Page 137 - DMGT521_PROJECT_MANAGEMENT

Project Management

Notes 3. Cost of levelling and development
4. Cost of laying approach roads and internal roads
5. Cost of gates
6. Cost of tube wells

The cost of land varies considerably from one location to another. While it is very high in urban
and even semi-urban locations, it is relatively low in rural locations. The expenditure on site
development, too, varies widely depending on the location and topography of the land.
9.1.3 Buildings and Civil Works

Buildings and civil works cover the following:
1. Buildings for the main plant and equipment.
2. Buildings for auxiliary services like steam supply, workshops, laboratory, water supply,
etc.
3. Godowns, warehouses, and open yard facilities.
4. Non-factory buildings like canteen, guest houses, time office, excise house, etc.
5. Quarters for essential staff.

6. Silos, tanks, wells, chests, basins, cisterns, hoppers, bins, and other structures necessary for
installation of the plant and equipment.
7. Garages Sewers, drainage, etc.

8. Other civil engineering works.
The cost of the buildings and civil works depends on the kinds of structures required which, in
turn, are dictated largely by the requirements of the manufacturing process. Once the kinds of
structures required are specified, cost estimates are based on the plinth area and the rates for
various types of structures. These rates, of course, vary with the location to some extent.

Notes The cost of land varies considerably from one location to another. While it is very
high in urban and even semi-urban locations, it is relatively low in rural locations.

9.1.4 Plant and Machinery

The cost of the plant and machinery, typically the most significant component of the project cost,
consists of the following:
Cost of Imported Machinery

This is the sum of (i) FOB (free on board) value, (ii) shipping, freight, and insurance cost,
(iii) import duty, and (iv) clearing, loading, unloading and transportation charges.

Cost of Indigenous Machinery

This consists of (i) FOR (free on rail) cost, (ii) sales tax, octroi, and other taxes, if any, and
(iii) railway freight and transport charges to the site.

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