Chapter 2 - Part 1

CHAPTER 2-PART 1
Influence of Site and Market Conditions and

Economics of Prefabrication
Effect of site conditions on building cost:
Each site has its own peculiar characteristics

which can have a considerable influence on
the total cost of development.
• Site location
• Demolition and site clearance
• Contours
• Ground conditions
Effect of Site Conditions on Building Costs
1. Site location
• The cost of building in the center of a city
could be as much as 30% more expensive
than erecting a similar building on a
provincial site or in the sub-urban area.
• This could be due to:-
 Higher wages.
 Costly materials.
 Higher operational costs.
 The cost of operating on different sites can
be vary.
 A project in a remote country site may
involve long length of temporary access
road.
 Some place need temporary power cable
for electricity supplies
 Location-too far- increased costs of
transporting operatives and materials to the
site.
A site in a congested urban area can give rise to major
problems in:-
1. Delivery and storage of materials.
2. Protection on adjoining buildings.
3. Restrictions on the use of mechanical plant.
A very exposed site is more vulnerable to vandalism and theft.

Hence require more costly security measures.
Some part of the country have higher rainfall than others and
this can lead to greater loss of working time.
2. Demolition and Site Clearance
 Some site may require:
 Demolition
 Removal of heavy foundation and plant
bases
 Breaking up of extensive paving areas
 Chopping down a number of large trees
and grubbing up and disposing their roots.
Some sites could involve costly protection work as
they may contain:-
 Acids
 Sulphates (salt)
 Heavy metals and other contaminants
 Possible emission of methane (natural gas) and
radon (odorless radioactive gas)
Unstable fill may also necessitate expensive

foundations.
3. Contours
• Some sites are entirely level whereas
some are more have steep sloping site.
• The more steeply sloping the site, the

greater will be the cost of foundations
and earthwork.
• The steeping of trip foundations

increases their costs.
4. Ground Conditions
 Where the strata is of low bearing
capacity, it may be necessary to
introduce piled or other more
expensive types of foundations.
 Raft foundationsmay be 3x as
expensive as normal strip foundation.
 Piled foundations used to transmit loads to a
deeper load-bearing strata could be as much
as 5x as expensive.
 In these circumstances, it might be advisable to

consider increasing the number of storeys in the
building to take fuller advantage of the higher
loadbearing capacity of the piles.
 The cost of excavation in rock could be 5 – 8x
as expensive as working in normal ground.
 The probable length of haul in the disposal of

surplus soil also needs consideration.
 Indeed, bad ground condition could possibly

increase overall building costs as much as 5%.
 Where groundwater level is close to the surface
of the site, costly pumping operations may be
needed throughout the substructural work.
 The type of strata will also influence the form and

extent of support that will be needed to the sides
of excavations.
Planning & Building Regulations
The shape and size of the building, as well as
probable cost, are affected by:-
 Height restriction
 Land set apart for back lane
 Parking requirements
 Width of a block of building and distances between
buildings
 Permitted building extension and usage
 Landscaping conditions
 Access requirements and other similar
considerations.
Availability of Services
 The position and capacity of existing services such as

sewers, water mains, electricity cables, gas mains and
telephone services are other important influences on
site costs.
 Setting up a new point of services would cost more
than connecting to nearby public services as it might
incur extra cost work and costs like excavation and
earthwork.
Availability of Labour, Materials and Plant
Contractors needs to make several important decisions at the
tendering stage, each of which will influence the cost:
a. Whether all labour requirements can be met from within

the organisation or whether it will be necessary to recruit for
the project.
b. Whether mechanical and non-mechanical plant already
owned by the organisation is suitable and likely to be
available or whether it will be necessary to purchase or hire
for the project
c. Whether it will be desirable to sublet to specialist
certain aspects of the work such as earthworks,
formwork, scaffolding, structural metalworks and
mechanical and electrical services.
Other Factors Influencing Cost
 A contractor can influence the cost of a project

by his selection of constructional methods and
by adjusting these methods to increase the
effectiveness of the resources used.
 However, this is constrained by the design of the
building, the availability of the materials and
plant.
Other Factors Influencing Cost
 Another important cost aspect is the quantity of

material wasted on building sites.
 The cost of wastage of materials is sometimes in

excess of the allowances made by the estimators.
 Effective planning and site supervision can

always reduce the wastage and lead to cost
saving.
Use Of Plant
 With the continual rise in labour cost, both

direct and indirect, many contractors are making
greater use of plant.
 A knowledge of all types of plant is necessary and
also to ensure that each can be used most
profitably and of fullest possible.
 A contractor has sometimes to choose between
hiring or purchasing plant.
 The decision is influenced considerably by the

likely future demand for that particular plant.
Use of Plant
Advantages of owning plant:-
a. Plant is readily available at all times.
b. Plant may be retained on a particular site if
circumstances make this desirable.
c. Plant can be transferred from one site to another
without great difficulty.
d. In emergency situations, machines can be taken off
from less important work as the contractor has
complete control of the plant.
Advantages of hiring plant:-
a. It offers a wide variety of plant types to the
contractor.
b. Free from liabilities attached to the
purchase of plant particularly when a
contractor is short of capital.
c. Ensure maximum economy with full plant
utilisation and is an aid to quicker building
construction.
Main factors to be considered when
evaluating the economics of buying or hiring
plant:-
1. Forecasts of commitments to assess plant

requirements
2. Availability of workshop facilities for servicing
plant
3. Length of time for which plant will be required;
if < 60% utilisation is likely to be achieved,
then it is better to hire than purchase.
4. Adequacy of capital available for purchase.
5. Availability of personnel for controlling
and operating plant holdings
6. Cost of transporting plant to sites.
Cost of owned plant are made up of:-
1. Capital costs
2. Interest on capital
3. Depreciation
4. Licences and insurance
5. Overheads
6. Maintenance
7. Repairs and replacements
8. Haulage to sites
9. Fuel and operating costs.
3 principal methods of charging for plant:-
1. Percentage of the contract price
2. Direct cost to contract
3. Hire charge
Efficient costing system is necessary to
ensure realistic rates are charged for use of
plant.
Market Consideration
Many unforeseeable and external factors which can
influence the building costs:-
 National and local shortage of labour and/or
material
 Credit squeeze ( a period of economic difficulty
when it is difficult to borrow money from bank)
 Abnormal rainfall resulting in a sharp rise in
groundwater levels.
 Sudden increases in the price of building
materials or components or fuel
 Time for completion
 Special requirements of the building owner (
such as phased completion of various sections
of the work)
 Insufficient information supplied to the

contractor during tendering stage.
 Method of tendering.
Thank you

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CHAPTER 2-PART 1

Influence of Site and Market Conditions and

Each site has its own peculiar characteristics

A very exposed site is more vulnerable to vandalism and theft.

Unstable fill may also necessitate expensive

• The more steeply sloping the site, the

• The steeping of trip foundations

 In these circumstances, it might be advisable to

 The probable length of haul in the disposal of

 Indeed, bad ground condition could possibly

 The type of strata will also influence the form and

 The position and capacity of existing services such as

a. Whether all labour requirements can be met from within

 A contractor can influence the cost of a project

 Another important cost aspect is the quantity of

 The cost of wastage of materials is sometimes in

 Effective planning and site supervision can

 With the continual rise in labour cost, both

 The decision is influenced considerably by the

1. Forecasts of commitments to assess plant

 Insufficient information supplied to the

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