Chapter:3

Analysis of road, sanitary

and water supply work.
-By Rajiv khatiwada
Introduction
• Analysis of rates (AOR) is the process of evaluating, determining and
comparing rates of items or components used in a construction project
• AOR is important for accurate cost estimation, budgeting, and
competitiveness in bidding.
• It helps in making informed decisions, mitigating(reducing) risks, and
optimizing project budgets.
• AOR is crucial for ensuring that cost estimates are accurate, competitive,
and reflective of current market conditions
Factors affecting rates

• Specification
• Quantities of materials
• No. of different types of labourer and their own rate
• Location of site of work and distance from source of material.
• Profits and miscellaneous expenses
Factors affecting rate of roads
• Location
• Rate of each item
• Widening(add 1% cost in every item)
• Amount of earthwork
• Alignment
• Availability of materials
• Availability of workmanship
• Binding materials
Factors affecting rates/cost of sanitary
Factors influencing the rate or cost of sanitary works include scope of work, design
requirements, site conditions, regulatory compliance, labor costs, material costs,
contractor overhead and profit, project schedule, project location, and project
management
• Scope of work: Complexity and scale affect costs, with larger projects typically
costing more
• Design requirements: High-quality materials and advanced technologies can
increase costs but enhance performance
• Site conditions: Topography, soil, accessibility, and existing infrastructure can
impact costs
• Regulatory compliance: Meeting building codes and standards affects costs
• Labor costs: Wages, benefits, skill level, and efficiency impact overall costs
• Material costs: Fluctuate based on market demand, availability, and
specifications
• Contractor overhead and profit: Administrative expenses, insurance,
equipment, and profit margins contribute to costs
• Project schedule: Delays, disruptions, and changes can lead to additional
costs
• Project location: Regional economic conditions and differences in labor
rates and material costs can affect project costs
• Project management and contingencies: Mitigating unforeseen
challenges and cost overruns through effective project management and
contingency planning is crucial to managing costs efficiently.
Factors affecting rate/cost of water supply works
• Factors influencing the rate or cost of water supply works:
• - Source of water (groundwater, surface water, treated wastewater)
• - Water quality and treatment requirements
• - Treatment technology(filtration, aeration, disinfection, chemical treatment)
• - Distribution infrastructure
• - Regulatory compliance
• - Energy costs
• - Labor costs
• - Material costs
• - Geographic location
• - Project scale and complexity
Overhead or establishment charge:
• Overhead charges are indirect costs incurred by a business that are not
directly attributable to production or services
• Include administrative expenses, facility costs, utilities and services,
depreciation, indirect labor, and general and administrative expenses
• Accurate allocation is important for determining true cost, pricing decisions,
budgeting, and financial reporting
• Understanding and managing overhead charges is essential for businesses
to maintain profitability, control costs, and make informed decisions
• Proper management can enhance competitiveness, optimize operations,
and achieve long-term success
• It can be categorized into two sub groups;
a) General overhead:
expense made throughout year irrespective to running work in hands.
-establishment, stationary, printing, travelling expenses, rent tax etc
b) Job overhead:
expenses incurred indirectly for the job or the project
- supervision
- Handling of materials
- interest on loans
-workmen’s compensation and insurance etc
Task work or out-turn work
• The capacity of doing work by an artisan or a skilled person/labour in the
form of quantity of work per day is known as task work or out-turn work.
• They are hugely affected by factors as:
-nature
-size and height
-situation
-location etc
• In big cities, task work is greater than in small cities.
• In well organized work, less no of labours are required.
Labour rate
• Labor rate refers to the money paid to workers for their time and effort.
• It is different for different category of labours: skilled, semi-skilled, unskilled
• To obtain labour rate, the number and wages of different categories of
labour required for each unit of work should be known and is multiplied by
wage per day.
• It varies with place, hence rate analysis for a particular place is required.(In
Nepal, it varies with district.
• Factors affecting labor rates include skill level, industry, location,
unionization, market conditions, government regulations, and company
policies
Material rate
• It includes the cost of materials(steel, wood, bricks etc). Based on current market
• It I’ncludes first cost, cost of transportation, local taxes and other charges.

Lead statement:
• Lead is the distance between the source of availability of materials and construction site
and expressed in km.
• This statement is required to transport materials from a distant place more than 8km.
• Cost of conveyance depends upon lead
• It gives total cost of materials per unit item including first cost, conveyance , loading-
unloading etc.
(Check pdf for rates)
Rate pdf
Government procedure for analysis of roads:
The preparation of rate analysis for roads by government agencies involves a structured
process to determine the costs associated with various components of road construction and
maintenance projects. Here's a general outline of the procedure typically followed by
government authorities:
§ Scope Definition: Define the scope of the road project, including the type of road (e.g.,
highway, urban road, rural road), the length and width of the road, the number of lanes,
and any special features or requirements (e.g., bridges, tunnels, intersections).
§ Estimation of Quantities: Estimate the quantities of materials, labor, equipment, and
other resources required for each component of the road project. This includes quantities of
materials such as aggregates, asphalt, concrete, steel, and drainage pipes, as well as
quantities of labor and equipment hours.
§ Unit Rates Determination: Determine the unit rates for each item of work based on
prevailing market rates, historical data, contract prices, or industry standards. Unit rates
may vary depending on factors such as location, project size, material quality, and
construction techniques.
§ Cost Analysis: Calculate the total cost for each item of work by multiplying the estimated
quantities by the corresponding unit rates. Summarize the costs for all items of work to
determine the total project cost.
§ Overhead and Contingencies: Include overhead costs such as administrative
expenses, project management, supervision, and contingencies to account for
unforeseen expenses or changes in project scope. Typically, a percentage of the
total project cost is allocated for overhead and contingencies.
§ Tender Documents Preparation: Prepare detailed tender documents that include
the scope of work, specifications, quantities, unit rates, cost estimates, contract
terms, and conditions. These documents are used to solicit bids from contractors
for the execution of the road project.
§ Bid Evaluation: Evaluate bids received from contractors based on criteria such as
price, experience, qualifications, and compliance with tender requirements. Select
the contractor offering the most competitive bid that meets the project's technical
and financial requirements.
§ Contract Award: Award the contract to the selected contractor and enter into a
formal agreement outlining the rights, obligations, and responsibilities of both
parties. The contract specifies the scope of work, schedule, payment terms, quality
standards, and dispute resolution mechanisms.
§ Construction Monitoring: Monitor the progress of construction activities to
ensure compliance with specifications, quality standards, safety regulations,
and environmental requirements. Conduct regular inspections, testing, and
reporting to verify the quality and progress of work.
§ Payment Certification: Certify progress payments to the contractor based
on completed work milestones and quantities as per the contract terms.
Payment certification involves verifying the accuracy of invoices, supporting
documentation, and compliance with contractual requirements.
§ Project Closeout: Upon completion of construction, conduct final
inspections, testing, and acceptance of the completed road project. Close
out the contract, settle any outstanding payments, and prepare final
documentation, including record drawings, as-built plans, and maintenance
manuals.
Government procedure for analysis of roads,
water supply and sanitary
• Total cost of materials = X
• Total cost of labour = Y
• Total cost of tools and equipment = Z
• Sub total(A) = X+Y+Z
contractor’s profit and overhead = 15% of A = 0.15A
Total (B) = A+0.15A = 1.15A
VAT(optional) = 13% OF B
Grand total= B+ VAT