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Escalation in construction cost of buildings in 2007
Source : The Hindu Property Plus Published On : 2008-01-26 City : Chennai

The cost index shows that the percentage increase in the cost of construction from 2006 to 2007 is about 18%, writes C.H. GOPINATH RAO

 

     The price of materials and cost of construction are on a steady rise. The details provided by government organisations, like the Public Work Departments of both the Central and State Governments, help us understand the extent of price rise. The government data is based on the cost of various inputs, including contractor’s margin. The cost of construction per unit of plinth area is arrived at based on the specifications assumed and a scheduled of rates is arrived.

     While the state PWD updates the plinth area rates every year, the Central PWD has prepared the rates as on January 1, 1992, with the base as 100 at Delhi for standard specifications. The departments also furnish the cost indices for other cities. For buildings that have specifications different from that mentioned, along with the plinth area rates provided, adjustments have to be made by adding or subtracting for superior or inferior specification. For example, in the case of poor soil warranting special foundation suitable addition is to be made for the difference in the cost of foundation.  

     Different rates are specified for different types of buildings such as office, hospital, school or residential buildings.

     The cost index for Chennai in 1995 was 141, in 2000 it was 191, in 2004 it was 217, 2005 - 240, 2006 - 258 and 2007 – 305. The cost index shows that the percentage increase in the cost of construction from 2006 to 2007 is about 18 %. This can be explained in terms of absolute rates. For the example, the cost of construction of a residential building with a floor height of 2.9 m and standard specification (framed structure), excluding the cost of amenities such as plumbing, sanitary and electrical service, is given as Rs.2,810 a sq. m. as on January 1,1992, at Delhi base price. The cost index in Chennai for 2006 was 258. This means the cost of construction in Chennai during 2006 was (2,810*258/100)=Rs. 7,250 a sq. m. or Rs. 674 a sq. ft. The rate in 2007 was Rs. 674 * 305/258 = Rs. 796 a sq. ft.

     Material price and labour cost contribute to the rise in cost. The cost of cement increased by about 20 percent in 2006 – 2007 and labour by about 30 percent. In addition, the periodical scarcity of materials such as sand, brick and jelly also increased the prices.

     The scheme announced by the Government to offer 100 bags of cement at Rs. 200 a bag of construction of house on less than 1, 000 sq. ft. is a welcome step.

     Cement is an important ingredient and also consumes a lot of natural

resources that are collectively held. Regulating the price in that sense may be justifiable. However, the government scheme may not be of great benefit to the people in Chennai.

     The Government should consider increasing the quantity from a total of 100 bags to the extent of forty bags per 100 sq. ft. of the building.

    
 Alternate materials
 

     This is also the time to explore alternate building materials that are cost effective for the construction of buildings. These materials should be certified by research institutions for durability and desirability to infuse confidence in the minds of the people.  

    
 

COST OF MATERIALS                                                                                                               (in Rs.)

List of materials

2003
2004
2005
2006
2007

Cement per 50 kg

125
160
160-170
190-210
220-250

Steel per tonne

(6 mm to 25 mm)

15000-16000
25000-28000
24500-30500
26000-30500
29000-32500

Bricks (3000 nos.)

4800
6000
7000-7500
10000
12500

River sand per cu.ft.

11
12-50
12.5
14
22

40mm BG metal per cu.ft.

-
12
14
21
20

20mm BG metal per cu.ft.

-
15
15
24
24

Brought earth cu.ft.

-
5
5
6
6

Quarry dust per cu.ft.

-
8
8
8
10

Red gravel per cu.ft.

-
6
6
6
8

Timber per cu.ft.

-
-
800-1950
800 to 2250
950 to 3100
Plywood 6mm to

19mm per sq.ft. commercial

Plywood waterproof

Teak plywood
-
-
-
-
-
-
15-30
20-48
22-56
18 to 36
21-50
22-60
18 to 36
28-58
22-64

GI pies class B 15mm

to 50mm dia. per ft.

-
-
14-53
17 to 61
18 to 63

Paint per litre

-
-
140-160
140-160
140-160

PVC pipes 20mm

to 40mm per ft
-
-
5-15
6 to 19
5 to 15
Float Glass

4mm to 12mm per sft

 
 
 
 
28 to 90

Electrical wire

from 1*18 to 7*20

-
-
4-16
5-18
8 to 27
Labour
 
Mason
Man coolie
Woman coolie
Painter/Plumber
/Carpenter
 
-
-
-
 
-
-
-
-
 
-
200
130
100
 
200
225
160
120
 
200-225
250-300
170
130
 
225-250
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