thereby we conclude that the
variation arises from number of causes like:-
The cost of buying replacement system.
Loss of revenue from the system(from selling certificates of Renewable Energy Production)
The extra cost of buying electricity(since the purchaser cannot generate of its own)
The cost of contractor and other personnel

Thereby, the company tries to resolve all the conflicts and receive compensation against it.
Once you know that your project is viable the wheels can be set in motion to build, renovate or
convert it. This is perhaps the most intense time period, with critical deadlines and decision that
will have a serious impact on end result. It is important to make good use of professional
consultant in your development team to ensure accurate cost estimate, a cost effective design and
a smooth building process that complete on time. In domain of construction projects and risk
management, two key conclusions can be drawn from this research. Firstly, the complete project
information leads to more accurate capital cost budget estimates. One of the most serious
problems when budget is being estimated is that little information is often available. The
requirement is to invest more time in early briefing stages of design to clearly define project
scope and complexity. The second key conclusion is that change may be classified as greatest
risk. No matter how much designed information is produced for estimating it can be
counterbalanced by any design changes that are subsequently made. However , whilst the
industry is often criticized for being inefficient, the client must also review their driving
contribution to the process of effective risk management.
Therefore we can summarize that projects are unique in nature and much depends on the
industry, size, location,nature, complexity, business environment etc. in which they operate. The
truth appears to be that the concept of one size does not fit all is a good point to start with in
certain cases.

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 SUGGESTIONS

Hence a prudent project manager will control the budget. He would continually forecast the
budget. Regularly forecast resource usage by keeping the team informed thereby managing scope
meticulously.

Hence, outlining the seven essential tips towards creating and managing of your project budget
includes the following:-

1) Use historical data.

2) Reference lesson learned.
3) Leverage your experts.
4) Confirm Accuracy.
5) Baseline and re-baseline the budget.
6) Update in real-time
7) Get on track
If you manage your project expenses using these building blocks you are going to have a sound
foundation for your project success. Be sure to track the budget v/s actual cost when you are in
the project to see if you are adhering to that budget. Because after you make a budget, you have
to know how to manage it correctly.
Track and manage your project expenses while project planning within your project management
tool. You dont want to keep all data separate, where it could quickly become outdated. Rather
track project cost as you manage project line. Hence, project manager need to be able to
coordinate, implement and finalize projects according to specification according to budget and
on time. They must be highly organized, good at multi tasking, leading, communicatingand
problemsolver. Must take care of following:-
1) Project management tools.
2) Business management tools.
3) Project business plan and budget.
4) Project prioritization methodologies.
5) Projects risk factor.
6) Team management.
7) Subcontractors, vendors and supplier.
8) Project status information.

46
References

Ansoff, H. (1975). Managing the budget in construction planning California Management

Review. 18(2):21-33
.
Ansoff, H., Declerk, R., & Hayes, R., eds. (1976). From Strategic Planning to Strategic
Management. New York:

John Wiley and Sons.Archibald R.D., & Voropaev, V.I. (2003). Commonalities and Differences
in Project Management Around the World: A Survey of Project Categories and Life Cycles, ESC
Lille International PM Workshops

KM . Bredillet, C. (2004a). Project management governance : A situational approach. EURAM

conference. Munich, Germany.

Bredillet C. (2004b). Understanding the very nature of Project Management: a praxeological

approach. PMI Research Conference, London.

Annual statements of prestige tech

www.wikipedia.com

www.gogglescholar.com

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