Project Planning by Zero Costing in Road Construction

In this project Zero costing has been prepared and analyzed on a road construction project. In construction industry any project starts with making budget for it, the preliminary budget prepared is made as per the previous experience and consider cost incur roughly and in most of the time the cost in budget are very arbitrary taken as per previous experience. The Initial budget prepared is having high potential to vary in total cost by up to 20% if made by highly experienced professional. It directly means if things go wrong in budget, it directly impacts the profitability of the Project. Zero costing is something which is made from a scratch and not by doing many assumptions. to prepare a zero budget for construction project following need to be first available in place; BOQ prepared as per the final drawings and specification for Project. Rate Analysis for each and every activity from scratch i.e. - no assumption. Complete detailing of Overhead costs which will incur during project till completion. Staff Salaries- base on exact figures of payment. Material Rates. In Zero costing there are no cost are added directly without back calculations of it. All cost need to be justified in order to added into budget. In Zero costing when every expenses added together in summary sheet, we can make a profitability analysis for the construction project. It also helps in tracking project and ensuring cost of construction never exceed the budgeted amount.