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Paper Details

Paper Title
New Approach Towards Study and Estimation of Cost Escalation in Construction Industry
Abstract
Theconstructіon industry іs a vіtal sector іn any economy and significantly contributes to socio-economic growth of a country. Cost escalations one of the consequentіalіdentіfіedrіsks faced by constructіonіndustry. Current approach to accommodate price variation in India is unrealistic and non-compensating. With the advent of contracting practices in the construction industry and the risk faced by contractors, reviewing the existing methodology of price variation and suggesting changes in the working process is of utmost importance. This paper attempts to lay down two alternatives for the traditional cost escalation formula for the Indian construction industry. While the traditional formulae in India and many other countries rely on the use of Wholesale Price Index (WPI) and Consumer Price Index (CPI) to calculate cost variation, the new approaches lay stress on the establishment of new indices known as Construction Cost Indices, or using the market rate method for calculating escalation. This paper also tries to bring forth the various shortcomings in the existing methodology and suggests ways to avoid such inadequacies in the new approaches. The paper also emphasizes the use of these formulae in the international arena and provides a comparison of the methods to highlight the significance of new approaches.
KeyWord
Construction industry; cost escalation; Road Project; WPI; CPI; CCI.
Others Details
Paper Id : 99680
Author Name : Saeel K. Bhosale
Co-Author Name(s) : A.P.Khatri
Volume/Issue No : Volume 04 Issue 07
Page No : 140-146
DOI Number : DOI:10.21090/IJAERD.99680
Publication Date : 2017-07-13
License : This work is licensed under a Creative Commons Attribution 4.0 International License.
website : http://www.ijaerd.com/index.php
Impact Factor : 4.72, SJIF-2016
ISSN Details : eISSN: 2348-4470, pISSN:2348-6406