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Analysis of Indirect cost of Construction Projects in India

Abhinav Saini, Salman Khursheed, Virendra Kumar Paul, Kuldeep Kumar

Abstract


Cost is one of vital performance indicator for construction projects. All construction projects consists of direct and indirect costs. Indirect cost form significant part of contract value. Previous studies suggest that there exist a general practice of taking total overhead as percentage of direct cost or contract value. Such a thumb rule is highly susceptible to inaccuracy because various project factors. Since, indirect cost is an important factor for project and company performance. This research aims to analyze indirect cost for different construction projects in India. For this purpose, 3 on-going construction projects, having different project attributes were studied and their indirect cost were estimated. Overhead related to site was calculated through conducting site visit and collecting relevant data. And company overhead was calculated using company expense and operational revenue data of 15 publicly listed construction companies to form linear regression model. It was found that indirect cost varies based on a number of influencing factors as the literature suggests but comes out to be higher than reported or generally thought of. Also, findings suggest that operational revenue of contractor has direct relational with indirect cost of the project.


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References


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DOI: https://doi.org/10.37628/ijsdt.v4i2.864

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