ASSIGNMENT 3

ESTIMATION AND COSTING

Q1. Summarize the advantages of the centre line method over long wall and short wall method?

A1.

The central line method estimate for earthwork, concrete work or brickwork for all walls of a
whole building having the same section is estimated at a time. But for partition walls or walls of
other section of the building attention is required to locate the junctions with the main wall in
order to subtract half the width of the work of the main wall for each junction at the same level.

By long and short wall method each wall of a building is estimated separately. The long walls are
considered out-to-out and short walls in-to-in. For in-to-in consideration attention is required to
see the level with which the short wall joins with the long wall in order to deduct half the width of
the work from each joint at the same level.

Thus, by Centre line method estimate of a building can be prepared quickly eliminating lengthy
mathematical calculations.

But the centre line of a building cannot be physically measured at site, where as the long and
short walls i.e. out-to-out and in-to-in measurements of rooms of a building can be physically
measured.

So, Centre line method is preferred to prepare estimates and long and short wall method is
preferred

Q2. Give the units of measurement for plastering, flooring and painting?
A2.

Units of Units of
Particulars of item
measurement payment

Plastering, painting and finishing

1. Plastering – cement or lime mortar (thickness and

SQM Per SQM
proportion specified)

2. Pointing SQM Per SQM

3. White washing, colour washing, cement washing,

SQM Per SQM
(number of coats specified)

4. Distempering (number of coats specified) SQM Per SQM

5. Painting, varnishing (number of coats specified) SQM Per SQM

 Flooring

1. 25mm cement concrete over 75mm lime

SQM Per SQM
concrete floor (including lean concrete)

2. 25mm or 40mm cement concrete floor SQM Per SQM

3. Doors and window sills (CC or cement mortar

SQM Per SQM
plain)

Q3. List out the factors to be considered in design of septic tank?

A3. For the septic tank to function as an efficient suspended solids remover it should be of sufficient
capacity with proper inlet and outlet arrangements. It should be designed in such a way that the
sludge can settle at the bottom and the scum accumulates at the surface, while enough space is left
in between, for the sewage to flow through without dislocating either the scum or the settled
sludge.

The capacity of septic tank depends on number of users and interval of sludge removal. Normally

sludge should be removed every 2 years. The liquid capacity of tank is taken as 130 liters to 70 liters

per head. For small number of users 130ltr per head is taken. A septic tank is usually provided with

brick wall in which cement mortar [not less than 20cm (9 inch)] thick and the foundation floor is of

cement concrete 1:2:4. Both inside and outside faces of the wall and top of the floor are plastered

with minimum thickness of 12mm (one-half inch) thick cement mortar 1:3 mix. In order to provide

for the above indicated requirements the following considerations are made in the design of

septic tank:

 Sewage Flow: ...

 Detention Period: ...
 Tank Capacity: ...
 Dimensions of Septic Tank: ...
 Sludge Withdrawal and Disposal: ...
 Construction Details: ...
 Disposal of Septic Tank Effluent:

Q4. Describe the methods to determine the area of roads in excavation?

A4. Cross-section of earthwork of road in banking or in cutting is usually in the form of trapezium,
and the quantity of earthwork may be calculated by the following methods:
  Quantity or Volume = Sectional area x Length
 Sectional area = Area of central rectangular portion + Area of two side triangular portions
= Bd+2(1/2 sdxd
= Bd+sd2
S: 1 is the ratio of side slopes as horizontal: vertical.

ROAD ESTIMATING

Alternatively, sectional area of the two ends may be calculated and the mean of two sectional area is
taken out. Different kinds of soil as sandy, rocky, clayey etc., estimated separately as the rates vary.

1. METHOD 1. MID-SECTIONAL AREA METHOD

Quantity = Area of mid-section x Length
Area of mid-section = Area of rectangular portion + Area of two triangular portion.
The quantities of earthwork may be calculated in a tabular form as below:

2. MEAN SECTIONAL AREA METHOD

Quantity = Mean sectional area x Length
The quantities of earthwork may be calculated in a tabular form as below:

3. METHOD 3.PRISMOIDAL FORMULA METHOD

Quantity or Volume = L/6 (A1+A2+4Am)
 Q5. Define lump sum contract?

A5. A lump-sum contract is normally used in the construction industry to reduce design and contract
administration costs. It is called a lump-sum because the contractor is required to submit a total and
global price instead of bidding on individual items. A lump-sum contract is the most recognized
agreement form on simple and small projects and projects with a well-defined scope or construction
projects where the risk of different site conditions is minimal.

Advantages

 Low risk to the owner.

 'Fixed' construction cost.
 Minimize change orders.
 Owner supervision is reduced when compared to Time and Material Contract.
 The contractor will try to complete the project faster.
 The contractor will maximize its production and performance.

Disadvantages

 It presents the highest risk to the contractor.

 The Owner might reject change order requests.
 The project needs to be designed completely before the commencement of activities.
 The construction progress could take longer than other contracting alternatives.

Q6. Define Arbitrators?

A6.

Alternative Dispute Resolution (ADR) is a cost-effective, efficient form of resolving disputes without
having to resort to a full blown lawsuit. The two main forms of alternative dispute resolution are
mediation and arbitration. Think of arbitration as a mini court proceeding.

In arbitration, two disputing parties present their respective sides of the story to a neutral third party
(the arbitrator). Each party will have the opportunity to make statements and present evidence, and
the arbitrator will make a final decision that is binding on both parties.

The 4 Procedures of Construction Arbitration

 Regular Track Procedure

 Resolution of Disputes through Document Submission
 Fast Track Procedure
 Large, Complex Construction Disputes.
Q7. List out the different methods of depreciation?
 A7. Depreciation is the accounting process of converting the original costs of fixed assets such as
plant and machinery, equipment, etc. into the expense. It refers to the decline in the value of fixed
assets due to their usage, passage of time or obsolescence.
An example of Depreciation – If a delivery truck is purchased a company with a cost of Rs. 100,000
and the expected usage of the truck are 5 years, the business might depreciate the asset under
depreciation expense as Rs. 20,000 every year for a period of 5 years.

Various Depreciation Methods

 Straight Line Depreciation Method

 Diminishing Balance Method
 Sum of Years’ Digits Method
 Double Declining Balance Method
 Sinking Fund Method
 Annuity Method
 Insurance Policy Method
 Discounted Cash Flow Method
 Use Based Method
 Output Method
 Working Hours Method
 Mileage Method
 Other Methods
 Depletion Method
 Revaluation Method
 Group or Composite Method

Q8. Demonstrate the meaning of salvage value?

A8. Salvage value is the estimated resale value of an asset at the end of its useful life. It is subtracted
from the cost of a fixed asset to determine the amount of the asset cost that will be depreciated.
Thus, salvage value is used as a component of the depreciation calculation.
For example, let's assume you buy a car for $20,000. You believe that the car could last for 15 years.
After that, the car is probably "run into the ground" and its next stop is the junkyard. The salvage
value of the car is the price a junkyard or recycler might pay you for the old, nonworking car.
Salvage values are important in business because they affect the size of a
company's depreciation expense (and thus they affect net income). It is important to note, however,
that salvage values are merely estimates. Nobody knows what an asset will be worth 10 years in
advance.
Q9. List out methods of valuation?

A9. There are five main methods used when conducting a property evaluation; the comparison,
profits, residual, contractors and that of the investment.
 1. The Comparison method is used to value the most common types of property, such as
houses, shops, offices and standard warehouses. Ideally the market should be stable and
there should be multiple, recent lettings/sales of comparable properties (same size, location,
condition etcetera). The best comparable factors should be selected and analysed, and
thereafter adjustments can be made for their differences. Finally, an estimated market value
can be created.
2. The Profits method could be applied when no comparable rental/sale transactions are
available, and it’s often used for pubs, hotels, nursing homes (typically a business property
with an element of a monopoly, with results in lack of comparable variables). The method
estimates a business’s gross profits and thereafter deducts all working expenses excluding
any rental payments made; this gives the divisible balance, or the amount of capital to be
shared between tenant (for running the business) and landlord (for rent).
3. The Residual method could be used to value property with development potential or vacant
land that is having its current use changed to something more profitable. When calculating
land value one must take the gross development value minus the cost of development
(including the developer’s profit). The residual sum is then the capital that the developer can
spend on the property in its undeveloped form.
4. The Contractor’s method is a cost method of valuation, and can sometimes be used when
comparative, profits or investments methods cannot be used. The situation often occurs if a
property has a specialist nature, meaning there are no market transactions. The method
assesses all the costs of providing a modern equivalent property, and thereafter adjusting it
to reflect the age of the subject property.
5. Investment Method of Valuation: This method of valuation is usually applied for investment
properties. In the Investment Method, the annual rental income presently received or
expected over a period of time for the lease of the property is estimated and deducted
therefrom the expenses or outgoings incidental to the ownership of the property to obtain
the net annual rental value.

Q10. Distinguish between freehold and lease hold property?

A10. Freehold: Outright ownership of the property and land on which it stands. A freehold estate in
land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of
ownership. . Moreover, if one plans to sell such a property, it won't require any legal or government
consent, and, hence, has less paperwork attached. Understandably, freehold assets are more
expensive when compared to leasehold assets.

Leasehold: Method of owning property (usually a flat) for a fixed term but not the land on which it
stands. Possession of the property will be subject to the payment of an annual ground rent. When the
lease expires, ownership of the property reverts back to the freeholder. Nearly all flats in London are
leasehold.

As the name suggests, here the ownership of the land on which the property is built is leased for a
certain amount of time to the developer. Generally, the lease period varies from 30 to 99 years.
Comparison between Leasehold and Freehold property:

Leasehold Freehold
Land belongs to the state, leased to
Land belongs to the owner
owner for a certain number of years
At the end of the lease period,
Ownership is indefinite
owners must pay to extend the lease
Does not require state consent to
Requires state consent (obtained at
transfer ownership (except in certain
the land office) to transfer ownership
specially earmarked properties)
Most banks will not finance a
Banks finance freehold properties
property if the lease period is less
easily
than 30 years

SUBMITTED BY: ADITI CHANDEL

18001256