enough to Estimating and Valuation...By: nissan URL: to Estimating and Valuation 3enough [1] INTRODUCTION An estimate is a computation or calculation of the quantities required and

NISSAN FOUNDATIONS

Notes by: Er. Shambhu Kumar Shah

enough to Estimating

and Valuation

By: nissan

2013

Introduction, Methods of Estimating, Preparation of Detailed Estimate, Types of Estimates Analysis of Rates, Detailed Estimate, Valuation, Specification.

By: nissan URL: www.sentientsep.wordpress.com

3 enough to Estimating and Valuation

[1] INTRODUCTION

An estimate is a computation or calculation of the quantities required and expenditure

likely to be incurred in the construction of a work. The primary objective of the estimate is to

enable one to know beforehand, the cost of work. The actual cost should not differ much from

the estimated cost.

To make out an estimate for a work the necessary things are: (i) Drawings (plans, sections, etc.),

(ii) Specifications, and (iii) Rates

i) Drawings

Plans, sectional elevation and detailed drawings to scale, fully dimensioned are required.

The plan, elevation and sections are usually drawn to a scale 1cm = 1m and detailed drawings

are prepared to a scale of 1cm = 10cm.

ii) Specifications

The specifications can be divided into two categories:

a) General specifications or Brief specification

This gives the nature, quality, class and work of materials. It gives an idea of

whole building or structure and is useful in preparing the detailed estimate.

b) Detailed specification

This gives the detailed description of the various items of work; the quantities &

qualities of materials, their proportion, the method of preparation, workmanship and

execution of the work. These are helpful for the execution of the different items of work.

iii) Rates

The rates per units of various items of works including various materials to be used,

labour (skilled & unskilled) are calculated by using standard norms and approved schedule of

rates called ‘Rate Analysis’.

Units of Measurements and Payments for Various Items of Works

S.N. Particulars of Item Units of

Measurement & Payment per

01.

02.

03.

04.

05.

06.

07.

Earthwork in excavation in different soil

Earth filling in excavation in foundation

Surface dressing and levelling, cleaning

Sand filling

PCC/RCC work

PCC work (thickness specified)

DPC –cement concrete (thickness specified), Asphalt, Rich cement mortar

cu. m.

cu. m.

sq. m.

cu. m.

cu. m.

sq. m.

cu. m.

4

URL: www.sentientsep.wordpress.com

INTRODUCTION Notes by: Shambhu Kumar Shah

08.

09.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

Brick work in foundation and plinth

Honeycomb brick work: thickness specified

thickness not specified

Half brick partition wall

Stone masonry work

Wood work for door/windows, chaukhat, rafter, beam, roof trusses, etc.

Door/ windows panelled or glazed shutter

Wood work in partition, ceiling, flooring, etc.

Steel reinforcement in RCC work

Iron gate

Iron railing (height and types specified)

Iron grill, collapsible gate

Rolling shutter

Steel door and windows (types and fixing specified)

Barbed wire fencing

CGI sheet roofing / AC sheet roofing

Slate roofing, Timber roofing

Eaves board (thickness specified)

Centring and shuttering, form work

Cement plaster (thickness, proportion specified)

Cement pointing – struck, flush

Dado (thickness and type specified)

Skirting (thickness, type and height specified)

White washing, snow cement painting (number of coat specified)

Enamel painting, aluminium painting on grill (no. of coats specified)

Mosaic or terrazzo or granolithic floor over 7.5 cm (3”) Lime concrete

Brick soling (flat)

Brick soling on edge

Railing work (height and type specified)

Pipe – rain water, sanitary, water pipe, etc. (diameter specified)

Laying of pipe line – sanitary, water pipe, etc. (dia., depth, bedding, specif

Glazing work

Electrical wiring of light, fan, etc.

Supply of WC, wash basin, bib cock, etc.

cu. m.

sq. m.

cu. m.

sq. m.

cu. m.

cu. m.

sq. m.

sq. m.

quintal

sq. m./ quintal

m.

sq. m./ quintal

sq. m.

m.

sq. m.

sq. m.

sq. m.

sq. m.

sq. m.

sq. m.

sq. m.

sq. m.

m.

sq. m.

sq. m.

sq. m.

sq. m.

sq. m.

m.

m.

m

sq. m.

point

no.



Main Items of Works and their Methods of Measurements

1. Earthwork

Earthwork shall be taken in cubic meter (cu. m.) and the length, breadth and height or depth

shall be measured to get the cubic content.

E/W of different nature as in excavation in foundation, in trenches etc. in filling in plinth, in

banking etc. shall be measured under separate item.

E/w in different kinds of soil as ordinary soil, hard soil, ordinary rock, hard rock, etc. shall be

classified separately and measured under separate items.

The measurement shall be taken separately for every 30m lead and every 1.5m lift or height or

depth.

2. Concrete work

Concrete shall be taken in cubic meter and measurements of length, breath and height or

thickness shall be taken to the nearest 1 cm.

The kind of concrete, size, grading and proportion of materials, method of mixing, cutting, etc.

shall be described.

Different kinds of concrete work as lime concrete, cement concrete, RCC, etc. of different

proportions, different materials shall be taken under separate items.

3. Centring & Shuttering of RCC work

Form work (centring or shuttering) shall be taken in square meter (sq. m.).

Form work shall be measured as the actual surface in contact with the RCC work.

For slabs, vertical sides (edges) shall not be measured.

Form work of different kinds of work as beam, lintel, floor, road wall, column, etc. shall be

measured under separate items and fully described.

4. Brickwork

Brick work shall be taken in cubic meter and measurements of length, breath or thickness and

height shall be taken to compute the quantity.

The description of bricks and of the materials of mortar with proportion shall be stated.

Different kinds and classes of b/w shall be taken under separate items.

Scaffolding works are not measured separately but included in the item of brick-work.

No deduction or addition shall be made for opening up to 0.1 sq. m. in section.

5. Honey comb brickwork

Honeycomb brickwork shall be taken in square meter stating the thickness of well and the

pattern of honey combing.

Honeycomb holes or opening shall not be deducted.

If thickness of honeycomb wall is not specified it can also be measured in cubic meter.

6



6. Partition wall

Half brick wall or bricks-on-edge shall be taken in square meter stating thickness and shall be

fully described including mortar and its proportion.

Reinforcement as hoop mask, wire netting or bars if provided shall be included in the items and

fully described stating type, width, gauge or thickness of diameter and spacing.

7. Door and Window shutters

Doors and windows shutters shall be taken in square meter stating the thickness and kind of

wood and both faces shall be described.

The type of shutter i.e. flush, glazed, panelled, etc. shall be taken separately & each type fully

described.

For glazed shutter, it shall be measured flat over all in sq. m. including timber frame work stating

the thickness of timber and of glass panes. Glazing shall not be measured separately.

8. Steel reinforcement

Bar reinforcement shall be measured by weight in quintal stating the diameter and shall include

cutting to length, hooked ends, cranking or bending, etc.

Authorised overlaps shall be measured and different diameter bars shall be kept separately.

Binding wire shall not be measured separately; this shall be included in the item.

9. Cement plastering

Plastering shall be taken in square meter stating thickness, mortar and its mix.

Plastering of all roofs, ceiling, walls, etc. shall be measured under separate items.

The measurement of all plastering shall be taken for the dimension before plastering for length

and from top to floor or skirting to ceiling for height.

Exterior plastering to a height greater than 10m from average GL shall be measured separately

in stages of 3m.

When the two faces are plastered with different mortars of if one side plastered and other side

pointed, then deduction shall be made for the outer face only.

10. Cement Pointing

Pointing shall be taken in sq. m. and measured flat of the whole outer-face area stating the type

of mortar and its mix.

Various types of pointing as flush, struck, etc. shall be taken separately.

Pointing of wall, floor, roof, etc. shall be kept separately.

Raking of joints shall be included in the item.

11. Cement Painting

Cement painting shall be taken in square meter stating number of coats.

Preparatory work as cleaning, rubbing down, removing, etc. shall be described.

The item shall include repairs of surfaces as holes, cracks, patches, etc. not exceeding 0.1 m2

with materials similar to existing surface.

The deduction shall be made as same as plaster work i.e. for two faces painting, only one

external opening shall be deducted.



12. Water supply & Sanitary work

All pipes and fittings should be classified according to their types, diameters, jointing and fixing.

Pipes shall be measured in running meter stating size, class, pressure, etc.

Laying or fixing with overall fittings such as bends, junctions, etc. are included in the items of

work, so not measured separately.

Method of laying and jointing shall be fully described.

Digging and refilling of trenches, concrete bedding, etc. shall be measured separately.

Manholes up to 6 m. (20 ft.) depth shall be enumerated stating the size and depth and shall

include cast iron cover with frame (weight stated) materials and mortar, formwork, etc. all of

which shall be fully described.

Sanitary appliances i.e. water basin, water closet, sink, towel rod, soap case, etc. shall be taken

in numbers and measured separately and fully described.

13. Electrical work

Electrical wiring shall be taken in points as light points, fan points, power socket points, etc. and

shall be enumerated under different items and fully described.

Point wiring includes switch, ceiling rose, switch boards, battens, nails, wire, etc. in the item.

Earthing and service connection shall be enumerated and fully described as including earth

electrode, packing charcoal, earth wire, etc.

The number of fans, light bulbs, wall bracket, …me light, etc. are enumerated clearly and fully

described as brands, standards, size, watt, etc.

14. Dismantling & Demolition

The term dismantling implies carefully taking up or down & removing carefully without damage.

The term demolition – taking up or down or braking up without care.

The units and method of measurement of dismantling and demolition shall be generally the

same as those employed for the construction of the respective item of work. For e.g.:

RCC work

Brickwork m3

Thickness of plaster shall be excluded in the measurement of wall.

Dismantling of doors and windows shall be enumerated stating their size.

8



Method of Building Estimate or Methods of Taking Quantities

Method I : Long wall & Short wall Method

In this method; the external lengths of walls running in the longitudinal direction

generally long walls out-to-out and the internal lengths of walls running in the transverse

direction in-to-in are measured; and quantity is calculated by multiplying the length by the

breath and the height of the wall.

taking Height (H) = 4 m

Here,

Longer wall = 2 × 5.1 = 10.2 m

Shorter wall = 2 × 3.9 = 7.8 m

Total length (L) = 10.2 + 7.8 = 18 m

Since, Quantity = length (L) × breadth (B) × height (H)

Quantity = 18 × 0.1 × 4 = 7.2 cu. m.

Method II : Centreline Method

In this method; total length of centre lines of walls (long & short) has to be found out.

The total length of centre lines of walls, of same type, long and short having same type of

foundations and footings is found and then the quantities are obtained by multiplying the total

central length by the respective width and the height.

Total centre length of wall

= (2 × c/c of longer wall) + (2 × c/c of shorter wall)

= (2 × 5) + (2 × 4) = 10 + 8 = 18 m.

Since, Quantity = length (L) × Breadth (B) × Height (H)

Here, L = 18 m

B = 0.1 m

H = 4 m (assume)

Quantity = 18 × 0.1 × 4 = 7.2 cu. m.



For Two Roomed building:

Here,

Total centre length of wall = (2 × c/c of longer wall) + (3 × c/c of shorter wall)

= (2 × 9) + (3 × 4) = 18 + 12 = 30 m.

But, Quantity = length (L) × Breadth (B) × Height (H)

Here, L = total centre length – number of overlaps × ½ breadth = 30 – 2 × ½ × 0.1 = 29.9 m

B = 0.1 m

H = 4 m (assume)

Quantity = 29.9 × 0.1 × 4 = 11.96 cu. m.

Method III : Crossing Method

In this method, the overall perimeter of building is found out and the value equal to four

times the thickness of wall is subtracted from it, to obtain the centre line length. This method is

rarely used.

10


TYPES OF ESTIMATE Notes by: Shambhu Kumar Shah

[2] TYPES OF ESTIMATE

Types of Estimate 1) Preliminary Estimate or Approximate or Abstract or rough Estimate

2) Plinth Area Estimate

3) Cube Rate Estimate or Cubical Content Estimate

4) Detailed Estimate or Item Rate Estimate

5) Revised Estimate

6) Supplementary Estimate

7) Annual Repair or Maintenance Estimate (A.R. or A.M. Estimate)

1) Preliminary Estimate

Preliminary estimate is required for preliminary studies of various aspects of a project;

to decide the financial position and policy for administrative sanction by the competent

administrative authority.

In case of commercial projects as irrigation project, building project; the probable cost of the

project is estimated by this method to know whether the investment on the project is justified

or not.

In includes the approximate estimates of various works separately such as cost of land, cost of

each building, cost of roads, w/s and sanitary works, electrification etc.

2) Plinth Area Estimate

This is prepared on the basis of plinth area of the building.

It is calculated by finding the plinth area of the building and multiplying by the plinth area rate.

The area should be calculated for the covered area by taking external dimension of the building

at floor level. Courtyard or other open area shouldn’t be included in the plinth area.

It is only an approximate method.

For multi-storeyed building, the plinth area estimate is prepared for each storey separately.

3) Cube Rate Estimate

It is a preliminary or an approximate estimate prepared on the basis of the cubical

content of the building.

It is calculated by finding the cubical content of the building (length × breadth × height) and

multiplied by the cube rate.

It is most accurate as compared to the Plinth area estimate as the height of the building is also

compare.



4) Detailed Estimate

It is an accurate estimate and consists of working out the quantities of each item of work

and working the cost.

The dimensions; length, breadth and height of each item are taken out correctly from drawing

and each item are calculated, and obstructing and billing is done.

It is prepared in two stages:

i) Details of measurement and calculation of quantities:

ii) Abstract of estimated cost

- The cost of each item of work is calculated in a tabular form from the quantities already

computed and total cost is worked out in Abstract of Estimate Form.

- 3 % of the estimated cost is allowed for contingencies.

- 2 % is provided for work-charged establishment.

- Detailed estimate is usually prepared work-wise, under each sub-work as main building,

servant quarters, garage, boundary walls etc.

Detailed estimate is accompanied with:

i) Report ii) General Specification iii) Detailed Specification

iv) Drawings: Plans, Elevations, Sections, Site Plan etc. v) Calculations & Designs

vi) Analysis of Rates as per approved Schedule of rates

Detailed estimate is prepared for technical sanction of the competent authority, for arranging

contract and for the execution works.

5) Revised Estimate

The revised estimate should be accompanied by a comparative statement showing the

variations of each item of works, its quantity, rate and cost under original.

Revised estimate is detailed estimate and is required to be prepared under any one of the

following circumstances:

i) When the original sanctioned estimate is exceeded or likely to exceed by more than 5 %.

ii) When the expenditure on a work exceeds or likely to exceed the amount of

administrative sanction by more than 10 %.

iii) When there are material deviations from the original proposal, even though the cost

may be may be met from the sanctioned amount.

6) Supplementary Estimate

It is a detailed estimate and is prepared when additional works are required to

supplement the original works, or when further development is required during the progress of

work. This is a fresh detailed estimate of the additional works in addition to the original

estimate.

7) Annual Repair or Maintenance Estimate

It is a detailed estimate and is prepared to maintain the structure or work in proper

order and safe condition.

For building; this includes white washing, colour washing, painting, minor repairs etc.

For road works the A.R. Estimate provides for patch repairing, renewals, repairs of bridges and

culverts etc.

12



Various TERMS

Contingencies

The term ‘contingencies’ indicates incidental expenses of miscellaneous character which

cannot be classified under any distinct item sub-head, yet pertain to the work as a whole.

In an estimate a certain amount in the form of contingencies of 3% to 5% of estimated cost, is

provided to allow for the expenses for miscellaneous petty items which do not fall under any

sub-head or items of work.

The contingency may be expend for the project management cost, i.e. fuel, papers, allowance

for related technician for supervision, vehicles etc.

If there is any saving against the amount provided under contingencies, this amount may be

utilised with the sanction of the competent authority, to meet the expenses of extra items of

work, if any unforeseen expenditure, expenses to minor changes in design etc.

Work-charged Establishment

Work-charged establishment is the establishment which is charged to work directly.

During the construction of a project, for a certain number of works; supervisors, watchman,

munshi, etc. are required to be employed, and their salaries are paid from the amount of work-

charged establishment provided in the estimate.

For work-charged establishment a percentage of 1.5% to 2% of the estimated cost is included in

the estimate.

The work-charged employees are temporary staff and their appointment services are terminated

at the expiry of the sanctioned period.

Departmental or Centage Charges / Supervision charges

When the engineering department takes up the work of other department a percentage

amount of 10 % to 15 % of the estimated cost is charged to meet the expenses of establishment,

designing, planning, supervision etc. and this percentage in known as centage charge.

Centage charge is also made on contributory and deposit works of local bodies, private persons

and others.

Centage charge is provided in the estimate of the work and is also known as supervision charges

of works.

Administrative Approval or Sanction

For any project or work required by a department, an approval or sanction of the

competent authority of the department, with respect to the cost and work is necessary at the

first instance.

The approval authorises the engineering department to take up the work.

It denotes the formal acceptance by the department, concerned for the proposal.

After administrative approval is given the engineering department (p.w.d.) take up the work and

prepares detailed designs, plans and estimates and then executes the work.

The engineering department prepares approximate estimate and preliminary plans and submits

to the department concerned for administrative approval.



Expenditure Sanction

Expenditure sanction means allotment of fund for a specific work and usually accorded

by the finance department.

No expenditure can be incurred before expenditure sanction is given.

Technical Sanction

Technical Sanction means the sanction of detailed estimate, design calculations,

quantities of works, rates and cost of the work by the competent authority of the engineering

department.

After the technical sanction of the estimate is given, then only the work is taken up for

construction.

In case of original work the counter signature of the local head of the department should be

obtained in the plan and estimate before technical sanction is accorded by the engineering

department.

Bill of Quantities

It is a statement of the various items of work giving the description, quantities and unit

of rates.

It is prepared in a tabular form similar to the ‘Abstract of Estimated Cost’ of the detailed

estimate, but the rate and amount column are left blank (unfilled).

It is primarily meant for inviting Tender and supplied to the Contractor to fill up the rates and

amounts column.

On receipt of the tenders the rates and amounts are compared and decision about entrusting

the work is finalised.

Bill of Quantities (Typical Sheet)

Item

no. Particulars of Items Quantity Rate Unit per Amount Remark

1.

2.

3.

4.

5.

6.

7.

Earthwork in excavation

Earthwork in filling

Lime concrete in foundation

First class brick work in lime mortar in

foundation and plinth

Damp proof course 2.5 cm C.C. 1:1.5:3

Brick work 1:6 mortar in superstructure

35 m3

30 m3

15 m3

35 m3

12 m2

35 m3

… …

… …

… …

… …

… …

… …

per % m3

per % m3

per m3

per m3

per m2

per m3

… … …

… … …

… … …

… … …

… … …

… … …

Split up of Cost of Building work

i. Excavation & concrete in foundation ii. Earthwork up to plinth

iii. Earthwork up to superstructure iv. Roofing v. Flooring

: : : : :

3 % 5 % 25 % 20 % 6 %

14



vi. Wood works – D/W vii. Internal finishing

viii. External finishing ix. Water supply works x. Sanitary works

xi. Electrification

: : : : : :

15 % 6 % 3 % 4 % 8 % 5 %

Total : 100 %

Terms used for Preparing Preliminary Estimation

i. Plinth Area

It is the built up area of building measured at floor level of any storey.

Courtyard, open areas, balconies, cantilever projection are not included.

Plinth offsets are not included.

ii. Floor Area

Floor area means plinth area minus wall area.

It includes floor of all rooms, varandah, passing corridor, staircase room, kitchen, stores, etc.

iii. Circulation Area

It is the floor area of verandah, passing corridors, balconies, entrance hall, porches, staircase

used for the movement of people.

It may be divided into two parts:

a) Horizontal Circulation Area (verandah, corridor, porch, etc.): 10 – 15 % of plinth area

b) Vertical Circulation Area (staircase, lift, etc.): 4 – 5 % of plinth area

iv. Carpet Area

It is the useful area or liveable area or settable area.

This is the total floor area minus circulation area and minus other non-usable area as

bathroom & w. c., air conditioning room, etc.

For office building : 60 – 70 % of plinth area

and for residential building : 50 – 65 % of plinth area, is considered as carpet area.

Complete Estimate of a Project This should include all items of expenditure from the beginning up to the end.

The complete estimate includes the following:

(i) The cost of preliminary works as surveying observations and investigations and other

preliminary works.

(ii) Cost of land including its acquisition and legal expenses.

(iii) Cost of improvement of land by levelling, digging and filling if required.

(iv) Cost of planning, designing, preparation of estimate etc.

(v) Cost of building structure, including internal electrification, sanitary and water supply works.



(vi) Cost for supervision charges during execution of works.

(vii) Cost of temporary accommodation or staff, labour and other amenities (for big project only).

(viii) Cost of water supply and electric connection during construction.

(ix) Cost of external services as roads, electric service lines, storm water drains, external water

supply and sanitary works etc.

(x) Cost of maintenance and repair works and other running expenditures during the construction

(if the construction runs for a number of years).

(xi) For building designed and supervised during construction by an architect, the fees of architect.

Solved Problem

Prepare a preliminary estimate of a building with the following data.

Given,

Carpet area = 9000 m2

Circulation area = 20 % of built up area

Area covered by brick wall = 15 % of built up area

Plinth area rate = NRs. 12000 per sq. m.

Cost of w/s and sanitation = 8% of building cost

Cost of electrification = 8% of building cost

Cost for architectural treatment = 1.5% of building cost

Contingencies and supervision charges = 7.5 % of total cost

Soln.

Since, Plinth area or Built up area = Carpet area + Circulation area + Area occupied by wall

Let, be the built up area or plinth area

= carpet area + 20% of built up area + 15% of built up area

or, = 9000 + 0.2 × + 0.15 ×

= 13846.15 m2

Now,

i) Building cost = 13846.15 @ 12000 per sq. m. = 16,61,53,800

ii) W/s and Sanitary installation = 8% of building cost = 1,32,92,304

iii) Electrification cost = 8% of building cost = 1,32, 92,304

iv) Architectural treatment cost = 1.5% of building cost = 24,92,307

Total Cost = 19,52,30,715

Contingencies and supervision charge = 7.5% of total cost = 1,46,42,303.63

Grand total Cost of the building = NRs. 20,98,73,018.63 .

16


RATE ANALYSIS Notes by: Shambhu Kumar Shah

[3] RATE ANALYSIS

The determination of rate per unit of a particular item of work, from the cost of

quantities of materials, the cost of labourers and other expenses; required for its completion is

known as the Rate Analysis. The rate of material and labour may vary from place to place and

the rates of different items of works also vary from place to place.

Purposes

a) To workout the actual cost of unit rate of an item of work.

b) To workout the economical use of materials and process in completing the particular item.

c) To workout the cost of extra items which are not provided in contract bond, but are to be

done as per the direction of the department.

d) To revise the schedule of rates due to increase in the cost of materials and labours or due

to change in technique.

Factors affecting Rates

i) Specification of works and materials, quality of materials, proportion of mortar, method of

constructional operation, etc.

ii) Qualities of materials & their rates, number of different types of labourers and their rates.

iii) Location of the site of work and its distance from the sources of materials and the rate of

transport, availability of water.

iv) Profits and miscellaneous and overhead expenses of contractor.

Overhead Costs Overhead costs include general office expenses, rents, taxes, supervision and other costs

which are indirect expenses and so called not productive expenses on the job.

The contractor may be allowed to add an overhead cost of 15% of the construction cost.

The miscellaneous expenses on overheads may be under the following heads:-

A. General Overheads i) Establishment (office staff) ii) Stationary, printing, postages, etc.

iii) Travelling expenses iv) Telephone v) Rent and taxes

B. Job Overheads a) Supervision (salary of Engineers)

b) Handling of materials, tools, plants,

c) Repairs, carriage and depreciation of T. & P.

d) Amenities of labour

e) Workmen’s compensation,

insurance, etc.

f) Interest on investment

g) Losses on advances

Task or Out-turn Work

The capacity of doing work by an artisan or skilled labour in the form of quantity of work

per day is known as the task-work or out-turn of the labour.



The out-turn of work per artisan varies to some extent according to the nature, size,

height, situation, location, etc. In bigger cities where specialised and experienced labour is

available the out-turn is greater than in small towns and country sides. In well organised work,

less labour is required.

1. Rate Analysis for PCC (1:2:4) for 1 m3. Solution:

Wet volume of concrete = 1 m3

Dry volume of concrete = 1 1.52 ( 50 – 55 % of wet vol.)

Total parts of mix proportion = 1 + 2 + 4

= 7

Quantity of cement =

= 0.217 m3

= 0.217 30 bags ( 1m3 = 30 bags)

= 6.5 bags

Quantity of sand = 0.217 2 = 0.434 m3

Quantity of aggregate = 0.217 4 = 0.868 m3

Water = 0.5 6.5 50 = 162.5 litres [ w/c ratio = 0.5]

Particulars Unit Quantity Rate Amount

Materials

Cement Bags 6.5 650 4225

Sand m3 0.434 1400 607.6

Aggregate m3 0.868 1800 1562.4

Water Litres 162.5 0.2 32.5

Labours

Skilled nos. 1 400 400

Unskilled nos. 4 250 1000

tools/plants

3% of labour cost 42

Total 7869.5

Add 10 % contractor's overhead 786.95

Total Rate = 8656.45 (per m3)

2. PCC (1:1.5:3) for 10 m3. Solution;

Wet volume of concrete = 10 m3

Dry volume of concrete = 10 1.52 = 15.2 m3

Total mix proportion = 1 + 1.5 + 3 = 5.5

Quantity of Cement =

= 2.764 m3

= 2.764 30 bags = 82.9 bags

Quantity of Sand = 1.5 2.764 = 4.146 m3

18



Quantity of Aggregate = 3 2.764 = 8.292 m3

Water = 0.5 82.9 50 = 2072.5 litres

[For 10 m3]


Materials

Cement Bags 82.9 650 53885

Sand m3 4.146 1400 5804.4

Aggregate m3 8.292 1800 14925.6

Water Litres 2072.5 0.2 414.5

Labours

Skilled nos. 8 400 3200


tools/plants 3% of labour cost 148.5

Sub-total 80128


Total Rate = 88140.8

Rate per m3 = 8814.08

3. Rate analysis for 75 mm thick PCC (1:2:4) for 180 m2.

Solution:

Wet volume = 180

= 13.5 m3

Dry volume = 13.5 1.52 = 20.52 m3

Mix proportion = 1 + 2 + 4 = 7


= 2.931 m3

= 2.931 30 bags = 87.9 bags

Quantity of Sand = 2.931 2 = 5.862 m3

Quantity of Aggregate = 2.931 4 = 11.724 m3

Water = 0.5 87.9 50 = 2197.5 litres


Materials: Cement bags 87.9 650 57135

Sand m3 5.862 1400 8206.8

Aggregate m3 11.724 1800 21103.2

Water litres 2197.5 0.2 439.5

Labours : Skilled nos. 22.5 400 9000


tools/plants 3% of labour cost 675

Total 110059.5



Rate per square meter = 703.16



4. Steel Reinforcement of RCC work : Unit = 1 MT (1000 kg). Solution; Quantity of steel = 1 MT

Add 5% for wastage = 1.05 MT


Materials: Steel MT 1.05 75000 78750

Binding Wire Kg 10 80 800

Labour: Skilled nos. 12 400 4800


T & P 3% of labour cost 234

Sub- total 87584

Add 15% for contractor's overhead 13137.6

Total Rate per MT 100721.6

5. Formwork for beam and slab ; Unit = 10 m2. Particulars Unit Quantity Rate Amount

Materials: Wood (normal) m3 0.07 18000 1260

Nails kg 2.5 100 250

Labours: Skilled nos. 1.72 400 688

Unskilled nos. 2.57 250 642.5


Sub-total 2880.415



Rate per cubic meter = 331.25

6. Brick work (1:4 cement mortar) in super structure for 1 m3. Solution;

Brick size = 230 mm 110 mm 55 mm

Thickness of mortar = 10 mm

Brick size with mortar = 240 120 65

Number of bricks =

= 534 nos.

Add wastage (5%) = 5 % of 534 = 26 nos.

Total bricks = 560 nos.

Volume of mortar in 1 m3 brickwork = 1 – 534 (0.23 0.11 0.055) = 0.2569 m3.

Dry volume of mortar = 0.2569 1.3 ( 30% of wet vol.)

= 0.34 m3

Mix proportion = 1 + 4 = 5


= 0.068 m3

= 0.068 30 bags = 2.04 bags

Quantity of Sand = 0.068 4 = 0.272 m3

Water = 0.5 2.04 50 = 51 litres

20




Materials: Brick nos. 560 10 5600

Cement bags 2.04 650 1326

Sand m3 0.272 1400 380.8

Water litres 51 0.2 10.2

Labours: Skilled nos. 1.5 400 600

Unskilled nos. 2.2 250 550

(scaffolding) Unskilled nos. 0.7 250 175

tools/plants

3% of labour cost 39.75

Total 8681.75


Total Rate/m3 = 9984.013

7. Half brick wall (110 mm thick) for partition with 1:4 cement mortar. [100 m2] Solution;

Quantity of brick wall = 100

= 11 m3.

Brick size = 230 mm 110 mm 55 mm

Mortar thickness = 10 mm

Brick size with mortar = 240 120 65

Number of brick =

= 5876

Wastage (5%) = 294 nos.

Total = 6170 ओटा

Volume of mortar in 11 m3 brickwork = 11– 5876(0.23 0.11 0.055) = 2.82 m3.

Dry volume of mortar = 2.82 1.3 = 3.66 m3.

Cement =

= 0.733 m3 = 22 bags

Sand = 0.733 m3 = 2.93 m3.

Water = 0.5 22 50 = 550 litres


Materials: Brick nos. 6170 10 61700

Cement bags 22 650 14300

Sand m3 2.932 1400 4104.8

Water litres 550 0.2 110

Labours: Skilled nos. 35 400 14000


(scaffolding) Unskilled nos. 16.1 250 4025


Total 111913.1


Total Rate(for 100 m2) = 128700

rate / m2 1287



8. Cement plaster (1:4) 12 mm thick, on wall (unit : 100 m2). Solution;

Wet mix of mortar = 100

= 1.2 m3

Add 30% to fill up joints, uneven surface = 1.2 1.3 = 1.56 m3

Add 25% for Dry volume = 1.56 1.25 = 1.95 2m3

Mix = 1 + 4 = 5


= 0.4 m3 = 12 bags

Sand = 0.4 4 = 1.6 m3

Water = 0.5 12 50 = 300 litres


Materials: Cement bags 12 650 7800

Sand m3 1.6 1400 2240

Water litres 300 0.2 60

Labours : Skilled nos. 12 400 4800


tools/plants 3% of labour cost 264

Total 19164


Total Rate(for 100 m2) = 22038.6

rate / m2 220.386

9. Water Closet fixing

Prepare a Rate analysis for supplying and fixing Water closet (WC) commode with low level

flushing cistern per number.

Particulars Quantity Unit Rate Amount

Materials:

1. (EPNC) water closet 1 no. 3000 3000

2. Low level flushing cistern of 10 litres capacity 1 no. 3500 3500

3. Bakelite heavy duty commode cover plate with

cp hinges 1 no. 500 500

4. Angle valve 1 no. 1200 1200

5. 400 mm dia. flushing pipe 1 no. 300 300

6. Screw, nails, clamps etc. 1 no. 300 300

Labours:

Skilled 3 nos. 400 1200

Unskilled 3 nos. 250 750

Sub-total 10750

15% contractor's overhead 1612.5

Total rate / no. = 12362.5

22



Labour Breakdown

S.N. Name of Work Unit Skilled Unskilled Scaffolding

(unskilled)

01.

02.

03.

04.

05.

06.

07.

08.

09.

10.

11.

12.

13.

14.

15.

16.

PCC (1:2:4)

RCC (1:2:4)

Steel reinforcement

Form work

50 mm thick flooring with PCC (1:2:4)

75 mm thick flooring with PCC (1:2:4)

Brickwork 1:4 cement mortar (foundation)

B/W 1:4 c/m (superstructure)

½ brick-wall, 1:4 c/m

Random rubble stone masonry work

12 mm thick 1:4 cement plaster on wall

12 mm thick 1:4 c/p on ceiling

20 mm 1:4 c/p on wall

Two coat snowcem paint

Two coat enamel paint

1 m3

1 m3

1 MT

10 m2

10 m2

10 m2

1 m3

1 m3

10 m2

1 m3

100 m2

100 m2

100 m2

100 m2

100 m2

1

0.8

12

1.72

1.25

1.25

1.5

1.5

3.5

1

12

15

14

5

12

4

7

12

2.57

2.5

3

2.2

2.2

5.1

2.25

16

20

19

5

8

0.2

0.7

1.6

Calculate the transportation charge per bag of cement by a truck for a lead of

30km, capacity of truck 400 bags per trip (assume necessary data).

Solution:

Here, Lead (L) = 30 km

We have,

Number of trips per day (i.e. 8 hrs.)

Assuming,

Speed of truck (S) = 40 km/hr. Then,

= 3.55

Also, Cost of truck per day = Rs. 12,000

Cost per trip =

= Rs. 3380.28

So, Cost per bag =

= Rs. 8.45 .



[4] DETAILED ESTIMATE

Road Earthwork Estimate Cross-section of earthwork of road in banking or in cutting is usually in the form of

trapezium. Quantity or Volume = Sectional area × Length

1) Mid-sectional Area Method

Area of mid-section = area of rectangular portion + area of two triangular portion

= B + 2 × ½ S

= B + S

Where, means mean depth =

In general, Quantity (Q) = (Bd + S ) × L

Stations or

Chain-age

Depth or

Height

Mean depth or Height

(d)

Area of central portion

(Bd)

Area of sides (S )

Total sectional

area (Bd+S )

Length between stations

(L)

Quantity (B d + S ) × L

Filling Cutting

2) Mean sectional Area Method

Quantity = mean sectional area × length

where, mean sectional are is given by;

(

)

3) Prismoidal Formula Method

Quantity (Q) =

( )

Here, = B + S (one end)

= B + S (other end)

= B + S (mid)

Where, =

* (

) (

)+

24


DETAILED ESTIMATE Notes by: Shambhu Kumar Shah

Estimate the cost of earthwork for a portion of road for 400 metre length from the following

data: Formation width of road is 10m. Side slopes are 2:1 in banking & 1.5:1 in cutting.

Station Distance in metre R.L. Of Ground R.L. of Formation i.e. (F.L.) F.L. – G.L.

25 26 27 28 29 30 31 32 33 34 35

1000 1040 1080 1120 1160 1200 1240 1280 1320 1360 1400

51 50.9 50.5 50.8 50.6 50.7 51.2 51.4 51.3 51

50.6

52.00 .

.

.

Downward gradient of

1 in 200

.

.

.

.

52 51.8 51.6 51.4 51.2 51

50.8 50.6 50.4 50.2 50

1 0.9 1.1 0.6 0.6 0.3 -0.4 -0.8 -0.9 -0.8 -0.6

(Note: In this table, last two columns are the parts of solution) Solution:

The road passes from cutting to banking in between the stations 30 (1200m) and 31

(1240m). The distance where is passes through zero (i.e. ground level) is given by ' ' as:

or,

So,

From symmetrical triangles,

( )

The length of banking portion is 17 m. & the

length of cutting portion is 40 – 17 = 23 m.

CALCULATION OF QUANTITIES

B = 10 m, s = 2 for banking and s = 1.5 for cutting

Stations or

Chain-age

Depth or

Height

Mean depth or Height

(d)

Area of central portion

(Bd)

Area of sides (S )

Total sectional

area (Bd+S )

Length between stations

(L)

Quantity (B d + S ) × L

Filling

Cutting

1000

1040

1080

1120

1160

1200

1217

1

0.9

1.1

0.6

0.6

0.3

0

…

0.95

1

0.85

0.6

0.45

0.15

…

9.5

10

8.5

6

4.5

1.5

…

1.81

2.00

1.45

0.72

0.41

0.05

…

11.31

12

9.95

6.72

4.91

1.55

…

40

40

40

40

40

17

…

452.4

480

398

268.8

196.4

26.35

1240

1280

1320

1360

1400

– 0.4

– 0.8

– 0.9

– 0.8

– 0.6

– 0.2

– 0.6

– 0.85

– 0.85

– 0.7

2

6

8.5

8.5

7

0.06

0.54

1.08

1.08

0.74

2.06

6.54

9.58

9.58

7.74

23

40

40

40

40

47.38

261.6

383.2

383.2

309.6

(– sign indicates cutting) Total Quantity: 1821.95 cu. m.

1384.98 cu. m.

Passes

from

filling to

cutting



Earthwork in Hill Road

case (i) : Fully in Banking or Fully in Cutting

Here, Transverse slope or cross slope of ground = r : 1 (H : V)

Side slope of bank or of cutting = s : 1 (H : V)

Height of bank or Depth of cutting at centre = d

Half formation width = b

In Banking (Filling) In Cutting

( )

case (ii) : Partly in Banking and Partly in Cutting

Here, Side slope of banking = s : 1 Side slope of cutting = p : 1

( )

( )

If G, falls on the right side of the centre F, then areas can be found by the same method

with the signs interchanged, i.e.

( )

( )

Note: (i) If C.L. lies on cut side then use (+) sign in formula of area of cut. (ii) If C.L. lies on fill side then use (+) sign in formula of area of fill.

26



Calculate earthwork of given chain-age of hill road having Cross slope 8:1, Chain -age interval

30m, Formation width 16 m, Side slope in cutting 1:1.

Chain-age 10 11 12 13 14

R.L. of Ground 180.5 183.36 185.52 187.1 186.5

R.L. of Formation 180.5 182 183.5 185 186.5

Solution:

Here, b = 16 ÷ 2 = 8 m r = 8 s = 1

the Area of Cut is found out by using the formula;

( )

Chain-

age

R.L. of

Ground

R.L. of

Formation

Depth

of cut

(GL–RL)

r s Area of

cut

Mean

Area (A)

sq. m.

Length

(L)

m.

Volume

(A*L)

cu. m.

10

11

12

13

14

180.5

183.36

185.52

187.1

186.5

180.5

182

183.5

185

186.5

0

1.36

2.02

2.1

0

8

8

8

8

8

1

1

1

1

1

1.016

25.000

37.994

39.629

1.016

–

13.008

31.497

38.812

20.323

–

30

30

30

30

–

390.242

944.914

1164.349

609.676

Total: 3109.181

A road is to be constructed in hill area with formation widths of 10m in banking and 8m in

cutting. Side slope in banking is 2 : 1 and side slope in cutting is 1½ : 1. The heights of filling

or the depths of cutting at the centres of the road and the cross slopes of the ground at

intervals of 30 metre are as given below. Calculate the quantities of earthwork for the length

of 210 metre.

Chain-age (m) Depth of cutting (cm) Height of banking (cm) Cross slope of ground

0 30 60 90

120 150 180 210

60 70 50 40 – – – –

– – – –

70 60 80 90

10 : 1 12 : 1 15 : 1 12 : 1 10 : 1 15 : 1 12 : 1 10 : 1

Solution:

The road passes from cutting to banking in between chain -ages 90m and 120m and

passes through zero.

For filling; b = ⁄ = 5 m, s = 2

For cutting; b = ⁄ = 4 m, p = 1.5



Here,

The distance of zero point from chain-age 90m:

or, 0.7 = 12 – 0.4

or, 1.1 = 12

= 11 m (approx.)

So, the length of cutting portion = 11 m. & the length of filling portion = 30 – 11 = 19 m.

Mean harmonic cross slope of ground at zero point,

= 11

At zero point one-half of road will be in cutting and another-half will be in banking, d = 0,

and formation width may be taken as

= 9 m, i.e. b = 4.5 m.

At zero point sectional area of cutting portion =

( )

=

( )

= 1.07

At zero point sectional area of filling portion =

( )

=

( )

= 1.13

CALCULATION OF QUANTITIES

b = 4 m for cutting, b = 5 m for banking, s = 1.5 for cutting & s = 2 for banking

( ) ( )

Chain-age (m)

Ht. of bank or depth

of cutting,

d (m)

s b

Cross slope of ground,

r

Sectional area, A (sq. m.)

Mean sec. area (sq. m.)

Distance, L (m)

Quantity

Cutting (cu. m.)

Filling (cu. m.)

0

30

60

90

101

– 0.6

– 0.7

– 0.5

– 0.4

0

1.5

1.5

1.5

1.5

1.5

4

4

4

4

4.5

10

12

15

12

11

5.71

6.60

4.53

3.66

1.07

…

6.16

5.57

4.10

2.37

…

30

30

30

11

…

184.70

166.98

122.86

26.04

120

150

180

210

0.7

0.6

0.8

0.9

2

2

2

2

2

4.5

5

5

5

5

11

10

15

12

10

1.13

8.83

7.07

9.90

11.58

…

4.98

7.95

8.49

10.74

…

19

30

30

30

…

94.65

238.52

254.55

322.28

Total: 500.58 910.01

Total quantity of cutting = 500.58 cu. m.

Total quantity of filling = 910.01 cu. m.

Passes

from

cutting

to filling

28



Estimate by centreline method the quantities of the following items of a two roomed

building;

(i) Earthwork in excavation in foundation; (ii) Lime concrete in foundation; (iii) 1st class

brickwork in cement mortar 1:6 in foundation & plinth; (iv) 2.5cm c.c. damp proof course.

Doors D – 1.2 m × 2.1 m Windows W – 1 m × 1.5 m

DETAILS OF MEASUREMENT AND CALCULATION OF QUANTITIES

Here, total centre length of wall = 2 × c.c. long wall + 3 × c.c. short wall

= 2 × 10.6 + 3 × 6.3 = 40.1 m

Ite

m

no.

Particulars of

Items No.

Length

(m)

Breath

(m)

Height

or

Depth

Quantity

(cu. m.) Explanatory notes

1. E/W in

excavation in

foundation

1 39 1.1 1 42.9

total centre length =

4.1 m

L = 40.1 – 1.1 = 39 m

2. Lime concrete in

foundation 1 39 1.1 0.3 12.87 L = 40.1 – 1.1 = 39 m

3. 1st class

brickwork …

1st footing

2nd footing

3rd footing

4th footing

Plinth wall above

footing

1

1

1

1

1

39.3

39.4

39.5

39.6

39.7

0.8

0.7

0.6

0.5

0.4

0.2

0.1

0.1

0.1

0.8

6.29

2.76

2.37

1.98

12.7

L = 40.1 – 0.8 = 39.3

L = 40.1 – 0.7 = 39.4

L = 40.1 – 0.6 = 39.5

L = 40.1 – 0.5 = 39.6

L = 40.1 – 0.4 = 39.7

Total: 26.1

4. DPC 2.5 cm c.c.

Deduct door sill

1

2

39.7

1.2

0.4

0.4

–

–

15.88

0.96

L = 40.1 – 0.4 = 39.7

Net: 14.92



Estimate the quantities of the following items of work from the given Septic tank and Soak-

pit drawings.

i) Earthwork in excavation

ii) Cement concrete 1:3:6

iii) Brickwork in 1:4 cement mortar in septic tank

iv) Brickwork in 1:6 cement mortar in soak-pit

Ite

m

no.

Particulars of

Items No.

Length

(m)

Breath

(m)

Height

or

Depth

Quantity

(cu. m.) Explanatory notes

1. E/W in

excavation

Septic tank

Soak-pit up to

3m depth

Soak-pit lower

portion

1

1

1

2.8

1.7

×

×

1.95

3

0.2

9.28

9.42

0.3

Ht. = 30 + 140 + 5 +

20 = 1.95 m

Total: 19 cu. m.

30



2. Cement concrete

1:3:6

Floor in

foundation

Sloping floor

1

1

2.8

2

1.7

0.9

0.2

0.05

0.95

0.09

Average thickness

= 5 cm

Total: 1.04

3. Brickwork in 1:4

c/m in septic tank

Long Walls:

1st step

2nd step

Short Walls:

1st step

2nd step

2

2

2

2

2.6

2.4

0.9

0.9

0.3

0.2

0.3

0.2

0.6

1.15

0.6

1.15

0.94

1.1

0.32

0.42

Ht. = 1.95 – (0.6 +

0.2) = 1.15 m

Total: 2.78

4. Brickwork in 1:6

c/m in soak-pit

Upper portion

Lower portion

1

1

π × 1.2

π × 1.2

0.2

0.2

0.5

0.2

0.38

0.15

L = mean

circumference

Total: 0.53

Estimate



[5] VALUATION

Intro

Valuation is the technique of estimating or determining the fair price or value of a

property such as building, factory, other engineering structures of various types, land, etc.

By valuation the present value of a property is determined.

The present value of property may be decided by its selling price, or income or rent it may fetch.

Factors affecting value of a property

i) Structure of the property

ii) Life of the property

iii) Maintenance of the property

iv) Location

v) Bank interest

vi) Legal control

vii) Supply and demand of valuation

viii) Purpose of valuation

Purpose of Valuation

i) Buying or Selling Property:

When it is required to buy or sell a property, is valuation is required.

ii) Taxation:

To assess the tax of a property its valuation is required. Taxes may be municipal tax,

wealth tax, property tax, etc.

iii) Rent Fixation:

Rent is usually fixed on certain percentage of the amount of valuation. (6% to 10%)

iv) Security of Loans or Mortgage:

When loans are taken against the security of the property, its valuation is required.

v) Compulsory acquisition:

Whenever a property is acquired by law, compensation is paid to the owner. To

determine the amount of compensation valuation of the property is required.

vi) Valuation of a property is also required if Insurance, Battlement charges, Speculation, etc.

Terms related to Valuation

a. Scrap Value

Scrap value is the value of dismantled materials. For a building when the life is over at

the end of its utility period, the dismantled materials as steel, bricks, timber etc. will fetch a

certain amount called scrap value of the building.

The cost of dismantling and removal of the rubbish material is deducted from the total receipt

from the sale of usable material to get scrap value.

For machine; scrap value is the cost of material only.

32


VALUATION Notes by: Shambhu Kumar Shah

b. Salvage Value

It is the value at the end of the utility period without being dismantled.

A machine after the completion of its usual life span or when it becomes uneconomic, it may be

sold and one may purchase the same for other purposes, the sale value of the machine is called

as salvage value.

Normally, scrap value and salvage value of a property or an asset get some positive figure, but

sometimes it may also be zero or negative charge.

c. Market Value

The market value of a property is the amount which can be obtained at any particular

time from the open market if the property is put for sale.

The market value will differ from time to time according to demand and supply.

It is also changed from time to time due to change on fashion, means of transport, cost of

material and labour, etc.

d. Book Value

The book value of a property at particular year is the original cost minus the amount of

depreciation up to the previous year.

The book value depends on the amount of depreciation allowed per year and will be gradually

reduced year to year and at the end of the utility period of the property, the book value will be

only scrap value.

e. Rateable Value

Rateable value is the net annual letting value of a property, which is obtained after

deducting the amount of yearly repairs from the gross income.

f. Obsolescence

The value of property or structure becomes less by its becoming out of date in style in

structure, in design etc. and this is called obsolescence.

The obsolescence may be due to the reason such as progress in arts, change in fashion, change

in planning ideas, new inventions, improvement in design technique etc.

E.g.; an old dated building with massive walls, arrangement of rooms not suited in present day

becomes obsolete even if it is maintained in a very good condition.

g. Annuity

Annuity is the annual periodic payments for repayments of the capital amount invested

by a party.

These annual payments are either paid at the end of the year or at the beginning of the year,

usually for a specified number of years.

If the amount of annuity is paid at the beginning of each year, it is called annuity due.

If the payment of annuity begins at some future date after a number of years, this is known as

Deffered Annuity.



h. Capital Cost

Capital cost is the total cost of the construction including land, or the original total

amount required to possess a property. It is the original cost and does not change, while value of

a property is the present cost which may be evaluated by valuation.

i. Capitalised Value

The capitalised value of a property is the amount of money whose annual interest at the

highest prevailing rate of interest will be equal to the net income from the property.

To determine the capitalised value of a property it is required to know the net income from the

property and the highest prevailing rate of interest.

Capitalised Value = Net annual income × Year’s purchase.

j. Year’s Purchase

It is the capital sum required to be invested in order to receive an annuity of Rs. 1.00 at a

certain rate of interest.

For 4% interest per annum, get Rs. 4.00 requires Rs. 100.00 to be deposited in the bank.

Thus, Year’s purchase =

Where, = rate of interest in decimal

The year’s purchase will be reduced in such a way that income of the property will provide both

for interest on the capital and for accumulation of the sinking fund to replace the capital.

In such cases, Year’s purchase =

Where, s = sinking fund

to replace Rs. 1 at the end of the given period

k. Sinking Fund

The fund which is gradually accumulated by way of periodic or annual deposit for the

replacement of the building or structure at the end of its useful life is term as sinking fund.

The main objective of creating sinking fun is to accumulate sufficient money to meet the cost of

construction or replacement of the building or structure after its utility period.

The cost of land is not taken into account in calculating Sinking fund as land remains intact.

The amount of annual instalment of the sinking fund may be found by:

( )

Where, = annual instalment required

S = total amount of sinking fund to be accumulated

= rate of interest in decimal

n = number of years required to accumulate the sinking fund

l. Depreciation

Depreciation may be defined as the decrease or loss in the value of a property due to

structural deterioration, used life, wear and tear, decay and obsolescence.

Methods of Calculating Depreciation

i) Straight line method

In this method, it is assumed that the property losses its value by the same

amount every year. A fixed amount of the original cost is deducted every year, so that at

the end of the utility period only the scrap value is left.

34



( )

ii) Constant percentage method or Declining balance method

In this method, it is assumed that the property will lose its value by a constant

percentage of its value at the beginning of every year.

(

)

⁄

Methods of Valuation

Following are the different methods of valuation:

i) Rental method of valuation

ii) Direct comparisons of the capital value

iii) Valuation based on profit

iv) Valuation base on cost

v) Development method of valuation

vi) Depreciation method of valuation

(i) Rental method of valuation

In this method, the net income by way of rent is found out by deducting all outgoings

from the gross rent. A suitable rate of interest as prevailing in the market is assumed and year’s

purchase is calculated. This net income multiplied by Y.P. gives the capitalised value or valuation

of the property.

(ii) Direct comparison of the capital value

This method may be adopted when the rental value is not available from the property

concerned. In such cases the capitalized value of the property is fixed by direct comparison with

capitalized value of similar property in the locality.

(iii) Valuation based on profit

This method is suitable for buildings like hotels, cinemas, theatres, etc. for which the

capitalized value depends on the profit.

(iv) Valuation based on cost

In this method the actual cost incurred in constructing the building or in possessing the

property is taken as basis to determine the value of property.

(v) Development method of valuation

This method of valuation is used for the properties which are in the undeveloped stages

or partly developed and partly undeveloped stage. If a large place of land is required to be

divided into plots after providing for roads, parks, etc. this method of valuation is adopted.

(vi) Depreciation method of valuation

According to this method of valuation the building should be divided into four parts, viz.

Walls, Roofs, Floor and Doors & Windows; and the cost of each part should first be worked out

on the present-day rates by detailed measurements.



The depreciated value of each part is ascertained by the formula: (

)

Where, P = Cost at present market rate r d = fixed percentage of depreciation

Different values of r d

Life of structures r d

100 yrs.

75 yrs.

50 yrs.

25 yrs.

20 yrs.

1.0

1.3

2.0

4.0

5.0

(100/100 = 1)

(100/50 = 2)

(100/20 = 5)

Valuation Principle The value of a commodity or an asset to the firm or its investors is determined by its

competitive market price. The benefits and costs of a decision should be evaluated using those

market prices. When the value of the benefits exceeds the value of the costs, the decisions will

increase the market value of the firm.

i) Time value of money and Interest rates

In many cases, costs and benefits occur at different times, we must incorporate the Time

Value of Money when making a financial decision. This is the difference in value between money

today and money in future. Also, it is the observation that two cash flows at different points in

time have different values.

Present Value – The value of a cost or benefit compounded in terms of cash today.

Future Value – The value of a cash flow that is moved forward in time.

ii) The NPV Decision rule

Net Present Value (NPV) is defined as the difference between the present value of

project or investment’s benefits and the present value of its costs.

iii) The law of one price

The practise of buying and selling equivalent goods or portfolios to take advantage of

price difference is called arbitrage. Such situations where it is possible to make a profit without

taking any risk or making any investments are called arbitrage opportunity. This concept is the

Law of One Price. In competitive markets, securities or portfolios with the same cash flows must

have the same price.

36



Property Valuation Report A property valuation report is a document that provides a detailed assessment of the

condition and value of an entire property.

A property valuation report is given to the property owner to indicate the condition of the

property (land, building, vehicle, factory, plant, etc.) and how much it is worth in the market.

1. Introduction or Executive Summary

The summary may include information such as the history of the property, its location,

previous use and other relevant information. This will give the reader a general idea of the

condition of the property.

In creating, a structure for valuation report, it is ideal to use the method of discussing the

important aspects first.

a) Land Particulars

After the introduction, general idea of the environment of the property’s

location is given. Overall feel of the neighbourhood, the community is explained in detail and

also if it is located in a busy city or in rural place.

b) Details of the Property

This includes the description of the structure. [If the report is for an existing

building; the number of rooms and bathrooms, total lot area, number of storeys, size of the

garage and other details are included. Description of the pool may also be included if there is

one.] Improvements and repairs that are needed on the property are assessed.

c) Market

Some of the details that are included here are; the date of purchase of the

property, the price when it was purchased, mortgage details and also tax details. It is

required to be as detailed as possible in computing, so that the results will be accurate.

2. Valuation Summary

This part summarise the property valuation report. The summary must contain the

valuation of the property based on the previous details and computation that were done.

Solved Problems

1) Workout the valuation of property from the following data:

Total plinth area of building = 300

Prevailed plinth area rate = Rs. 15000 / plinth area

Age of building = 25 years

Life of building = 75 years

Scrap value = 10 %



Solution:

Original value of building = Plinth area × Plinth area rate = 300 × 15000 = 4500000

Depreciated value of building (

)

(

)

= Rs. 1621785.22

Scrap value = 10 % of the building cost = 0.1 × 4500000 = Rs. 450000

Total value of building at present = Depreciated value – Scrap value

= 1621785.22 – 450000 = 1171785.22

Lump sum value of building = Rs. 1171000 .

2) A three storied building is standing on a plot of land measuring 800 sq. m. The plinth area of

each story is 400 sq. m. The building is of RCC framed structure and the future life may be

taken as 70 years. The building fetches a gross rent of Rs. 1500 per month. Workout the

capitalised value of the property on the basis of 6% net yield. For sinking fund 3% compound

interest may be assumed. Cost of land may be taken Rs. 40 per sq. m. Other data required

may be assumed suitably.

Solution:

Gross income per year = 1500 × 12 = Rs. 18000

Outgoing per annum (assuming suitable data):-

i) Annual instalment for Sinking fund, required to accumulate the cost of the

building {which is at the rate of Rs. 150 per sq. m. of plinth area (assumed)} in 72

yrs. @ 3% interest

So, S = 3 storey × 400 m2 × 150 per m2 = 3 × 400 × 150 = 180000

( )

( ) = 180000 × 0.0043 = Rs. 774

ii) Property tax @ 5% of gross income = 18000 × 0.05 = Rs. 900

iii) Insurance premium @ 0.5% of gross income = 18000 × 0.005 = Rs. 90

iv) Management charges @ 6% of gross income = 18000 × 0.06 = Rs. 1080

v) Maintenance charges @ 10% of gross income = 18000 × 0.10 = Rs. 1800

vi) Municipal taxes @ 15% of gross income = 18000 × 0.15 = Rs. 2700

Total outgoing per annum = Rs. 7344

Net income = Gross income – Expenses = 18000 – 7344 = Rs. 10656

Year's Purchase (Y.P.) = ⁄ = ⁄

Capitalised value of building = Net income × Y.P. = 10656 × ⁄ = Rs. 177600

Cost of land @ Rs. 40 per sq. m. = 800 × 40 = Rs. 32000

Total value of the property = 177600 + 32000 = NRs. 209600 .

38



3) A coloniser intends to purchase a land of 1,00,000 sq. m. area located in the suburb of a big

city to develop it into plots of 700 sq. m. each after providing necessary roads and parks and

other amenities. The current sale price of small plots in the neighbourhood is Rs. 30 per sq.

m. The coloniser wants a net profit of 20%. Workout the maximum price of the land at which

the coloniser may purchase the land.

Solution:

Total area of land = 1,00,000 sq. m.

Deducing, 30% for roads, parks, etc. = 30,000 sq. m.

Net area of land = 70,000 sq. m.

No. of plots @ 700 sq. m. per plot =

= 100

Selling price per plot @ Rs. 30 per sq. m. = 700 × 30 = Rs. 21,000

Total price from sale of all plots = 100 × 21,000 = Rs. 21,00,000

Expenses:

i) Expenditure for improving land @ Rs. 1 per sq. m. = 100,000 × 1 = Rs. 100,000

ii) Cost for providing Road, drainage, water supply

and electrification @ Rs. 3 per sq. m. of land = 100,000 × 3 = Rs. 300,000

iii) Engineer’s & Architect’s fee @ 5% of the sale price = 2,100,000 × 0.05 = Rs. 105,000

iv) Coloniser’s profit @ 20% of the sale price = 2,100,000 × 0.20 = Rs. 420,000

Total Expenditure = Rs. 925,000

Maximum price of land in the undeveloped stage = 2,100,000 – 925,000 = Rs. 1,175,000

Maximum rate of purchase =

= Rs. 11.75 per sq. m.

The coloniser may purchase the land @ Rs. 11.75 per sq. m. for a total amount of Rs.

11.75 lakhs.

4) Workout the valuation of a factory building with the following data: (assume any data, if

required)

i) Cost of land for life time period of the Factory Building is NRs. 64,00,000

ii) Gross income per year is NRs. 1,00,00,000

iii) Staff salary, water supply, electrical charge and telephone bill at the rate of 20% of

gross income.

iv) For repair and maintenance of machinery equipment, plants, etc. at the rate of 7%

of their capital cost of NRs. 22,50,000

v) Sinking fund for machinery with 30 years life at the rate of 5% on 90% of their capital

cost.

vi) Insurance premium per year is NRs. 1,80,000

Yearly charges for cold storage at the rate 8% & redemption of capital at the rate of 4%.

[Assume purchase for 60 years @ 8% and redemption of capital cost @ 4%.]



Solution:

Gross income (GI) = NRs. 1,00,00,000

Capital cost = NRs. 22,50,000

Expenses:

i) Staff salary, w/s, tel. @ 20% of Gross income = 0.2 × 1,00,00,000 = Rs. 20,00,000

ii) Repair & maintenance @ 7% of capital cost = 0.07 × 22,50,000 = Rs. 1,57,500

iii) Sinking fund (90% of capital cost or 10% of scrap value) for 30 years @ 5% interest;

( )

( ) = Rs. 30,479.15

iv) Insurance premium = Rs. 1,80,000

Total Expenses = NRs. 23,67,979.15

Net income = Gross income – Expenses

= 1,00,00,000 – 23,67,979.15 = Rs. 76,32,020.85

Capitalised value of building invest = Net income × Y.P. = net income × ⁄

= 76,32,020.85 × ⁄ = NRs. 9,54,00,260.63 .

Redemption @ 4% = 76,32,020.85 × 0.04 = Rs. 3,05,280.83

[According to the added portion:]

Year’s Purchase,

Where, = coefficient of sinking fund

= rate of interest on capital

Coefficient of sinking fund for 60 years;

( )

( ) = 0.0042

Y.P. =

= 11.88

Capitalised value = Net income × Y.P.

= 76,32,020.85 × 11.88 = NRs. 9,06,68,407.70

So, Total Valuation = 9,06,68,407.70 + 64,00,000 = NRs. 9,70,68,407.70 .

40



5) Workout the valuation of the cinema hall with the following data:

i) Cost of land = Rs. 5,500,000

ii) Gross income = Rs. 12,000,000

iii) Expenses undergone per year:

a) To run cinema including staff salary, electricity charges, municipal taxes,

license fee, stationary and printings etc. is 30% of gross income.

b) Repair and maintenance of plants, machinery and tools at 5% of their capital

cost, which is Rs. 10,000,000.

c) Sinking fund for machinery whose life is estimated as 30 years at 5% after

allowing 10% scrap value.

d) Insurance premium is Rs. 155,000 per year.

Assume years purchase for 60 years at 8% and redemption of capital 8%. Annual repair

of hall is 2% of gross income.

Solution:

Gross income (GI) = Rs. 12,000,000

Capital cost = Rs. 10,000,000

Expenses:

i) Staff salary @ 30% of Gross Income = 0.3 × 12,000,000 = Rs. 3,600,000

ii) Repair & maintenance @ 5% of capital cost = 0.05 × 10,000,000 = Rs. 500,000

iii) Sinking fund (90% of capital cost or 10% of scrap value) for 30 years @ 5% interest;

( )

( ) = Rs. 1356462.92

iv) Insurance premium = Rs. 155,000

v) Annual repair of Hall @ 2% of gross income = 0.02 x 12,000,000 = Rs. 240,000

Total Expenses = NRs. 5,851,462.92

Net income = Gross income – Expenses

= 12,000,000 – 5,851,462.92 = Rs. 6,148,537.08

Now, Year’s Purchase, Y =

Where,

( )

( ) = 0.0008

Y =

= 24.51

Capitalised value = Net income × Y.P.

= 6,148,537.08 × 24.51 = NRs. 150,700,643.8

So, Total Valuation = 150,700,643.8 + 5,500,000 = NRs. 156,200,643.80 .



SPECIFICATION

Specification describes the nature and class of work, materials to be used, workmanship,

etc. and is very important for the execution of work. Cost of work depends upon the

specification. It should be clear without any ambiguity anywhere.

Only drawing do not furnish the details of different items of work, the quantity of materials,

proportion of mortar and workmanship, which are described in specification.

During writing specification attempts should be made to express all the requirements of the

work clearly and in a concise form avoiding repetition.

Clauses of the specification should be arranged in the same order in which the work will be

carried out.

Specification depends on the nature of the work, the purpose for which the work is required,

strength of materials, availability of materials, quality of materials, etc.

1) General or Brief Specification

It is a short description of different parts of the work specifying materials, proportions,

qualities, etc.

General specification gives general idea of the whole work or structure and is useful for

preparing the estimate.

It also gives the nature and class of work and materials in general terms, to be used in various

parts of the work from foundation to the superstructure.

2) Detailed Specification

The detailed specification is a detailed description and expresses the requirement in details.

The detailed specifications of an item of work specify the qualities and quantities of materials,

the proportion of mortar, workmanship, the method of preparation and execution and the

method of measurement.

The detailed specifications of different items of work are prepared separately and describe

what the works should be and how they shall be executed and constructed.

The detailed specifications, if prepared clearly are very useful for execution of the work, so it is

an essential part of contract document.

Specification of Cement Concrete 1:2:4

(i) Materials

(ii) Proportion

(iii) Hand mixing

(iv) Machine mixing

(v) Slump

:

:

:

:

:

Aggregate (clean, dense, hard, durable)

Water

Sand

Cement

1:2:4

Turning 3 times

2 minutes of rotation / output: 15 – 20 mix per hr.

(7.5cm – 10cm) slump test result

42


SPECIFICATION Notes by: Shambhu Kumar Shah

(vi) Formwork

(vii) Laying

(viii) Curing

:

:

:

Side forms – 3 days

Form – 14 days

< 15 cm (6”) *no honey combing & air holes+

After two hours of laying it should be kept damp by covering with

wet gummy bags or wet sand for 24 hrs. and then cured by flooding

for 15 days.

# Approximate quantity of water required for cement may be taken 30% by weight of cement +

5% by weight of total aggregate.

# For concrete compacted by mechanical vibrators, the quantity of water shall be reduced by

20%.

† lekIr †

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