Effective Cost Controlling Methods for High-Rise Building Projects in Colombo

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  • The Sri Lankan Construction Industry


Project cost control systems are to give a fair indication of the existence and the extent of problems. Overruns in particular cost categories signal the possibility of problems and give an indication of exactly what problems are being encountered. Expense oriented construction planning and control focuses upon the categories included in the final cost estimation. This focus is particular relevant for projects with few activities and considerable repetition such as grading and paving roadways. The number of cost accounts associated with a particular project can vary considerably. For constructors, separate cost accounts might be used on a small project. These accounts record all the transactions associated with a project. Thus, separate accounts might exist for different types of materials, equipment use, payroll, project office, etc. Both physical and non-physical resources are represented, including overhead items such as computer use or interest charges.

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  • • Material Procurement Allocating finances and limiting the time frames by setting targets, immediately after commencing the project.
  • • Usage of material according to an appropriate plan or schedule.
  • • Benefits for materials management systems and Delivery


The Sri Lankan Construction Industry

The construction investment in Sri- Lanka has followed the economic changes that took place during the last decade after finishing the war in 2009. This resulted in a significant change particularly in the supply side of the construction industry. Projections towards the new millennium reveal that government policies will be the key deterministic factor with its traditional role changing from that of an investor and a regulator to that of a facilitator in construction The historical development of the Sri-Lankan construction industry is closely linked with the political Changes that took place during the last three decades. In this respect, the significant economic changes can be categorized into pre- and post-economic liberalization periods. In the pre-liberalization period of 1963- 74, the government channeled most investment into the building sector although it implemented Several irrigation projects under the patronage of foreign aid in order to create the necessary infrastructure For the agro- based economy in Sri-Lanka.

During the period from 1970 to 1977, the economic environment was shaped by the socialist influence. This resulted in restricted private-sector participation in economic development. The adoption of fixed exchange rates made it difficult for the many industrial activities, which faced problems including difficulties in the importation of materials. This badly affected foreign investments in the countryIn a past performance with the liberalization of the economy in 1977, the Sri Lankan construction industry once again underwent a significant change. During this period, public investments were channeled into major infrastructure projects such as the accelerated Mahaweli programme, Greater Colombo Economic Commission and Urban Development Programme with a view to creating a capital base in the country. Private and foreign capital was boosted through the provision of incentives and infrastructure support.

During 1978-1981, this change led the construction sector to grow at a much faster rate of 14. 3% at peak of the public sector investment, which coincided with private sector investment in commercial and industrial buildings moderate growth period from 1983 to 1988, was followed by an economic boom in the first half of 1990s during which the construction output grew again. Public housing programme implemented from 1978 to 1994 resulted in significant demand from the housing sector. The demand increased gradually from 1990 owing to two such programmes carried out during 1985-1996. Further housing programmes launched by related ministries and state agencies also created considerable demand. They were implemented on the ‘support-based approach’, completing 22,841 and 25,727 units in 1996 and 1997 respectively. The government also offered incentives to promote private investment and this led to a considerable increase in investment in industrial, commercial and shopping complexes.

During 1989-1999, Incentive scheme. Currently, the developers faced many problems including high land prices in the metropolitan region, high construction cost and high cost of financeAs such, in 1986 the Institute of Construction Training and Development (ICTAD) was set up to develop the industry in the areas of training, research and registration of contractors and consultants, contract conditions and other standards necessary for the industry. Cabinet paper introduced reform four key issues, namely poor construction management, insufficient workload, lack of continuity of work, delays in payments to contractors, and inadequate system of financing of contractors. Although the proposals aimed at the development of the local constructing sector, the inefficient implementation of reforms led to the failure of the sector to achieve the required levels of development. But in present the post war reconstruction and rehabilitation Requirements and the general economic revival are expected to trigger a construction sector boom over the next 5 years. We expect the construction sector growth to surpass the expected growth in GDP of 7-8% over the next 5 years. According to the Ministry of Finance and Planning, Construction related projects worth over Rs 700Bn is planned for 2010-2025. Although certain contracts may be awarded to foreign principles, a substantial part of the work would be re-assigned (by way of sub contracts) to local Contractors. In addition to the large scale projects initiated by The state, we estimate construction projects worth a similar amount, will be initiated by the Private informal sector.


Cost Studies of Buildings is about the understanding and application of costs to building and other structures. One of its aims is to ensure that scarce and limited resources are used to best advantage. It is about ensuring that clients receive the best value for money for the projects that they construct. As buildings have become more complex and clients have become better informed the techniques and tools available have become more extensive. The use of information technology has also provided a new array of possibilities particularly in the ease of modeling different design and construct solutions. This major event divided into three sections. The first of these provides a context for the material that follows later. It includes a simplified analysis of the construction industry since building costs cannot be studied in a vacuum but need to be considered within the industry to which they are applied. A more detailed study of the industry can be found in The Construction Industry of Great Britain been thought appropriate to include a brief history so far of the subject of building economics. The subject material in general is provided under a number of different titles and descriptors. It has variously been described as building economics, cost planning (although this definition now means something completely different) and cost control. The second section is about the different sorts of cost information that are required to undertake an effective study of building costs.

These include the traditional sources of cost information such as material prices and measured rates for different kinds of construction work as well as the more applicable cost analyses. Cost information can also come in many guises such as indices of cost, taxation and sources of funding and design data. While the latter is not strictly cost information, the design of a project has a particular influence on costs and the economics of design are influenced by a large number of factors. The importance of research ends this section. Without this, the subject remains sterile and innovation inBuilding costs does not take place. Cost innovation comes from many directions including designers, constructors and manufacturers. The third section is concerned with the practice of cost studies. These use a range of techniques that can be applied to each individual project in turn. A selection of these techniques will be adopted for all projects depending upon the aims and objectives sought by the client. Even in the simplest case some form of early price estimate will be required but this on its own is insufficient for modern-day clients. The practices being used are constantly being extended and improved as Chapter 2 will identify. These include a range of cost and value techniques from the inception through to the in-use phase. The whole aspect of the study of building costs h shifted the emphasis towards value for money.

This shift has included the following:

  • • Development appraisal
  • • Elemental analysis
  • • Application of cost planning
  • • Introduction of cost limits and allowances
  • • Educational research and practice
  • • Alternative procurement systems
  • • Cost–value reductions
  • • Whole-life costing
  • • Value engineering
  • • Facilities management
  • • Risk analysis
  • • The future directions of cost studies of buildingsSome will attempt to argue that a few of these techniques merely limit expenditure and apply a range of cost control practices, i. e. they are restricted to cost reduction mechanisms. In practice they do much more through refocusing the design and construction teams by adding value to the project.


Based on back ground study Considering about the high rise construction projects in Colombo. Concern about the selective construction firms who is engaging with high rise buildings and finding new methods for ‘Cost Controlling’ by learning the existing cost controlling methods in the construction industry.


  • • Learning the Cost controlling methods in the construction industry.
  • • To learn, how the cost is deviated among different stages of project
  • • To learn to increase the profitability by using cost control methods
  • • To learn how effective the cost controlling method to their employees’ salaries/wages and other benefits.


Research will be done by limited using the information of selected number of HIGH RISE building projects in selected organizations Colombo City Sri Lanka.


Planning to obtain data by discussion, CPD books, Books, government publications, and internet, Discuses with the respective staff in the organization and by referring basic records of information and as well as from the questioner survey. This chapter gives details of the methods and procedure of this study. A list of cost control method were identified from the review of literature, internet search and preliminary survey and developed into a questionnaire for the main survey. The review of literature also indicated the significance of the cost control on construction and, hence, the survey sought the perceptions of respondents about the relative importance of the selected cost control factors and their significance on construction. The methodology used in this study is survey questionnaire which can be categorized as quantitative research. Quantitative approaches are more specific and result oriented and itInvolves the collection of numerical data in order to explain, predict, and/or control phenomena of interest

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