COMPONENT OF BUILDING COST

COMPONENT OF BUILDING COST

The cost of building is a combination of various or individual elements of cost which makes up the total building cost. These element formed the basis for determining the trends of the building cost at a given period of time.

Building is divided into five (5) different elements according to Ayeni, (1986) which includes the following:
a) Labour element
b) Material element
c) Plant element
d) Overhead element
e) Profit element

LABOUR ELEMENT

This is define as all operatives on the site executing the project. They includes craftmen, artisans and apprentice of various cadres. They also include labourers and foremen of trade groups.

The overall cost of the combination of these manual hands will be considered in terms of unit cost of the work which gives the total cost of the given unit of work. Labour content in building cost is about 10-20% but if compared with material is 35-40%.

MATERIAL ELEMENT

The cost of the material required is usually more in proportion to that of labour (60:40) in ratio. Material takes 60% while labour takes 40%. Therefore, care must be taken in procurement and handling of the materials. In the case of procurement, the cost of material will depend on whether the materials is produced locally or imported and also the nature of supply: No construction industry can survives without satisfactory supply of raw materials. Buttler (1987).

The choice of the material used in the construction work has a significant impact either imported or locally produced. Where almost 75% of the materials used in the construction industry in Nigeria either as raw material or as finished product offer little hope for control of construction cost. (Ajan Lekole, 1987).

The development and use of local building materials which were previously available close to rural areas have been discarded in favour in imported materials some of which can be produced locally.

In contrast the sources of materials either imported or locally produced has a significant role in determining the building cost. Locally produced materials have less cost than the imported materials.

In building up the cost of the materials, certain cost are to be considered, they are:
(1) The cost of delivery of the materials to site.
(2) The cost of loading and unloading
(3) The percentage addition for shrinkage on materials like concrete and mortal mix if water is added to it.
(4) A percentage for waste on all the materials
(5) Lap percentage on materials like roofing sheets.
(6) Bulking percentage on materials like soil excavation.
(7) Percentage for absorption on material like paints.
(8) Percentage addition for compaction on materials like concrete placing and hard core filling during compaction.

PLANT ELEMENT

The plant simply means machines that perform the work which can be done by manual labour. At time, it is employed to do what may involved too much risk if done manually.

Plant can be classified into two classes:
(1) Small plant and tools: Such as scaffolding poles, wheel barrows, peak axes etc.

(2) Mechanical plant such as excavators, concrete mixers, dumper, and power hoist etc.

As the building designs and demand in Nigeria becomes more sophisticated, the need for the increase in the use of plant arises. Thus, the Nigerian building contractor is now faced with the growing need for mechanical plant.

Although there has been some indigenous efforts to produce some local machinery, almost all mechanical plants employed on Nigeria building site are imported.

This is because of the low level of technology in the country and in particular the absence of the functioning iron and steel industry in Nigeria. The scarcity of imported machine parts and foreign expertise is invariably reflected in the very high cost of building usually paid by the client. Mogbo, (1979).

OVERHEAD ELEMENT

This is the cost of administering a project and providing general plant facilities and site base services and distinct from site administration expenses. Much of which had been included in the preliminary section of the bill of quantities. The overall charges are commonly charged as a percentage on each item of the bill of quantities.

PROFIT ELEMENT

Like any other business undertaking, it simply means the monetary gains in which the contractor gets as a result of running the affairs of the work. The contractor must be expected to make profit, if he is to remain in business.

The profit is spread over each of the item of work and in the form of percentage on such item. These are some of the factors that influence the percentages of profit in the building industry such as:

1) The organizational structured of contracting firm: If for instance a structure was constructed by a small size firm and presently it will be constructed by a large firm or contractor the rat of the percentage charged on the item will be higher and it has an impact on increasing the building cost.

2) The volume of work the contractors have at hand also affects the profit charged by the contractor.

3) The types of tender adopted for the contract affects the percentage of profit. A negotiated contract will attract high profit than a competitive contract. However, the level of interest in the commercial market with time have effect on the percentage of profit to be charged by the contractor.

4) The location of site also plays its part, a site located in a business oriented area will attract high profit charges than a site in a place where poor people lives.

5) The type of client affects building cost; it is commonly by believed by the contractors that certain client, can afford to pay any cost as such will put a higher profit.

The profit and overhead usually amount to between 15-25 in building contract sum.

The profit and overhead element percentage is added together and calculated as a percentage to be added to the cost of each item or elements in the building, the total of all the item in the building plus profit and overhead form the building cost.