Aditya Academy of Architecture & Design Building Structure VII

CHAPTER 1

Specification, Quantity and Costing of Buildings

Introduction:-
Estimation is the method of process of determining the probable cost of a
construction before the work is started.

It involves the predetermination of the quality and quantity of material required,

labour required etc.,

Definition of Estimation :-

 An estimate of a project is a force-cost of its probable cost.

 It may also be defined as the process of calculating the quantities and cost of
various items of proposed work.
 It depends on plan, elevation and section.

Necessity of estimates:-

 To assess the volume of work involved in the project.

 To arrange and organize material, manpower, equipment and tools-and-
plant necessary for the project.
 To fix the project completion period.
 To ascertain the fund required for completing the purpose to work.
 To justify the investment from cost benefit ratio.
 To invite tenders and preparation of bill of quantities.
 To obtain necessary administrative approval, necessary technical sanction
and arrangement and allocation of funds required for the project.

Quantity Surveyor
Quantity surveyor is a person who is responsible on estimating the quantities
from the design drawings, and measurement of the quantities in the site during the
project implementation, and preparing the current and final payments.

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Duties and Requirements of a Good Quantity Surveyor :-

 Preparing bill of quantities (Taking off, squaring, Abstracting and billing)

 Preparing bills for part payments at intervals during the execution of work.
 Preparing bill of adjustment in the case of variations ordered during the
execution of work.
 Giving legal advice in case of court proceedings.

The following are the qualities of a good surveyor:-

 The quality surveyor must be well versed with the drawings of work.
 He should be able to read the drawing correctly and bill the quantities
accurately
 He should have a thorough knowledge of the construction procedure to be
adopted, the various items of works involved in the execution: and the
different materials to be used in the work.
 He should be able to prepare schedule to be priced by tenderor.

Types of Estimation

There are five types of estimate:

a. Approximate Estimate
b. Detailed Estimate
c. Quantity Estimate
d. Revised Estimate
e. Supplementary Estimate

a. Approximate Estimate: This is also known as preliminary/rough estimate.

This estimate is prepared to work-out an approximate cost of the project in a
short period without going into details. This estimate is done for preliminary
financial evaluation of different alternatives and for administrative sanctions.

b. Detailed Estimate: This estimate is prepared by working out the quantities

of different items of work and then working out the cost by multiplying the
quantities by their respective rates. In detailed estimate provisions for any
other expenses like contingencies, T&P, work-charged establishment etc. are
added to the above cost to calculate the total amount required for project
completion.

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c. Quantity Estimate: Quantity Estimate/Quantity Survey is a part of detailed

estimate which list the quantities of all the items required to complete the
project. These quantities are worked out from the drawings. The purpose of
Quantity Estimation is to prepare bill of quantities.

d. Revised Estimate: It is a detailed estimate for the revised quantities or

revised rates of items of work originally provided in the estimate without
any deviation in original design and specifications approved for the project.
It is required when the material cost or the material quantities deviates
significantly (> 5%) from sanctioned value.

e. Supplementary Estimate: This estimate is worked out during progress of

work due to any changes or addition of works to originally approved. A
supplementary estimate is different from the revised estimate in the aspect
that, the former is worked out for the works which are not present in the
original design whereas the latter is worked out when there is a deviation of
materials from original proposal.

f. Abstract Estimate: This is the third and final stage in a detailed estimate.
The quantities and rates of each item of work, arrived in the first two stages,
are now entered in an abstract form. The total cost of each item of work is
now calculated by multiplying the quantities and respective rates.

Data Required for Estimation:

To make an estimate following data are necessary: i.e. drawings, specifications and
rates.

Drawings: For calculating quantities of various items for the work, various
drawings like plan, profile, section and elevation are required.

Specifications: Specifications contains detailed descriptions of all workmanship,

materials, and methods of preparation and execution for different items of the
work.

Rates: The rates per unit of various items of work, the rates of various materials to
be used in the construction, the wages for various categories of labors are required
for cost estimate. Moreover the distance between location of work and source of
materials and cost of transportation of materials are required for calculating cost of
materials at work site.

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Terminology

Taking off in quantity surveying:

This is the process of finding out the quantities for various items of works
involved in a project by taking off various dimensions from the plan, sections of
the drawings and tabulating in a measurement seat. The measurement sheet
contains following columns like description, number, length, breadth,
thickness/height and quantity.

Contingencies:

There are certain expenses which are incidental in nature and it is not
possible to predict them with reasonable accuracy. To cater all such expenses an
additional amount of 3% to 5% of estimated cost is provided in the total estimate.

Lump sum items:

These are small items, such as, front architectural or decoration work of a
building, fireplace, site-cleaning and dressing, etc., for which detailed quantities
cannot be taken out easily or it takes sufficient time to find the details. For such
items a lump-sum rate is provided in the estimate.

Work charged establishment:

During the construction of a project considerable number of skilled

supervisors, work assistance, watch men etc., are employed on temporary basis.
The salaries of these persons are drawn from the L.S. amount allotted towards the
work charged establishment. That is, establishment which is charged directly to
work. An L.S. amount of 1½ to 2% of the estimated cost is provided towards the
work charged establishment.

Tools and plants (T&P):

Use of special type of tools and plants, like concrete mixture, batching plants
or WMM plant, etc., may be required for efficient execution of large projects. To
cater such expenses about 1% to 1.5% of the estimated cost is allotted under the
head tools and plants (T&P).

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Day work:
During execution of a project there may be certain type of works, for which
the actual quantities of labor required is difficult to measure. For example fine
architectural works, and drawings in the wall. The payments towards such items
are made on the basis of actual number of days or actual quantity of materials
required. Such works are known as day works.

Sub work:
A large project may consist of several independent small works. Such small
works are known as sub work. For example setting of a university may contain the
construction of administrative building, classrooms, faculty chambers, hostels and
faculty residences. Estimations for each of the sub works are done separately and
accounts of expenditure are kept sub work wise.

Deposit work:
The construction or repair works whose cost is not met through government
funds but through some non-government sources is called deposited work. The
cost is deposited in cash or placed at disposal of the divisional officer. The works
executed for municipalities or other bodies fall under this category.

Provisional quantities:
During preparation of an estimate if it is apprehended that additional
quantities against some items may be required due to variation of site conditions,
then those quantities are estimated separately from the dimensions of the drawing
and kept separately in the estimate under a heading Provisional Quantities.

Provisional sum:
While preparing the estimate some amount is provided in it for items whose
details regarding cost or specifications are unknown during the preparation. For
example the cost and specifications for a lift may be unknown during estimation
for the building. Such amounts are known as provisional sum. However the
payments for these provisional items are done as per actual rate.

Prime Cost:
Prime cost is the purchase cost of articles at a shop. Prime cost is generally
referred to the supply of a particular article and not for carrying out a work. The
prime cost includes the cost for carriage but excludes the cost of fixing or fitting.
For example: the door and window fittings are purchased from the shop at a cost of
Rs 1000.00. The transportation cost is Rs.50.00 and the cost for fixing and fitting is
Rs.100.00. Then the prime costs of the fittings are Rs. 1050.00.

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Actual Cost:
The actual cost is the actual expenditure incurred in completing a work
excluding profile but including other incidental, establishment and travelling
charges. The actual cost is the cost incurred by the contractor to complete the
project.

Capital Cost:
Capital cost is the actual amount incurred in completing a work. This
includes expenditure incurred in surveying, designing, planning, drawing, cost of
material, equipment, laborers, supervision, legal expenses, travel expenses, taxes,
electricity and water charges, contingencies and any other expenses related to the
work but excluding profit.

Work value:
This is the total amount provided for all scheduled items of work in the
estimate. Thus work value is the estimated value for the work excluding the
amount for contingencies, work charged establishment, tools and plants etc. as per
actual rate.

Abstracting in quantity surveying:

In abstracting the works of a similar description are assembled, grouped and
transferred from the measurement seat to a special rolled abstract paper where they
are totaled and reduced to their specified unit of measurement.

Summary of estimated cost:

This is the summation of abstract of estimated costs for different sub-works
involved in the project and is drawn up separately. Such a summary page is
prepared when a project contains different sub-works.

General abstract of cost:

This is the summarization of abstract of costs of several individual items of
sub-works or works as a whole, like: cost of land, earthwork, bridges, pavement,
retaining wall, etc. required to complete a road project. The amount required for
contingency, work charged establishment, T&P, maintenance are added on
percentage basis to the general abstract of a cost.

Bill of quantities (BOQ):

This is defined as a list of brief descriptions and estimated quantities. This
lists in a tabular form all the items of work involved in connection with estimate

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for a project with the description, corresponding quantity, unit rate and amounts
column. The columns indicating unit rate and amounts are kept blank. BOQ is
provided in a tender form for item rate tenders. Contractors‟ put up their own
competitive rates and calculate the totals to offer their estimate amount to complete
the whole work. The BOQ is also required to calculate the quantities of different
materials required for the project.

Principles of Measurements

 Units of measurement

The units of measurements are mainly categorized for their nature, shape and size
and for making payments to the contractor. The principle of units of measurements
normally consists the following:

Measurement Unit Characteristics of Example

Type Item

Length M.R Works have specific As pipes

length and width
Area M2 Works with specific as plastering, painting,
thickness,
Volume M3 Variable dimensions Footings, columns,
stairs,
Lump-sum Lump sum Works have details Earth work, earthling
(L.S) (L.S) difficult to be system (electrical).
calculated
No. No. Works have 3 dim. Windows, doors,
fixed
Weight Ton / kg Have specific width As steel
Time Day / hrs Labor / equipment Workers‟ wages,
Equipment.

 Rules for measurement

The rules for measurement of each item are invariably described in IS- 1200.
However some of the general rules are listed below.

 Measurement shall be made for finished item of work and description of

each item shall include materials, transport, labor, fabrication tools and plant
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and all types of overheads for finishing the work in required shape, size and
specification.
 In booking, the order shall be in sequence of length, breadth and height or
thickness.
 Same type of work under different conditions and nature shall be measured
separately under separate items.
 All works shall be measured subject to the following tolerances.
o Linear measurement shall be measured to the nearest 0.01m.
o Areas shall be measured to the nearest 0.01 sq.m
o Cubic contents shall be worked-out to the nearest 0.01 cum

In concreting works any opening more than 0.1 m2 (for items measured by area)
or 0.1 m3 (for items measured by volume) are deducted in the quantity calculation.

The bill of quantities shall fully describe the materials, proportions,

workmanships and accurately represent the work to be executed.

In case of masonry (stone or brick) or structural concrete, the categories shall be
measured separately and the heights shall be describe.

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 Measurement for common items of work

Item Unit Method of measurement

Measurements for earthwork
Site leveling Lump It takes into consideration all site leveling including
sum the excavation, fill, according to design drawing.
3
Excavation (cut) M Measured by 2 methods :
1. Footing areas according to blinding area × depth
of excavation according to drawings.
2. External dimensions of the building × depth
of footings
3
Fill (backfill) M = Excavation – concrete work for footings and
columns under ground level.
= Ground plan × depth of ground beams –
(concrete for ground beams and ground floors)
Concrete Work
2
Blinding m = Length × width (the thickness should be
concrete, specified in the drawings and specifications)
ground concrete, Ribs blocks don‟t subtract from the slabs concrete.
benching, and
slabs concrete
with
fixed thickness

Item Unit Method of measurement

Footings, columns, M3 = length × width × thickness
ground beams, o Ground beams are measured from its
stairs, and connection with columns
canopies, o Concrete stars include the stairs, steps,
stair slabs, walls supporting the stairs.
Concrete No. The dimensions must be specified in the
decoration works drawings.
as curves
Plastering and Painting work
2
Plastering and m = length × width
Painting o Engineering measurement after subtracting
the openings, more than 0.1 m2
o The area is measured above the skirting
(terrazzo chips)

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Internal plastering = walls + slabs

Miscellanies Work
2
Block works m = length × width (the thickness should be
specified in the drawings and specifications)
- Subtract all openings more than 0.1 cm2.
Terrazzo, marble, m2 = length × width
ceramic (engineering measurement)
Doors/ Windows No. The exact dimensions should be specified in the
design drawings.
Sometimes carpentry works measured in m2 or
m length according to the item described in
BOQ.
Electrical and No. The dimensions should be specified clearly in
sanitary pieces / the design drawings as the sockets, lamps,
accessories fluorescent lighting, etc.
W.C., washing basins, sinks, manholes,
pumps…etc.
Piping M.R The dimension and details should be specified in
the drawings, as (cables, pipes, etc.)
Works with special Lump All details should be specified in the drawings,
Detail sum as earthing, gas network, etc.

1. Approximate Estimate

Approximate Estimate is made to find out an approximate cost in a short

time and thus enable the administrative authorities to evaluate the financial aspects
of various schemes and subsequently allows them to sanction them.

 Importance

Approximate estimate is prepared with preliminary investigation and survey.

It does not require detailed surveying design, drawing etc. It is basically done to
evaluate feasibility of a project. If it is observed from approximate estimate that the
cost of the project is very high then the project may be abandoned without
preparing a detailed estimate. Thus the cost required for detailed surveying design
or drawing required for preparation of detailed estimate is saved.

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 Purpose of approximate estimate

 Approximate estimate provides an idea about the cost of the project, which
enables the authority to check the feasibility of the projects considering the
funds available for the project.

 Approximate estimate does not require any detail investigation, design or

drawing and hence saves both time and money.

 If several alternatives are available for the original works, a comparison is

done from approximate estimate and the decision is made to select the
project according to this comparison.

 Approximate estimate is required for getting the administrative approval for

conducting detailed investigation, design and estimation.

 Approximate estimate for a property or project is required for insurances and

tax scheduling.

 Methods of Approximate Estimate

There are seven methods used for approximate estimate of the building.
 Plinth area or square meter method
 Cubic rate or cubic-meter method
 Approximate quantities with bill
 Service unit or Unit rate method
 Bay Method
 Cost comparison method
 Cost from materials and labor

 Plinth area or square meter method:

This is prepared on the basis of plinth area of the building. The rate for unit
plinth area is deducted from the cost of a building having similar specifications and
dimensions in the locality. The plinth area is calculated for the covered area by
taking external dimensions of the building at the floor level. Plinth area does not
include the courtyard or any other open spaces.

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 Cubic rate or cubic-meter method:

In this method the cost is estimated by multiplying the cubical contents of

the building (length × breadth × height) with the rate calculated in cubic meter
which is deducted from a building having similar specifications and dimensions in
the locality.

 Approximate quantities with bill:

In this method the total length of walls is calculated from the plant. Length
of different sections of the wall like foundation including plinth and super structure
and area of wood work, flooring and roofing is calculated separately. These items
are then multiplied by their cost per running meter length or area in sq. to obtain
the total cost.

 Service unit or Unit rate method:

In this method all costs of a unit quantity such as per km. (highway), per
meter (bridge), per classroom (may be school or colleges), per bed (hospitals), per
cubic meter (water tank) is calculated and multiplied with the cost per unit
deducted from similar structures in the locality.

 Bay Method:

The rate for one additional bay is calculated. Then the approximate
estimated cost for the building is worked out by multiplying the number of bays in
the proposed building with the cost of one such bay.

 Cost comparison method:

When a number of dwellings of similar specification and dimensions are

constructed as a part of a larger project for example staff quarters, the approximate
estimates for all such dwellings can be estimated by multiplying the quantities of
various items for a prototype structure with present market rates.

 Cost from materials and labor:

Here approximate quantities of materials and labor per sq. of plinth area are
calculated with some empirical equations or from past experience. This is then
multiplied by total plinth area of the building to calculate the total quantity of

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materials and labor required for the building. The total cost is calculated by
multiplying these quantities with prevailing unit rate.

2. Detailed Estimate:

Detailed estimate is prepared by working out the quantities of different items

of work and then working out the cost by multiplying the quantities by their
respective rates. The unit quantity method is followed to prepare a detailed
estimate where, the rates per unit work of one item including profit are estimated
first and the total cost for the item is found, by multiplying the cost per unit of rate
by the quantity of items. In detailed estimate provisions for any other expenses like
contingencies, T&P, work-charged establishment etc. are added to the above cost
to calculate the total amount required for project completion. The procedure for the
preparation of a detailed estimate is divided into 2 parts:

a) Details of measurement and calculation of quantities

b) Abstract of estimated cost

 Details of measurement and calculation of quantities

Representative measurements for dimensions of all individual items

involved in the whole work are taken off from the drawing of the work and entered
in respective columns of a standard measurement form as shown below. Then
multiplying, item wise respective dimensions of the quantities of all items are
worked out in the measurement form.

Details of measurement form:

Item Description Nos. Length Breadth Height/ Quantity Remark

No. Depth

 Abstract of estimated cost

The cost of each item is calculated by multiplying the quintiles computed in

the measurement form with a specific rate in a tabular form known as abstract form
as shown below:

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Abstract of estimate form

Item Description Unit Quantity Rate Amount
No.

A percentage of 3% to 5% is added for contingencies, to allow for petty

expenditures, unforeseen expenditures due to changes in design, changes in rate,
etc. which may occur during execution of the work. Further, a percentage of 2.0%
to 2.5% is also added to meet expenditure of the work charged establishment. For
big projects an amount of 1% to 1.5% of the estimated cost is also provided to
purchase special tools & plants for specific purpose.

The main functions of an abstract of estimate are as follows:

The total estimated cost and the different items of works required to complete
project can be known.
Basis on which percentage rate tenders are called after excluding the amount for
contingency and work-charged establishment.
A part of tender document and a contractor can arrive at his own rates from the
schedule of work described in the description column.
This is the basis on which bills are prepared for payment.
Comparative costs of different items of works can be known.

 Data Required for Detailed Estimate

Following data are required for calculation of detailed estimate:

Drawing: The quantities of various items are taken off from the drawings
mainly: plans, sections, and other relevant details for the works.

Specifications: The specification of the work describes the nature, class,

workmanship, method of preparation etc. which are required to calculate the cost
of various items.

Rates: The rates for different items of work are derived from schedule of rates or
from rate analysis. The estimated cost is calculated by multiplying the rates with
the quantities of various items.

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Standing circulars: The taxes and insurance etc. prevailing at the locality of the
work is required to fix up rates of various items.

 Steps in Detailed Estimate

A detailed estimate can be analyzed in five distinct steps:

Divide the whole project or work in various items.

Divide the various items and group them under different sub heads.

Enter the detailed of measurement of each item of work in measurements form

and calculate the total quantity of each of them.

After the quantities are taken off, the numbers, length, area or volumes are
estimated and entered in last two columns of measurements sheet. All these values
must be checked by different persons by tick-mark in other color ink. If any
correction is done it must be cross checked.

Finally, the cost under item of work is calculated from the quantities computed at
workable rates. These costs along with rates are entered in „Abstract Form’.
Therein, expenditures towards contingencies, work charge establishment and tools
and plants are added to the estimated cost and then totaled. This grand total gives
the estimated cost of work.

 Factors Affecting the Cost of a Project

Quantity of materials: For a large project, the quantity of materials required is

large and thus it can be procured at a lower price.

Availability of materials: The cost of materials, which are easily available, is

comparatively lower.

Transportation of materials: The cost of transportation is added to the cost of

the material at site. Thus more is the transportation cost; the more is the cost of
material.

Location of Site: If the site is located at an odd place for which loading,
unloading, staking and restacking of materials are necessary for several times.

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Thus, apart from cost incurred by such operations the possibility of damage or loss
in transit is more which affects the cost.

Labor charges: The skill and daily wage of the local labor affects the rate of a
item.

 Documents Accompanying Detailed Estimate

The detailed estimate is generally accompanied by following supporting

documents:

a. Report on the design

b. Specifications
c. Working drawing (Plans, section, elevation and other details)
d. Design charts and calculations
e. Particulars of scheduled rates or rate analysis.

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CHAPTER 3
SPECIFICATION
Definition

Specification is a statement of particulars for execution of any item of work.

It describes the nature and the class of the work, materials to be used in the work,
the workmanship and the tools and plants which are required to complete an
engineering project in accordance with its drawing and details. Specifications are
written by experts of a particular field.

Necessity of Specification

A specification is a statement of particulars. An engineering specification

contains the details about nature and class of the work, quality of the material to be
used, workmanship and tools and plants required for the project. The drawings
show the proportions and relative positions of the various components of the
structure. It is not possible to furnish the information on the drawings regarding the
quality of materials to be used and the quality of workmanship to be achieved
during construction, due to shortage of space. Thus details regarding materials and
workmanship are conveyed in a separate contract document which is known as the
specifications of the work. In general, the drawings showed what is to be done,
whereas the specifications state how it is to be accomplished.

Importance of Specification

 The specification describes the quality and quantity of a materials,

workmanship and equipment required for execution of the project and hence
it directly affects the cost of the project. Moreover, it allows the contractor to
make programs for their procurement beforehand.
 Specification provides specific guidelines for the workmanship and the
method of doing work. Thus, it serves as a guideline for supervising staff to
execute the work.
 Specifications enable the employer to check the quality of the materials and
workmanship.
 The contractor bids the tender as per the specification and is paid as per the
tendered price. Any change in specification changes the tender rate.
 Specifications form a part of contract document, without which the contract
document becomes invalid. On each page of the specifications both the
parties i.e., owner and contractor should sign so that these specifications,

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where clear instructions, regarding the quality and procedure of works etc.,
are given will be binding on both the parties.
 If any dispute arises between the parties, the specifications will help the
arbitrator or the court to settle the dispute. If the contractor‟s work deviates
from the specifications, he will be liable for penalty.
 The specification also mentions the mode of measurements, quality and
procedure of item, which is binding on both the parties to adhere to it. The
contractor cannot ask for extra measurements or owner cannot give less
measurements.
 The general character and the scope of the work in illustrated and defined by
the specifications and signed by both parties. So it becomes a legal binding
on both the parties to adhere strictly to the agree specifications.
 In the absence of complete specification, the contractor‟s obligation is
limited to performance of only what is called for in such incomplete
specifications. As such great care has to be taken in preparing specifications.

Types of Specifications:

The specifications can be broadly classified as:

 General specification
 Detail specification
 Contract specifications
 Standard specification
 Special specification
 Open or manufacturer‟s specification

General Specification

In general specifications nature and class of the work, names of

materials, and the proportions that should be used in the various items of the
work are described. Only a brief description of each and every item is given.
It is useful for estimating the project without going through lengthy detailed
specifications general information for the quantities of the materials nature
and class of the work can be known from the general specifications, but they
don‟t form a part of the contract document.

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Detail Specification

The detailed specifications describe the item of work in details, accurately

and complete in all respects in relation to the drawings of the works. Detailed
specification for a particular item specify the qualities, quantities and proportion of
the materials and the method of preparation and execution and mode of
measurements for that particular item of work in a project. The method and
duration of protection of finished works as required are specified in the detailed
specifications. The detailed specifications are arranged in the same sequence of
order as the work carried out. The detailed specifications form an important part of
contract document.

Contract specification

The specifications written for a particular construction project given contract

to accompany the detailed drawings are called contract specifications or project
specifications.

Standard specification

Preparation of detailed specification for an item is a time and labor extensive

job. Also, there are scopes for deviations and omissions while writing lengthy
specifications. Thus, the standardized specifications for most of works are prepared
by the engineering department which serves as a standard guide to the department.
These standard specifications are numbered. After standardizing specifications, it
is not necessary to write detailed specifications, with all the contract documents.
While preparing the contract document only the serial number of standard
specifications is written. This saves time, labor and other expenditures.

Special specification

Some items that are not covered or work not well covered by the
departmental standard specifications, special specifications for such items are
drawn up by engineer-in-charge approved and included in the tender paper under a
heading special specifications.

Open or manufacturer’s specification

Open specification/manufacturer‟s specification is specifications of products

of manufacturers which state both physical and chemical properties and such other

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information of the product but not description of workmanship to be achieved

during construction. The physical properties specify mainly the strength weight
thickness or size and such other physical properties of the product. The chemical
properties specify mainly the composition of chemical contents of the product and
the precautionary measures if any required for storing the product.

How to Write Specification

While writing specifications following principles shall be adopted:

1. Description of materials: The quality and size of materials required to do

an item of work shall be fully described for checking up at site according to
the clauses provided in the specifications. The proportion of mixing or
treatment of materials if required before use shall be really described.

2. Workmanship: The complete description of workmanship. The method of

mixing and proportion, the method of laying, preparation of base or surface,
compaction, finishing and curing etc. specially applicable to the item of
work shall be stated in different clauses.

3. Tools and Plant (T&P): The tools and plant to be engaged to carry out a
work shall be described. The method of operation and by whom to be
supplied shall be stated.

4. Protection of New Work: The method of protection of new works against

damage or the method of curing if required, the test of completed work if
necessary shall be described in separate clauses.

5. Expression: While writing a specification endeavor shall be made to

express the requirements of the specification clearly and in concise form
avoiding repetition and unusual words. The style of the tense shall remain
same throughout. As the specifications are legal documents, terms such as
suitable, proper and words having more than one meaning shall be avoided.
The sentience shall be short simple and concise because fewer words will
involve less risk or legal difficulty.

6. Clauses of the specification: As far as possible, the clauses shall be

arranged in the order in which work shall be carried out. This does not mean
to follow the works according to the order of arrangement, but it facilitates
references. While framing the clauses for quality of materials, workmanship,

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tools and plants etc. practical possibilities should be realized. Correct and
complete but not repeated information shall be given so that the owner and
the contractor carryout the work following the specifications. Abbreviations
which are familiar can be used.

Arrangement of Specification Paragraph

The paragraph of a particular specification should be arranged in the following

sequences:
 Materials that is required for work.
 Specifications for materials.
 Preliminary work, before the construction.
 Procedure for executive the work.
 Tests, if any.
 Clearing on completion.
 Mode of measurements.

General Specification of Building

Buildings are classified in four categories depending superiority of their

construction specifications: Class A (First class buildings) are having highest
specification while class D (fourth class) are having lowest specifications.

General specifications for first class building

1. Foundation and plinth: Foundation and plinth shall be of first class brick
work in 1:6 cement mortar over 1:4:8 cement concrete.

2. Damp proof course: DPC shall be of 25 mm thick cement concrete

(1:1.5:3), mixed with one kg of Impermo (or any water proofing material)
per bag of cement.

3. Superstructure: Superstructure shall be of 1st class brickwork with 1:6

cement mortar. Lintels over doors and windows shall be of R.C.C.

4. Roofing: Roof shall be of 100 mm thick R.C.C. (1:2:4) slab with 100 mm
lime terracing above over RCC lab as required. Height of the room shall not
be less than 3.5 m.

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5. Flooring: Mosaic/Marble flooring shall be provided in all floors including

staircase.

6. Finishing: Inside and outside wall shall be finished with 12 mm cement

mortar plaster (1:8). Inside shall be distempered over 2 coats of white wash.
Outside shall be snowcem washed two coats over one coat of white wash.

7. Doors and windows: Chaukhats shall be seasoned teak wood and shutters
shall be 40 mm paneled glazed. All fittings shall be provided with iron grills.
All wooden and grills shall be painted with enamel paint over one coat of
priming.

8. Miscellaneous: Rain water pipe shall be of cast iron. Building shall be

provided with 1st class sanitary, water fittings and electrical installations.

Writing the Detailed Specifications for Construction Work

The detailed specifications of any work consist of two sets of provisions: General
provisions and Technical provisions.

General provision

These are also known as conditions of contract and they apply to the work as a
whole. In this document, the conditions governing the contract are written. The
following groups of conditions of contract are generally accommodated under the
general provisions.

a. Conditions a relating to documents: These pertain to Bill of quantities and

schedule of prices, Drawings, Standard specifications.

b. Conditions relating to the general obligations of the contractor: These

pertain to, Acts, bye-laws and regulations, fencing, watching and lighting of
the work spot, Insurance.

c. Conditions a relating to labour and personnel: These pertain to Accidents

to workmen, Contractors representative, Rates of wages paid to the
employees, Removal of the employees of the contractor.

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d. Conditions a relating to the execution of the work: These provisions are

related to Alterations, additions and omissions during the progress of work,
Amount of extra items, Damages, Defective work, Work at night and on
holidays, Workmanship etc.

e. Conditions a relating to measurements and payments: These pertain to

Method of measurement of completed works, Method of payments etc.

f. Conditions a relating to default and non-completion: These pertain to

Failure to complete the work in time, Right to suspend the work Time of
completion etc.

g. Conditions a relating to settlement of dispute: These pertain to arbitration,

Jurisdiction of court etc.

Technical provisions

These specifications describe the technical requirements of each type of

constructions. The technical provisions contain detailed instructions regarding the
desired quality of the final product. The technical provisions are of three types.

a) Specifications for materials and workmanship

For materials the following properties should be included in the specifications:

Physical properties such as size, shape, grade, strength, hardness etc., Chemical
composition of the material, Electrical, thermal and acoustical properties,
Appearance of the material.

A clear statement regarding the inspection and procedure of test of the
material.

For workmanship, the following important features should be included in the

specifications; the results desired, the tools and plants to be engaged, detailed
description of the construction method for each item, Instructions regarding the
protection of the finished work as well as of the adjacent property.

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b) Specifications for performance

These specifications are written for the overall performance of the finished
product and hence they are written if the contract is for the supply of equipment
and machinery such as pumps, motors etc. In these specifications, general
description, design and installation and guarantee etc., of the equipment are
specified.

c) Specifications for proprietary commodities

Commercial products which are standardized or patented are called proprietary

commodities. The specifications written for such materials should include the
name of a particular brand or firm. (eg. Sun brand, Everest brand etc.) However, it
is not desirable in case of public works to specify certain trade names or brands. To
avoid monopoly and favoritism, it is general practice to specify the selected brand
and then it is followed by the phrase “or equal”.

Detailed Specifications of Civil Engineering Materials

Detailed specification for first class brick

The earth used for molding the bricks shall be free from organic matters salts
and chemicals. The size, weight and colour of the burnt bricks should be uniform.
The adjacent faces of the bricks are to be right angles to each other. The bricks
shall be free from cracks, flaws and lumps. They should not break where dropped,
from 1 meter height, on the ground. They should not absorb water by more 15 % of
their self-weight when immersed in water for one hour. The average compressive
strength of the bricks shall be not less than 7.5 N/mm2. The dry weight of one
brick shall not be less than 3 kg.

Detailed Specification for cement

Ordinary Portland cement or rapid hardening Portland cement confirming to IS:

269 – 1989 and IS:8041 – 1990 shall be used. The fineness of the cement shall not
be less than 30 minutes and the final setting time shall not be greater than 10 hours.
The average compressive strength, after 7 days curing, of 1:3 cement mortar cubes
shall be not less than 33 N/mm2 (33 grade).

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Detailed Specification for sand for mortar

The sand used for mortar shall be clean, sharp, heavy and gritty. It should be
free from clay, salt, mica and organic impurities. It shall not contain harmful
chemicals in any form. Medium and fine sand are to be used in mortars. Coarse
sand shall be sieved through 600 micron sieve and used in mortars for plastering
works.

Detailed Specification for coarse aggregate

The aggregate to be used in reinforced cement concrete shall be of blue

granite stone, machine crushed and well graded with a nominal size of 20 mm. It
shall be hard, dense, durable strong and free from flakes. The aggregate shall not
contain harmful materials such as coal, mica clay, shells, organic impurities etc.
The compressive strength, crushing value etc. of the aggregate shall be in
accordance with the requirements of IS: 383 – 1970.

Detailed Specification for water for concrete

Water used for mixing and curing concrete shall be clean and free from
injurious amounts of oils, acids, alkalis, salts, sugar, organic materials or other
substances that may be deleterious to concrete or steel. Potable water may be used
for mixing concrete. The suspended organic solid matter in the water shall not
exceed 200 mg/l and inorganic solid matter shall not exceed 3000 kg/l, the pH
value of water shall be not less than 6. Water sued for curing should not produce
any objectionable stain or unsightly deposit on the concrete surface. The presence
of tannic acid or iron compounds in the water is objectionable.

Detailed Specification for reinforcement

The reinforcement shall be of high strength deformed steel bars confirming

to IS: 1786 – 1985. It should be bendable, wieldable and have the modulus of
elasticity not less than 200 KN/mm2. The yield strength of the steel used shall not
be less than 415 N/mm2. All reinforcement bars shall be free from loose mill
scales, loose rust and coats of paints, oil, mud or other coatings which may destroy
or reduce bond.

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Detailed Specification for wood for doors and windows

The wood shall be teak, well-seasoned and dry. It should be free from
cracks, knots, defects and disease. It should be sawn in the direction of grains so
that the edges are perfectly straight and square. The dimensions of the
frames/scantlings/planks shall be as prescribed in the drawings. Patching or
plugging of any kind is not permitted.

Detailed Specifications of Common Construction Works

1. Detailed specification of for earth work excavation for foundation

[Sequence: Leveling the surface; Dimensions; Shoring; Fencing; Dumping the

soil; Water in foundation; Treatment of the bottom; Trench filling; Measurement]

a) Leveling the surface

The whole area of construction is to be cleared of tees, grass, roots of trees etc.,
complete and leveled horizontally to enable easy marking of centre line of the
building.

b) Dimensions
The excavation shall be done in accordance with dimensions of trenches shown in
the working drawings.

c) Shoring
The sides of the trenches should be vertical and the bottom of the trenches should
be flat. In the case of loose soils the sides of the trenches should be shored with
steel sheets.

d) Fencing
Suitable temporary fencing is to be provided around the site of excavation to avoid
any accidental fall into the trenches.

e) Dumping the soil

The excavated soil is to be dumped and heaped at a minimum distance of 1.5 meter
away from the trenches so that it does not slide again into the trenches.

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f) Water in Foundation
Water, if any accumulated in the trench, should be pumped out without any extra
payment and necessary precaution shall be taken to prevent surface water to enter
into the trench.

g) Treatment of the bottom

The bottom of the trench shall be watered and compacted by ramming before the
foundation concrete is laid. Excessive excavations should not be adjusted by filling
with loose excavated soils. Sand or plain concrete may be used for the adjustment
of levels, that too with proper compaction.

h) Trench filling
After the concrete has been laid and masonry has been constructed the remaining
portion of the trench shall be filled up with earth free from rubbish and refuse
materials, in layers of 15 cm and watered and well rammed.

i) Measurement
The measurement of the excavation shall be taken in cu. m. as for rectangular
trench bottom width of the concrete multiplied by the vertical depth of the
foundation from the ground level and multiplied by the length of trench even
though the contractor might have excavated with slopping side for his
convenience. The rate shall be for complete work for 30 m lead and 1.5 m lift,
including all tools and plants required for completion of the works.

2. Detailed specification of for lime concrete in foundation

[Sequence: Lime; broken bricks; fine aggregate; proportioning; mixing; laying and
compacting; curing; measurement]

a) Lime
The lime used for the concrete shall be freshly burnt and slaked. It should be
free from clayey particles and ashes. Unslaked stone particles should be removed
by shifting.

b) Broken bricks
The over burnt bricks and the pieces of well burnt bricks are to be broken to
sizes ranging from 20 mm to 40 mm and stacked for easy measurement. The brick
bats shall be free from dirt, dust, rubbish, leaf etc.

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c) Fine aggregates
Surki made from well burnt brick bats is to be used as fine aggregate. It
should pass through I.S. sieve no.48 and free from dust and dirt.

d) Proportioning
Lime, surki and broken bricks are to be mixed in the proportion of 1:2:5 by
volume. The materials are to be measured loose without shaking or ramming.

e) Mixing
The mixing shall be done only by mechanical mixer. The broken bats are to be
soaked in clean water for at least 2 hours before mixing. The materials are first
mixed to get uniform distribution and then water is gradually added. The mixing
process is to be continued till all the brick bats are coated with mortar uniformly
and a workable concrete is obtained.

f) Laying and compacting

The concrete shall be laid to the required thickness, not more than 200 mm
and a time, and compacted by ramming with rammers weighing 4.5 to 55 kg.

g) Curing
The lime concrete, so laid, is to be kept wet for at least 7 days.

h) Measurement
The measurement shall be taken in cu. m. for the finished concrete. The
length and breadth shall be measured correct to 1 cm and depth correct to 05 cm.

[Similar Item: Detail specifications for lime concrete in roof terracing]

3. Detailed specification of random rubble masonry in foundation and

basement

[Sequence: Materials; preparation of mortar; method of laying; curing;

measurement]

a) Materials
The stone shall be obtained from the approved queries. It shall be sound, free
from cracks and decay and shall have a specific gravity of not less than 2.5.
[Include detail specification for cement and sand]

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b) Preparation of mortar
The materials (cement and sand), with ratio 1:6, shall be first mixed dry
thoroughly till uniform colour is obtained and then shall be mixed wet adding
water slowly and gradually for at least turning three times to give uniform
consistency.

c) Method of laying
The stones are to be laid on broadest face which gives better opportunity to
fill the spaces between stones by the mortar. The stones are laid layer by layer with
sufficient mortar in between them for better binding. The outer face of the
basement should be vertical and the joints are to be staggered. There shall be no
gap, between the stones, unfilled by mortar.

d) Curing
The masonry should be kept in we condition by sprinkling water thrice daily
for at least 7 days after construction.

e) Measurement
The measurement shall be taken in cu. m. for the finished concrete. The
length and breadth shall be measured correct to 1 cm and depth correct to 05 cm.

[Similar Items: Detail specifications for random rubble masonry in super

structure]

4. Detailed specification for 1st class brickwork in super structure

[Sequence: Materials; preparation of mortar; soaking of bricks; method of laying;

curing; scaffolding; measurement]

a) Materials
[Include detail specification for first class brick, cement, and sand]

b) Preparation of mortar
[Similar to 3, but the ratio of cement to sand is 1:3 or as specified.]

c) Soaking of bricks
Bricks shall be well soaked in water for at least 12 hours before their use,
preferably in a tank provided at site of work.

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d) Method of laying
Bricks shall be well bonded and laid in English bond unless specified. Every
course shall be truly horizontal and shall be truly in plumb. Broken bricks shall not
be used except as closers. All corners shall be truly in plumb. Mortar joints shall
break for bonding and shall not exceed 10 mm in thickness. Only skilled masons
shall be employed on the work. Brick shall be laid with frogs upward except in the
top course. Brickwork shall be carried out not more than 1 m height at a time.
When one part of the wall has to be delayed, stepping shall be left at an angle of
450. All joints shall be racked and faces of the wall cleaned at the end of each
days‟ work.

e) Curing
The work shall be kept well watered for at least 15 days.

f) Scaffolding
Necessary and suitable scaffolding shall be provided to facilitate the
construction of brickwork. It shall be sound and strong enough to sustain all loads
likely to come upon them.

g) Measurement
The measurement shall be taken in cu. m. The rate shall be for the complete
work inclusive of scaffolding and all tools and plants.

[Similar items: Detailed specifications of 1st class brick work in foundation and
plinth, 2nd and 3rd class brick work, brickwork in mud mortar and Reinforced
Brick (R.B.) work.]

5. Detailed specification for Reinforced Cement Concrete

[Sequence: Materials; form work; proportioning; mixing of concrete; laying of

concrete; curing; formwork; measurement]

a) Materials
[Include detail specification for cement, sand, course aggregate, water and
reinforcement]
Reinforcement shall be hooked and bent (cold) and placed in position as per design
and drawing and bound together tight with 20 S.W.G binding steel wire.

b) Centering and shuttering

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Centering and shuttering shall be made of timber and tight with necessary
wedges and sufficiently strong and sable not to yield under laying of concrete. A
coat of oil washing or a thin layer of paper shall be spread to have a smooth
finished surface preventing adherence of concrete.

c) Proportioning
Proportions of cement, sand and course aggregate shall be 1:2:4 for slab,
beam and lintels and 1:1.5:3 for columns unless otherwise specified. The sand and
course aggregate shall be measured by volume with boxed and cement by number
of bags.

d) Mixing of concrete
Concrete shall be mixed by concrete mixture. Cement, sand and course
aggregate shall be put into the as per the required proportions for one batch. The
total quantity shall not exceed the manufactures rated capacity. The machine shall
be revolved to mix materials dry and then water shall be added up to the required
quantity. After 2 minutes rotation for through mixing, the mixed concrete shall be
discharged on a masonry platform or iron sheet.

e) Laying of concrete
Concrete shall be laid gently in layers not exceeding 150 mm and compacted
by wooden thapi or some mechanical vibrator until a dense concrete is obtained.
While concreting, steel bars shall be given side band bottom covers of concrete by
pacing the precast concrete blocks of 1:2 cement mortar 25x25 mm in section and
thickness of specified cover. Concreting shall be laid continuously. If laying is
suspended for rest or the following day, the end shall be slopped at an angle of 300
and made rough for future jointing. When the work is resumed, the previous
slopped surface shall be roughened, cleaned and a coat of neat cement paste shall
be applied and then the fresh concrete shall be laid.

f) Curing of concrete
Freshly laid concrete shall be protected from rain by suitable covering. After
24 hrs of laying of concrete the surface shall be cured by flowing with water of
above 25 mm depth or with covering by wet gunny bags. The curing shall be for a
minimum period of 14 days or otherwise specified.

g) Removal of form work

The centering and shuttering shall be removed after 14 days of casting. It
shall be removed slowly and carefully so that no part is disturbed.
h) Measurement

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The measurement shall be taken in cu. m. The rate shall be for the complete
work inclusive of form work and all tools and plants but excluding steel.

Note: [Similar Item: detailed specification for plain cement concrete]

6. Detailed specification for damp proof course (D.P.C.)

[Sequence: Materials; preparation of mortar; Application of DPC; measurement]

a) Materials

Damp Poof Course shall be of plain cement concrete of 1:2:4 mix and 30 mm
thickness. 12 mm size hard and dense stone chips shall be used as coarse aggregate
and river sand of 5 mm nominal size shall be used as fine aggregate. The aggregate
shall be clean and free from dust, dirt, mud, organic matter etc. The coarse
aggregate is to be washed well before mixing. Fresh port land cement of I.S.I.
approved brand of 43 grades is to be used as the binding material. Potable water,
free from harmful salts, shall be only used for mixing the concrete.

b) Preparation of mortar

The coarse aggregate and sand are to be measured separately by volume and
mixed dry in a clean and stable platform to get a mixture of uniform colour. This
mixture is stacked to a uniform height and the cement of required quantity is
spread over the stack, turned over in dry state first, and with water twice to get a
workable and uniform concrete.

c) Application of DPC

The brickwork in basement is stopped at plinth level, cured will for 7 days, top
surface cleaned well for dust by wire brushes. Form work is provided along the
two sides of wall by wooden planks, to the required height. Gauge plates are to be
provided at one meter interval, connecting the two side planks by nails, keeping at
a clear distance equal to the width of wall at plinth level. The concrete, mixed as
mentioned above, shall be placed and compacted well by tamping rods to have a
net thickness of 30 mm. Damp proof course shall not have any joints, the whole
concreting be completed without any break, and it need not be provided over door
openings. The top surface of concrete, when starts to dry, shall be roughened to
provide bondage with the super structure. The side planks shall be removed on the

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next day and the concrete shall be cured for 7 days by keeping the surface
constantly wet.

d) Measurement

The measurement shall be taken in sq. m. The rate shall be for the complete
work inclusive of all tools and plants.

7. Detailed specification of for plastering with cement mortar

[Sequence: Materials; preparation of mortar; preparation of surface; application of

mortar; curing; measurement]

a) Materials

[Include detail specification for cement and sand]

b) Preparation of mortar

[Similar to 3, but the ratio of cement to sand is 1:4 for inner wall and 1: 6 for outer
wall or as specified.]
Mortar for plastering shall be prepared at a time of such amount which can be used
within the initial setting of cement.

c) Preparation of surface

The joints of brick work shall be racked out a depth of 18 mm and the surface shall
be brushed, cleaned, watered and kept wet for two days before plastering. In case
of cement concrete surface, the face shall lightly roughen, cleaned, washed and
wetted.

d) Application of mortar

Plastering shall be started from the top and proceed towards the bottom. The
plastered surface shall be made level and flush with wooden straight edges and
rubbed thoroughly with wooden floats to ensure smooth and even surface.

e) Curing

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The work shall be kept well watered for at least 15 days.

f) Measurement

The measurement shall be taken in sq. m. The rate shall be for the complete work
inclusive of all tools and plants.

8. Detailed specification for form work and centering to R.C.C. Roofing

[Sequence: Strutting; formwork; centering]

a) Strutting

Props used for strutting shall be of casuarinas posts of 100 to 130 mm diameter.
The props are to be vertical and rest on firm ground or on wooden sole plates of
thickness not less than 40 mm. All props shall be provided with double wedges to
facilitate tightening and loosening of shuttering. The horizontal spacing of props in
both directions shall not exceed 750 mm. When the height of strutting exceeds 3.5
m, suitable horizontal bracings should be provided. Splicing of props shall be as
per the approved drawings. The props shall be constantly watched, by a carpenter,
during the process of concreting and immediate remedial measures are to be taken
in any of them get loosened.

b) Form Work

The formwork shall be of stiff and strong wood, easily workable with nails and
light in weight. The form work shall be true to shape and size specified in the
structural drawings and strong enough to with stand the forces caused by vibration
of concrete and the incidental loads imposed on it during concreting. The
unsupported length of the planks, particularly of the side plates shall not exceed 1.0
m to avoid buckling. The levels of the form work are to be checked before placing
the reinforcement bars in position.

c) Centering

Well-seasoned wooden planks or steel sheets are to be used for the shuttering
work. The joints shall be water tight to avoid leakage of cement slurry during
compaction. The surfaces of planks and sheets which would come into contact with
concrete shall be cleaned well and coated with oil of approved quality to the

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prevent adhesion of concrete. The complete centering work shall be assembled so

that it can be removed, on completion of the specified period, easily without
causing any demand to the concrete surfaces and edges.

9. Detailed specification for cement concrete flooring

a) Bottom Layer

The base shall be of cement concrete of 1:2:4 mix, 25 mm thick. The coarse
aggregate, 12 mm size stone chipping, shall be hard, durable strong and free from
dust and organic matters. The fine aggregate, 5 mm size river sand, shall be also
free from dirt, clay, mud etc. Fresh Portland cement having initial setting time not
less than 30 minutes and of grade 33 shall be used. Portable water, free from
harmful substances shall be used for mixing and curing. The concrete mixed as
mentioned above shall be spread over the well prepared base, to a uniform
thickness of 25 mm, compacted and leveled using wooden floats. The top surface
shall be roughened with
2 mm deep lines at 100 mm intervals, with scratching sticks, to provide bond to the
top layer. The bottom layer shall be cured for at least 3 days before the tope laying
being laid over it.

b) Top Layer

The top layer is of 1:3 cement mortars, 12 mm thick finished with a floating coat of
neat cement. Find sand, sifted through 5 mm size mesh and free from clay and dust
shall be used. To have a red coloured finish, 3 kg of red oxide of approved quality
may be mixed with 50 kg of cement and is used in preparing the mortar. The
cement with red oxide is mixed with sand in the ratio 1:3 by volume in dry state to
obtain a uniform colour. Water is then added slowly; a paste of uniform
consistency is prepared and laid over the base layer to a uniform thickness of 12
mm. It is leveled and smoothened by wooden floats. In the process of finishing
cement slurry mixed with enough red oxide is sprayed on top of cement mortar
layer. The surface should be covered with a thin layer of water constantly from
next day for at least seven days for better curing.

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c) Measurement:

The measurement shall be taken in sq. m. The rate shall be for the complete work
inclusive of all tools and plants.
10.Detailed specification for mosaic tile flooring

a) Base Course

The basic course shall be of 25 mm thick cement concrete of a 1:2:4 mix using 12
mm size granite stone chips as coarse aggregate and sand as fine aggregate. The
top of flooring concrete or R.C.C. slab shall be cleaned well and applied with
cement slurry of 2 kg/m2 before placing the chips concrete. The base course is to
be compacted, leveled and smoothed by wooden floats.

b) Mosaic Tiles

Precast tiles of 200 mm x 200 mm x 20 mm size are to be used. They shall be

manufactured under hydraulic pressure of not less than 14 N/mm2 and given the
first grinding with machine before laying. The proportion of cement to sand in the
backing of the tiles shall not be leaner than 1:3 by weight. Similarly the proportion
of cement to marble power to marble chips in the wearing layer of the tiles shall be
not leaner than 3:1:7. The marble chips shall be hard, dense sound and
homogeneous in texture.

c) Laying of Tiles

The bedding for the tiles shall be with cement mortar 1:3. The average thickness of
the bedding mortar shall be 20 mm and the thickness at any place shall be not less
than 10 mm. Cement bedding shall be spread, tamped and corrected to proper
levels and allowed to harden before the tiles are set. Neat cement slurry of honey
like consistency shall be spread over the bedding at the rate of 4.4 kg/m2. Tiles
shall be washed clean and shall be fixed in this grout one after another, each tile
being gently tapped with a wooden mallet till is properly bedded and in level with
the adjoining tiles. The joints shall be kept as thin as possible not exceeding 1.5
mm and in straight lines.

d) Curing, Polishing and Finishing

The day after the tiles are laid, all joints shall be cleared of the grey cement grout
with a wire brush to a depth of 5 mm and all dust and loose mortar removed and

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cleaned. Joints shall then be grounded with whit e cement mixed with pigment to
match the shade of tiles. The same cement slurry shall be applied to the entire
surface of the tiles in a thin coat. The floor shall then be kept wet for a minimum
period of 7 days. The surface shall thereafter be grounded evenly with the
polishing machine fitted with coarse grade grit blocks, adding required water
during the process. After grinding, the surface shall be washed clean and covered
with thin coat of cement slurry with pigment. The surface shall be again cured and
polished with machine fitted with medium grade grit blocks. Similarly a third
grinding shall be done by fine grade grit blocks. After the final polish, the surface
shall be cleaned using diluted oxalic acid and wiped with a soft cloth. The
measurement shall be taken in sq. m. The rate shall be for the complete work
inclusive of all tools and plants.

11.Detailed specification for distempering

The distemper shall be of the approved colour and quality. Water shall be added as
prescribed by the manufacture, stirred well often during use, to maintain uniform
colour and consistency. The plastered surface of the wall is scraped and cleaned
with wire brushes and rubbed smooth with sand papers. Distemper shall not be
applied in wet weather. It shall be applied with good brushes, first horizontally and
then immediately crossed off vertically which together shall constitute one coat.
The second coat will be also applied in the same manner after the first coat has
dried. The finished surface shall be even and uniform and shall show no brush
marks. The measurement shall be taken in sq. m. The rate shall be for the complete
work inclusive of all tools and plants.

[Similar Items: Detail specifications for white wash and colour wash]

12.Detailed specification for Pointing

The joints of the brickwork shall be raked out to a depth of 20mm (3/4”) and the
surface of the wall washed and cleaned and kept wet for two days before pointing.
The materials of mortar cement and sand, or lime and surkhi or sand, or kankar
lime as specified, shall be of standard specification. The materials of mortar shall
be first dry mixed by measuring with boxes to have the required proportion as
specified (1:2 or 1:3 for cement sand mortar, 1:1 for lime surkhi mortar or kankar
lime mortar), and then mixed by adding water slowly and gradually and thoroughly
mixed. Mortar shall then be applied in the joints slightly in excess and pressed by a
proper tool of the required shape. Extra mortar if any is removed and surface
finished. Mortar shall not spread over the face of bricks, and the edges of the bricks

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shall be clearly defined to give a neat appearance. After pointing the surface shall
be kept wet for seven days.

Flush pointing

The mortar shall be pressed into the ranked, cleaned and wet joints and shall be
finished off flush and level with edges of brick to give a smooth appearance. The
edges shall be neatly trimmed with a trowel and straight edge.

Ruled pointing

The mortar shall be passed into the ranked, cleaned and wet joints and a groove of
shape and size of 5 to 6mm deep shall be formed running a forming tool of steel
along the center line of the joints. The vertical joints also shall be finished in a
similar way at right angles to the horizontal line. The finished work shall give a
neat and clean appearance with straight edges.

Weather or truck pointing

The mortar shall be applied on the cleaned and wet joints and horizontal joints
shall be pressed and finished with a pointing tool so that the joints are sloping from
top to bottom. The vertical joint shall be finished as ruled pointing.

Raised or trucked pointing

The mortar shall be applied in raked, cleaned and wet joints in excess to from
raised bands. The mortar shall be pressed and run with proper tool to from bands of
6mm(1/4”) raised and 10mm (3/8”) width or as directed.

13.Detailed specification for wood work for door and window frames

a) Materials

Timber shall be of teak, sal, deodar etc., as mentioned, well-seasoned, dry, free
from sap, knots, crack or any other defects or diseases. It shall be sawn in the
direction of the grains. Sawing shall be truly straight and square. The scantling
shall be planned smooth and accurate to the full dimensions, rebates, rounding and
mouldings as shown in the drawing made, before assembling. Patching or plugging
of any kind shall not be permitted except as provided.

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b) Joints

These shall be mortise and tenon type, simple, neat and strong. Mortise and tenon
joints shall fit in fully and accurately without wedging or filling. The joints shall be
glued framed, put together and pinned with hardwood or bamboo pins not less than
10 mm dia. after frames are put together pressed in position by means of a press.

c) Surface Treatment

Wood work shall not be tainted, oiled or otherwise treated before it has been
approved by the Engineer-in-Charge. All portions of timber abutting against
masonry or concrete or embedded in ground shall be painted with approved wood
primer or with boiling coal tar.

d) Gluing of Joints

The contract surface of tenon and mortise joints shall be treated before putting
together with bulk type synthetic resin adhesive of a make approved by the
Engineerin- Charge.

e) Fixing in position

The frame shall be placed in position truly vertical before the masonry reaches half
the highest of the opening with iron clamps or as directed by the Engineer-in-
Charge. In case of door frames without sills, the vertical members shall be
embedded in the flooring to a depth of 40 mm or as directed by the Engineer-in-
Charge. The door frames without sills while being placed in position shall be
suitably strutted and wedged in order to prevent warping during construction. The
frames shall also be protected from damage, during construction.

14.Detailed specification for wood work for door and window shutters

a) Materials

Specified timber shall be used, and it shall be well seasoned, dry, free from sap,
knots crack or any other defects or disease. Patching or plugging of any kind shall
not be permitted except as provided.

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b) Joinery work:

All pieces shall be accurately cut and planned smooth to the full dimension. All
members of the shutters shall be straight without any warp or bow and shall have
smooth, well planned faces at right angles to each other. In case of panelled
shutters the corners and edges of panels shall be finished as shown in drawings,
and these shall be feather tongued into styles and rails. The anels shall be framed
into groovers to the full depth of the groove leaving an air space of 1.5 mm and the
faces shall be closely fitted to the sides of the groove. In case of glazed shutter,
sash bars shall have mitred joints with styles. Styles and rails shall be properly and
accurately mortised and tenoned. Rails which are more than 180 mm in width shall
have two tenons. Styles and end rails of shutters shall be made out of one piece
only. The tenons shall pass through styles for at least 1 th of the width of the style.
When assembling a leaf, styles shall be left projecting as a horn. The styles and;
rails shall have 12 mm groove in panelled portion for the panel to fit in.

The depth of rebate in frame for housing the shutters shall in all cases be 1.25 cm
and the rebate in shutters for closing in double shutter doors or windows shall be
not less than 2 cm. The rebate shall be splayed. The joints shall be presses and
secured by bamboo pins of about 6 mm diameter. The horns of styles shall be sawn
off.

c) For battened shutters:

Planks for batten shall be 20 mm thick unless otherwise specified and of uniform
width of 125 to 175 mm. These shall be planned and made smooth, and provided
with minimum 12 mm rebated joints. The joint lines shall be chamfered. Unless
otherwise specified the battens for ledges and Braces shall be 30 mm thick and
fixed with the battens on the inside face of shutter with minimum two number 50
mm long wood screws per batten. The ledges shall be 225 mm wide and braces
175 mm wide, unless otherwise specified. The braces shall incline downwards
towards the side on which the door is being hung.

d) Gluing of joints for paneled or Glazed shutters :

The contact surfaces of tenon and mortise joints shall be treated before putting
together with bulk type synthetic resin adhesive of a make approved by the
Engineering- Charge.

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Shutters shall not be painted, oiled or otherwise treated, before these are fixed in
position and passed by the Engineer-in-Charge.

For glazed shutters, mounting and glazing bars shall be tub-tenoned to the
maximum depth which the size of the member would permit or to a depth of 25
mm, whichever is less.

e) Fittings:

Details of fittings to be provided shall be as per the schedule of fittings supplied by

the Engineer-in-Charge in each case. The cost of providing and fixing shutters
shall include the cost of hinges and necessary screws for fixing the same. All other
fittings shall be enumerated and paid for separately. The fittings shall conform to
their respective IS specifications. Where fittings are stipulated to be supplied by
the department free of cost, screws for fixing the fittings shall be provided by the
contractor and nothing extra will be paid for the same.

15.Detailed specification for painting new wood work

a) Paint

Ready mixed paint of approved quality and colour shall be used

b) Preparation of surface

The surface to be painted shall be rubbed down smooth with medium and fine sand
papers and cleaned off any dust. Knots, cracks holes etc., shall be filled with putty
made of 2 parts of whiting. 1 part of white lead mixed together in linseed oil and
leveled to the surface. A primer coat is applied to the surface with ready mixed
wood primer of best quality.

c) Application

Painting shall be carried out at the driest season of the year. Paint shall be applied
with brushes, smoothly spread without any visible brush mark. The second coat
shall be applied when the first coat is perfectly dried. The paint shall be stirred
often with stick so that it does not settle down.

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CHAPTER 4

RATE ANALYSIS
Rate Analysis

The process of determining rate per unit of any work in Civil Engineering
project like earthwork, concrete work, brickwork, plastering, painting etc. is known
as Analysis of Rates or simply Rate Analysis. The rates of materials and labour
vary from place to place and hence the rates of different items of works also vary
from place to place. The rates of these works further help in determining cost of
particular work and in turn cost of the project.

Necessity of Rate Analysis

 To determine the actual cost per unit of the items.

 To work out the economical use of materials and processes in completing
the particulars item.
 To calculate the cost of extra items which are not provided in the contract
bond, but are to be executed as per the directions of the department.
 To revise the schedule of rates due to increase in the cost of material and
labour or due to change in technique.

Factors Deciding Rate of Items

The various factors that are involved in determining rate of any item, process or
work are mentioned below:

 Specifications of works and material about their quality, proportion and

constructional operation method.
 Quantity of materials and their costs.
 Cost of labour and their wages.
 Location of site of work and the distances from source and conveyance
charges.
 Overhead and establishment charges
 Profit and miscellaneous expenses of the contractor

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Procedure of Rate Analysis

The analysis of rates is worked out for the unit payment of the particular
item of work under two heads: Materials and Labour.

 The cost of items of work = Material cost + Labour cost

 Other costs included to the above cost of items of work are:
 Tools and Plants ( T & P ) = 2.5 to 3 % of the labour cost
 Transportation cost (if conveyance more than 8 km is considered.)
 Water charges = 1.5 to 2 % 0f total cost
 Contractor‟s profit = 10 %

Material cost

 The rate of various materials as per specifications for the items under
consideration can be chalked out from market survey. The costs of
materials are taken as delivered at site of work. This is inclusive of:
 The first cost (cost at origin),
 Cost of transport, railway freight (if any), etc.
 Local taxes and other charges.

a) Lead statement

 The distance between the source of availability of material and

construction site is known as "Lead” and is expressed in Km. The cost of
conveyance of material depends on lead.
 This statement is required when a material is transported from a distant
place, more than 8kms (5 miles). The lead statement will give the total
cost of materials per unit item including first cost, conveyance loading-
unloading, stacking charges etc.

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A typical lead statement is provided as follows:

Sl. Materials Unit Cost Lead Conveyance Total Total
No. at (in charges Conveyance Cost
Source Km) (Per charges (In
(per Km/ Per (/Per Unit) Rs.
unit) Unit) /Per
unit)
1 Rough Cum 250.00 25 5.00 125.00 375.00
Stone
2 Sand Cum 12.00 20 4.00 80.00 92.00
3 Cement Bag 370.00 Local - - -

Labour cost

To obtain labour cost the number and wages of different categories of labourers,
skilled (Skilled 1st Class), semi-skilled (Skilled 2nd Class) and unskilled, required
for each unit of work should be known and this number is multiplied by the
respective wage per day. The labour charges can be obtained from the standard
schedule of rates. 30% of the skilled labour provided in the data may be taken as
1st class, remaining 70% as 2nd class. The length of time required to do a certain
piece of the work may vary according to the skill and mental development of the
workmen and working conditions to the particular job.

a) Task or out-turn work

This is the quantity of work which can be done by an artisan or skilled labour (with
the help of semiskilled and unskilled labours) of the trade working for 8 hours a
day. The outturn of work per artisan varies according to the nature, size, height,
situation, location etc. Out-turn is more in larger cities, as the more specialized and
experienced labours are available, than the small cities and country sides.

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The recommendation of All India Standard Schedule of Rates and various other
govt. reports are used to work out approximate quantity of labour required to
prepare the analysis of rates. IS: 272 (part 1)-1974, provides recommendations for
labour output constants for building work which can be used to fix up the labour
cost.

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A typical labour output constant issued by National Building Organization is

provided bellow:

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Miscellaneous cost

a) Cost of equipment, Tools and Plants (T& P)

The cost of equipment and ordinary tools and plats and miscellaneous petty
items (sundries) are added to the specific item rate as lump-sum. A provision of 2.5
to 3 % of the labour cost is made for such items. In certain tools and plants if it is
difficult to allocate their use for a particular item of rate; then the cost of such tools
or plants may be allocated to the over-head expenditure.

For big works and projects where it becomes necessary to use special types
of equipment like batching plants or WMM plant or dumpers or cranes for
transportation of concrete mix, provisions of an amount 1% to 1.5% of the
estimated cost is provided in the estimate under the head “special tools and plants”.

b) Water charges

For drinking purpose of the workers and for the work, arrangement of water is
made sinking tube well; bore well or from temporary connection from
municipality. For this purpose a provision of 1.5 to 2 % of total cost (Material +
Labour+ Sundries) is made in the estimate.

c) Over head charges

Overhead charges include general office expanses, rents, taxes, supervision and
other cost which are indirect expanses on the job. Expanses for small tools such as
planks, ladders, ropes and other hand tools are also included in the over-head
charges. A provision of 2.5% to 5% is made in the rate analysis as overhead
charge. Overhead charges can be divided under two categories: General Overhead
and job overhead.

General overhead:

These are the expanses made throughout the year irrespective to running works in
hand.

These include:

 Establishment charge including rent of office space and taxes

 Salaries to office staff
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 Purchase of stationary, Printing, postage etc.

 Electricity, telephone and water bills
 Travelling expanses

Job overhead:

These are the expanses indirectly incurred for the job or the project. These include:
 Salaries of personnel engaged for the work (Site engineers, Surveyors or
site office staff)
 Rent of temporary site office space, electricity, telephone and water bills
 Handling of materials
 Repairs, carriage and depreciation of T & P.
 Labour welfare, safety measures and insurance etc.
 Interest on investment
 Thept and other losses.

d) Contractor’s profit

Generally a provision of 10% is made in the rate analysis as contractor‟s profit

for ordinary contracts. For small jobs 15% profit and for large jobs 8% profit may
be considered as reasonable. Contractors profit is not included in rate analysis if
material is supplied by the department.

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CHAPTER 5

CONTRACT
Contract

A contract is the agreement entered into voluntarily by two or more parties who
promise to exchange money, goods, or services according to a specified schedule
and are legally enforceable.

Contractor: A person or a firm who undertakes any type of contract.

Essentials of a Valid Contract

 There must be mutual agreement between the two parties,

 There must be an offer made by one party called the promisor.
 The other party called the “promise” must accept the offer.
 There must be considerations, which usually, payments in the form of
money for doing of an act or abstinence from doing a particular act by
promisor for promise.
 The offer and the acceptance should relate to something that is not
prohibited by law.
 The offer and acceptance constitute an agreement that when enforceable
by law becomes a contract
 The contracting parties entering into agreement should be competent, i.e.
not disqualified by either infancy or insanity to make such agreement.

Legality of Contracts

Some of the legal aspects of contracts are given below.

 For a contract to complete a definite piece of work, recovery is possible

only after completion.
 The impracticality of a work cannot be excuse for nonperformance.
 A contractor who refuses to carry out the work before completion can be
subjected for breach of contract.
 When an employer makes it impossible for contractor to complete the
work in accordance with the contract, the contractor can sue for the rate
of the completed work.

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 The penalties described in the penalty clause will not be applicable if the
execution of the contract is delayed because of the fault of the employer.
 In case of the contractor‟s inability to complete the work, after part
execution the employer can consider the contract as rescinded and take an
action for the damages. The contractor under such circumstances has no
lien for the money spent on the work by the contractor.
 When a contractor has finished part of a work and refused to complete
the entire work and the employer without the consent of the contractor
takes the work in his own hands for completion. In this case the law
implies that the employer has to pay for the work, which has done by the
contractor.
 When a contractor without lawful excuse, refuses to carry on the work
after part performance, the employer may have to pay for the materials
delivered on the site by the contractor as distinguished from the
materials, which have become fixed in to the work.
 When a contract is formed and it becomes impossible to perform the
work immediately or at a later date, it may be possible to adjust the rights
and liabilities of the parties.

Types of Contract:

Contracts offered by PWD departments are mostly of following types:

1. Lump sum contract

2. Schedule contracts or Item Rate contract
3. Percentage Rate Contract
4. Labour contract
5. Materials supply contract

Lump sum contract (/Drawings and Specifications Contract)

In this type of contract, the contractor undertakes the construction work or the
execution of the specified work and completes it in all respects for a fixed amount
of money. Detailed specifications of all items of works, detailed drawings, plans
etc., are supplied by the department to the contractor. The contractor on the basis
of given details, works out the total cost of the construction and quotes it in lump
sum. The design, shape and materials are as per the choice of contractor, but they
have to be got approved before the start of the work.

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Advantages:

 The final price is known, by the owner, before the work commences.
 The contractor has more incentive to reduce his cost to increase the
profit.
 The contractor hopes to complete the job as quickly as possible, to
minimize overhead, to maximize profit and to move to the next Job.
 When level of risks is low and quantifiable, and
 When the client does not wish to be involved in the management of his
project.
 That can be accurately and completely described at the time of bidding
such as residential and building construction.
 When limited variation is needed.
 The materials used on the temporary works during construction are
relieved earlier resulting in their effective use in other works also.

Disadvantages:

 The owner tries to get the maximum work out of money he spends,
whereas the contractor tries to get the maximum profit, this causes
conflicting interests.
 It becomes very difficult to adjust the additions and alterations in the plan
and the specifications at a later stage.
 If the plans and specifications are not clear, the contractors will quote
higher rates, resulting in high cost of the work.
 The contractor carries much of the risks. The tendered price may include
high risk contingency.
 Competent contractors may decide not to bid to avoid a high-risk lump
sum contract.

Item Rate Contract (unit price)

In this type of contract, the contractor undertakes the work on the item rate
basis. The payment is done on the basis of quantities of items done and payments
are made on the basis of their respective rates. The quantities of various items are
worked out by detailed measurements. This type of contract is also known as unit
price contract. The approximate quantities of all possible items of work are worked
out and are shown in the tender form. Every contractor quotes his rates against each
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item are arrives at the final total amount of the work. This is the most common
type of contract system, which is widely adopted.

Advantages:

 The additions and alterations in the plan and specifications can be easily
made at any stage.
 As the contractor gets the payment against the actual quantities of items
done by him, the method is economical. No possibility for excess payment.
 As the rates are item-wise the contractor is not worried regarding the
uncertainties in the plan and specifications.
 The work can be started after accepting the tenders without waiting for all
the detailed drawings and specifications.

Disadvantages:

 The total cost of the work can only be computed after completion of entire
project. In such case the owner may face financial difficulties if final cost
increases abnormally.
 Before preparing the bills for payment of money to the contractor, all
measurements of various items of work have to be carefully taken and
suitably entered in the measurement book.
 Great care shall be taken by the department officers to strictly enforce the
specifications during execution of work to avoid the using of substandard
materials by the contractor.
 Contractor raises prices on certain items if he apprehends the quantity of
those items is likely to increase during execution and make corresponding
reductions of prices on other items, whose quantity likely to reduce during
execution. This increases total cost of the project.

Percentage Rate Contract (cost-plus percentage)

In this type of contract the contractor agrees to take the work of construction
for fixed percentage over the actual cost of construction. This type of contract is
given when no contractor is agreeing to do work on other types due to uncertainties
and fluctuations in the market rates of materials and labour. The department keeps
the actual up to date records of the expenditure incurred on the work and pays the
fixed percentage as agreed over it to the contractor. The contractor arranges for the

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labour, materials required for completion of the work, and maintains proper
account of the construction costs.

The cost plus or percentage contracts can be of the following types:

Fixed Percentage of Cost

Contractor is paid the actual cost of the work and agreed percentage in
addition to allow for profit.

b. Cost plus a fixed sum

The contractor gets actual cost of construction plus an amount of fee (in
percentage of construction cost) which is inversely variable according to increase
or decrease of estimated cost agreed first by both the parties.

c. Cost plus a fixed sum with profit sharing

In this type of contract the contractor is reimbursed at cost with an agreed

upon fee up to the GMP (Guaranteed Maximum Price) which is essentially a cap.
Beyond this point the contractor is responsible for covering any additional cost
within the original project scope. Additionally an incentive clause is there, which
specifies that the contractor will receive additional profits as reward to the
contractors who minimizes the cost.

d. Cost plus variable percentage

Contractor is paid the actual cost of the work and a variable percentage in
addition to allow for profit. Variable percentage allows the contractor to get better
profit for completing the work at minimum cost.

Labour contract

In this type of contract, all materials for the construction are arranged and
supplied at the site of work by the department or owner. The labour contractor
engages the labour and gets the work one according to specifications. The contract
is on item rate basis for labour portion only. The contractor is paid for the
quantities of work done on measurement of the different items of work at the
stipulated rate as in agreement. Contractor uses his own tools for working. Plants

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and machineries are arranged by the department or owner. This system of contract
is not generally adopted in government works but preferable for private sectors

Materials supply contract

In this form of contract, the contractors have to offer their rates for supply of
the required quantity of materials, inclusive of all local taxes, carriage and delivery
charges of materials to the specified site within the time fixed in the tenders.

Factors Influencing Selection of Contract System

 Quantity and quality of work

 The appropriateness for providing an adequate incentive for efficient
performance by the contractor
 The ability to introduce changes
 The allocation of risks
 The start and completion date of the project

Contract Documents

Following documents are included in the contract documents.

1. Title page: Name of work, contract bond number, etc.

2. Index page: Content of the agreement with page references.

3. Tender notice: Giving brief description of work, etc. Usually 2% of the

estimated cost is deposited along with tender.

4. Tender form: Contractor‟s rates and time of completion, penalty clause, etc.

5. Bill of quantities: Giving quantities and rates of each item of work and the
total cost of the whole work.

6. Schedule of issue of materials: Giving list of materials to be issued to the

contractor with rates and place of issue.

7. General specifications: Specifying the class and type of works.

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8. Detailed specifications: Each item of work and of each material to be used in

the work.

9. Drawings: Complete set of drawings like plans, elevations, etc. and site
plan, of fully dimensioned.

Conditions of Contract

Both parties of a construction team should be fully acquainted with their

rights and duties. So while preparing the contract agreement, certain clauses related
to the work are laid down and these will be binding on both parties. The main
purpose of the conditions of contract is to avoid dispute and keep the parties as far
as possible out of the court of law. Therefor it is imperative that all the clauses of
conditions of contract must be precise and definite and there should not be any
room for ambiguity or misconstruction therein.

The conditions of contract mainly depend upon the nature of the work. For most of
the civil engineering construction projects following clauses are mostly provided in
the contract documents:

1. Rates inclusive of materials, labour, etc.

2. Amount of security money

3. Time for completion of work

4. Progress to be maintained

5. Penalty for bad work

6. Mode of payment

7. Extension of time limit for delay

8. Termination of contract

9. Compensation to labour, minimum wages, etc

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CHAPTER 6
TENDER

A Tender is the contractor‟s bid in writing offering to execute the specified

work of construction, supply of materials etc., at the rates and amounts indicated,
within the time limit and under conditions specified and agreed to.

Tenderer: A person or a firm who tenders bid in response to invitation for tenders.

Tendering: The process of inviting bids and accepting them is known as tendering.

Tender form: It is a printed standard form of contract giving standard conditions

of contract, general rules and directions for guidance of contractors. There is also a
memorandum for giving: general description of the work, estimated cost, security
deposit, time allowed for the work from the start date of written order of
commence, columns for signature of the contractor before submission of tender,
signature of witness to contractors signature and signature of the officer by whom
tender is accepted. This is a part of the tender document.

Necessity of Tender

 To carry out the work in a fair and transparent way.

 To ensure the work is awarded to a competent contractor at a fair price. The
lowest bid is generally accepted, unless there are good reasons for not doing
so.
 Once client/government accepts a tender, it is binding on both parties. This
means that the person or company that won the tender has to provide the
goods or services in the manner agreed to and at the price offered, and
client/government must pay the agreed price at the agreed time.

Earnest Money Deposit (EMD)

It is the amount, which the contractor has to deposit with the department at the
time of submitting a tender. This accompanies the tender form and this is usually
2% of the total estimated cost of the project. This serves as a check to prevent the
contractor from refusing to accept the work when the tender has been accepted.
The other objects of collecting earnest money are:

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 To reduce unnecessary competition: If no earnest money is collected,

heavy competition may start among the tenderers. The contractors who do
not have sound financial status may also offer their tenders, which increase
the unnecessary competition among the tenderers.

 To act as a tool for punishment: In case the contractors quote lower

without intention of doing work, the earnest money shall be forfeited by the
department as a punishment to such contractors.

 To act as compensation: When the lowest contractor refuses to take up the

work, the work can be allotted to the second lowest contractor. The earnest
money forfeited from the first lowest contractor compensates to loss of the
department.

Security Money Deposit (SMD)

The contractor has to deposit about 10% of the tendered amount with the
department as soon as his tender is accepted. This is inclusive of the earnest money
already deposited by the contractor. This money is kept as a check so that the
contractor fulfils all the terms and conditions of the contract and carries out the
work satisfactorily in accordance with the specification and maintains satisfactory
progress for completion of the work. In case he fails to fulfill the terms of the
contract, the whole of the security money or part of it is forfeited by the
department. When the contractor completes the work as per drawings,
specifications and directions of the department within the specified time, the
security money is refunded to the contractor. Normally the security deposit is
refunded after the maintenance period, which may be 6 to 12 months after the
completion of work, and it‟s handing over to the department.

Retention Money

Retention money is described as the sum of money held by the employer as

a safeguard for any defective or non-conforming work by the contractor. Retention
money safeguards the employer by defects which can occur during the defects
liability period if the contractor doesn‟t response according to the contract terms.
Retention Money provides additional safeguard to the employer. Retention money
gives the idea of importance of completing the signed project as per it‟s terms and
designs. With such retention held, the contractor takes the responsibility to

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complete the construction project as per the design and quality stated in the initial
contract.

Difference between SMD and Retention Money

Security money deposit Retention money

 This is compulsory to be  This is not compulsory and very

deposited before entering into a rarely arises out of the contract.
contract.
 The amount deposited on the  It has no relation with the
basis of tendered amount. tendered amount but depends on
the amount of claims against a
contractor.
 This is refundable after the  This has no relation with the
maintenance period is over. maintenance period and can be
only released after finalization of
or adjustment of the claim.
 The amount cannot be collected  The amount can be withheld from
from any other contract even any other contract under the same
under the same engineer-in- engineer in charge.
charge.
 This is meant for nonfulfillment  This is meant for fulfillment of
of conditions of contract against a any claim against this tender or
tender. other tender under the engineer in
charge.
 This is a compulsory cause of the  This is not a compulsory clause
conditions of contract. and is provided in some tendered
as an additional clause.

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Tender Documents

The following tender documents are made available along with the tender forms to
enable contractors to bid for the job.

1. Notice inviting tenders (NIT) in a standard approved form of a department.

2. General conditions of the contract including time limits.

3. Special conditions of the contract that may have to be highlighted.

4. Amount of Security deposits to be paid /deducted.

5. Bill of quantities

6. Schedule of tools and plant and other facilities to be made available by the
owner, indicating the conditions, hire changes and the place of delivery.

7. Schedule of stores to be issued by the owner indicating the rates and their
place and issue.

8. Detailed specifications or reference to standard specifications for each item

of work.

9. Set of approved drawings, including Layout plan and working drawings.

Elements of Tender Operation

Tender notice

Whenever works are to be let out on contract, tenders are to be invited from
the registered contractors or both registered and unregistered contractors depending
on the magnitude and nature of the work by issuing notice in newspapers. The
notice that includes various particulars of work is named as Tender Notice. It is
essential that tenders be given adequate publicity so that a sufficient number of
contractors may bid and the most attractive offer may be obtained. At the same
time it is also necessary that bids be obtained from contractors who have the
capability and capacity to undertake the work.

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Tenders are publicized by the issue of a notice inviting tenders, which

indicates (1) name and description of the work (2) estimated cost (3) completion
time (4) earnest money payable indicating the manner in which payment is to be
made (5) security deposit (6) time and place where tender documents may be
inspected or obtained (7) last date and place of obtaining tender papers and
submission thereof (8) time and place of opening the tenders (9) authority
competent to accept tenders. The tender notice may be advertised in newspapers
and issued to registered contractors by post. Copies of the tender notice are also put
up on the notice boards of various offices of the organization. For very large works
or those involving special techniques, which may not be within the capacity of the
construction industry in the country, global tenders will be issued all over the
world inviting bids for the work. Contractors are given a reasonable period of time,
depending upon the size of the work to prepare and submit their tenders. Tender
documents are usually priced and are issued on payment of the prescribed amount.
The sale of tender papers starts and closes at the time notified in the tender notice.

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Typical Notice Inviting Tenders

Tender No.:____________

i) Sealed tenders are invited for the following work:

Name of the work : _____________
Estimated cost : _____________
Price of the tender form : _____________
Ernest money deposit amount : _____________
Time for completion : _____________

ii) Tender form and documents can be obtained from Office of the Executive Engineer,
PH Division, Bangalore from xx/xx/2022 to xx/xx/2022 except Sunday and public
holidays during 10 AM to 6PM at a price of Rupees. 1000/- per set.

iii) Each tender must accompany with earnest money in the form of treasury challan,
demand draft in favor of EE, PH division, Bangalore.

iv) Bids must be delivered in the tender box to be kept in the office of the Office of the
EE, PH division, Bangalore by 31/12/2015 till 06 PM.

v) The authority reserves the right to reject any tender /all tenders without assigning any
reason.

vi) Other details can be seen in the RFP document.

Date: xx/xx/2022. S/d-

Executive Engineer,

PH division, Bangalore

Time limits for tender notice

Following time limits between date of call for tenders and the date of opening of
the tenders are followed by central public works department.
__________________________________________________________________
Cost of the work Time limit
__________________________________________________________________
Up to 1 lakh 10 days
Between 1 lakh to 10 lakh 2 weeks
More than 10 lakh 3 weeks

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Necessity of including tender notice in contract document

Tender notice includes several information and conditions such as time of

completion, earnest money, refund of earnest money, period of validity of rates
quoted by the tender, site inspection, etc. which are not included in the conditions
of contract/ Without performing as agreement for the above such particulars the
contract is invalid. So the tender notice paper is a very important document on
which tenders and subsequent agreements with the contractor are based. Hence
tender notice must be a part of the contract document.

Submission of tender and deposit of earnest money

According to the directions contained in the notice inviting tenders, the

contractor are required to submit their tender on or before the date and hour fixed
for the same duly filled in, signed and witnessed. Before that he has to deposit the
earnest money deposit usually 2 to 2.5% of the estimated cost put to tender.

Opening of the tenders

The sealed tenders are received are to be opened in the presence of the
contractors or their representatives tendering for the wok at the time and place
already notified. The divisional accountants should also be requested to be present
on such occasion wherever possible. The officer opening the tenders has to read
out the rates offered in case of item rate and percentage ate tenders and the amount
in case of the lump sum tenders for the information of all those present.

To avoid tampering of rates etc. the original tenders, before a comparative

statement is made out and put up to him by the office, he has to attest the
corrections, overwriting etc. in red ink, number them and put his initials at the foot
of each page of the documents attached to the tenders. Tenders containing
unauthorized corrections and mutilations are liable to reject. The tenders which are
not received in proper form duly filled in or signed or are not supported by
requisite earnest money are to be summarily rejected and a record of such cases to
be kept in the register of the tenders received.

Comparative statement of tenders

Comparative statement of percentage rate and lump sum tenders are made
out by the officer opening the tender. It contains the information regarding the
name of the contractor, date of receipt of tenders, percentage above or below the

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rates entered in the tender document, amount in case of lump sum tenders. The
recommendations or orders regarding acceptance or rejection of the tender are
recorded on it.

Acceptance of tender

After investigation the comparative statement the lowest tender shall be

accepted as a rule by the competent authority. If for any reason, economical or
otherwise, the lowest tender is not accepted, reasons should be recorded
confidentially and reference shall be made to the tender committee or next higher
authority for order as to which of the contractors the work should be given. No
tender can be accepted or the circumstances under which lowest tender may be
rejected.

Followings are the conditions under which the lowest tender may be rejected:

1. When the tender is informal (i.e. not submitted in the form as prescribed by
the department or within due date).

2. If it is not technically sanctioned or exceeds the sanctioned amount for the

work.

3. If it involves liabilities exceeding the amount of the expenditure sanctioned.

4. If there is any uncertainty or any condition of an unusual character.

5. If it exceeds the amount up to which he is empowered to accept tenders.

6. If any provision infringes any standard rule or order of higher authority.

7. If adequate competition and fair rates are not received.

8. In case a contractor has quoted abnormally low rates, analysis of rates may
be asked from the contractor and thorough investigation with necessary
remarks and recommendations in respect of the tender should be forwarded
to the next higher authority for his approval. The lowest tender in such a
case may or may not be accepted.

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If the rates quoted are on the high side, all tenders may be rejected and re-
invited to obtain a reasonable bid. In order to ensure that there is no legal
complication in not accepting any tender, a clause is added in the tender notice
reserving the right to reject any or all tenders without assigning any reason. The
tenderer whose bid is accepted is intimated in writing and asked to sign the
contract documents within a specified period of time. If he fails to do so, the offer
is cancelled; the security deposit forfeited and the work allotted to the contractor
whose tender is the next highest.

After signing the contract agreement, the site of the work is formally handed
over to the contractor, and then he can start the work. The time for completion is
reckoned from the day the site is handed over to the contractor.

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CHAPTER 7
CARRING OUT OF WORK

Terminology

Administrative Approval: This term denotes the formal acceptance by the

Administrative department concerned, of the proposal for incurring expenditure in
the PWD.

Technical sanction: It is an order by a competent authority sanctioning a properly

detailed estimate of the cost of a work to be carried out by the PWD.

Detailed Estimate: An estimate prepared on the basis of the detailed quantities of

all items worked out from the designs and drawings are known as a detailed
estimate.

Major Estimate: An estimate whose sanctioned amount exceeds a certain fixed

limit is known as major estimate. In PWD this limit is fixed at Rs.1 lakh.

Minor estimate: An estimate whose sanctioned amount is lower than a fixed limit
is known as minor estimate. In PWD this limit is fixed at Rs.1 lakh.

Petty Work: A work, which does not cost more than Rs.7500 is known as a petty
work.

Debit and Credit: In simple terms, „debit‟ means expenditure and „credit‟ means
a receipt.

Cash: The term „cash‟ as defined in the CPWD code includes legal coins, notes,
cheques, deposit-at-call receipts of scheduled banks, drafts and payments on
demand.

Methods for Carrying out the Work

Public works are carried out either departmentally or through contractors.

Complicatedand important works, where a high degree of reliability in the quality
of work is essential, are generally executed departmentally by engaging contractual
labours. This method requires intensive planning and supervision, so that the
output of labours and machines is commensurate with the expenditure incurred.

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For most works, however, the contract method is employed. Through this method
the department, taking advantage of competitive bidding by rival contractors, is
able to get the work executed at the lowest possible rates. Moreover, the risks
involved in construction and the day-to-day problems are the headaches of the
contractor and the departmental staff can devote sufficient time to ensure that the
contractor's work is in accordance with the designs, specifications, time schedule
and other conditions laid down in the agreement.

These are the different methods for carrying out the works:

1. Contract methods

2. Employment of daily labor on muster roll

3. Piece work agreement

4. Work order

In certain cases due to its situation or nature or due to being not susceptible to
measurements the works cannot be carried out by contract. The work in such cases
is got done by departmental labour and supply of materials, usually the day to day
maintenance work is attended to by the work charged establishment. The work is
done by them are not measured. They are monthly paid staff employed more or
less on the same footing as the regular establishment except that their pay and
allowance are charged directly to the work.

Contract methods

In this system the whole work is done by a contractor who arranges all
materials required and employ the workers required for completion of projects in
time. The contract system may be lump sum contract, item rate contract, cost plus
percentage contract, labour contract or materials contract. Details about contract
system are provided in previous lectures.

Employment of daily labor on muster roll

Work may be executed departmentally through employment of daily labours

such as mason, coolies, bhisties, carpenters, etc. The materials required for the
construction such as bricks, cement, sand, lime, surki, timber steel etc., and tools

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and plants required for the operations are got issued from the store by indent or
purchase directly chargeable to the work. The attendance of the labours is kept in
Muster Roll by the overseer or by his authorized agents.

a) Payments to daily labours through muster roll

Except for the regular and work charged establishments, all persons engaged
departmentally for the execution of works are considered as casual labour. Their
wages are drawn on "Muster rolls". Muster rolls are prepared in the prescribed
form (Form 21).
The Nominal Muster Roll (N.M.R) form consists of two parts.

Part I of N.M.R. form consists of necessary columns for entering the names of
labour, designation, father's name, their attendance particulars, rates of wages and
the total amount payable for each labour. N.M.R form has the provision for
entering the total amount of the muster, signature or left hand thumb impression of
the labour as a receipt. At the bottom of this form, the person preparing such
N.M.R form should sign before submitting to A.E / D.E.E who in turn verifies the
details entered and makes the payment.

Part II of the muster roll is used for recording the name of work, amount of work
done in cases in which the work is susceptible to measurements. Other details like
the number of measurement book, pages in which the measurements are recorded
will also be entered in this part. If the work is not susceptible to measurement, a
remark to that effect is recorded.

Some important instructions regarding the preparation of Muster rolls are:

 Duplicate copies of muster rolls should not be prepared.

 Separate muster rolls are prepared for each period of payment. Labour may
be paid more than once a month depending upon local conditions and
practices.

 The daily record of attendance and times should be recorded in such a way
as to leave no possibility of tampering or making unauthorized entries.

 After the muster roll has been passed, payment should be made as early as
possible.

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 A record of wages that remains unpaid must be kept in a register of unpaid

wages.

 Subsequent payment of unpaid wages is recorded in the hand receipt. A note

of the same is recorded in the register of unpaid wages as well as in the
muster roll.

 Wages that remain unpaid for three months must be reported to the
divisional office.

 Progress of work done by the labour is recorded and is to be compared with

departmental rates.

 Muster rolls are checked with reference to entries in the measurement book
to the extent of 50% in the sub-divisional and 50% in the division office,
when the divisional engineer makes payments.

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Fig. 8.1. Typical muster roll form

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Piecework agreement

These are agreements for doing the work at agreed rates, without reference
to the total quantity of work or time. Small works or piecework up to Rs.5000/- are
got done through the contractors by piecework agreement. In piece-work, the
quantity of work is not mentioned and only the rate is mentioned. This agreement
is used

(i) for small works

(ii) when it is necessary to start work in anticipation of the formal
acceptance of the contract and
(iii) for running contract. This type contract can be terminated by both parties
at any instance without any penalty. Piece work agreements are:

Advantages:

 Urgent small work can be carried without any tenders

 If a contractor leaves, another can take the work

Disadvantages:

 Only petty contractors are interested in this contract.

 Hence careful supervision is required

Work order

Work order is used for petty works; work orders may sometimes also
mention the time limit within which the work is to be completed. No formal
agreement is drawn up with the contractor as in the case of piece-work when the
work is awarded by a work order.

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Measurement Book (M.B.)

The measurement of all works and supplies are recorded in the measurement
book and the payments of all works and supplies are made on the basis of the
measurements recorded.

Form 23 (measurement Book)

Particulars Details of actual measurement Contents of area

(1) (2) (3) (4)

No. L. B. D.

The measurement book is a most important record since it is the basis of all
accounts and quantities whether the work is done by daily labour, piece work,
Schedule contract, lumpsum contract or of materials received. As this is the
original record of actual measurements or accounts and forms a reliable record; it
may have to be produced as evidence in court of law in case any dispute arises. It
is therefore preserved carefully and the movement between officers and persons is
also watched continuously. The loss of M.B. is a serious issue and in such
conditions it should be reported to the next higher authority citing the incident and
for orders for sanction to its write off.

The following instructions should be observed carefully while recording

detailed measurements in the M. B.:

 All entries to the measurement book should be made in a continuous chain

and in chronological order.

 The pages of the measurement book are machine numbered. If any page left
blank through mistake should be cancelled by diagonal lies and cancellation
being initialized and dated.
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 Entries to the measurement book should be recorded in ink directly at the

field.
 At the end of each set of measurement, the officer recording them has to
certify “measured by me” and to put his full signature with date.

 Any lines not required should be carefully scored out in order to prevent
additional entries being made later on.

 No entry should be erased. If a mistake is made, it should be corrected by

crossing out and inserting the corrections. The corrections made should be
initialized with date.

 Separate measurement book has should be used to record the works done by
contractor and the works done by departmental labour.

 After completion of the detailed measurement, the abstract of quantities is

drawn up in the M.B.

Check of measurements of works

Entries recorded by the section officer are always subjected to test check by
subdivisional officer to the extent of 50% by their money value. Similarly, the
divisional officer is required to test check at least 10% of the measurements,
recorded by his subordinate and to accept responsibility for general correctness of
the bill as a whole.

The object of check measurement is to detect errors in measurements and to

prevent fraudulent entries. Check measurements should therefore be conducted on
such items:

 Which appear obviously incorrect

 Which would be more easily susceptible of fraud

 Which would more seriously affect the total amount of the bill if inaccurate

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After completion of abstract, the M.B. is sent to the sub-divisional officer for
entering the rates of items of the bills by assistant engineer, and for arithmetical
and other checks by the Sub-Divisional clerk. The bill thereafter is typed out in the
prescribed form and made ready for payment and submitted to the divisional office
for further check and payment. Any corrections to or calculations of rates needed is
made in red ink by the sub-divisional or divisional officer. In case of the final bill,
the corrections should be confirmed by the person making the original entries
before authorizing the payment. The bill after scrutiny is endorsed with a pay order
both on M.B. and bill forms and signed by the divisional officer or executive
engineer or engineer in charge.
The bill having been accepted and receipted by the contractor, a crossed cheque
for the net amount is drawn ad handed over to the payee by the disbursing officer.

Standard Measurement Book:

A set of M.B. containing detailed measurement of specific buildings and

structure maintained by each sub-division is kept to facilitate framing annual
repairs estimate and for payment to the contractors for jobs connected therewith.
Their M.Bs are known as standard measurement books (S.M.B). The S.M.Bs saves
time and labour of the departmental officers from repeated work of taking detailed
measurements of the same building again and again.

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CHAPTER 8
LAND AND LABOUR LAWS

Land Acquisition Act

Land acquisition is defined as the process of getting back the land by the
government with the certain compensation. Land is needed by the government for:

 Strategic purposes like armed forces and

 Industry and Infrastructure

 Planned development

 Residential purpose for poor, educational & health schemes

 Land for private companies for public purpose

 Needs that arise from natural calamity

Procedure for land acquisition

In India Land can be acquired by the Government according to Land

Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013 (Land Acquisition
Act, 2013). When the Government requires land for any of the stated purposes, a
notification to that effect shall be published in the Official Gazette and in two daily
newspapers circulating in that locality of which at least one shall be in the regional
language. Thereupon it will be lawful for any officer and for his workmen to enter
upon and survey and take levels, to dig or bore into the subsoil in such locality.

Objection

Any objection by any person to the process should be made in writing to the
Collector within 30 days of publication of the notice.

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Enquiry and award by the Collector

When government declares public purpose and shall control the land
directly, consent of the land owner shall not be required. However, when the
government acquires the land for private companies, the consent of at least 80% of
the project affected families shall be obtained through a prior informed process
before government uses its power under the Act to acquire the remaining land for
public good, and in case of a public-private project at least 70% of the affected
families should consent to the acquisition process.

On the day so fixed, the Collector shall proceed to enquire into the
objections (if any) and being satisfied that all the persons interested in the land
who appeared before him have agreed in writing on the matters to be included in
the award of the Collector in the form prescribed by rules made by the appropriate
Government, make an award according to the terms of such agreement.

On making an award, the Collector shall tender payment of the market value
compensation awarded by him to the persons interested and entitled thereto
according to the award. If there be any dispute as to the title to receive the
compensation or as to the apportionment of it, the Collector shall deposit the
amount of the compensation in .the Court.

Dispute and delay for acquiring land

The Owner of the land who has not accepted the award may move to the court of
law hence causing delay for acquiring a land for even several years.

Matters to be considered in determining compensation:

 The market value of the land on the date of the publication of the
notification;

 The damage sustained by the person interested, by reason of the taking of

any standing crops or trees which may be on the land at the time of taking
possession thereof;

 The damage sustained at the time of taking possession of the land, by reason
of separating such land from his other land;

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 The damage sustained at the time of taking possession of the land, by reason
of the acquisition injuriously affecting his other property, movable or
immovable, in any other manner, or his earnings;

 If, the person interested is compelled to change his residence or place of

business, the reasonable expenses incidental to such change; and

 The damage bonafide resulting from reduction of the profits of the land
between time of the publication of the declaration and the time of taking
possession of the land.

In addition to the market value of the land an amount calculated at the rate of
twelve percent per annum of such market value as interest for the period
commencing on and from the date of publication of the notification in respect of
such land to the date of the award or taking possession of the land, whichever is
earlier

Types of Labour

Construction labour can broadly be divided into two classes namely casual labour
and regular establishment.

Casual labour

Casual labour is employed as and when required for the execution of work,
payment is made on the basis of the number of days the labour works. There is no
provision of leave, except the weekly holidays. This is also known as daily labour.

Regular Establishment:

Regular establishment generally includes supervisory personal that are required for
more or less continuous period during construction. They are paid monthly wages
and entitled to leave and other benefits. The employees may be temporary or
permanent. Permanent employees have great security of service and may be
entitled to more service benefits than the temporary employees.

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Labour Laws Related to Construction Industry

Construction is the largest industry in India and most of the employees who
are working in construction industry are labours and skilled workers. As the nature
of construction work is temporary the workers are recruited as and when required
for the execution of work and are retrenched when no longer needed. Construction
labour is migratory in nature, moving from one site to another site, and the labour
attached to big contractors tends to migrate to new work sites taken up by them.

Because of such frequent migration construction labour has not been able to
organize itself to the extent that labour in factories and other organized sectors of
trade has. Consequently, construction labour has extremely poor bargaining power
and this situation is fully exploited by employers. The construction labour beside
low wages, they live in crowded unsanitary temporary huts built at the construction
sites in unhygienic surroundings without basic amenities of life. For the welfare of
the labour, the Governments have, from time to time, brought out labour laws.

Labour laws are classified into the following types

 Laws concerning the working conditions of labour.

 Laws concerning wages and other payments to labour.

 Laws concerning the social security of labour.

These laws are proved very much helpful to the labour for improving their living
conditions.

Trade Unions Connected With Construction Industry

Trade unions are voluntary group of workers which are formed with the objective
of protecting and promoting the interest of workers. Trade unions have both legal
status and social approval. The main functions of Trade unions are:

i. Improving working conditions at site

ii. Improving wages of workers

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iii. Promoting welfare activities such as health plans, life insurance, bonus,
provident fund etc. for workers
iv. Providing legal assistant to workers where ever required.

v. Establishing cordial relation between employers and workers

Important trade unions connected with construction industry in India are:

 All India Trade Union Congress (AITUC): founded by congress party in

1919.
 Presently under influence of Communist party of India

 Indian National Trade Union Congress (INTUC): formed in 1947 by

congress
 party.

 Bharatiya Mazdoor Sangha (BMS): set up by Jan Sangh (Bharatiya Janata

 Party) in 1955

 United trade Union Congress (UTUC): founded by left parties in 1949

 Hind Mazdoor Sabha (HMS) set up in 1948 by socialist party.

 Center of Indian Trade Unions (CITU) funded in 1970 having 2,231

affiliated unions. Functioning under influence of communist party of India
(Marxist)

Labour Insurance

Insurance laws are applicable only to regular employees. In construction industry

most of the labour is of casual nature and insurance laws are not applicable to
them. For the welfare of casual labour, different Acts such as Minimum wages Act,
Compensation Act etc. are passed by the Government.

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Payment of Wages

The remuneration given to workers for work performed by them is known as

wages.
Wages are of two types.

Nominal wage: This is the remuneration paid to the worker in the form of money,
but it does not include the value of any other benefit that may be provided.
Real Wage: Labour is often entitled to different benefits, such as leave, medical
care, house rent allowance, bonus etc. If the value of such benefits is added to the
nominal wage, it is known as real wage.

Wages are paid to the labour based on two methods:

 Depending upon time devoted to the work (Time rate system)

 Depending upon the quantity of work performed (Piece rate system)

Time Rate system:

In Time rate system of payment of wages, a suitable rate of payment is fixed per
unit of time devoted to work by the labour. The unit of time can be hours, days,
weeks or months. The rate of payment for casual labour is fixed per day and that of
regular employees per month in the construction industry.

Advantages

 It is simple and easily understood by labour.

 The quality of work will be good.

 The workers do not get overstrained.

Disadvantages

 Constant supervision is required.

 Effective cost control can not be ensured.

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Piece Rate System

In this system payment is made on the basis of the output of the workers. The work
done by each labour is measured and payment is made at the agreed rate. Thus a
worker can make more money by increasing his output. The rate of each item of
work is fixed on the basis of the past record of output.

Advantages:

 The overall productivity is increased.

 The need of supervision is reduced.

 Effective cost control can be ensured.

 The system is fair to the workers and employers.

 The better workers with higher outputs get higher payment.

Disadvantages:

 The system is unsuitable for works which cannot be measured.

 The quality of work is lowered.

 There are no guaranteed wages for workers.

Whatever the system may be, there must be an adequate compensation for the
labour put in and this is known as “fair wages”

Minimum Wages Act, 1948

The Minimum wages Act of 1948 was passed for the welfare of labour and
provided for fixing the minimum rate of wages of labour. The Act aims at making
provisions for the statutory fixation for the minimum rate of wages in number of
industries where there are extensive chances for the exploitation of labour.

The main provisions of Minimum wages Act are:

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 The setting of advisory committees to collect information on which the

minimum wages are based.

 The wages of a worker in any scheduled employment shall be paid on a

working day by:

 The 7th day after the last day of the wage period if the
establishment has less than 1,000 employees

 The 10th day after the last day of the wage period if establishment
has more than 1,000 employees

 The wages of an employee should be paid without any deductions except

those items given below

 Fines in respect of acts of omission

 Absence from duty

 Loss of goods directly attributed to the neglect of the employee

 House accommodation provided by the employer

 Amenities and services provided by the employer

 Income tax

 Subscription to the provident fund

 Recovery of advances

 Deductions ordered by the court

 Payments to co-operative societies / Life Insurance

 Corporation

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Workmen Compensation Act, 1923

The Workmen Compensation Act passed to protect the victims of accidents and
their families from hardships out of and in the course of employment. The Act
covers workers employed in hazardous occupations as specified in the schedule but
excludes those employed in clerical or administrative work. The Act provides for
payment of compensation in case of accidents on work sites. The compensation,
however, is not payable for injuries due to

1. Disobedience or negligence,

2. Non observance of safety measures

3. Consumption of liquor

4. Diseases which are not contracted as a result of the occupation.

In the case of the death of a worker, compensation is paid under all circumstances.

Accidents are due to

1. Human causes such as poor eye sight, negligence, effect of intoxicants,

2. Mechanical causes such as inadequate safety devices, live electrical

equipment, unreliable scaffolding etc. and

3. Environmental causes. Such as poor lighting, heat, noise etc.

The result of an accident may be:

1. Temporary disablement, which may be total or partial.

2. Permanent total disablement.

3. Permanent partial disablement.

4. Death.

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The Compensation to be paid is depends on the result of the accident. The Act
provides for the appointment of Commissioner for the quick disposal of claims for
compensation. The employers are required to notify fatal or serious accidents to the
commissioner within seven days. Civil courts are debarred from considering cases
arising out of the Act and these are under the jurisdiction of the commissioner.

Contract Labour Act, 1970

The contract labour Act, 1970 was passed to regulate the employment of contract
labour in certain establishments. It also provides for improving the service
conditions of contract labour. The Act is of importance to the construction industry
where works are executed through contractors or by contract labour.

The Act applies to every establishment and contractor employing twenty or more
workmen. The Act does not apply to establishments in which only work of an
intermittent or casual nature is performed.

The Act provides for the constitution of a Central Advisory Contract Labour Board
under the Central Government and of state Advisory contract labour Board under
each State Government to advise the Central and State Governments on matters
arising out of the administration of the Act and to carry out the functions assigned
to it under the Act.

The main provisions of the Act are:

Registration of establishments

Every principal employer of an establishment to which the Act applies is required

to make an application to the registering officer on the prescribed form for the
registration of the establishment.

Licensing of Contractors

Every contractor executing any work through contract labour is required to obtain
a license

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Welfare and Health of Contract Labour

Under the Act, the following facilities are required to be provided for the welfare
and health of the contract labour:

 For works likely to continue for more than three months, where labour is
required to halt at night in connection with the working of the establishment,
the contractor should provide rest rooms. Separate rooms should be provided
for women.

 For works likely to continue for more than six months and employing more
than 100 or more labour, an adequate canteen should be provided.

 Latrines and urinals must be maintained in clean and sanitary conditions.

Payment of wages

Responsibility for the payment of wages rests upon the contractor

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CHAPTER 9
DISPUTE AND ITS RESOLUTION

Dispute

Given the uncertainties involved in a constructuion project and the magnitude of

funds involved it is only natural to have disagreement between the parties, but
these needs to be resolved. While most such day-to-day differences are resolved in
an amicable manner, without having to resort to a more formal mechanism, the
parties at times agree to disagree and seek redressal through independent
intervention.

Causes of Disputes

Following are the main causes of disputes between the owner and the contractor:

 Incorrect or different site conditions

 Use of faulty and ambiguous provision in contracts

 Change orders/extra or out-of-scope work

 Suspension of works

 Poor quality of work and construction defects

 Default by the contractor

 No publicity involved

 Unfair distribution of risk

 Delay in payments and over payment

 Levy of compensation for delay

 Termination of work-order

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Various Dispute Resolution Mechanisms

Negotiation

Parties themselves or their representatives try to resolve the dispute without

involving any neutral third party.

Mediation

Mediation is a private, quick, cheap process (compare to either arbitration or

litigation) where a third party makes possible dialogue between the parties in order
that the parties can reach their own decision that is initially non-binding. The
parties can however, agree to be bound by their final decision.

Conciliation

It is a process similar to mediation except that the conciliator can express an

opinion on the merits of the case and is required to recommend a solution if the
parties fail to agree.

Mini-trial

In Mini-trial, the case is heard not by judges, but by the senior professional
or other high level business people having full settlement authority from both
sides. A third party neutral usually joins the party representatives listening to the
proofs and arguments, an can make any necessary decision to regulate the process.

Adjudication

The dispute is referred to an adjudicator, an eminent person with sound legal

knowledge, who is appointed to provide speedy legal decision without going
through time consuming court proceedings.

Arbitration

Arbitration is a process where a third party who is independent of parties,

but may be appointed by them, makes a decision on the dispute. The decision is
binding and can be enforced by the courts. Thus arbitration is a out-of-court

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proceeding where the arbitrator acts as judge. The outcome is one of a win/lose
situation.

Litigation

Litigation (used when all other venues fails) is a dispute resolution method
that is inquisitorial and adversarial, where by the disputants initiate legal action
against the other party by going to the court. It is costly and results into much delay
for the disputants and may not do justice to the parties. However, the benefit the
litigation is that the court has the authority to find out the “truth” from the parties
and the enforcement of the order or the judgment is supported by other law
enforcement agencies.

Advantages of Arbitration over Litigation

 Cost: Arbitration is less expensive than court proceeding.

 Speed: Disputes are settled much faster through arbitration as compared to

law suit in the court.
 Convenience: Arbitration hearings are fixed considering the convenience of
both the parties.

 Technical knowledge: Both parties have the distinct advantages of

appointing arbitrators having technical knowledge and expertise which
facilitates satisfactory judgment.

 Informality: Arbitration is conducted in a relatively informal atmosphere

observing certain minimum prescribed legal formalities.

 Proceedings in the private premises: Arbitration proceedings are held in

the private premises; consequently business activities of the parties do not
suffer.

 Confidentiality of awards: The arbitral proceedings and an arbitral awards

are generally non-public and can be made confidential.

 Finality of award: The award given by the arbitration is final except in

exceptional cases.

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Disadvantages of Arbitration

 Arbitration may be subjected to pressure from powerful law firms

representing the stronger and wealthier parties.

 Arbitration agreements are sometimes contained in ancillary agreement or

small print in other agreements and consumer or the employees often do not
know in advance that they have agreed to mandatory binding pre-dispute
arbitration purchasing a product or taking a job.

 The awards of arbitration by large is final and binding. There is very Limited
Avenue for appealing against erroneous decision of arbitrators.

 In some arbitration agreement, the parties are required to pay for the
arbitrator, which adds an additional layer of legal cost that can be
prohibitive, especially for small consumer disputes.

 Arbitration in most countries has fewer enforcement options than the

litigation. A party seeking to enforce an arbitration award has to resort to
judicial remedies, called an action to confirm an award.
 Matters like; matters related to crime, status, family law, etc., cannot be
resolved by arbitration as power of parties to enter into an agreement upon
these matters is least restricted.

Types of Arbitration

Arbitration without intervention of a court

It arises from the execution of an arbitration agreement. The court may set
aside the award of arbitrators only in exceptional cases. After the award by the
arbitrator is declared, the parties concerned can apply for a decree on the award,
same as any other decree of a court of law.

Arbitration with intervention of a court

The selection of the act gives an alternative right to the parties to an

arbitration agreement. The appointment of arbitrator can be done jointly by the
parties or one arbitrator by each party or the court.

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Arbitration in suits (Cases)

When the suit is pending before the court and when the parties desire to
settle the same through arbitration before the judgment is pronounced, they can
apply for the same and in such cases the court may refer the matter to the
arbitrator, appointed in such a manner as may be agreed upon between the parties.

Arbitrator

Arbitrator is a person chosen by the parties themselves to whom the disputes

and differences are referred to the arbitrator acts as judge and gives his judgment
which is binding to both parties.

When both the parties mutually agree upon a single person to act as a judge,
he is known as sloe arbitrator. But when each party forwards own arbitrator, it is
called Joint arbitrator. For joint arbitrator an umpire is selected with the consent of
both parties.

Qualification of an Arbitrator

a) An arbitrator must be an expert in the particular branch of profession and the

matter in the dispute.

b) He should not be related to any of the parties.

c) He must be impartial, unbiased and free from ill feelings against nay of the
parties.

d) He must have unquestionable character, high integrity and unshakable faith

in justice.

e) For engineering project, an arbitrator should be a person not bellow the rank
of superintending engineer. Preferably, he must be from the panel of
arbitrators provided by the high court.

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Powers of arbitrator

a) To administer oath to the parties and witness appearing,

b) To state a special case for the opinion of the court or any question of law
involved or state the award wholly or in part in the form of a special case of
such question for the opinion of the court

c) To make the award conditional or in the alternative

d) To correct in an award any clerical mistake or error arising from the

accidental slip or omission.

e) To administer to any party to the arbitration interrogatories as may in the

opinion of the arbitrator or umpire, be necessary.

Procedure to Settle of Dispute by Arbitration

The beginning of the arbitration process involves one party giving notice to
another of their intent to arbitrate a dispute, informing them of the nature and basis
for the proceeding. The other party then gets a period of time to respond in writing,
indicating whether they agree to resolve this dispute via arbitration. Once it is
established that the disagreement will be resolved in an arbitration, the arbitration
process itself begins, based on the rules and procedures selected by the parties or
specified by contract.

After this, the process is somewhat similar to a courtroom trial. Parties make
arguments before the arbitrator(s), call witnesses, and present evidence to establish
and defend their respective cases. The rules for an arbitration hearing may differ
from those of a courtroom, however, and opportunities to question or cross-
examine witnesses may be more limited. Once the hearing is concluded, an
arbitrator or panel is given a certain amount of time in which to consider the
decision and make a ruling.

One of the reasons that arbitration is often thought of as quicker as and

cheaper than litigation is that the paperwork involved in a dispute is cut down
sharply when compared to litigation. The procedures for many arbitrations cut
down sharply on some of the burdensome and expensive litigation tools

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collectively known as "discovery". The discovery process is intended to allow for

exchanges of documents and evidence between parties in a dispute. However, this
can often lead to costly and time-consuming disputes, with mountains of
paperwork. The arbitration process usually cuts down significantly on discovery,
allowing an arbitrator to take a more active role and possibly curtail excesses.

a) Steps in Arbitration

1. Dispute arises between two parties

2. One party submits a formal request for resolution of dispute through

arbitration (This may be to a specific arbitrator or to an arbitral institution.
Choices may be predicated by a pre-contractual term in an agreement which
has given rise to the dispute.

3. The other party then gets a period of time to respond in writing, indicating
whether they agree to resolve this dispute via arbitration. Arbitration process
begins once the other party agrees.

4. Parties agree on an arbitrator or an arbitrator is appointed by an arbitral

institution or a court.

5. Arbitrator accepts appointment.

6. Preliminary meeting at arbitrator's request. This may be a joint session with

everyone present or may be conducted by telephone conference.

7. Arrangements for the arbitration including hire of venue and travel

arrangements, usually done by the parties with or without the assistance of
an arbitral institution.

8. Preliminary hearings and interim awards possible in respect of security of

costs, scope of arbitration agreement etc.

9. Arbitrator directs to the claimants to submit his statement of facts containing

detail grievances and claims against respondents within a specified time
period. The claimant submits his statements of facts along with copies of all
documents justifying his claims. The arbitrator next directs the respondent to
submit his counter statement of facts within a specified date. Respondents

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prepare the defense, duly supported by adequate documentary evidence and

witnesses, and submit before arbitrator.

10.Then the hearing of the case starts. The claimant‟s representative (often a
lawyer) reads the statement of fact. Then the arbitrator directs the respondent
or his representative of to counter the statement by claimants with
evidentiary proof. During hearing if representative of respondent or
claimants wants arbitrator may provide permission to cross examine the
witness.

11.After the completion of pleading of both the parties, each party is given the
permission to argue his case on the basis of findings in course of the sitting
held in the case. Arbitrator hears the pleadings and arguments of both the
parties scrutinize and examine all documents and papers produced in the
course of the sittings and then close the case and publish the awards. As per
the prevailing law arbitration must complete within four months from the
date the arbitrator first enters in to reference.

12.The arbitrator has to made his award on a non-judicial stamp paper, sign it
and shall give notice to the parties for signing it thereof and the amount of
fees and charges payable in respect of the arbitration award.

13.After the award is written on the stamp paper, it should be examined if it is

acceptable to both the parties. Once it is decided to accept the award,
immediate action should be taken to have the award made a rule of the court
by taking necessary steps before the court by either party although it is not
necessary for arbitrations out of court. This is made to ensure the award of
arbitration is enforceable.

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CHAPTER 10
VALUATION

Definition

Valuation is the technique of determination of fair price of a property such as land,

building, factory or other structures. Valuation determines present value of the
property for sale or renting purpose.

Difference between Cost, Price and Value

 Cost means the original cost of construction minus the loss due to its age and
change in taste or fashion.

 Price is the amount calculated adding the cost of the production, interest on
investment and profit to the producer or the owner.

 Value is the worth or utility of a property. Value of a property depends

largely on the demand and supply.

For example the cost to draw a painting may be 1,000/- rupees, but by adding
profit for the painter the price may be fixed at 1,500/- rupees. Let us consider the
painting is a very famous painting whose demand is more (like Monalisa by
Leonardo da Vinci) then the value of the painting may be significantly high.

Purpose of the Valuation

The main purposes of valuation are as follows:

 Sale or Purchase of a property

 To fix up the municipal taxes, wealth tax and estate duty on a property

 To fix up the gift tax payable to the govt when the property is gifted to
somebody else.

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 To probate, i.e. to prove before a court that the written paper purporting to
be the will of a person who has died is indeed his lawful act the official copy
of a will is to be presented along with court stamp fees. The stamp fee
depends on the value of a property and for this valuation is necessary.

 To divide the property among the shareholders in case of the partition.

 Assessment of income or stamp duty.

 To pay the capital gains tax when a capital asset is disposed of and the
proceeds exceed the costs incurred in acquiring the asset.

 Rent Fixation

 To work out the insurance value of a property

 To determine the quantum of loan that can be sanctioned against a property

as mortgage or security

 For compulsory acquisition of the property by govt. for public purpose.

 To determine the speculative value of a property, i.e. the purchase of a

property with intention to sale at a later date and to make some profit.

 To fix up the betterment charges, i.e. construction of new road, providing

market complex, community hall etc. so that the value of the property will
increase.

Terminology

Incomes:

a) Gross income: Total income from all sources.

b) Outgoings: these are the expenses which are required to be incurred to

maintain the property. These includes: Taxes, periodic repairs, management

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and collection charges, sinking fund, and loss of rent (for the period when
the property is not occupied).

c) Net income: The amount left after deducting all outgoings from the gross
income.

d) Net income = gross income- outgoings.

e) Perpetual income: It is the income receivable for indefinite period of time.

f) Deferred Income: it is the income receivable after a lapse of certain period.

Scrap value

If a building is to be dismantled after the period its utility is over, some

amount can be fetched from the sale of old materials. The amount is known as
scrap value of a building. Scrap value varies from 7% to 10% of the cost of
construction according to the availability of the material.

Salvage value

If a property after being discarded at the end of the utility period is sold without
being into pieces, the amount thus realized by sale is known as its salvage

Scrap value Salvage value

______________________________________________________________________________
This is the dismantled sale value of the This is the estimated value of an asset as
materials of an asset at the end of its a
useful whole without dismantling at the end of
life. its
useful life.
Scrap value is counted in the calculation Ordinarily the salvage value factor in
of depreciation of a property at the end the calculation is omitted by accounting
of the useful life and usually this is scrap value
considered 10% of the cost of the
structure or on lump sum basis.
Scrap value of an asset is merely sale of Salvage value deposition may take the
scarp and has a limitation. form of a sale of the asset to a purchaser
who will continue to use it for the
function for

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which it was originally designed. In this

case salvage value dominate scrap value
in the calculation of depreciation
Scarp value is not counted as a There are time when it may be a minus
minusquantity. quantity

Year’s purchase

It may be as the figure which when multiplied by the net income from a
property gives capitalized value of the property. It can also be defined as “a certain
amount of capital whose annuity of Rs.1/- at a certain rate of interest can be
received”

Year‟s purchase = 100/rate of interest = 1/i

Capitalized value

It is defined as that amount of money whose annual interest at the highest

prevailing rate will be equal to the net income received from the property. To
calculate the capitalized value, it is necessary to know highest prevailing on such
properties and income from the property.

Example:

Calculate the capitalized value of a property fetching a net annual rent of 25000
and the highest rate of interest prevalent being 7%.

Ans:

Net annual rent = 25,000

Rate of interest = 8%

In order to get an annual interest equal to the net annual rent of Rs. 25,000

(8/100) * X = 25000

X = 25000 * (100/8) = 3, 12, 500.00

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Capitalized value = Net annual income * Year‟s purchase (Ans.)

Obsolescence

The value of property decreases if its style and design are outdated i.e rooms not
properly set, thick walls, poor ventilation etc. The reason of this is fast changing
techniques of construction, design, ideas leading to more comfort etc.

Market value

The market value of a property is the amount, which can be obtained at any
particular time from the open market if the property is put for sale. The market
value will differ from time to time according to demand and supply.

Book value

Book value is the amount shown in the account book after allowing necessary
depreciations. The book value of a property at a particularly year is the original
cost minus the amount of depreciation up to the previous year.

Market Value Book Value

Value is fixed by the purchaser Value is fixed by the depreciation
Value is higher during the subsequent
Book value cannot be higher during
years subsequent years even due to the
due to increase in price index increase of price index.
Value may be constant for a period Value cannot be constant, rather there is
a gradual fall
Applicable to any type of property This cannot be applicable in case of land
or metal articles like steel copper or
gold etc.
Market value is considered for the Book value is considered for the
valuation accounts book of a company
Depends on the forces of demand and Book value does not vary due to
supply demand and supply

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Annuity

It is defined as the return of capital investment in the shape of annual instalments

monthly, quarterly, half-yearly and yearly. It is the annual payments for the
repayment of the capital amount invested by a party. These annual payments are
made at the beginning or end of a year, usually, for a specific number of years.

 Annuity Certain: If the amount of the annuity is paid for a definite number
of years. The lesser the number of year higher the annuity and vice versa

 Annuity Due: If the amount of annuity is paid at the beginning of each

period or year and payments are continued for definite number of periods

 Deferred Annuity: If the payment of the amount of annuity begins at a

future date after a number of years.

 Perpetual Annuity: If the payment of the annuity continues for an indefinite

period.

Though annuity means annual payment, the amount of annuity may be paid by 12
monthly installments, quarterly or half-yearly installments.

Sinking fund

It is an amount which has to set aside at fixed intervals of time (say

annually) out of the gross income so that at the end of the useful life of the building
or the property, the fund accumulated should be equal to the initial cost of the
property. The sinking fund may also be required for payment of the loans.

𝑠𝑖
Sinking found I =
1+𝑖 𝑛 −1
Where, S = Total amount of sinking fund to be accumulated,
n = useful life of the property or nos. of years required to accumulate
the sinking fund,
i= rate of interest in decimals and I = is the annual installments paid.

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Example:

A pumping set with motor has been installed in a building at a cost of 2500.00.
Assuming the life of the pump as 15 years, find the annual installment of sinking
fund required to be deposited to accumulate the whole amount of 4% compound
interest.

Ans:

𝑠𝑖
Annual Sinking fund, I =
1+𝑖 𝑛 −1

0.04
I = 2500 x
(1+0.04)15 −1

= 2500 * 0.05 = Rs. 125.00 (Ans.)

Factors Affecting Value of a Building

 Type of the building

 Location

 Building structure and durability

 The quality of materials used in the construction

 Size of the building

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Depreciation

It is the loss in value of a building or property due to structural deterioration, wear

and tear, decay and obsolescence. It depends on use, age, nature of maintenance
etc. A certain percentage (per annum) of the total cost may be allowed as
depreciation to determine its present value.

The percentage rate of depreciation is less at the beginning and increases with age.
Annual depreciation is the annual decrease in the value of the property.

Comparison between Depreciation and Obsolescence

Depreciation Obsolescence
This is the physical loss I the value of This is the loss in the value of the
the property due to wear & tear, decay property due to the change in design,
etc. fashion, in structure of the other, change
of utility and demand.
Depreciation depends on its original Obsolesce depends on normal progress
condition, quality of maintenance and in the arts, inadequacy to present or
mode of use. growing needs etc.
This is variable according to age of the This is not dependent on age of the
property. More is the age, more will be building. A new building may suffer in
the amount for depreciation its usual rent due to obsolescence.
There are different methods by which At present there is no method of
the amount of depreciation can be calculation of obsolescence
calculated

Calculation of Depreciation

The amount of depreciation being known, the present value of the property can be
calculated after deducting the total amount of depreciation from the original cost.

 Straight line method

 Constant percentage method
 Sinking fund method
 Quantity survey method

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Straight line method

It is assumed that the property loses its value by the same amount every year. A
fixed amount is deducted every year, so that at the end of the utility period, only
the scrap value remains. Therefore, the annual depreciation “D” is estimated as:

Original value – Scrap value C –S

D= =
Life in Years N

And the book value after „n‟ years = Original cost – n x D

Constant percentage method (declining balance method)

It is assumed that the property will lose its value by a constant percentage of its
value at the beginning of every year.

𝑠𝑐𝑟𝑎𝑝 𝑣𝑎𝑙𝑢𝑒 1/𝑛

Annual Depreciation, D = 1 −
𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡

1
𝑆 𝑛
OR, D = 1-
𝐶

Value of property of depreciated cost = C – DC

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Sinking fund method

It is assumed that the depreciation is equal to the annual sinking fund plus
the interest on the fund for the year, which is supposed to be invested on interest
bearing investment. If A is the annual sinking fund and b, c, d etc. represent
interest on the sinking fund for subsequent years, then the depreciation at the end
of various years can be calculated as:

Year Depreciation Total Book

Value for the Year Depreciation
__________________________________________________________________

1st year A A C–A

2nd year A+b 2A + b C - (2A + b)

3rd Year A+c 3A + b + c C - (3A + b + c)

And so on……

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Quantity survey method

The property is studied in detail and loss in value worked out. Each step is
based on some logical reasoning without any fixed percentage of the cost of the
property. Only an experienced valuator can work out the amount of depreciation
and the present value of the property using this method.

Age of the building Depreciation per year Total depreciation

0-5 years Nil Nil

5-10 years @ 0.50% 2.5%

10-20 years @ 0.75% 7.5%

20-40 years @ 1.00% 20%

40-80 years @ 1.50% 60%

Total depreciation after 80 years 90%

The balance 10% is the net scrap value on dismantling at the end of the utility
period.

Methods of Valuation of Building.

The valuation of a building is determined by working out its cost of construction at

the present day rate and allowing a suitable depreciation.

Following data are required for valuation of a building

 Cost of incurred if the building to be constructed in present day

 Age of the building should be determined

 Visual inspection of its present condition

 Future life span should be determined

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Estimation of present day cost

Present day cost may be estimated from the records, Estimates and Bill of
Quantities. If the actual cost of construction is known, this may increase or
decrease according to the percentage rise or fall in the rate obtained from the
PWD Schedule of Rates. Following are the methods to ascertain the present
day cost of a building:

a) Cost by detailed measurement

Cost of construction may be calculated by preparing the BOQs of various

items of works by detailed measurement at site and taking the rate of each
item of work as per the current PWD SOR. All the items of work shall be
thoroughly scrutinized and their detailed specification ascertained as per
original.

b) Cost by plinth area

The plinth area of the building is measured and the present day plinth area
rate of similar buildings in the locality is studied, and the cost calculated. It
is necessary to examine thoroughly the different parts of the building
including the foundation, structure, doors & windows, finishes etc.

Estimation of present day value of the building

Following methods are available to determine value of a building:

a) Direct comparison method/ Plinth area method:

It is the simplest form of valuation. The cost of the property is derived from the
cost of property sold recently at its neighborhood. Plinth area cost prevailing in the
locality is then worked out. Finally value of the property can be derived from
Plinth area cost multiplied by the plinth area of the property. Similarly Cost may be
estimated by Cubical content method.

b) Depreciation rate method:

After deciding the cost of the building or structure by any one method,
described in 11.9.1, it is necessary to allow a suitable depreciation on the cost.

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c) Rental method

In this method, the net income by way of rent is found out by deducting all
outgoings from the gross rent. A suitable rate of interest as prevailing in the market
is assumes and the years purchase is calculated. The net income multiplied by Y.P.
gives the capitalized value or valuation of the property.

d) Land and building method

In this method, the market value of land and the depreciated value of building
are determined individually. Then these two values are added to determine the final
value of the property.

e) Development method

This method of valuation is used for the properties which are undeveloped or
under developed. Those properties were brought, developed and then offered for
the sale. The valuation in that case would depend on initial investment,
development cost and expected profit.

Mortgage

Mortgage is the conditional conveyance of property as security for the repayment

of a loan. Money borrowed against the security of mortgaged property. Amount of
loan sanctioned against a mortgaged property is usually 50 – 70% of the of the
property cost.

Mortgagor: The person who takes the loan.

Mortgagee: The person who gives the loan.

Mortgage Deed: Documents required for the mortgage transaction

Types of Property

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a) Freehold property

When the owner is in absolute possession of the property and can utilize it in any
which manner he likes. He can use the property for himself, grant lease or
tenancies for any period of time.

b) Leasehold Property

It indicates the physical possession of the property, but the use of it may be
allowed by the original owner (lessor) as per the lease documents.

Easement

Privileges and rights that one owner of the property enjoys through or over the
property of another. The person who enjoys the easement is the Dominant owner
and the owner over whose property the easements are enjoyed is the Servant
owner.

1. Right to use light and air from an adjoining property.

2. Right of flow of rain water over the other‟s land.

3. Right of access from the adjoining owner‟s land.

4. Right to run services through the neighbor‟s land.

5. Right of support for a building from the adjoining owner‟s land.

Easement rights may be granted through documents for uninterrupted periods of 20

years.

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