Construction and Refurbishment

Estimation of Construction Cost



Estimation of Construction Cost

Task 1

The currency used for the cost study is United Arab Emirates Dirhams (DH) and the exchange rate at the time the author wrote this article was one US dollar is equal to 3.68 UAE Dirhams. On March 25, the exchange rate at Yahoo Finance.com was 0.2722. In editing the article for publication, all DH listings were converted to US dollars and all graphs show both DH and dollar listings, These were added to assist the US readers, and were not part of the original article. The following four projects along Sheikh Zayed Road are selected from Dubai for comparing the cost of the project. Sheikh Zayed Road is the major highway in Dubai which connects Dubai and Abu Dhabi. All the projects selected here are constructed by international contractors or international contractors in joint venture with local contractors located in Dubai.

Contract No. R659/5 - Improvement of Interchange No. 3. The project is located in Dubai - Abu Dhabi highway (Sheikh Zayed Road). The project consists of one main bridge (multi-cell, posttensioned, cast-in-place, concrete, box girder bridge), one ramp bridge, road works, traffic signal works, signing, road marking, storm water drainage works, lighting, utility relocation works and other related construction works.

Following are the BCIS (Five Year Forecast) estimates that are used to caluclate accurately the project construction:

 

2Q2010

3Q2010

4Q2010

1Q2011

2Q2011

3Q2011

4Q2011

1Q2012

Percentage change on previous quarter

+4.3%

+0.5%

+0.5%

-0.5%

+2.3%

-0.4%

0

-2.2%

In the above table the forecats are base on the different elements and their forecats such as building costs, inflation, material prices, wage rates, construction orders, price level, industry groth and output, and tender prices.

The General Building Cost Index rose by an annual 2.6% in 1st quarter 2012. Materials costs rose by 2.4% in the year to 1st quarter 2012, and nationally agreed wage rates rose by 1.2%. General inflation rose by 3.7% over this period (BCIS, 2012, Pp.2-27).

With the costs of a completed semiconductor plant now exceeding $1billion, and some forecasts predicting the cost will soar up to five times this total over the next five years, facility owners are insisting that fab construction projects be gauged in terms of cost and schedule performance.

Increasingly, owners want new semiconductor facilities constructed in less time, for less money, and with higher quality standards. Currently, no standards are available that can quantify the average cost and time required for construction of a semiconductor facility based on the size, number and complexity of the systems, and technology of the facility. Moreover, no literature is currently available that can correlate construction cost and schedule of a semiconductor facility and the variation of one to another. For example, the knowledge of the impact of a fast track construction schedule on the facility construction cost could assist owners in the decision making process. With demand expected to fall in 2012 and 2013, the average of wage awards over the first couple of years of the forecast period is likely to be muted (BCIS, 2012, Pp.2-27). The average level of wage agreements is then forecast to ...