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Building development is a long and challenging cycle. Development work should go through many strides, from arrangement and development to handover and use. All the while, it is additionally fundamental to compute how much the development cost is. To accurately determine the amount of capital to invest and build, it is usually necessary to calculate the most accurate construction investment rate. So what does the construction investment unit cost? Find out with Indianapolis Contractors in the article below!
What Is The Cost Of a Construction Investment unit?
Construction investment unit cost is the necessary cost level to invest in the construction of a new work calculated by a unit area, capacity, or service capacity according to the design of the work.
The construction investment unit cost is one of the bases for preliminary determination of total investment, total project investment, resolution, and management of construction investment costs at the preparation stage. Construction investment unit prices are used to determine the value of land use rights. The unit price of construction investment proves the actual value of the asset. It is an essential work product when determining the value of the enterprise, from which it can be equitized under the guidance of the competent authority.
Investment unit cost includes construction costs, equipment, management of development venture projects, development speculation counseling, and different costs. The calculated investment unit cost provides value-added tax for the above fees.
Purpose of using construction investment capital rate
Investment unit cost is widely used in construction and when executing projects and works. Looking at the investment rate, individuals and organizations can calculate and plan the actual expenses to invest in the construction of new jobs in the most effective way.
The investment unit cost of construction acts as a basis for preliminary determination of total investment, total project investment, and management of construction investment costs at the project preparation stage.
According to regulations of competent management agencies, the owner may temporarily use the value of construction investment capital rate to determine the value of land use rights and fulfill financial obligations on land.
Construction investment unit cost includes expenses: construction, equipment, project management, construction investment consulting, and other fees. Construction investment unit cost includes value-added tax for the above payments.
The cost content in the investment rate does not include the cost of performing some types of work according to the specific requirements of the particular project/construction, such as:
- Compensation, support, and resettlement expenses include: costs of compensation for land, houses, structures on land, properties attached to the land, on the water surface, and other compensation expenses as prescribed; support when the state recovers ground; resettlement costs; fees for organizing compensation, support, and resettlement; cost of land use during construction (if any); expenses for the technical infrastructure that has been invested and built (if any) and other related expenses.
- Loan interest during construction investment (for projects using loan capital);
- Initial working capital (for construction investment projects for production and business purposes);
- Provision expenses in the total investment (provision for arising workload and provision for price slippage during project implementation);
- Other costs include environmental impact assessment and treatment of the project’s impacts on the environment; international quality registration, construction deformation monitoring; cost of work quality inspection; special reinforcement of the building foundation; expenses for hiring foreign consultants.
How is the construction investment unit cost determined?
Not all businesses or organizational units can stand up for investment or construction in an unorganized manner. It must be based on different bases and regulations to be able to announce the investment rate accurately and precisely.
Investment unit rate is applied when constructing new construction works, having diversified and widespread nature. This project uses modern and advanced construction technology to bring beautiful work by the standards prescribed by the state on construction.
To quickly determine and plan the latest investment rates, it is necessary to apply the bases and quality criteria prescribed by the state.
It can be applied and based on the level of construction work being reached, the technical standards, the investment area for the construction of the work, the function of use, specific instructions, and other expenses by the project under construction and with the announced initial requirements.
Points and plans to build. Determining the total investment in the construction of works depends on the time and stage of making the initial research report before the construction. Thus, to calculate a specific initial construction investment rate, it is necessary to determine the project’s total investment at the time of construction and use the announced investment rate near when defining the project’s time.
Above is information related to the construction investment rate for your reference. Hope the article has brought you valuable information for your work and life. Follow our website for more helpful information. Thank for reading.