Delay, the main cause of cost overruns

[Carrales Broe]

Everyone knows that one year’s delay in completing a building project increases the project cost by about 15 to 20 percent. When considering the delay involved in building [REMOVED] City has one of the highest cost overruns mainly due to its status as a high cost destination. Recently proposals have been given to the Kerala State Housing Board (KSHB) to construct more than 8000 tenements of various categories under their mass housing schemes. It would easily generate about 150 crore rupees as extra funds for KSHB, and another 150 crore rupees can be easily raised from Housing Financing Banks, which are now aplenty.

Thus, as a nucleus about 300 crore rupees can be set aside as the KSHB’s own Housing Revolving Fund and this can be multiplied by the snow-balling effect. Unfortunately, these outdated discriminative procedures of tender notices and contract documents have unnecessarily wasted about one year, though every point has been resolved and sorted out. Therefore, unless, these inhibitions are sorted out, there will not be any progress in the creation of ample social mass housing amenities and the eradication of slums in Kochi.

Steel rates have further increased by five percent recently in addition to the cost escalation earlier. Cement manufacturers have formed a cartel. There is bound to be an increase in oil prices shortly which will further escalate and skyrocket the prices of everything. Hence, timely execution of the apartment projects within the specified deadline while keeping to the quality standards and the approved plan must be the main priority of the project experts as prices of building materials double every 4 – 5 years.

Completing construction activities at a faster pace even when adhering to the quality standards is possible only through total mechanization of civil engineering operations, which has been achieved only by a few of the leading builders. It will help to create ample living spaces at low cost to help the unfortunate roofless millions to own a shelter, which they can call their own. The vested interests must stop the overt sabotaging activities and harness this expertise of the proven industry people to serve the human needs of the roofless millions and try to give them reasonable living conditions.