Running cost of construction

What is Running cost?

Running costs in construction refer to the ongoing expenses incurred during the construction phase of a project. These costs are separate from the initial construction costs and include various expenses that are necessary to keep the construction site operational and maintain project progress. Here are some common running costs in construction:

running cost
  • Labor Costs: This includes wages, salaries, benefits, and any additional costs associated with the workforce on the construction site, such as overtime pay, training, and insurance.
  • Material Costs: Ongoing expenses for construction materials required during the construction phase. This includes the cost of purchasing, transporting, and storing materials on-site.
  • Equipment and Machinery Costs: Rental or lease fees, fuel, maintenance, and repairs for construction equipment and machinery used on the site.
  • Utilities: Expenses for water, electricity, and other utilities needed to power construction equipment, site offices, lighting, and other on-site facilities.
  • Site Facilities: Costs associated with temporary facilities, such as site offices, construction trailers, portable toilets, fencing, and security measures.
  • Site Maintenance: Regular maintenance and repair costs for the construction site, including cleaning, waste disposal, landscaping, and general upkeep.
  • Safety Measures: Expenses for safety equipment, training programs, safety inspections, and compliance with safety regulations to ensure a safe working environment.
  • Permits and Insurances: Costs for obtaining necessary permits, licenses, and insurances required for construction operations, including liability insurance and workers’ compensation insurance.
  • Communication and Technology: Expenses related to communication systems, internet connectivity, software licenses, and technology infrastructure required for project management and coordination.
  • Testing and Inspections: Costs for conducting quality control tests, inspections, and certifications to ensure compliance with building codes and project specifications.
  • Transportation and Logistics: Costs associated with transporting personnel, materials, and equipment to and from the construction site, including fuel, vehicle maintenance, and logistics services.
  • Administrative and Legal Costs: Expenses for administrative tasks, legal fees, and project management software required for documentation, contracts, permits, and compliance with regulatory requirements.
  • Contingency Budget: A contingency budget is set aside to cover unexpected costs or unforeseen events that may arise during the construction phase.
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It is important for project managers and stakeholders to carefully estimate and track running costs to ensure proper budgeting and financial management throughout the construction project. Effective cost control and monitoring help maintain project profitability and ensure the successful completion of the construction project within the allocated resources.

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