There are many different sayings on the topic of money and how it affects fate: “a miser pays twice,” “according to income and expense,” and other folk wisdom. We talked with the founder and CEO of WALTER Construction, Eugene Walter, about how realistic it is to meet the funds allocated for everything about everything.
-Eugene, money has always been and remains a very acute topic. What should the general contractor do to meet the contractual cost agreed upon at the entrance to the project?
- If two key project participants, the customer and the general contractor, behave openly and honestly, go to the same goal, then, in my experience, this seriously contributes to controlling the project budget properly. We recently conducted a professional survey, and when asked about the key problems in the implementation of projects, the second most popular answer was the option “initially underestimated cost”. There are many reasons for this, ranging from an incompetent initial cost estimate to an attempt to enter a budget from the top.
For a number of construction companies, jumping into a project at a low tender price with a full understanding of the real cost is a cleverly built strategy. How to work in such cases? To achieve a large number of negotiations and to disassemble each technological solution to the bone with one goal - to at the tender stage, with a large number of unknowns, as accurately as possible estimate the future value of these "Xs" and "Games".
In our practice, there was a case when the initial project budget was underestimated by half, and there was a high probability that the tender would simply be canceled until better times. And only joint work with the specialists of the customer company made it possible to avoid this and reach the real cost of the work. Yes, she has grown seriously, but she has become grounded.
However, this is not always the case - customers and investors are not ready to face the truth. Many enter construction with a budget that is out of touch with reality, as a result, they get a colossal frustration and slide into a huge investment pit.
- Are errors in cost estimation a problem only for Russian projects or is it international in scope?
- I think the second option is closer to the truth. Let's remember Berlin-Brandenburg Airport, which opened at the end of October. It is not for nothing that it was nicknamed the “graveyard of billions” - the project overrun was 4 billion euros. I can assume that the best world-class specialists were involved in the implementation of the project, but even that did not save him. People are still working on construction sites, and the human factor cannot be disregarded.
- You mentioned the results of the survey. And what is the most popular answer to the question about the key problems in the implementation of construction projects?
- In fact, the problem of estimated pricing, of course, can be solved within the framework of one or another investment project: for example, the customer and the general contractor agree on the use of unit prices: here, a cube of concrete or one ton of turnkey metal structures costs 100 rubles.
In the end, everything is simple: they assembled 100 tons or filled in 100 cubic meters - they received 10 thousand rubles. In this case, everything is transparent and very simple: everyone at the construction site and in the back office understands how to calculate the closing volumes, whether the general contractor is fulfilling the production plan, etc. And no one goes into how long your crane worked, how many people were on the site, how much money you spent on their salaries - all these questions disappear.
Simplicity in everything, and most importantly in communications and chains of approvals - this is what you need to strive for everywhere, not only at the construction site. The word "difficult" comes from the word "lie". If you look closely at the area of activity where everything is very difficult, as a rule, various kinds of schemes and intrigues will come out. Often, an entire project can suffer from incorrect behavior of just one link in the chain. Returning to the question: My opinion is that you need to try to go out on the one. If, for some reason, this is impossible, the most, in my opinion, effective way is to develop and enforce the rules in terms of document flow between the customer, the general contractor and the contractor. I have worked for many years in the structure of the Customer and I know firsthand how much time is consumed, for example, by coordinating technical solutions. So, I just introduced a rule: from the date of receipt of the technical solution from the contractors, a maximum of one day should pass. It worked like a clock. Everyone was happy, and most importantly, they were confident that they would not have to stop the flywheel at a construction site.
However, it also happens that you find yourself in a dead end due to the extreme degree of formalism and bureaucracy: for example, you have a certain amount according to estimates - 100 rubles.
In the course of the project, you come to what you need within the articles.