cost engineering in chinese construction sector

1、Cost Control in the Chinese Construction Sector - Page 1 - Cost Control in the Chinese Construction Sector Peter K.M. Ho Director, Davis Langdon there are a number of countries adjoining it such as Russia and Mongoli

2、a in the North, Korea in the East, India, Vietnam and Laos in the West. It covers an area of 9,528,000 sq km, making it the third-largest country in the world, just behind Russia and Canada. Since the communist regime

3、 decided to open up China to foreign investment in 1978, the country has become one of the world's fastest growing economies and is among it’s 10 largest. In 2008 China’s GDP was about USD4,360 billion and it’s gr

4、owth rates in GDP are close to 11% per year over the past few years. In 2008, the total fixed asset investment in China is about USD2,500 billion which includes investment in Real Estate of about USD440 billion. The g

5、rowth in investment in Real Estate in the past 5 years ranges from 21% to 27%. Cost Control in the Chinese Construction Sector - Page 3 - The Cost Control process – 5 key stages of cost assessment Due to the heavy cap

6、ital investment, long construction period and complex nature of construction projects, the cost control process normally involves 5 key stages of cost estimating and assessment over the lifespan of a project, each usin

7、g different calculation and estimating methods. 1. Feasibility Stage ? Feasibility Estimate This is an important document for making decisions as to the feasibility of the project. It sets down the budget limit for

8、a project which normally should not be exceeded. Due to the limited information available at this feasibility stage the estimate would just be a rough indication of costs based on historical data. 2. Preliminary Desig

9、n Stage ? Preliminary Estimate based on preliminary design information This estimate is an update of the Feasibility Estimate upon receipt of subsequent design development information. This document is essential in s

10、upporting the submission of the Preliminary design to the Government Planning Department for approval. If the Preliminary Estimate exceeds the budget set in the feasibility estimate either additional funding is to be s

11、ought or a revision to the design is required to bring down the estimate to within the budget. 3. Detailed Design Stage ? Detailed Design Estimate This estimate is prepared on the basis of an itemized build-up accor

12、ding to the recognized rules and method of measurement, after completion of the detailed construction drawings. Under a tender situation if this estimate is completed by the Developer then it can be used as the Pre-t

13、ender Estimate which must be submitted to the Tender Bureau for record purposes. The Pre-tender Estimate, duly signed and stamped by a Registered Cost Engineer, is also a prerequisite for the issue of the Constructio

14、n Permit for the Works. If the tender sums received are deviated from the Pre-tender Estimate and the deviation amount is beyond the limits set out in the marking scheme for the tender assessment, the tender exercise h