What drives building costs in KwaZulu-Natal, and how to read a cost estimate

You get your first cost figure before anyone draws the building in detail. Treat that figure as a range with assumptions behind it. Once you know the assumptions, you can test them against your site and your brief.

The site

Your site sets costs before design starts. Steep ground in Durban, Westville, Kloof and the upper highway areas means cut and fill, retaining walls and deeper foundations. Clay or fill under the building can call for piles or a raft. Order a geotechnical investigation at the start of the project: your engineer designs the foundations from that report, and you pay for what the report finds.

Access affects the price as well. A tight urban plot, a narrow road or a site far from suppliers adds to transport, crane hire and labour costs. Near the coast, salt air shortens the life of steel, fixings and coatings, and your engineer will specify heavier protection that costs more on day one.

The specification

Two buildings with the same floor area can differ in cost by a wide margin. Finishes, glazing, roof type, the number of bathrooms and kitchens, and the building services account for the difference. On a commercial building, mechanical and electrical work, lifts, fire protection, backup power and solar can make up a large share of the total. Ask your QS to show these as separate elements so you can see their weight.

Rain and the programme

KwaZulu-Natal gets most of its rain in summer. Heavy storms stop earthworks and concrete work, and contractors price that risk into their programme. On a sloping site, stormwater control is a cost of its own. A longer programme adds preliminaries as well: site staff, supervision, security and equipment hire, paid for each month the contractor stays on site.

The market

Contractors price according to how busy they are, and material prices move with the rand, fuel costs and demand. Your estimate carries a base date. Work priced after that date needs an allowance for escalation, and your QS should tell you how they calculated it. Escalation changes from year to year, so check the current figure with your QS before you fix a budget.

Reading a cost estimate

Start with the notes on the first page, then turn to the totals. The notes tell you what the figure means.

• Stage and basis. An estimate from an area schedule carries more uncertainty than one measured from detailed drawings. Look for the drawing numbers and revisions the QS priced.
• Base date. The prices hold for a stated date. Check whether the estimate includes escalation to the tender date and through construction.
• Floor area and rate. A rate per square metre helps you compare projects, as long as you know whether it includes external works, services and parking.
• Provisional sums and prime cost sums. These are allowances for work or items nobody has designed or chosen yet. Large allowances mean more of the cost remains open.
• Contingency. Check the amount and its purpose. A design contingency and a construction contingency cover different risks.
• Exclusions. Land, professional fees, municipal fees and contributions, VAT, loose furniture and finance costs can sit outside the construction figure. Add them back before you compare the estimate with your budget.
• Assumptions. The QS lists what they assumed about the ground, service connections, access and procurement. Each assumption becomes a risk if it proves wrong.

Questions to ask your QS

• Which drawings and specification did you price?
• What have you excluded, and what would those items cost?
• How much of the total sits in provisional sums?
• What escalation have you allowed, and up to which date?
• Which items carry the most risk on this project?

Keep the estimate current

Ask for a revised estimate at each design stage and compare it with the previous one. If the total moves, your QS should show you which elements changed and the reason for each change. Quantum prepares feasibility estimates, cost plans and development appraisals for projects across KwaZulu-Natal, and updates them as your design develops.