Professional Practice II Quantity Surveying Specification Handout PDF

[CHAPETR] I: QUANTITY SURVEYING =========================================== 1. **Introduction** 1. Preparation of specification 2. Taking measurements of civil works (Taking off quantities and preparing BOQ) 3. Preparation of approximate (preliminary) cost estimate at the very early...

[CHAPETR] I: QUANTITY SURVEYING =========================================== 1. **Introduction** 1. Preparation of specification 2. Taking measurements of civil works (Taking off quantities and preparing BOQ) 3. Preparation of approximate (preliminary) cost estimate at the very early stage of the project 4. Preparation of detail cost estimate at different stages (taking as built measurements and preparing payment certificates or approval of payment certificates prepared by taking measurements) 5. Preparation of tender documents and examining tenders 6. Preparation of schedule of prices to negotiate with pre-qualified bidders (labour rates, material supply rates, equipment rental rates) 7. Determination of values of works (executed works) and preparation of payment certificates 8. Preparation of final accounts on completion of all of the works. 9. Valuation of property 2. Measurement of Civil Works ========================== -- -- -- -- -- -- -- -- -- -- -- -- Taking off ========== Title [ ] ---------------------- ----------------------- -- -- -- -- -- -- Page [ ] Page [ ] Total W/m ∑W -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Squaring: ========= Abstracting: ============ Writing the Final Bill ====================== Basic Principles in Taking Off ============================== 1. Drawings shall be fully understood and clearly detailed. 2. During discrepancies in detailing, dimensioning or if missing items exist obtain clarification from the designer. 3. The BoQ shall accurately represent the works to be executed. 4. Works, which cannot be measured accurately, shall be expressed as provisional quantity (PQ) and will result in provisional sum (PS) and lump sum (LS) 5. Shall be prepared in such a way that discrepancies or mistakes in taking off will not result in excessive variation in the project cost which directly will affect the budget allocation for the project. 6. There shall be the understanding that measurements are taken to the nearest cm. 7. Built items shall generally include all possible entrants like labor, materials (including storing, loading, unloading and handling), fixing, use of plant and equipment, wastage of materials, equipment; which will result in a better process for establishing prices and profit. 8. There shall be understanding that there is a standard paper format to carry out measurements of civil works, namely take off sheet or dimension paper, bending schedule and specification worksheet. 9. Prior knowledge of the regulations is necessary (For E.g. roofing is measured in horizontal projection). 10. Measurements of civil works shall be carried out in such a way that it can be easily checked and audited. 4. Types of Taking Off =================== 5. Technical Specification and Method of Measurements for the different trade of Works =================================================================================== 5. **Building Project** --- -- 1 2 3 1 --- -- 2 ---- -- 3 4 5 6 7 8 9 10 II SUBSTRUCTURE ============ 1. Excavation and earthworks (mandatory) 2. Concrete works (can be neglected sometimes) 3. Masonry works (mandatory) Excavation and Earthworks ========================= Site clearance ============== Excavation (bulk excavation) ============================ - Ordinary soil - with boulders and without boulders and can easily be removed by shovel. - Weathered rock --it can be divided easily without blasting. - Rock- bedded rocks that cannot be dug without blasting (requires using explosives) Note: - Working space for bulk excavation is 25 cm (not used for shallow masonry) - Depth of excavation less than 30 cm -- measured per m^2^ ,depth \> 30 cm per m^3^. Fill / Embankment ================= d. Disposal - cleaning the building area including cart away. ========================================================== e. **Sundry items** -- application of termite proof solution, providing hard coring, dust blinding, expansion joints, etc are itemized as sundry items; measured in m^2^. 2. Concrete Works ============== f. **Concrete** Grades of Concrete ================== Formwork -- measured in m^2^ ============================ 1. Vertical formwork to columns, walls and beams: 16 hrs 2. Soffits formwork to slab: 21 days 3. props to cantilever slabs: 14 days 4. Soffits formwork to beams: 21 days 5. Props to cantilever beams: 14 days Reinforcement ============= 3. Masonry Works ================ a. stone for facing works shall generally be selected for consistency in grain, color and texture, throughout the work b. stone for below ground work shall be chiseled from natural stone SUPER STRUCTURE =============== 1. **Concrete works** -- a. **Concrete**: mostly as discussed in substructure part b. **Formwork**: Specify the type of material used and where to use (zigba or steel) c. **Reinforcement**: Differentiation is made as to the diameters and where used (sub and super structure) and Weight per unit length for Ф6 is 0.222 kg/m; for any other diameter d2, with weight per unit length w2: 2. **Masonry works** -- measured by volume Classification of stone masonry works: 1. Stone wall concealed from view or to be left for further finish (cheaper) - shall be built in stone sizes of not less than 300 mm per course (one lay ) and 400 mm wide per stone, - faces of stone walls to receive further finish shall have horizontal and vertical joints raked out to form adequate key for further finish. 2. Roughly dressed stone wall (expensive) - Shall be built in stone sizes of not less than 300 mm per course and 400 mm wide, - The joints of the fair chiseled natural stones shall be finished slightly proud (aesthetical) and cleaned off flush at completion, - The joints shall be raked out to a depth of 15 mm as the work proceeds and prepared for jointing. 3. Dressed stone wall facing (more expensive) - The pattern type and size of the stone units shall be as detailed on drawings, - The joints of dressed stone wall shall be finished good and raked out to an approximate depth of 15 mm. Stabilized soil block wall ========================== Roofing and wall cladding Galvanized corrugated iron sheet (CIS) ================================================================ Galvanized plain steel sheet (GPSS) =================================== Galvanized ribbed sheets (EGA sheets) ===================================== Aluminum corrugated sheet for roofing and cladding ================================================== Aluminum plain sheet accessories ================================ Roof clay tiles =============== Fixing accessories of roofing ============================= Method of measurement for roofing --------------------------------- Carpentry and joinery works =========================== Joinery ======= A. **Ceiling** Suspended ceiling Soffits ========================= Milled timber Soffits ===================== Milled timber accessories ========================= Doors, Windows and Wall Panels Doorframes ========================================= a. Glazed wooden doors - the side , top bottom and intermediate rails shall be mortised and tenoned - rails shall be single width timber b. Panel wooden doors - plywood or other panels are used in place of glazing c. Flush wooden door - Finished thickness of flush doors not less than 40mm, Face panels on either face shall not be less than 8 mm, Cover panels if tongued, boards shall not be less than 15mm. Cupboard and counters ===================== Methods of measurement for carpentry and joinery ================================================ - Structural members other than truss shall be measured by length stating size (eg columns, beams) - Roof trusses shall be enumerated stating type and referring drawings (sometimes measured in meter length) - Boarding, flooring, partitions, Soffits (ceiling),curtain walls are measured by area and shall be understood as including frames , corner lists and hard wares(hinge ,handle, lock ) - Fascia boards, eaves, skirting shall be measured by length stating girth - Built in furniture and boards shall be enumerated stating sizes. 5. **STEEL STRUCTURAL WORK** Steel is used for constructing:- - Beams, columns, suspended slab, truss, rafter - Composite structure (steel +concrete) - Up to 15m span we can use timber trusses, but for span greater than 15m,we have to use a steel structure Bolts and nuts -------------- - are used to connect (fix )structural steel with concrete or other material - welding is usually not recommended for steel structures because it does not allow movement Steel plates (steel to steel connection) ---------------------------------------- - used for splices of joints - used for bearing plates Fabrication ----------- - shall follow sequences which are suitable for assembling and erection - cutting shall be sawing, shearing (steel cutter ),copping or flame cutting (oxyacetylene cutter) - holes shall be drilled or punched - holes shall not be more than 3mm larger than diameter of bolts Assembling erection ------------------- - adequate care shall be taken to ensure that components are not bent or twisted - bolted connection shall be drawn together - washers shall be provided where slot holes are oversize - anchors and embedded connection shall be set and grouted before mounting Method of measurement ===================== - Beams, trusses, columns and purlins, bracings, rails, etc shall be measured by weight (Kg), identified by profiles and type of structures - Connection plates, base plates, angle iron ties, brackets shall be measured by weight or enumerated stating profiles and dimensions respectively - Anchor bolts enumerated stating size and development length METAL WORKS =========== - Metal door window frames and Steel profiles produced from standard grade of steel - Aluminum profiles: - wrought aluminum and alloys are used. Nuts, bolts, screws and fasteners are coated or produced from non-oxidizing metal. Fabrication ----------- - Formed accurate to required profiles and sizes Erection -------- - be placed accurately in position aligned, plumbed, and leveled - they are usually door and window frames and hence no assembling of parts except fabrication and erection Casement doors and windows ========================== - side , bottom, and top hinged - LTZ frame (iron made) - SECCO profile (steel) - RHS frames (refer KASI manual) - SECCO profile is more expensive than LTZ Heavy duty sliding door ======================= - Guide and roller trucks shall be in mild steel in the sizes specified - Rollers shall be heavy duty and produced from stainless steel and be provided at top 3. Louver window ============= 4. **Security grills** - Produced from mild steel galvanized or precoated solid plates or hollow profiles of patterns as Guard rails =========== - fastened to support securely embedded in concrete or welded Wire netting and fly screen =========================== - netted wire produced from steel - mesh for flag screen shall not be more than 10 mm Corner protection ================= - not less than 30 mm - shall be securely screwed and embedded to angle of materials for protection Method of measurement --------------------- - Doors and windows enumerated stating sizes (the glazing work shall be measured separately) - Curtain walls by area - Balustrade rails, corner protection by length stating development length - Security grills fixed to windows and doors by area - Louvers enumerated in size stating number of blades (louver jamb sets) FINISHING WORK ============== 1. **Plastering and Pointing works** The ingredients are: - Cement (ordinary Portland cement), Lime - Gypsum (such as plaster of Paris ) - Aggregate (fine or crushed aggregates), water - minimum thickness of 5 mm - spread by trowel and allowed to cure for 24 hours before applying the second coat - max thickness of 12 mm - dried for 21 days - max thickness of 3 mm - shall be finished truly and level, use fine sand for smooth finish as final coat **Fine coat lime plaster**: - mix proportion 1:2 (lime: fine aggregate) - max thickness of 3 mm - further finish up to 28 days - max thickness of 3 mm - cured for 28 days - shall be manual or machine sprayed, wetted for 7 days **Cement pointing**: - mix proportion 1:2 (cement: fine aggregate) - can be flush or recess pointing Method of measurement ===================== - plaster and pointing works shall be measured by area and Internal and external works shall be measured separately Floor and Wall Finish ===================== - shall be pre-cast or cast in situ elements - shall have a minimum topping of two parts of marble or granite chipping from an approved quality with one part cement - the minimum grading of the chip shall be 5mm - usually have a thickness of 2 cm - shall be applied onto 3 cm thick cement screed bedding (specified thickness ) - minimum thickness shall be 20mm - shall be applied on 3 cm cement screed bedding - cheaper than terrazzo tile - shall be in accordance with quality, color and texture as shown (specified ) - shall be straight edged and smooth surfaced - cement mortar backing for walls and cement screed bedding for floors - flooring thickness shall not be less than 20 mm and does not exceed 50 mm - chips shall be irregular shape and the smallest dimension shall not be less than 100mm - the exposed surface of mortar finish to marble chip shall not exceed 1:3 proportion - ceramic tiles shall be glazed type of approved color , texture and size - ceramic tiles shall be 6mm thick for walls and not less than 15mm for floors - mosaic tiles shall be in regular square or hexagonal sizes not exceeding 25mm in dimension of each size PVC tiles - usually thermoplastic - the tiles and skirting shall be resistant to household oil and acids - the glue (adhesive ) for fixing PVC tiles and skirting shall be in accordance with manufacturer's instruction - usually 2mm thick PVC tiles and 48 mm cement screed is used - Width of 70mm and shall be tonged and grooved - Nailed to sawn timber joists - Minimum size of joists 60x100mm c/c 50 cm - Joists shall be accurately embedded in concrete - Skirting: - machine smooth finished with minimum thickness of 20 mm and width 80mm, Edges shall be chamfered COPPING, CILLS, STEPS, RISERS ============================= - can be from marble , terrazzo , concrete , stone etc and shall be laid as per the drawing Method of measurement --------------------- - all finishes to floors and walls except skirting , copping and cills - all finishes to risers , treads, and landings to stairs - skirting, risers, treads, cills and copings, dividing strips in floors The following shall be understood as included: - preparing background, hacking , raking , grouting , bedding , jointing , rubbing and priming GLAZING ======= Transparent glass ----------------- - Sheet glass (clear glass) - Transparent glass shall be clear or tinted, transmitting light and capable of showing objects Figured glass ------------- - have sufficient imprinting of texture or pattern totally or substantially obscure vision Opal glass ---------- - vision from inside but not from outside Wired glass ----------- Putty ----- - used for fixing the glass to the frame - shall be quick , hard setting, tropical putty specially manufactured for glazing works Method 0f Measurement --------------------- - glazing shall be measured by area - glazing to louvers and special fixing may be enumerated by stating size and thickness - The following shall be understood as included: - Bedding, mastic, fixing, beading, cleaning etc. PAINTING WORKS Oil based priming paints: - ========================================== - priming coat -- initial or preparatory coats - applied to surfaces readily mixed or base paints **Aluminum priming paints** - for wood work - shall be for brush application **Metallic zinc rich priming paints** - shall be applied to iron and steel surfaces **Oil Paints** - water proof - shall be applied in accordance with manufacturers instruction - can be applied for walls, wood work , metals **Plaster Emulsion Paints** - normal and usual type of painting - shall be selected for interior and exterior works **Synthetic Enamel Paints** - used for metals with manufacturers instruction - painting shall be measured by area - special application to edges shall be measured in length stating the girth - internal and external surfaces shall be measured separately SANITARY WORKS ============== Pipes ===== - Galvanized steel pipes --used for distribution of water (pipes for cold and hot potable water) internally and externally installed having plain or threaded ends. - Pipes are measured by length stating diameter taken along the centerline over all fittings **Valves**: - Flanges used to connect pipes and for controlling - Check valves, gate valve, service valves - shall be in specified material and size at positions indicated in drawings - Enumerated stating diameter - can be used for cold water distribution - usually used for solid waste and surface drainage with vent pipe in horizontal and vertical stacks - shall be measured in length stating diameter and understood to include accessory joint fitting like Y,T, joints - shall be laid on a minimum concrete bed of 150mm - enumerated stating size and depth including all related earthwork Septic Tanks, Soakawy Pits and Percolation Ditch ================================================ - Measurement shall be done in accordance with the method of measurement for each item of works - May be specified on lump sum for costing **Sanitary Fixtures** - Shall be manufactured of standards acceptable for the intended purpose - Appliances shall be supplied with mounting and plugging devices, valves, chains, waste plug, traps, handles, flexible pipes, bolts, nuts screws, hinges etc. ELECTRICAL INSTALLATION ======================= Underground cable ducts ======================= - made of pre-cast concrete pipes or galvanized steel pipes - for protection of power and telephone outlet cable - it shall be the responsibility of the contractor to ensure that the underground duct is installed correctly according to each party's requirement - pre-cast concrete , galvanized steel UPVC are used (similarly as given for sanitary installation) - Manholes -- similar to the requirements for sanitary installation Distribution boards (DB) ======================== - The contractor shall supply and install medium voltage MD panel as shown on the drawings. Arrangement of the panel shall be as to permit the ready incoming and outgoing cables. - Sub distribution board (SDB) shall be surface flush mounted and DB shall be of the type fully enclosed sheet steel cabinet and hinged cover - DBs shall be enumerated stating the power and voltage supply including all related works 3. **PVC cables** -- underground cables shall be pvc insulated steel wire and pvc served overall and all cables shall have copper conductors - measured in meter linear Light points, power and socket outlets ====================================== - outlets are either of bell, fan , telephone , TV or antenna - outlets shall be enumerated and understood as including all related works **Light points** - Fed through specified size pvc insulated conductors of thermoplastic conduits of 13.5 mm diameter for surface installation including junction boxes with cover and insulating caps - Ditto as above but in steel conduits of 15 mm diameter **Socket outlets** -- same as light points Electrical fixtures =================== - Light fixtures --shall be enumerated stating type of fixtures - Air conditioners - Fans, Bell systems - Shall be enumerated stating type of fixture C. EXTERNAL WORKS, SERVICES =========================== Road Project ============ -- -- -- -- [CHAPETR II]: SPECIFICATION ======================================= 1. **Introduction** 1. Design and drawing 2. Labor employment 3. Materials to be used 4. Construction method 5. Equipments used 1. Dimensions, extents, size, shape, and location of component parts 2. Location of materials, machineries, and fixtures 3. Interaction of furniture, equipments and space 4. Schedules of finishes, windows and doors 1. Type and quality of materials, equipments, labor or workmanship 2. Methods of fabrication, installation and erection 3. Standards, codes and tests 4. Allowance, submittals and substitutions 5. Cost included, insurance and bonds 6. Project records and site facilities. 2. Purposes of specifications ========================== 1. Guide the bidder at the time of tendering to arrive at a reasonable cost for the work 2. Provide guidance for execution and supervision of works. 3. Guide the contractor for the purchase of materials 4. Serve as a part of contract document to limit and describe the rights and obligations of each contracting parties. 5. Guide the bidder to identify his capacity to execute the work. 6. Serve as fabrication and installation guide for temporary and permanent works. 7. Guide the contractor for the purchase and/or hiring of equipments. 8. Serve for the owner to know what he/she is entitled to receive 9. Serve for the manufacturers of construction materials, equipments, tools etc to grade, classify, and improve qualities of their produces. 10. Indirectly, the specifications are very much related to the legal considerations, insurance considerations, bidding requirements, alternates and options, rights, obligations and remedial measures for the contracting parties. Types of Specifications ======================= 1. **Manufacturer's specification**: Manufacturers prepare specification of their product for the guidance of their users, which may include property description and installation guide lines. 2. **Guide Specification** : Specifications prepared by an individual or group of individuals based on manufacturer's specifications, established trends of workmanship, service and laboratory tests and research findings to be used as guide lines for preparation of contract specifications. 3. **Standard Specification**: Specifications which are intended to be used as a reference standard in the construction of a project. The guide specification which has been standardized by a recognized authority is considered as standard specification. 4. **Contract (Project) Specification**: the specification prepared for a particular project to accompany the drawings and other contract documents. - Administrative and Procedural Requirements - Scope, definitions - Reference organizations and Standards - Project description, site facilities - Submittals and quality assurance - Delivery, storage and handling - Project records, Insurances, Other general requirements 1. **Proprietary Specifications**: This specifications call for desired materials, producers, systems, and equipments by their trade names and model numbers. For detailed descriptions reference should be made to manufacturer's specifications. They are of two types; closed (sole) source and open or equal source. 2. **Performance Specifications**: specifications which define products based on desired end results which are performance oriented; most appropriate when new or unusual products or systems are required or when innovation is necessary. Describing the problems or conditions under which the products or systems must operate, and the parameters for the acceptable solutions is difficult and challenging. Testing methods and evaluation procedures for defining the required performances must be explicitly specified. 3. **Reference Specifications**: Specifications which refer to levels of quality established by recognized testing authority or standards set by quality control authorities. These specifications are also used in conjunction with other types of specifications. 4. **Descriptive Specifications** : Specifications which describe all components of products, their arrangements and methods of assembly, physical and chemical properties, arrangement and relationship of parts and numerous other details. The specifier shall take total responsibility for the function and performance of the product. 5. **Cash Allowance Specifications**: Specifications meant to direct bidders to set aside a specified amount of money to be applied to the construction work at the direction of the specifier. 4. Specification writing ===================== Specification writing require ============================= 1. Visualization (having clear picture of the system) 2. Research (to know the legal impact correctly) 3. Clear thinking (understanding things directly without misleading) 4. Organizing (organizing what we know to write the specification) b. Specification writing require professional ability to read drawings =================================================================== c. **Specification writing require** wide knowledge of the construction materials, various levels of workmanship, different construction equipments and method of construction to be employed d. **Specifications use simple and clear language** such that it can readily be understood. e. **Specifications shall be brief and short** as much as possible (avoid long sentences without punctuations) f. Specifications shall include all items affecting the cost of the work ===================================================================== g. **Specifications shall be fair** and do not attempt to throw all risks and responsibilities on one of the parties signing the contract, the employer or the contractor. h. **Specifications shall avoid repetition of information** shown on drawings to avoid mistakes and duplications within the specifications and drawings i. Specifications shall not include inapplicable text and do not specify the impossible or anything not intended to be enforced. 1. What are the useful references in specification writing? ======================================================== 1. Codes and ordinances of governments, cities, or municipalities. For example, Ethiopian Building Code of Standards (EBCS) 2. Standards prepared by distinct societies and government agents. For example, ACI standards, ASTM standards, BS, ES. 3. Standards or model specifications prepared by manufacturers, professional societies, and government bodies. 4. Master specifications and previously written specifications. 5. Information or experience acquired by personal observation and contact with trained or experienced people in the construction industry. 2. Specification language ====================== 1. The drawings are more clearly interpreted, not duplicated. 2. Rights, obligations, and remedial measures shall be designated without ambiguity or prejudice. 3. Clearly express the extent of works under consideration; therefore, the phraseology used in regard shall be: - i. Judged by its quality not its length ii. Should be concise and short and written with commonly used words iii. Punctuations are important but their usage shall be limited to few iv. Capitalizing the first letters is mandatory for the following expressions: - a. Parties to the contract; e.g. Employer/Client /Contractor/ Engineer b. Space within the building; e.g. Bed Room, Toilet, Living Room c. Contract documents; e.g. Bill of Quantity, Working Drawing, Specification v. Minimize pronouns, better to repeat nouns vi. Minimize the use of symbols vii. Do not use foot notes, do not underline within a sentence for emphasis a. shall in place of must; use "shall" for the duties of the contractor or the consultant to represent the word "must" b. "will" is used for the duties of the employer to represent the word "must" c. "must" --avoid the use of the word "must" and substitute by the word shall to prevent the inference of different degrees of obligation d. Avoid the use of words which have indefinite meanings or limitless and ambiguous in their meanings. For example, any, either, same, similar, etc. [CHAPETR III]: PROJECT COST ESTIMATION ================================================== 1. **Project Cost Estimation** General - Preliminary investigation (project appraisal costs) - design and supervision (consultancy cost ) - construction works (contractor's cost ) - land owning cost, and - monitoring costs e. Quantity for dry base analysis\...= 1.55m^3^ f. Volume of cement... = 1/6\*1.55 = 0.258m^3^ = 0.258m^3^/0.035m^3^ per bag = 7.4 bags of cement h. Coarse aggregate = 3/6 \*1.55 = 0.775m^3^ of coarse aggregate i. Water = 0.16 m^3^ ( assuming w/c 0.62) Exercise: Do similarly for C 20 and C 30 concretes -------------------------------------------------- - know the volume of work in reference to the fund available - determine actual cost per unit of item - identifying engineering estimate of the work for bidding purpose - work out economical use of materials , labor and equipments - in cases of variations to determine the extra cost to be incurred - when changes in cost due to legislation happens, to work out the escalation in cost 1. Correct information of the market price of the materials at the time of need to be used as a basic price 2. Correct information of the rates of various categories of skilled and unskilled laborers as wage rates to be used for daily work rate 3. Output of laborers per day for various types of items (productivity) 4. Correct information of the rates of various categories of equipments and tools as rental rates to be used for major items of rates 5. Up-to-date knowledge of the construction methods. 1. Type and documentation of the project 2. Construction scheduling 3. Bidding environment 4. Quality and availability of material and labor (given in specification) 5. Construction facilities /tools and method of construction 6. Location of the site: Transportation charges 7. Proper management 8. Land charges (lease) 9. Nature of subsurface condition 3.2 Types of Costing or Estimation ================================== Cost per functional unit ======================== Plinth area method -- cost per m^2^ =================================== Cubical Content method -- cost per m^3^ ======================================= Detailed cost estimate( based on item rate) =========================================== Rate Analysis ============= Direct Cost (DC) = Material Cost (MC) + Labour Cost (LC) + Equipment Cost (EC) ------------------------------------------------------------------------------ A. Quantity for dry base analysis\...= 1.55m3 B. Volume of cement... = 1/6\*1.55 = 0.258m^3^ = 0.258m^3^/0.035m^3^ per bag = 7.4 bags of cement -- ------------------------- -- **T[o]{.smallcaps}tal** -- ------------------------- -- Lab[o]{.smallcaps}ur c[o]{.smallcaps}st (LC) ============================================ --------------------------------------- ------------- -- -- **= 23.78** **T[o]{.smallcaps}tal LC ( Birr/m3)** --------------------------------------- ------------- -- -- Equipment C[o]{.smallcaps}st (EC) ================================= = 20 Birr/hr \* 1/0.5 m3/hr -- ----------------------------- -- **T[o]{.smallcaps}tal EC** DC = MC + LC +EC ================ [CHAPTER IV]: PROJECT VALUATION =========================================== Purp[o]{.smallcaps}se [o]{.smallcaps}f Valuati[o]{.smallcaps}n ============================================================== 1. **F[o]{.smallcaps}r rent valuati[o]{.smallcaps}n** -- valuati[o]{.smallcaps}n [o]{.smallcaps}f a pr[o]{.smallcaps}perty is d[o]{.smallcaps}ne to fix the rent. Rent is fixed [o]{.smallcaps}n basis [o]{.smallcaps}f certain percentage [o]{.smallcaps}f the valuati[o]{.smallcaps}n. It is generally 6% to 10% per annum. 2. **F[o]{.smallcaps}r buying or selling** -- every seller [o]{.smallcaps}r buyer is willing to sell [o]{.smallcaps}r purchase the pr[o]{.smallcaps}perty up to certain limiting price and that is [o]{.smallcaps}nly arrived at by valuati[o]{.smallcaps}n 3. **F[o]{.smallcaps}r Security [o]{.smallcaps}f l[o]{.smallcaps}ans [o]{.smallcaps}r m[o]{.smallcaps}rtgage** -- when it is required to have l[o]{.smallcaps}an against the security [o]{.smallcaps}f any pr[o]{.smallcaps}perty [o]{.smallcaps}r when the pr[o]{.smallcaps}perty is to be used for c[o]{.smallcaps}llateral for security like performance [o]{.smallcaps}r advance payment b[o]{.smallcaps}nd, valuati[o]{.smallcaps}n is necessary. 4. **Acquisiti[o]{.smallcaps}n** -- when a pr[o]{.smallcaps}perty is c[o]{.smallcaps}mpuls[o]{.smallcaps}rily acquired by government, given to the [o]{.smallcaps}wner for the valuati[o]{.smallcaps}n is necessary. 5. **F[o]{.smallcaps}r Tax assessment** -- to determine the pr[o]{.smallcaps}perty tax. H[o]{.smallcaps}use tax, etc., valuati[o]{.smallcaps}n is necessary. Imp[o]{.smallcaps}rtant Definiti[o]{.smallcaps}ns ================================================= Valuati[o]{.smallcaps}n [o]{.smallcaps}f Building ================================================= 1. **Rent Return Meth[o]{.smallcaps}d**: based building. 2. **Valuati[o]{.smallcaps}n [o]{.smallcaps}n land and building basis**: in this meth[o]{.smallcaps}d the c[o]{.smallcaps}st of land is added [o]{.smallcaps}n the depreciated c[o]{.smallcaps}st of the building. 3. **Valuati[o]{.smallcaps}n [o]{.smallcaps}n pr[o]{.smallcaps}fit basis**: suitable for c[o]{.smallcaps}mmercial buildings like h[o]{.smallcaps}tels, cinemas, etc. In such cases the net pr[o]{.smallcaps}fit is calculated after deducting all [o]{.smallcaps}utgoings and interest of capital invested. The net pr[o]{.smallcaps}fit is multiplies by future life [o]{.smallcaps}f the building. 4. **Valuati[o]{.smallcaps}n [o]{.smallcaps}n c[o]{.smallcaps}st basis**: in this meth[o]{.smallcaps}d the actual c[o]{.smallcaps}st incurred in c[o]{.smallcaps}nstructi[o]{.smallcaps}n [o]{.smallcaps}f pr[o]{.smallcaps}perty with due c[o]{.smallcaps}nsiderati[o]{.smallcaps}n [o]{.smallcaps}f depreciati[o]{.smallcaps}n, is taken as the basis to determine the value [o]{.smallcaps}f the pr[o]{.smallcaps}perty. 5. **Devel[o]{.smallcaps}pment meth[o]{.smallcaps}d [o]{.smallcaps}f valuati[o]{.smallcaps}n**: this meth[o]{.smallcaps}d is used for pr[o]{.smallcaps}perties that are underdevel[o]{.smallcaps}ped [o]{.smallcaps}r partly devel[o]{.smallcaps}ped [o]{.smallcaps}r if the building require ren[o]{.smallcaps}vati[o]{.smallcaps}ns by alterati[o]{.smallcaps}n. The anticipated future net inc[o]{.smallcaps}me is ren[o]{.smallcaps}vated and multiplied with the future life [o]{.smallcaps}f the pr[o]{.smallcaps}perty to get the value. 6. **Depreciati[o]{.smallcaps}n meth[o]{.smallcaps}d [o]{.smallcaps}f valuati[o]{.smallcaps}n**: the pr[o]{.smallcaps}perty value is determined based [o]{.smallcaps}n the b[oo]{.smallcaps}k value for the year by deducting the deprecati[o]{.smallcaps}n.