UGANDA, Kampala | Real Muloodi News | Budgeting plays a crucial role in construction projects, helping project owners and developers manage costs, make informed decisions, and ensure successful outcomes.
After consulting her contactor, Racheal Namuli got a loan from a bank to finish two floors on her three-storeyed building.
With a budget of USh50m, Namuli bought tiles, cement, sand, grout, paint, undercoat and a few other materials.
When she delivered the materials, her contractor informed her that she had bought excess tiles, so she sold some.
However, later, the contractor said that he had miscalculated and that they would need all the tiles after all. He also requisitioned kitchen sinks as well as prepaid power metres, which she estimated would all cost USh5m.
With no more money to spend on materials, Namuli was forced to use offcut tiles for the rest of the areas, which greatly affected the structural design, especially the aesthetics.
Nuru Ashaka, a property developer stresses that a construction project budgeted wrongly as Namuli’s is destined to fail.
“Because I know it might be difficult to budget to the dot, what I do is make three different budgets for every project. From these I get the average and that is what I work with. As a project owner it is important that you have good communication with your contactor or project manager. They need to understand your tastes, preferences and vision for your project and then help you achieve that within your means,” Ashaka explains.
This article highlights the significance of budgeting before and during construction, emphasising the importance of accurate estimations, effective project management, and collaborative teamwork.
With a focus on meticulous planning and budget realignment, developers can navigate unforeseen challenges and achieve their desired results.
Drawing Accurate Budgets
To avoid costly mistakes, it is essential to develop accurate budget that align with the project’s goals and financial capabilities.
By working closely with architects and engineers, developers can assess the feasibility of design choices and adjust accordingly.
Considering potential variables such as fluctuating material costs, transportation expenses, and market conditions, developers can anticipate and plan for potential budget adjustments throughout the project’s duration.
The Role of Bill of Quantities (BOQ)
Joseph Oryang, a civil engineer at Century Investors Limited says every project should have a bill of quantities (BOQ) with a detailed description of the project, aspects of the work and quantity of the work, for instance, the number of square metres of brickwork and the cost of each square metre.
A comprehensive bill of quantities serves as a critical tool for accurate cost estimation. By providing a detailed breakdown of the project’s requirements and quantities, developers can assess the final cost with precision.
Hiring qualified and experienced quantity surveyors or engineers ensures an exhaustive BOQ, minimising assumptions and miscalculations that may lead to cost discrepancies during construction.
“Very often do people develop shallow BOQs and leave out a lot of things and make assumptions. When it comes to the actual work, the costs under the assumptions are often different from what had been projected. To get an accurate bill of quantities, you need to hire a quantity surveyor or engineer who is not only qualified but experienced in construction,” Oryang advises.
Effective Project Management and Budget Realignment
Project owners must maintain effective project management to stay within the initial budget. Constant communication with contractors and project managers is vital, ensuring a clear understanding of the project’s vision, preferences, and financial constraints.
With the ability to adjust expenses as needed, developers can mitigate financial strain and allocate resources optimally, maintaining the project’s integrity while adhering to budgetary limitations.
Consultation for Materials and Resource Allocation
Peter Musomba, the business manager at Hardware World Limited, says budgeting is a vital aspect no matter the project size, short or long term because it allows for consultation with experts who guide on using the right materials.
Budgeting in construction projects facilitates consultation with experts during different stages, ensuring the proper allocation of materials and financial resources.
“For each stage, there is an allocation of resources and this gives you the exact amount to use. In most cases, you buy what you need for a given stage. For instance, when you are building the foundation in a damp place, sometimes you buy blocks first yet such blocks are not necessary in the preliminary stages where you instead need stone aggregate and a damp proof course (DPC) and other foundation materials,” Musomba explains.
Hardware dealers and contractors play crucial roles in guiding developers on material choices and cost-effective solutions.
By following a structured approach that aligns material procurement with project milestones, developers can prevent wastage, misallocation, and unnecessary expenses.
Forecasting Project Duration
Budgeting in construction provides insights into the project’s timeline and helps forecast its completion. By analysing the bill of quantities and estimating material requirements for each stage, developers can determine the project’s spending period.
This information is particularly useful for commercial projects, as it allows for accurate financial planning, potential client engagement, and revenue projections.
Determining Financing Sources
Thorough budgeting enables developers to identify suitable financing sources. By understanding the project’s financial requirements, developers can plan and secure funding from appropriate sources, ensuring a seamless and well-supported construction process.
For businesses, Musomba says maintaining a stable financial foundation through profitability and savings facilitates the self-financing of construction projects.
Project Auditing and Problem Identification
Budgeting in construction projects plays a vital role in auditing the progress, allowing developers to assess the effective utilisation of funds and identifying potential issues.
By comparing projected expenses and achievements at various stages, developers can pinpoint shortcomings and address them promptly.
Weather conditions, contractor performance, and unforeseen circumstances are among the factors that can impact the project’s effectiveness and budget adherence.
“If you got the funds on time, could it be that the contractor was not effective? You are able to audit yourself in terms of effectiveness, which normally hinges on the side of the funder or contractor or both. Sometimes the effectiveness could be audited in terms of weather. In the construction industry, when it rains, construction rates are low because you do not expect people to work under the rain because rain will wash away or dilute the cement,” Musomba explains.
Collaborative Approach and Expert Guidance
Developers should actively engage with architects, engineers, and contractors to ensure a collaborative approach. This teamwork ensures that the project’s vision is translated into practical design choices and suitable material selection.
“However, they should work with contractors who understand the house design, format, material and land terrain and other site technical concerns to do the budgeting. Quantity surveyors could also give estimates,” Musomba says.
Relying on the expertise of professionals prevents costly mistakes and helps maintain budgetary discipline. Clear communication channels and a shared understanding of the project’s requirements foster a successful construction process.
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