Stages of project estimate

A project estimate is prepared in steps, each making the cost more accurate than the last.

1. Identification (preliminary/approximate estimate): the need for the project is established and a rough cost is obtained from the plinth-area rate, cost per km, or the cost of a similar project. This is used for the feasibility decision and budget allocation.
2. Survey and investigation: topography, soil, geology, hydrology and traffic data are collected to decide the layout.
3. Design and drawings: the project is designed, and detailed drawings and specifications are prepared.
4. Quantity calculation: the quantity of each item is measured from the drawings and entered in a bill of quantities.
5. Rate analysis: the rates of items are fixed from norms, material and labour rates, lead and lift, transport, overhead and profit.
6. Detailed estimate and abstract of cost: the cost of each item is calculated and the costs are added; contingency, supervision, escalation and VAT are included.
7. Preparation of the report: the estimate report with drawings, specifications, calculations and rate analysis is written.
8. Approval and tendering: the competent authority approves the estimate, and it becomes the basis for tender evaluation. Later, revised or supplementary estimates cover changes during construction.