Wednesday, April 28, 2010

Finding Ways To Cut Hospital Construction Costs

February 23, 2010 17:06 PM

KUALA LUMPUR, Feb 23 (Bernama) -- The government wants to reduce the cost of building hospitals in the country by one-third without compromising basic quality and the facilities provided, said Minister in the Prime Minister's Department Tan Sri Dr Koh Tsu Koon.

For example, he said the Prime Minister had directed that the benchmark should be RM500,000 per bed instead of the RM1.5 million in some hospitals currently.

He said the cost per bed was calculated by the costs incurred when a hospital was built and divided by the number of beds available.

"If the cost per bed is very high, then you have to either charge very high in order to get the returns or you have to suffer losses...and in the case of government hospitals, the taxpayers' money again would be involved," he told reporters after launching the International Continuing Professional Development Conference themed "Towards World-Class Nursing", here Tuesday.

However, he refused to reveal the exact costs incurred by the government when building hospitals, saying that the question should be posed to Health Minister Datuk Seri Dr Liow Tiong Lai.

Koh said value for money, reducing costs and cuts in unnecessary luxurious features should be given priority by healthcare service providers in line with the government's 1Malaysia concept.

"The second emphasis is on human development...meaning that it is better (for the healthcare service providers) to spend money on brains than on bricks," he said.

He said the present government was placing strong emphasis on value for money and quality of human resources in the healthcare service.

The minister also said that Malaysia still needed to produce more nurses and paramedics at various levels, especially to cater for the 1Malaysia clinics.

"By comparison, we have around 150,000 healthcare personnel in government service where the ratio is five to 1,000 population compared with 1.5 million in UK with the ratio of 24 to 1,000," he said.

Koh said, the interesting part was that despite the shortage of healthcare personnel, Malaysia still emerged as one of the principal suppliers of nurses to other countries.

Therefore, he welcomed the initiative by International College of Health Science (ICHS) in Malaysia to further expand its programme by building a new campus in the country and introducing a degree in nursing.

The three-day inaugural conference was held to provide a platform for aspiring nurses and healthcare professionals to develop and enhance their skills and professionalism in an effort to elevate the standard of the nursing profession in Malaysia.

The conference was attended by more than 200 professionals from private and government hospitals as well as healthcare institutions.


5 Tips To Better Building Cost Estimating

Building a new home can be an exciting highlight in one’s life. It may be dreamy, but the practicalities of expenses and budget limits can keep one’s feet planted on the ground. It would pay to know if the construction of one’s dream house would actually fit into the budget in order to prevent an expensive nightmare from ensuing. Here are some good points to consider in Building cost estimating.

Determine the Basic Structure

Construction cost estimation begins with determining the overall structure of the house. Shape, size, and quality of construction can affect cost. More complex shapes tend to be more expensive per square foot, as well as in terms of labor and materials needed. The basic and most economical shape of a house is square or rectangular.

Larger buildings also cost more than smaller buildings, but will cost less per square foot than smaller ones. It is also more advisable for a home to have an even-number size to reduce waste materials. On the same square footage, a two-story home is less expensive than a single-story home. A two-story home will have a smaller roof and foundation, plus, plumbing and ventilation are more compact.

The quality of construction factors significantly in construction cost. A deeper foundation (more than 30 feet deep), cathedral ceilings, gypsum wallboard interiors, and decorative kitchen and bathroom fixtures are more ornamental than economical and invariably cost more.

Houses in housing tracts by merchant builders are generally more low-priced than custom homes.

Type of Heating/Cooling

The type of heating and cooling systems that will be used in the proposed home is also important in determining construction costs. A centralized system is the cheapest means of heating or cooling an entire house. Unit heating or cooling can still be relatively cost-effective and even cheaper than centralized heating and cooling systems, depending on the number and type of heating and/or cooling units. Having a fireplace built is somewhat more expensive because of higher labor costs.


Location matters in construction costs. Homes located in the suburbs tend to cost less than those built in metropolitan areas. Construction costs also vary by state and zip area. Among the states with high construction costs is New York.

Contact Local Builders

Builders can give a good picture of the costs of building a home. They provide details on the amount they usually charge. If asked, they can present a breakdown of expenses. Builders of houses that are similar in structure to one’s desired home may provide an even better estimate of the construction costs.

Construction Estimating Software

Although prospective homeowners may not need it as much as commercial contractors or cost estimators might, construction estimating software can be a useful tool in approximating construction expenses. Construction estimating software computes for estimates based on the basic factors that affect construction costs, like the structure of the house and location. While the more high-end products are available for purchase, there are freeware estimating programs that can be found on the Internet.

Other Considerations

Estimates don’t always agree with the actual expenses of construction. Changes and unforeseen problems may cause the actual expense to be higher than the original bid price. it would be wise to allot a contingency allowance for such events. Also, construction costs increase every year. If the actual construction is still years after the planning, inflation and market conditions should also be factored into construction cost estimates.

Estimating The Building Cost Of A New Home

If you plan on building your own home, the first thing you should worry about is estimating the building cost.

No contractor can ever give an exact costing on a new home construction. In general, new homes tend to cost more than their budget after all is said and done.

But the trend of going over budget makes estimating building costs all the more important. So, how do you build an estimate on the costs of your dream home?

There are many things that factor into the cost of building your own home. Keep them in mind when you are faced with a new home construction:

1. Less Is More

In general, it costs more to build a small house than it is to build a bigger abode. This is because when you build a larger home, the cost is spread over the land area or the total square feet.

It also usually costs less to build a two-story home with the same area as a one-story house, precisely because a two-story house has a smaller foundation and roof. Plumbing and ventilation are also more compact in two-story houses.

2. Shape Affects Cost

Rectangular-shaped houses cost less to build, while more angles and corners in your home increases labor input and the materials needed for construction. Homes with dome-shaped roofs also tend to use materials efficiently and thus cost less.

3. The Bathroom, Among Others, Will Cost More

The most expensive areas to build in any home are the kitchen and the bathrooms. There are a host of other features that can affect your building costs.

If you are using other homes as benchmark for your estimated costs, be sure that the homes you are looking at have the same exact features as what you had in mind.

4. Land Affects Preparation Cost

Get to know the terrain of the land you are building on. Is it flat? Or will you need to fill it with dirt, move rocks or clear some trees? These factors can affect the cost of your site preparation and, in effect, the cost of building your home.

5. Inflation and Market Conditions Affects Cost

Inflation, aside from affecting your purchasing power, also increases your constructions costs by 3% to 6% annually. If you want to get a rough estimate of the cost of your dream home, try comparing prices with similar homes that are, at most, six months old.

If you want to draw up a specific estimated amount of the cost, meet with contractors that build similar houses. They can tell you how much they charge, but do not forget to ask what the exact inclusions in the price are. Some contractors will give you a list of the materials they use.

You can also take a look at new homes that look very similar to the house you want to build. Build rapport with the homeowner and ask for the price of the land and the cost of the home. Deduct the land price from the home price. Then divide the result by the square footage of the house. The result is the cost per square foot.

When you have calculated the per square foot cost, you may multiply it by the total square footage of your dream home to get an estimate of the total cost.

How To Lower Commercial Construction Cost

Commercial building construction has gone a long way in effectively developing ways and means to increase building performance and increase energy efficiency while maintaining lower commercial construction cost.

Construction material costs have been on the rise proportionately with the developments in construction technology. Thus the challenge to use new and cheap construction materials is always present.

The popularity of using steel for construction works is a growing phenomenon. That is why commercial buildings have been widely defined as pre-fabricated buildings. A relatively large number of building elements or components are completed in shops outside the construction site and delivered ready to be installed. It can either be the roof, walls, or complex steel frames. Construction of commercial buildings using materials made up of pre-fabricated steel is seen more frequently as more and more builders learn about the many advantages of this method as compared to using other materials.

Among the advantages that come with purchasing pre-fabricated structures is efficiency. Construction has proven to be faster therefore labor costs are lowered and most importantly, precious time is saved. The lesser time spent in construction, the lesser the costs.

Pre-fabricated steel structures are light weight and are therefore easier to maintain and handle. They are fire proof and also 66% recyclable. This decreases waste products and thus roves to be very cost-efficient. Another good quality of pre-fabricated steel structures is that it is tough and it can survive environmental hazards like snow, storms and strong wind thus an increased durability against rotting and splitting.

Because pre-fabricated steel arrive at the construction site already complete, assembling them takes lesser effort and skill. Work can just be relegated to sub-contractors, enabling reduction in labor costs.

Most commercial property home owners are not aware of the advantages of cost segregation which is an excellent way to reduce tax liability and eventually increase cash flow by identifying all construction related expenses that can be depreciated in the years to come. Through the combined knowledge and experience of engineers in cost and construction estimation and the expert documentation of IRS data and tax codes, the result is an enhanced and accelerated depreciation of these identified deductions.

Deficiencies in the construction phase are a major source of inefficiency in construction cost as well as labor and material cost. Some of the major deficiencies seen in commercial construction include construction defects due to inefficient or malfunctioning equipment and imperfections in the design planning.

A lot can be compromised because of these flaws; that includes building durability and performance and certainly indoor quality and comfort. Being able to detect and immediately provide remedies for these deficiencies can certainly get commercial property owners closer to the goals of reducing commercial cost by all means. Fortunately, quality assurance can be tapped to provide such service. Building commissioning can provide detection and remedy as its main service is to act as a messenger that reveals and identifies the right approach on how to deal with pre-existing problems.

Commercial property owners should take special care in choosing construction companies that are well aware of the technologies, techniques and methods of providing the best construction project. A company that can provide the knowledge and experience to exhaust all means to reduce commercial construction costs is also a must. There should also be sufficient awareness of service agencies that perform studies on cost-efficiency in all of the construction phase to be able to determine methods that can help in reducing over-all construction cost.

Lowering Construction Costs

Top Tips To Lower Construction Cost

The construction of a building not only demands great capacity and handiness in management, but also a magnitude of expenditure for the wide range of materials that are needed. Also, operating costs for labor are often underestimated by project managers, whether they are of the trained or self-taught variety. It is best if you complete an initial round of estimating before you complete a first sketch of your plans. By doing so you will have an approximate budget to aim for at an early stage. This will be your target against which you will try progressively for lower construction cost.

Here are some tips to guide you when estimating your building costs, with a view to keeping them low:
1.Use materials that are typical and have a high rate of supply because they are easier to get hold of. In addition, they cost less and can lessen inaccuracies in matching and avoid holdups and interruptions. You must also consider removing features that are not really necessary or are just plain expensive for you. Reducing the size and number of windows and avoiding vaulted ceilings can cost less.

2.If you want to conserve energy, go for a square or rectangular shape for your building. This is probably the most practical shape to use because it costs less energy for cooling and heating due to its lesser amount of wall surface open to the elements on its exterior. Furthermore, buildings with these shapes cost less to build because you don’t have to put in additional work and equipment for curved walls and so on. Remember that you can utilize your materials more efficiently with fewer angles and corners.

3.The roof is probably the supreme design highlight that is most drawn attention to but it need not be highly expensive. Compared to hip roofs, gable roofs are cheaper because they don’t require additional framing and minimize details. Besides employing your roof as protection from heat and cold, consider insulating your building to the utmost degree. This might cost a little more but will make the interior environment of the building more comfortable and will also save energy over time.

4.It may be a good idea to inquire from builders within the area you’ll be setting up the construction about the assortment of costs that you’ll have to pay because they can give you a ball-part figure on the approximate expenses according to the designs you wanted. Also, it is better to choose builders within that particular area because they are more familiar with the overheads and regulations there.

5.Choose a relatively standard size for the building and round this up to a percentage of two feet. The most cost-effective way is to use even numbers to reduce discarded resources. Not only does the building’s size affects its cost but also the lot in which you plan to construct it. When selecting the site, it’s better to use a leveled lot so you can avoid spending on filling soil or getting rid of trees.

Once you have an approximate idea of the expenditures that your project will entail, you will have a guide in modifying any adjustments you need for your budget. It is important to specify all the necessary details beforehand so that you won’t experience shortage and will also avoid too many changes to the designs and features. Its also a good idea to prepare an extra amount for unanticipated costs.

What to Do About Those Rising Construction Costs...

By Eliot Brown

As the economy sours, ever-rising construction costs seem to be an in-vogue subject: Last night, the New York Building Congress released a report on the topic; the Manhattan Institute put out recommendations for controlling cost escalations earlier this month; and, on Monday, the Bloomberg administration announced a set of initiatives to lower costs of city projects.

The basic problem--costs have been going up at least 10 percent annually for the past few years--doesn't seem to have any easy solutions, as the reports (both of which involved consultation with the same firm, Urbanomics) recommended a broad array of changes that could lower costs to varying degrees.

Much of the cause is rooted in demand (which has grown tremendously) and supply (which has not), but both reports were critical of inefficiencies in the billions of dollars in public sector-led construction, which is far more costly than private sector construction.

Among the recommendations from the two organizations: adopt new accountability requirements for issuing permits; create a public-private research center for new building technology; examine creating a government oversight construction command center; increase salaries for public regulators; preserve use of non-union labor; and conduct more rezonings that allow for more development.

On Monday, the Bloomberg administration announced it was adopting a set of reforms pertaining to construction contracts with city agencies, including a pilot program that allows contractors to seek compensation for delays caused by the city.

Speaking to the high cost of doing contracts for the city, Deputy Mayor Robert Lieber, the keynote speaker at the Building Congress' breakfast this morning, was not without color:

"The city is a pretty shitty client," he said, explaining that the new measures adopted are expected to limit many of the longtime inefficiencies inherent to city contracts. "The only reason that anyone would bid on city projects is because if you win and you get one, the contract is so loaded with fat that it's going to make it economically justifiable for you to want to participate in that.

"We think some of the bids we are receiving are padded somewhere between 15 to 20 percent so that the contractors can cover some of the costs of doing business with the public sector," he continued. "We want to make sure we're more competitive in terms of what we're offering, so we can get a response [to bids] and bring costs down."

Brazil consortium wins rights to build one of world’s largest hydroelectric dams

April 22, 2010

A consortium of nine companies has won the rights to build one of the world’s largest hydroelectric dams, Brazilian authorities said Tuesday.

Brazil’s electricity regulator, Aneel, said the Norte Energia consortium won the bidding process for the huge Amazon project, which is heavily opposed by environmentalists, Indians and the director of the blockbuster movie Avatar.

The consortium is led by state-controlled Companhia Hidro Eletrica do Sao Francisco, which offered a price of 77.97 reals ($57.12) per megawatt produced. The other partners are all private. The consortium had only one competitor: the Belo Monte consortium, composed of six companies.

The bidding for the Belo Monte dam was halted three times before a final appeal by the government allowed the winning bidder to be announced Tuesday.

About 500 protesters gathered outside the Aneel building where the bidding took place to condemn the project, saying it will cause serious social and environmental damages.

The government dismisses claims that the project will have a negative impact on the environment or the local community.

“Belo Monte is the most studied hydroelectric plant in the world,” Mines and Energy Minister Marcio Zimmermann said.

The $11 billion, 11,000-megawatt dam, to be constructed on the Xingu River feeding the Amazon, would be the world’s third-largest hydroelectric energy producer, behind China’s Three Gorges dam and the Itaipu dam that straddles the border of Brazil and Paraguay.

Movie director James Cameron has lobbied to stop the project, visiting Brazil’s Indians and even comparing their struggle against the dam to the plot of Avatar. Avatar depicts a fictitious Na’vi race fighting to protect its homeland, the forest-covered moon Pandora, from plans to extract its resources.

Environmentalists and indigenous groups say Belo Monte would devastate wildlife and the livelihoods of 40,000 people who live in the area to be flooded.

Brazilian President Luiz Inacio Lula da Silva insists that the dam is essential, and says it will provide clean and renewable energy to fuel the South American country’s growing economy.

Opponents organized protests across Brazil on Tuesday to condemn the project. Amazon Watch, a San Francisco-based group that works to protect the rain forest and the indigenous people living there, said thousands of people were engaging in coordinated protests in nine cities, including in Altamira, which would be partially flooded by the Belo Monte reservoir.

The group said Indians began arriving by boat to establish a permanent village to block the dam's construction.

Zimmermann said Altamira will significantly benefit from development spurred by the dam.

Associated Press.

Skilled worker shortage leads to rising construction costs on Truro, Nova Scotia hospital project

March 1, 2010


Experts say the escalating price of a new hospital in Truro, N.S., is symptomatic of growing cost pressures on public and private projects, brought on partly by a growing shortage of skilled workers.

The hospital, a major construction project in Atlantic Canada, was initially priced at $104 million but has since grown to $180 million.

Krista Wood, spokeswoman for the Colchester East Hants Health Authority, says contractors are building in the extra costs of transporting and housing skilled workers, which could be as much as $100 a day for each worker.

“Contractors responding to bids are having to build in the cost of bringing in people to do the work,” said Wood. “It seems to be coming more commonplace.”

Like the rest of the country, Nova Scotia is experiencing what experts say will be a steady decline in skilled workers, the product of an aging workforce and a declining birthrate.

Statistics Canada says 15.3 per cent of Canadian workers are 55 or older and there are just as many Canadian workers over 40 as under.

The practical effects are already being felt in capital projects undertaken by provincial departments and municipalities alike.

Almost every municipality in the province is running into the same problem, says Port Hawkesbury Mayor Billie Joe MacLean, who is also a vice-president of the Union of Nova Scotia Municipalities.

He cites a tender his town put out for a water treatment plant, thinking bids would come in at about $2.2 million. It came in at $3.8 million. “We were astounded,” he said.

MacLean said the lack of qualified labour is also having an impact on smaller contracts, including one in neighbouring Antigonish County to plow snow from sidewalks.

“They got one bid on a job that was estimated by their people at $260,000. It ended up at $585,000.”

None of this comes as any surprise to Jim McNiven, a senior policy research adviser and professor emeritus at Dalhousie University.

Nova Scotia will likely be looking at almost zero unemployment by 2015, he says, with a lot of jobs that can't be filled.

“From brain surgeons right down to people who make beds in hotels, it doesn't matter what it is. You're still going to be short,” said McNiven. “The story you're hearing out of Truro is going to be commonplace.”

McNiven said the Canadian birthrate dropped below the level needed to replenish the workforce 40 years ago and the number of immigrants that would have to be brought in to address the shortfall would be unrealistic - half a million over the next 20 years for Nova Scotia alone.

He says governments are going to have to start getting creative to address the problem, beginning with changes to labour market rules designed in the 1980s when people outnumbered jobs.

“For instance, we're finally getting rid of mandatory retirement, where we've been telling people that 'We don't care if you want to work. You can't, because young people need jobs,' ” he said.

“We also need to find a more efficient system to match up people who say they are looking for work with those who need them for work.''

Michael Atkinson, president of the Canadian Construction Association, says the current economic downturn has temporarily created a larger labour pool.

But he says that will quickly disappear once the recovery begins to ramp up. ``We're going to have to find 320,000 new workers by 2017 just to keep pace with retirees and to keep pace with what expected demand will be at that time,” he said.

Atkinson says he's not sure a labour shortage can be blamed for escalating costs in public building projects.

“Was it a realistic estimate of costs, or was it done three years ago when they were getting through all the approvals and hasn't been touched since?” he asked.

“They may have a budget but is that a realistic estimate of what the construction costs will be? No way.”

-Canadian Press

Rising Construction Costs

According to Ken Simonson, chief economist at The Associated General Contractors of America, as residents in Louisiana, Mississippi and Alabama struggle to put their lives back together in the wake of Hurricane Katrina, the looming reconstruction efforts spell higher construction costs for the entire country.* As victims begin to rebuild, construction companies are expecting to see an impact on the cost and availability of building materials. Construction sites from Rhode Island to Hawaii will have to scramble as supplies are diverted for hurricane repairs.

In response to supply constraints and worldwide demand – especially from developing countries, such as India and China – the costs for framing, lumber, steel and cement have gone up over the past year. According to Keith Schwer, director of the UNLV Center for Business and Economic Research, an event, such as a hurricane, that would further stretch those resources is bound to have an impact on the availability and cost of certain construction materials.**

Simonson agrees. “Cement was already in short supply in 32 states and the District of Columbia last month. This disruption to ocean, barge and rail transportation from Katrina, and the loss of power to cement plants in the storm’s path, will cut further into cement supplies.” ***

Katrina caused more damage than most other hurricanes, because of the flooding. Homes that have been soaked and ruined are going to need millions of sheets of plywood, gypsum board and roofing materials.

Lumber mills in Louisiana, Mississippi and Alabama that mill southern yellow pine, used for plywood, have reported production disruptions. Some of the mills have sustained damage, while others are intact but not producing due to power outages. And lumber, like all commodities, is priced based on supply and demand. If a natural disaster disrupts the supply, it can lead to shortages that push up the price.

According to David Beattie, who manages inventory for West Kingston lumberyard in Rhode Island, the price of plywood has already gone up about 5 percent, from $280 to $300 per 1,000 board feet.****

So what can the average consumer expect? According to a special report put out by Reed Construction Data entitled Hurricane Katrina Implications for Construction*****, initial demand will be for the materials, equipment and specialized labor that’s used in the clean up and the reopening of utilities, bridges, roadways, etc. Look for a rise in costs for the use of construction equipment and operators, and specialized utility equipment and tradesmen, especially in areas near the Gulf.

After a few weeks, demand will jump for materials like plywood and roofing, which is used to make buildings more secure. The major work of rebuilding New Orleans won’t begin until some time around the end of the year, depending on how fast the water recedes and when contractors are allowed into the city. This phase in the rebuilding efforts will start in earnest early next year – and continue on for several more years – producing rising cost pressures for all materials, equipment and labor, especially concrete and steel.

Luckily, Hurricane Katrina hit when the plywood, panel and roofing markets had reasonably steady prices and adequate supplies, so the effects on the national supply from added demand in the Gulf Region should be small and short-term.

However, the concrete, construction equipment and metals markets are much tighter. Even though steel prices have dropped this past year, the excess inventory that caused this is largely exhausted. Katrina’s impact on the price of these materials will be more significant and longer lasting.

*The Associated General Contractors of America – Construction News - Accessed 09/12/05.

**LV likely to see shortage of materials as Gulf rebuilds, by Jennifer Shubinski, Las Vegas Sun, September 01, 2005, Accessed 09/12/05.

***The Associated General Contractors of America.

****Ripple effect feared – R.I. businesses worry that disruptions in lumber and oil production will drive up construction and other costs, by Lynn Arditi, The Providence Journal, Thursday, September 1, 2005, Accessed 09/12/05.

*****Reed Construction Data, Special Report, Hurricane Katrina Implications for Construction, September 6, 2005

Concerned With Construction Costs? Hire a Quantity Surveyor

By Chris Jenkinson

If you are concerned about the construction costs on a building project in the UK, consider hiring a quantity surveyor Yorkshire professional. When you are concerned about the cost of materials and the contracts associated with these material vendors and subcontractors, this type of surveyor can work with your construction team to ensure you keep costs low while ensuring you have enough materials to avoid construction setbacks.

Defining the Role

Generally, when you hire a quantity surveyor, Yorkshire professional, you can expect someone who has a broad set of skills which are applied to the contracts and costs on building projects. This UK surveying professional may use a variety of methods to do their job including value management, feasibility studies, cost planning, cost and profit analysis, estimation of costs and materials forecasting. They even involve themselves in resolving disputes with subcontractors and vendors who handle the materials and supplies.

This type of surveyor integrates well with the entire construction team including you, the client as well as the architect of the building project and the various engineers handling a variety of duties including electrical, plumbing, mechanical and physical aspects of design. Quantity surveying professionals are invaluable when drafting contracts as well as interpreting them. These skills can help when settling disputes with subcontractors and other outsiders on the building project as well as measure effectiveness of construction progress.

Quantity surveying encompasses the management of building costs by precise measurements. These can be done by studying the blueprints and other drawings prepared by the architects, engineers and designers. In addition, the surveyor applies their specialised knowledge of current market prices of labor, general work, materials and equipment to evaluate project progress. Maximising the use of the materials and ordering materials to arrive based on building schedules is essential to success, particularly when trying to follow a specific timeline.

Auditing of current contracts as well as the paperwork involved is another crucial duty. A surveyor specialising in quantity surveying should also be able to audit invoices and past payments to ensure the construction company is not overpaying for materials and services. Adapting current building schedules may be necessary based on materials and cost forecasting.

Contract negotiations with subcontractors and vendors are sometimes within the realm of this type of surveyor as well. Basically, anything having to do with the cost of the construction project is fair game. For your UK construction needs, hire a quantity surveyor, Yorkshire professional.
Learn more about benefits of hiring a Yorkshire quantity surveyor. Options include hiring the skilled professionals at

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How Much Will Your New House Cost?

A building plans pro tells how to estimate your home building costs
By Jackie Craven, Guide

You want to build a new house, but can you afford it? Knowing how much your dream house will cost can help you modify your plans to meet your budget.

To plan your budget, start with a free online building cost estimator. Then look for the details and hidden costs that will add to your final bill. Here are tips from a building plans pro.

"Guesstimate" the Cost of Your New Home
Home building tips by Ken Katuin

1. Contact Local Builders
Meet with builders who construct houses that are similar in size, quality, and features to the home you want. Builders will tell you how much per square foot they usually charge for home construction. They can also give you a ballpark idea of what your dream home might cost. However, it is important to know exactly what is included in the price. If you ask, some builders will provide you a list showing the materials they will use.

2. Count the Square Footage
Look at newly constructed homes that are similar in size, style, quality, and features to the home you want. Take the price of the home, deduct the price of the land, and divide that amount by the square footage of the home.

For example, if the home is selling for $230,000 and the land costs $30,000, then the construction cost is around $200,000. If the home is 2,000 square feet, then the cost per square foot is $100.

Use several new homes in your area to get an approximate square footage price. After you have calculated an average square footage cost, you can multiply that cost by the finished square footage of your house plan to get a ballpark estimate.

3. Expect Some Features to Cost More
The most expensive areas in a home are usually the bathrooms and the kitchen. The number of windows and the size and quality of windows can also affect the cost. Vaulted ceilings and high roof pitches can increase the cost of a home. When using other homes to calculate an estimate, be sure the home has a similar style and features of the home you plan to build.

The cost per square foot is often higher for a small home than that of a larger home. When building a larger home, the cost of expensive items (such as a furnace or kitchen) is spread over more square footage. Consequently, a larger home may have a lower square footage cost than a smaller home. Also, it usually costs less to build a two-story home when compared to a one-story home that has the same square footage. This is because a two-story home will have a smaller roof and foundation. Plumbing and ventilation are more compact in two-story homes.

Small details in the design of your home can make a big difference in the price. To save on costs, begin estimating construction expenses before you select your final blueprints. Here are important factors to consider:

Size of Home
When building a home, it's best to work with even numbers. Have your home size rounded up or down to increments of two feet. This reduces wasted materials. Also, it's most economical to build a home which is no deeper than 32 feet. If the depth exceeds 32 feet, then your roof trusses may need to be specially designed and will be more expensive.

Shape of Home
Homes that have a rectangular or box shape cost less to build. Having more angles and corners in the shape of your home can increase the amount of labor and materials needed to build a home. Dome shaped homes also make efficient use of materials and tend to cost less than other shapes.

Site Preparation
Preparing a site for construction can have a big impact on the cost of a home. Building on a flat lot will usually cost less. If you have to haul in lots of dirt, do a lot of grading, clear trees, or blast through large rocks, then site preparations can become more expensive.

Cost Overruns
Usually the finished cost of a home is more then the original bid price. Cost overruns occur from overspending the allowances, making changes, and encountering unforeseen problems. Proper planning can greatly reduce cost overruns. In general, it is a good idea to allow an additional 10% to cover unexpected costs.

Inflation and Market Conditions
Usually the cost of building a home increases around 3% to 6% per year. If it will be several years before you begin construction, remember to include inflation into the cost estimate for your home. When using other homes to compare prices, try to use homes that have been built within the last six months.

~ By Ken Katuin

How to Estimate Construction Costs for a New Home

By an eHow Contributing Writer

The cost of building a new home doesn't have to be a mystery. Break it down into its components to estimate how much it will cost you. Factor in everything, such as labor, material and any possible license/permit fees. It's better to generous in your calculations rather than coming up short in the end.


Step 1
Obtain a house plan for your new home.

Step 2
Decide what types of materials you intend to use (think of flooring, windows, roofing, the frame, siding) and get prices from supply houses.

Step 3
Decide how many contractors you want to work with. You can hire a single firm (a general contractor) to build the entire project or you can subcontract the work out to the various trade specialists such as masons, carpenters, roofers and electricians, acting as your own general contractor.

Step 4
Get prices from each contractor for the work required. If you're using a general contractor, this figure will be substantially equal to the total cost.

Step 5
Add the costs quoted by contractors to the prices you obtained for materials not included in the contractors' prices to generate the total construction cost.

Step 6
Add the costs of building permit fees, architectural fees, insurance, financing fees and legal costs to come up with the total expense of building the house.

Tips & Warnings
The trade specialists required for most home construction are (in roughly chronological order): excavator, mason, carpenter, roofer, siding contractor, plumber, electrician, heating/AC contractor, insulator, drywall installer, finish carpenter and painter.

Acting as your own general contractor can allow you to save considerably on construction costs, but be advised that hiring and supervising subcontractors is a difficult and tricky project. Be honest with yourself about your ability, knowledge and available time before undertaking this task.

How much does it cost to build a new house in _______ ?

A new house will probably cost between $80 and $200 per square foot...

In one form or another, this question is one of the most frequent requests we receive from our visitors. Unfortunately, it is also one of the few questions that we simply cannot answer very specifically. Can you tell me how much it costs to take a vacation or send my kids to college? How much should I expect to spend on a new car? What is the "average cost" of a dinner for two or a gallon of gas?

All of the above questions contain so many variables that it is impossible for anyone to answer them accurately without first asking several additional questions and gathering much more information. The same is true when calculating the cost to build a new home.

Let's begin by considering what square foot homebuilding costs really are — nothing more than the total cost of a given project divided by the total number of square feet in that project. So, a 2,000 square foot home with total construction costs of $250,000 would cost $125 per square foot to build. Spend another $50,000 on a gourmet kitchen, an elegant master bath, marble tiles in the foyer, a fancy curved stair, 10 foot ceilings, or any other combination of "above average" features or finishes and that same 2,000 square foot house would now cost $150 per square foot to build; an increase of 20 percent.

Now consider the structure itself. If the house in question is a rancher, with all of the finished area on one floor, the roof would have to be large enough to cover the entire 2,000 feet of living space. Turn that single level rancher into a two-story colonial and the roof size is instantly reduced by 50 percent because the second floor system became the "roof" for half of the area on the first floor. Increase the roof pitch from 3/12 to 12/12 and the roof area (including framing members, sheathing, shingles) quickly increases by 35 percent. Of course, these examples are oversimplified because they don't consider any other differences like the need to add the cost of stairs and take away the space they occupy, or in the case of a slab-on-grade foundation, the difference between the cost of a concrete slab verses a wooden floor system, but hopefully the point has been made. Costs of similarly sized homes can also vary considerably due to the shape of the building, the number of corners or offsets in the design, the type of foundation and required local footing depth, the pitch of the roof, and many other design characteristics that are not directly related to the size of the house.

Next we have all of the regional, governmental, political, seasonal, and unpredictable human factors. Development impact fees, which more and more state and/or local jurisdictions are charging owners or land developers, can range from a few thousand dollars to more than $50,000 (at last check) per single family home. Labor and material costs can vary substantially based upon the time of the year, complexity or uniqueness of the project, good or bad economic times, jobsite conditions, regional markets, the unemployment rate, local building codes, construction moratoriums, zoning laws, covenants and restrictions, availability of supplies and workers, weather conditions, natural disasters, public or private water and sewer, and several hundred other factors. And, to make matters worse, there really isn't any uniform method of measuring square footage or defining what is included in those numbers. Is your builder or realtor using exterior dimensions or interior dimensions? How do they define heated or unheated space? Have they included the garage or basement or unfinished loft areas in their calculations? What about decks or covered porches? Is the land included in the square foot costs? What about building permits, liability insurance, utility connections, wells, septic systems, driveways, sidewalks, landscaping...

Unfortunately, the only way to be sure that your homebuilding budget is reasonable is to identify and price every item that will be used to build your individual home and bid all of the associated subcontracts and labor costs. Of course, in order to do that, you will need to have plans and specifications and you will need to develop a complete and thorough estimate for your individual project. The obvious problem here is that not many people want to buy a dozen different house plans and then spend weeks or months pricing them in order to determine which one(s) they can afford to build. So, a more realistic approach to determining how much your new home will cost might be to simply work backwards. Start by determining how much you can afford to spend, then be realistic about the size of the house you need, and finally, decide what and where you can afford to build.

There are plenty of financial resources on the Internet that will help you learn more about mortgages and calculate monthly payments for a given loan. After you have a good idea of your financial situation you can look in the real estate section of your local newspaper for homes that are in your price-range. Often, the advertisements will provide you with prices and square foot descriptions from which you can develop a square foot price. Then, visit several model home communities and tour model homes in order to see room sizes, the type of finishes, and the quality of workmanship that you should expect in that price-range. Be sure to take - and use - pencil, paper and a camera to record what you like, as well as, what you don't like about the homes you will be touring. Also remember that many of the things seen in model homes often are not included in the price of the "standard model". If you visit on a weekend, you might even be able to walk around the community and talk to homeowners that are working outside. Introduce yourself, tell them what you are doing, be polite and respectful, and you might be pleasantly surprised by how much information they will happily give you.

You may also want to check with local mortgage bankers, real estate agents, or friends who have recently built a new home or addition to see what type of "ballpark" numbers they can provide. Local contractors and homebuilders associations might be able to quote "average" homebuilding costs and figures. However, before you put too much faith in "average" numbers, keep in mind that the only house that you really care about is the one that you are about to build. Home prices of $55, $79, $84, $87, $92, $110, $122, and $315 per square foot combine to produce an average of $118 per square foot, which is probably a reasonable figure for many areas of the country, yet the difference between the lowest figure and the highest is very substantial. While professional builders may be able to average their profits and loses over several projects, the typical homeowner or owner-builder probably cannot. So, regardless of how you finally come up with the numbers, be sure to take the time to review your finances, prepare a reasonable budget, and produce an accurate construction estimate for the specific home that you are about to build.

Good luck with your project, thank you for visiting B4UBUILD.COM, and have fun building!

Greg Susman

Who Should Pay for Pricing Scope Changes?


When a project owner has issued directives involving a changed scope of work, or is merely considering changes, the owner quite appropriately looks to the contractor for a price proposal. On a large, complex project, or a project plagued by excessive changes, the preparation of change order proposals can be quite burdensome for the contractor.

The common wisdom is that the cost of preparing change order proposals and negotiating contract modifications is part of the contractor’s general and administrative, or home office, overhead. This cost is absorbed by the mark-up on direct costs. But what if the proposal does not result in a change order? What if the project owner reduces rather than expands the scope of work? There would then be no increased direct costs to mark up.
In federal construction contracting, this problem is addressed by allowing recovery of the expense of proposing and negotiating change orders as a direct cost of project administration. The rationale is that the project owner, the government, controls changes in the scope of work and initiates the preparation of change order proposals. The process exists for the convenience of the government and the efforts should be compensable to the contractor.

Contractor recovery of change order proposal costs is strictly limited. The efforts cannot involve the prosecution of a claim against the government. The costs, such as attorney, accountant and consultant fees, must be segregated and allocated to that one contract. As one contractor recently learned, the costs cannot be carried in the G & A pool and then duplicated as direct contract costs.

As always, I welcome your comments on this matter. Does it make sense to compensate contractors for the direct cost of a change order process which is controlled and initiated by project owners? Or, do contractors generally make out just fine with change orders and the mark-ups on direct costs?

Bruce Jervis, Editor
Construction Claims Advisor

Can A Contractor Reserve A Claim While Accepting Final Payment?

Under the terms of virtually every construction contract ever drafted, the contractor’s acceptance of final payment operates as a waiver and release of any existing claims. A Texas contractor recently tried to have it both ways. The contractor submitted an invoice for the contract balance. But, the transmittal letter said the contractor reserved its rights under an existing,
unresolved differing site condition claim. The owner issued a check for the invoiced contract balance and the contractor deposited it. The contractor then argued that this had not been true “final payment” because the reservation of rights letter notified the owner that the contractor expected additional compensation.

Is there any way a contractor can legally and ethically accept final payment without releasing existing claims -- and a bar against future claims? This language is consistent with a general rule of contract law. The project owner is entitled to closure. It is a final payment.

As always, I invite your comments below on this topic.

Don't miss next week's issue of Construction Claims Advisor:
Retainage of Disputed Change Order Amounts Upheld
Contractor Lost Rights against Sub’s Performance Bond
Bid Disqualified Due to Incomplete Questionnaire

Bruce Jervis, Editor
Construction Claims Advisor

Contractor seeks $485 million more for power plant project

By Thomas Content of the Journal Sentinel
Posted: Dec. 30, 2008

Costly Construction

Completion of the Oak Creek coal-fired power plant project is three months behind schedule, and Bechtel Power Corp. has submitted claims to Wisconsin Energy Corp. for $485 million.

Original project cost: $2.191 billion, as established by state Public Service Commission

Added costs because of pre-construction litigation delays: $50 million-$55 million

Revised project cost: $2.24 billion

Weather and labor cost claim submitted in December: $413 million

Project delay costs claim submitted by Bechtel: $72 million

Damages Bechtel may be forced to pay for the project being late: $250,000 a day, or $22.75 million, based on the revised schedule.

We Energies is being asked to pay $485 million more to Bechtel Power Corp., the company building two new coal-fired power plants in Oak Creek, because the most expensive construction project in state history is running late and over budget.

Bechtel blamed severe weather conditions and labor problems for construction delays that have put the $2.2 billion project three months behind schedule.

The dispute between the two companies could take a year to 18 months to resolve, utility spokesman Rick White said, but a victory by Bechtel could boost the cost of the project for both utility ratepayers and shareholders.

The claims were disclosed in a filing with securities regulators by Wisconsin Energy, which says the claims are "without merit" and that the utility aims to shield customers from any added costs.

Under a cap imposed by state regulators, customers of We Energies and two utility partners in the project can be charged just $110 million, or 5%, more than the $2.2 billion they're already bearing for the project, as approved by the state Public Service Commission in 2003.

But if Bechtel's claims are upheld and the commission agrees the added costs were out of the utility's control, it's possible that regulators could approve even more price increases.

Since 2004, We Energies customers have seen electricity bills jump by 28%, or more than $225 a year for the typical residential customer, primarily for both new power plants and higher fuel costs.

Also on the hook if Bechtel's claims are granted are Madison-based MGE Energy Inc. and WPPI Energy of Sun Prairie. Those companies each have a 7.5% ownership stake in the project.

Who bears the risk?

It's far too early to tell what kind of exposure the utility and its customers would see, White said, but the utility is confident Bechtel's claims are unwarranted.

"The issue is, who bears the risk?" White said. "We believe that the contract states very clearly that Bechtel should bear the risk, not Wisconsin Energy or We Energies or anybody else."

Bechtel has told the Milwaukee utility it would miss the September 2009 deadline for completing the first of the two coal plants. That plant is now projected to be running by the end of 2009.

"Bechtel strongly believes that its claim for schedule extension and compensation is fully supported by our contract and the facts," Francis Canavan, a Bechtel spokesman, said in a statement. "We are currently engaged in the dispute resolution process provided for under our contract, and we will respect the confidentiality that is inherent in this process."

Bechtel said severe weather and labor issues led to $413 million in higher costs, while other delays in the start of construction in 2005 account for $72 million in higher costs.

Although it has committed to building the first plant by the end of 2009, Bechtel is requesting schedule relief, according to the filing. Wisconsin Energy has agreed to conduct a study to determine whether severe weather during construction played a role in the project's being delayed.

A schedule extension would mean Bechtel wouldn't face damages of $250,000 a day for every day the project is delayed. The damage amounts were set in the contract the two companies negotiated.

Based on the current project timeline, Bechtel would face damages of $22.75 million. But its request for schedule relief seeks to avoid three more months of damages for the first coal plant and another three months for the second one, in case it also is delayed. All told, Bechtel is looking to avoid paying total damages of almost $70 million.

Rain, snow and high winds

Bechtel's claim notes last winter's severe weather, when southeastern Wisconsin experienced 99 inches of snow, four feet more than an average winter. The company also says high winds from September 2006 through April 2007, and rain in June, caused delays.

Factors causing higher labor costs, Bechtel said, include "a significant shortage in the availability of craft labor . . . significant increases in competing projects," and higher overtime and per-diem costs needed to attract construction workers to the project.

White said Wisconsin Energy is protected from the claims based on the terms of the contract, which allow Bechtel relief from higher labor costs only if wage rates escalate by at least 4% a year, which has not occurred.

While agreeing that last winter's weather was severe, White said that doesn't entitle Bechtel to its claim.

"This is Wisconsin," he said. "We've known about Wisconsin weather. If you're going to build a project in Wisconsin and you accept it on a lump-sum contract basis that you can do this in Wisconsin, then you agreed to do that."

Under a process outlined in the companies' construction contract, the companies have agreed to keep this dispute out of court, White said. The contract calls for informal negotiations between the companies, which have now begun. After that, they would try to resolve the dispute through mediation. If that fails, the matter would be resolved in binding arbitration.

That entire process is expected to last until mid-2010, about the time both coal plants are expected to be generating electricity.

Under construction are two 615-megawatt power plants. Together, they will generate enough power for more than 300,000 homes.


The operational framework of Takaful avoids elements of Riba (interest or usury) and Gharar (unknown or ambiguous factor in the operation of contract). Riba and Gharar are the basic reasons why Muslim scholars regard conventional insurance as being against the principles of Shari’ah.

The core principles of Takaful are:
Policyholders cooperate among themselves for their common good.
Every Policy holder pays subscription to help those that need assistance.
Divide losses and liabilities among the community by a pooling system.
Eliminate uncertainty in respect of subscription and compensation.
Not derive advantage at the cost of others.
Invest funds in Shari'ah complaint instrument.

From an operation viewpoint, under Takaful the members agree to devise schemes under which they themselves are insured and are insurers. Each member pays a premium as a contribution to a common fund referred as Takaful fund or policyholder’s fund. The Takaful operator, which invariably is an insurance company, manages this Takaful fund. The Takaful operator has to ensure the member’s level of contribution commensurate with the degree of risk. Therefore, the Takaful operator can apply scientific principles in the assessment of the contribution. The members allow the Takaful operator to take Tabarru (donation) to pay the losses suffered by other members in the pool. If there is any surplus left from the contribution after deduction of Tabarru and charges, that surplus belongs to the members.

Takaful is a unique way of managing the insurance needs of the Muslim community in a manner consistent with religious beliefs.

© SALAMA - Islamic Arab Insurance Company. Copyright 2007. All Rights Reserved.

TAKAFUL for the good of all

Takaful for the good of all

Today insurance plays a very important role in commercial and personal finance, but while most of us take insurance for granted, for people of the Muslim faith conventional insurance is incompatible with their religious beliefs. Under Islamic jurisprudence (Shari'ah), conventional insurance is not permissible. Therefore an innovative concept, based on solidarity, cooperation and mutuality which have been the keystones of Islamic society from the days of the holy Prophet, began to develop in the early 70's in Sudan, Middle East and Far-East Asia and it was called Takaful.

It is important to understand that Islam is not against the concept of insurance but the basis of operation of conventional insurance, which does not meet the requirement of Shari'ah. In fact, the concept of insurance which simply means the pooling of common resources to help the needy is very much in line with the teaching of Islam which propagates solidarity, mutual help and cooperation among members of the community. The essence of insurance could be seen in the system of mutual help in the Arab tribal custom of blood money or diyah. Under this system, a victim or the injured party would be compensated by the members of the community whose action had resulted in the loss of life or impairment of the victim. Therefore the principle of compensation and group responsibility was accepted by Islam and the holy Prophet. Muslim scholars have acknowledged that the basis of shared responsibility is embedded in the system of aqila as practiced by Muslims of Mecca (Muhajirin) and Medina (Ansar), and laid the foundation of mutual insurance.

It needs to be emphasized that the operational framework of conventional insurance is against the tenets of Shari'ah, but not the basic concept of the insurance. Takaful which means 'the act of a group of people reciprocally guaranteeing each other' - is based on the concept of mutual cooperative insurance. The Takaful framework is based on solidarity, responsibility and brotherhood among members who agree to share the defined losses to be paid out of defined assets.

© SALAMA - Islamic Arab Insurance Company. Copyright 2007. All Rights Reserved.


Contractors' All Risks Insurance [CAR] protects the interests of contractors involved in civil, mechanical or electrical contracts like construction of buildings, bridges, dams, towers etc, against their exposure to loss, damage or liability by a variety of external and internal causes during the course of construction.

Section 1: Physical Loss or Damage: This section provides coverage for losses on materials and contract works from a variety of risks such as;

Accidental damage during construction
Fire, lightning
Water damage, flood, storm and tempest
Collapse, collision, impact, burglary, theft and malicious damage, aircraft
Breakdown or explosion to any part of the contract e.g. Lifts in buildings etc.
Consequent damages due to defects in material casting, workmanship and design
Riot, strike, subsidence, landslide, cyclone, hurricane, earthquake, volcanic eruptions.

Section 2:Third Party Legal Liability: This section provides indemnity to third party due to the Legal liability of the insured resulting from negligence of the insured up to an agreed limit(s) for;

Accidental bodily injury &/or death to third parties
Accidental damage to property (excluding property belonging to or in the custody or under the control of the insured, and legal expenses for defending any proceedings with company’s consent.

Maintenance Cover: Maintenance Period Cover protects the insured against any loss &/or damage that occurs in the course of the compliance with the maintenance obligation under the contract, subject to the cause of such loss or damage having originated during the period of insurance.

The premium is calculated on the basis of contract value, period of contract, value of Construction Plant & Machinery, nature and type of project, previous loss history of the contractor and the experience of the contractors in similar type of projects.


This plan is usually sought by contractors, in relation to the requirement un der a contract which normally specifies the need to have adequate cover or protection for building under construction.

If your project relates to structural and infrastructural works e.g. dams, roadwork etc. and use basic or relatively simple building material such as sand, gravel, cement, wood, steel etc. then this product is for you.

Perils covered :
Natural - Fire, Lightning, Water damage, Float, Storm and Tempest subsidence, Landslide, Cyclone, Hurricane, Earthquake, Volcanic Eruption.
Social - Burglary or Theft and Malicious Damage.
Chemical - Explosion, Spontaneous Combustion, Heating, Fermentation.
Miscellaneous - Impact and Aircraft Damage.
Others - Accidental Damage.


1. The principal,
2. The contractors engaged in a project, including all subcontractors.

In order to prevent overlaps or gaps in the cover provided, a CAR takaful should be concluded for all parties concerned.

What does IKHLAS Contractors' All Risks Takaful Plan cover?

IKHLAS CAR Takaful can be taken out for all building and civil engineering projects, such as:
1. Residential and office buildings, hospitals, schools, theatres;
2. Factories, power plants;
3. Road and railway facilities, airports;
4. Bridges, dams, weirs, tunnels, water supply and drainage systems, canals, harbors;

In particular, the cover comprises the following:

Contract Works
This term implies all the operations to be carried out by a contractor and his subcontractors in compliance with the building contract, including preparatory work on the site, the execution of temporary structures, as well as the use of all the materials stored on the site which are to be incorporated in the structure.

Construction plant and equipment
This term implies workers’ accommodations, storage sheds, preparation and mixing plant, scaffolding and utilities.

Construction machinery
This term implies earthmoving equipment, cranes and the like, as well as site vehicles not licensed for use on public roads no matter whether such machinery is owned or hired by the contractor.

Costs for clearance of debris
This term implies the expenses incurred for the removal of debris from the site in the event of a loss indemnifiable under CAR takaful plan.

Third party liability
This term implies legal liability arising out of property damage or bodily injury suffered by third parties and occurring in connection with the contract works on or near the building site.

Surrounding property
This term implies property located on the site as well as property surrounding the site.

Scope of Cover
CAR takaful provides an ’all risks’ cover - every hazard is covered which is not specifically excluded. The most important causes of losses indemnifiable under CAR takaful plan are :- Fire, lightning, explosion, crashing aircraft, extinguishing water or other fire fighting measures,
- Flood, inundation, rain, snow, avalanche, tsunami,
- Windstorm of any kind,
- Earthquake, subsidence, landslide, rockslide,
- Theft, burglary,
- Bad workmanship, lack of skill, negligence, malicious acts or human error.

The cover provided by CAR takaful is only subject to a few obvious exclusions which the international insurance market usually applies. These exclusions named in the certificate essentially comprise:- Loss or damage due to war or warlike operations, strike, riot, civil commotion, cessation of work, requisition by order of any public authority,
- Loss or damage due to willful act or willful negligence of the participant or of his representatives,
- Loss or damage due to nuclear reaction, nuclear radiation or radioactive contamination,
- Consequential loss of any kind of description whatsoever, such as claims from penalties, losses due to delay, loss of contract,
- Loss or damage due to mechanical and/or electrical breakdown or derangement of construction machinery, plant and equipment,
- Loss or damage due to faulty design,
- The cost of replacement, repair or rectification of any deficiencies in the contract works. However, loss of or damage to correctly executed items resulting from the inadequacy of other items of the contract works is generally covered under CAR takaful.

Period of Cover
The cover attaches as from the commencement of work or after the items entered in the schedule of the certificate have been unloaded at the site and terminates when the completed structure or any completed part thereof is taken over or put in to service. The Takaful Operators’ liability for construction machinery and construction plant and equipment commences from their unloading at the site and expires on their removal therefrom. In addition, it is possible to extend the period of cover to include a maintenance period.

Sum Covered
The sum covered must be equal to the amount stated in the building contract, plus the value of any construction material supplied and/or additional work performed by the principal. Any increase in the contract sum must be notified immediately to the Takaful operators in order to avoid under takaful.
Usually, separate sums covered are fixed for: - Construction machinery and construction plant and
- Existing buildings and clearance of debris,

Third party liability cover is likewise subject to a separate limit of indemnity for any one accident or series of accidents arising out of one event.

The Takaful Operators indemnify the participant for the expenses incurred for eliminating loss of or damage to the property covered. However, expenses for rectifying deficiencies that would have been incurred anyway - without the occurrence of such loss or damage - are not indemnified.

Moreover, a so-called deductible is agreed on for each CAR takaful. This is the share in each loss which the Participant has to bear for his own account and which is thus deducted from the indemnity. The purpose of such a deductible is to stimulate the Participant’s interest in loss prevention and to relieve the Takaful Operators from dealing with the many minor losses where the administration expenses incurred would be excessive compared with the indemnity.

Generally, the limit of indemnity is the sum covered unless a limit for each and every loss and/or an aggregate limit for all losses occurring during the period of takaful has been agreed.

Maintenance Period
Usually, the building contract provides for a maintenance period of 12 months after the completed structure has been taken over. For this period maintenance cover may be granted under the CAR certificate. The following types of cover:

Maintenance visits cover
The Takaful operators’ liability during the maintenance period is limited to loss or damage caused by the Participant in the course of the operations carried out for the purpose of complying with the obligations under the maintenance provisions of the contract.

Extended maintenance cover
In addition to the protection provided under maintenance visits cover, this type of cover also includes loss or damage caused during the erection period.

Period of Cover
24 months - 25% loading
36 months - 50% loading
Extensions - charge pro-rata

Extensions (Loading)
Expediting Expenses - 10%
Vibration Weakening - Between 10% to 20% depending on proximity
and removal support of third party property (Decline extension if third party property is immediately adjoining the risk)
Vibration weakening - Between 10% to 20% depending on and conditions.

Beri tender secara terbuka

KUANTAN 28 April - Menteri Besar Pahang, Datuk Seri Adnan Yaakob (gambar) berkata, kerajaan negeri akan melakukan pemberian tender bagi semua projek kerajaan secara terbuka.

Pada masa sama, beliau mengingatkan kontraktor yang membuat tawaran terendah tidak semestinya mendapat tender, sebaliknya ia diberikan berdasarkan keupayaan masing-masing.

Katanya, pengalaman beliau selama 24 tahun menjadi wakil rakyat termasuk 11 tahun sebagai Menteri Besar mendapati, pemberian tender kepada kontraktor yang memberi tawaran terendah tidak menyelesaikan masalah projek yang gagal disiapkan.

"Jangan pula ada yang memikirkan bahawa mungkin Menteri Besar dan kerajaan negeri akan memberi (tender) kepada yang paling tinggi pula, bukan.

"Kita akan memilih mengikut kemampuan kontraktor dan pada masa sama kita berikan sedikit kesaksamaan supaya tidak banyak kontraktor yang mempunyai terlalu banyak kerja pada satu masa sehinggakan mereka tidak mampu menjalankan semua projek," katanya….

Ulasan: Juruukur bahan di mana juga telah diajar sejak dulu mengenai kebaikan tender terbuka untuk mengelakkan kronisme dan rasuah. Juruukur bahan di latih untuk menilai tender. Kalau ikut nasihat juruukur bahan biasanya kurang berlaku masalah pasca kontrak. Tapi masalah dapat di kesan apabila nasihat tidak diikuti oleh lembaga tender yang mempunyai agenda peribadi. Juruukur bahan menjadi tonggak menyelamatkan duit rakyat dan tidak bias.