Undertaking building in Kenya can be a costly, arduous matter, involving many factors that need to be considered by a real estate investor. It mounts a formidable financial challenge to the person interested in construction of a building project, but this can be overcome by conscientious planning by an individual. The involvement of experienced professionals in the process of building in Kenya will also go a long way to ease this burden on the developer.
The impact of Cost Factors when building in Kenya can be immense.
Challenges brought about due to cost factors often result in delays and project failure of building projects. Failure to properly consider any of these issues will most likely result in cost overruns and inflated building costs in the process of creating a project. As these issues occur at different stages while building in Kenya, properly assigning them to a time line will assist architects and developers to know what needs to be handled at specific times during the project.
Cost control in building projects must occur both at pre-contract stage as well as post contract stage of building in Kenya. Cost control is the product of having a proper cost plan in place, and the process of adhering to this cost plan is the essence of cost control. A cost plan is what enables a developer to prepare an elaborate cash flow projection that will help to articulate how money is likely to run during the cost of the project.
Cost planning is very relevant when building in Kenya
A cost plan is a useful tool while building in Kenya as it enables a developer to counter check the progress of implementing the building project while ensuring that it is within his or her financial wherewithal. All the factors that contribute costs to a project need to be confirmed and compared to the provisions in the cost plan, and any deviations from this need to be harmonized.
Once a project to undertake a building in Kenya is conceived, the cost estimate and cost budget are set in place as the main guiding parameters regarding the cost of a project. The design and documentation of the project is then undertaken with this cost plan as the goal to achieve in actual construction of the project.
The creation of a cost estimate is the domain of a project’s quantity surveyor working in tandem with the architect. The cost estimate is worked out and continually updated as the project’s design is being undertaken, and any elements that can cause a huge variation from the approved budget are avoided. However there can be a marked disconnect between a figure given by a quantity surveyor as an estimate and the actual figures provided by a contractor quoting to actually undertake a project.
Introduce a tendering process prior to construction of buildings
The best way to reduce costs at this stage of a project is to create a competitive bidding process rather than hiring a single sourced contractor. Competitive bidding introduces a sense of contest that is sure to drive down prices being quoted for different elements to be used in a construction. The rationale is simple, competing contractors would want to get the job if it is worthwhile for them. They would be willing to offer lower rates for their work in order for them to get the project.
Once bids are received through a process of tendering, the evaluation of bids can be undertaken by the project consultants to ensure that the tender prepared by the contractors is complete. Sometimes some unscrupulous contractors may complete bills of quantities with their rates for undertaking the works, and stealthily leave out something that is key, for example Value added tax. A skillful quantity surveyor can detect these anomalies in a tender and indeed this is part of their scope of work on a project.
In larger projects when building in Kenya, a client may require contractors of a certain level of skill and competence to undertake a particular project. Various tiers of contractors are available, and one is able to select a particular group of contractors who are registered with the Ministry of Public Works at a certain level of competence. These may relate to issues such as availability of requisite plant and equipment, cash flow reserves, and experience in undertaking certain kinds of projects. A process of prequalifying or post-qualification of contractors can also accompany the tendering process to further rate the contractors based on their capability in addition to their tender pricing.
Evaluation of tenders shall ensure that all the tenders have been received on common ground and provide a cost effective way to evaluate work that is required on a building project. The tenders must also be compared to the final cost estimate that the building consultants have produced in order to be valid. It should not have a wide variance to this amount as that may indicate that the contractor may have under quoted or over-quoted for the work.
This is intrinsic for the success of the building project. Once the tender has been evaluated and is considered responsive by a client, it is possible to award the project to a contractor to undertake the actual construction work. The next stage of ensuring that the project construction is undertaken within a given tender sum is the next area of involvement in cost control. However the parameters for construction have already been set and agreed and the process of building in Kenya has already become more cost effective.