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Photo: A. Roy Chowdhury

Useful tool: Two revisions in rates have formed the basis for arriving at construction cost:

The Government of Tamil Nadu Public Works Department has published the standard schedule of rates for basic items for the year 2008-2009 during their sesquicentennial year (1858-2008).

The other is the revision of Central PWD cost indices for various cities including Chennai.

These two indexes have been useful for many to arrive at a detailed cost of construction and use them as a bench mark figure to indicate the square feet rate of construction. The indexes also give an indication of the current trend in escalation of the cost of building and value of property.

After a period of about 15 years the central PWD has revised the plinth area rates. The rates prevailing in Delhi are taken as the base and relative rates for other cities provided.

Till now the 1992 rates were considered as the reference, but from now on 2007 rates will serve as the base index. Delhi index is assumed as 100 and in comparison Chennai index is given as 132 as on October 2007.

This revision is based on the data of actual expenditure for projects completed in the recent past and provided by the officers on the field at various locations.

The rates were prepared based on the cost of various inputs including contractors’ margin.

The cost of construction per unit of plinth area on the specifications assumed and schedule of rates arrived are given. For buildings that have specifications different from that mentioned adjustments have to be made by adding or subtracting for superior or inferior specifications.

For a R.C.C framed structure residential building up to six storey floor height of 2.9 metres without amenities and without extras, the rate as per earlier 1992 index was Rs 2810 per sq m.

The corresponding Chennai rates would be as follows: The cost index at Chennai in 1992 was 3.05 and the unit rate was Rs. 2810 x 3.05 = Rs. 8570/. per sq.m. or Rs. 796 per sft.

Now after the revision, the base rate is Rs. 9000. The cost index at Chennai is 1.32 times the unit rate (Rs. 9000 x 1.32). This works out to Rs. 11880 per sq.m. or Rs. 1103 per sft.

If we include amenities like water supply and electricity which is about 21.5% per cent of the construction cost then the cost per square feet is 1340 sq.ft. This appears to be more realistic.

The Government of Tamil Nadu Public Works Department has now published the standard schedule of rates for basic items for the year 2008-2009.The labour and work rates are furnished under different headings. A statement showing the extra percentage allowed as per general note to schedule of rates is included. This note provides 10 per cent extra on labour where labour alone is involved for head load for Chennai and the surrounding 32 km area. However the rates for cement and steel are not provided.

Based on this revision, the basic rate at Chennai for a framed structure residential building for ground floor and three floors is given as Rs.8150 per sq.m or Rs. 757/ per sq.ft.

If you take the cost of basic amenities is Rs. 1145 + Rs. 455 (in well developed areas) the rate with amenities is Rs. 9750/ per sq. m or Rs. 905 per sq.ft.As this rate is based on the rate as on 2007-08, while revising the rates for 2008-09 it may work to a realistic figure.

This is less than prevailing market rate. A quick survey of the market indicates that the prevailing cost of construction is approximately between Rs.1200 and 1300 sq.ft for a standard specification.

The main difference in the State PWD scheduled rates is in labour and sand costs. The rates for steel and cement, which are the main components for calculating the unit rate, have not yet been furnished.

The gap between State and Central Government rates exists. Probably, a common workable rate would serve better. The difference between the government and market rates also needs to be bridged and made more realistic for the contractors to take up government projects. At a more general level, individuals who are either constructing their own house or buying apartments can use a realistic government rate as a bench mark and negotiate with the contractors and builders.

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