The Problem of Exceeding the Cost of Construction and New Opportunities to Solve it at the Stage of Project Preparation

Abstract:

The article discusses the problem of exceeding the planned cost of construction, sources of origin and ways to manage the risk of the need for additional financing of construction at the stage of project preparation. The possibilities of solving the problem by substantiating the reserve funds for unforeseen works and costs on the basis of the process approach and the digital model of distributed risk assessment are considered. In order to improve the reliability of determining the cost of construction, the dependence of the reserve funds for unforeseen works and costs, risk cost and risk degree is determined. An example is given of substantiating the reserve funds for unforeseen works and costs in the composition of the summary budget calculation of capital repair of the 1st Yelagin bridge over the Srednyaya Nevka river in Saint-Petersburg taking into account project design, production, technology, pricing, contractual and inflationary risk factors.

• Periodical: Materials Science Forum (Volume 931)
• Pages: 1122-1126
• DOI: https://doi.org/10.4028/www.scientific.net/MSF.931.1122
• Online since: September 2018
• Authors: Sergey G. Oparin*
• Keywords: Project Preparation for Construction, Reserve Funds for Unforeseen Works and Costs, Risk Cost, Risk Degree, Risk Management, The Reliability of Determining the Cost of Construction, The Risk of the Need for Additional Financing

References

[1] Information on https://www.dp.ru/a/2016/05/23/Zenit-Arena_podorozhaet.

[2] The method of determining the cost of construction products on the territory of the Russian Federation, MDC 81-35.2004, as amended by the Order of the Ministry of construction of the Russian Federation from 01.06.2012 № 220.

[3] S.G. Oparin, Process-oriented concept of risk management in the economy, In: Risk management in the economy: problems and solutions. Proceedings of the scientific-practical conference with international participation RISK'E-2016, under the redaction of S.G. Oparin, Saint Petersburg, 2016, pp.18-26.

DOI: 10.33293/1609-1442-2019-1(84)-139-145

[4] S.G. Oparin. Development of theoretical bases and methods of economic risks quantitative assessment on the basis of digital model of integral convolutions, in: Proceedings of the international scientific-practical conference ECOPROM-2015, under the redaction A.V. Babkin, Saint Petersburg, 2015, pp.725-737.

[5] E.V. Kazaku, A.A. Leontiev, S.G. Oparin, A.E. Stasishina. Methodology of risk management for the need of additional financing when preparing the estimates for construction by the road sector resource method, in: Risk management in the economy: problems and solutions. Proceedings of the scientific-practical conference with international participation RISK'E-2016, under the redaction of S.G. Oparin, Saint Petersburg, 2016, pp.26-38.