Friday, July 17, 2020

Bhutan's Construction Industry : Episode II: Estimation

When we were in our final year, one of our Professors who had double Ph.D, told us one thing that stuck in my head for ages. He said, by the time you become a practicing engineer, you should give "thoda punch" to the Indian Standard Codes. 

While I don't remember many things that I was taught, I remember this part vividly because of his gesture, of course, he wasn't posed like Muhammad Ali nor was he going to knock someone out. He made his fists and bowed like an old man, who wanted to punch a little kid or someone who was even older and shorter than him. It was like the Hercules had the whole globe to carry, but it wasn't on his shoulders, it was in his belly! Yes, the globe was in his belly. 

With time, I realized how truthful he was, because as he had mentioned, Indian Standard Codes did not get revised with time, and it stayed like those wine bottles which waited to be opened - except, with time, getting bitter and older! 

Why I write this, is because we too follow the Indian Standard Codes and have derived many standards/guidelines/publications/coefficients from the manuals present in India. I am not saying that all these manuals are erroneous, I am just saying that it has been more than two decades that they haven't been updated. While we have not updated many norms in our own guidelines, we have also embraced the very nature of our Guru's methods of not updating - hence, after a decade of being taught, I remember the posture - thoda punch toh maar na parey ga? ~ little punch needed to be hit? 

 COVID 19 has hampered the industry like tsunami, we are not sure how we will make our comebacks, how many waves we are yet to suffer, and we are clearly not sure when will we be joining the club of being self-reliant? However, it has made clear that what used to work before isn't going to work now. What's going to be our arks for the apocalypse? 

 Now, I am not a Superman nor am I some genius that folks should listen to me, nor do I claim that I can resolve and solve the economic crisis. What I have observed till date in our line of works, is that most often, our Detailed Project Reports are haywire. Either someone screws it up so much that during execution time, there occurs many frictions. This being, either there are items which will not be executed at all or there will be necessity to formulate new items. In other countries, there are particularly assigned engineers, known as Quantity Surveyors, whose sole job is only to foresee the materials required for execution and how much it would cost. I cannot fully comment upon them, because I have not worked outside our country.  

 But, I had worked with few foreigners in few projects (hydro, building, water resources). This is to finally discuss the elephant in the room. Yes, we suck with our estimates. We have never incorporated the actual market rates, and we base our estimates upon BSR, which has computed analysis of built up rates based upon labor charges, as lowest as it could possibly be - 50% or lesser than the current market rate. 

In current scenario, expats would have asked us Nu.400 per day for labor and Nu.500 by Bhutanese laborer, but our BSR has Nu.215 for labor category 5, what is that category?  I know not. It also mentions Nu.232.93 per labor for market rate. If we quantify with the current market rates, just because of labor charges, an item's rate might shoot up by 11%, keeping other factors of materials and coefficients constant (materials taken as BSR). So, when one person prepares an estimate, based upon the BSR, and is tendered out, how low can bidders quote? Recently I saw a Nu. 3 Million tender, which was only possible to be worked at Nu. 4 Million, as per market rates.

Perhaps, the problem lies here, because our tender bids do not quantify in line with the actual market rates, and in lieu to it, our bidders also quote low in order to get works, eventually, we all wonder, why there are potholes after three months of a project? 

 Are we asking our own contractors to come up with inferior quality of works? Are we asking them to break laws?  Because, the pavements of Bangkok, Thailand is different from Thimphu, Bhutan. We should also address that the methodology, price, quality and materials used were different as well. But, can our momentary quantity surveyors at least see what is to be incorporated in their estimates? Even if it is not to the details of screws of a park bench, the park benches, and its components and elements should not be missed or at least be incorporated in the estimates. 

Secondly, I think that the time factor for consultants and engineers are not adequate. Just admit to do someone’s works, and they will call you the next day – this modern day slavery is very difficult. Engineers often get very little time to prepare drawings and to estimate, and it is always better for engineers who does the drafting to prepare estimation of a project. However, the timeline should at least be given a month for drawings and a month or two for estimation. We have observed, we are only given a month for both the drawings and for estimation. Albeit the entire design process takes for 6 months or so, for government projects, engineers are given very less time. With time constraints, it is difficult to come up with realistic estimate.

But, we cannot just blame time or BSR, because even if we prepare accurate estimate, should it not comply with BSR, engineers get Audit Memos. Now, this is where it gets even messy, because many projects are screwed up by the FEAR of audit memos, rather than the actual memos. Hence, with penny wise, pound foolish mentality, a project suffers with its timeline.

The conclusion is, if we expect nine women to give birth to a child in one month, then we are simply being unreasonable or a dreamer, and yet it is nice to be a dreamer and your motivational speaker will remind you to be one, in construction industry, if your dreams are not reasonable, it will not be applicable to be executed. We cannot ask a bag of diamonds at the cost of gold, because the two being valuable, are just different materials. 

Perhaps, we too can get better works and have projects being executed on time, if only our estimates are accurate as well. Even if not accurate, at least, workable. But like they say, who knows, if we start paying the correct rate, and give huge sums as mobilization advances to our contractors, they might find more mistresses and buy more vehicles for themselves.

With time, it is not sure when our Standard Codes will be worked upon, so that we can get correct coefficients. Till then, I reckon, a lot of contractors who are not aware of bidding process and quotations, are being punched and knocked out financially - because someone once must have told them, quote below 18%, you will get the job. A job gotten though, is no job if it is to kill you with stress and bankruptcy. 

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