In this assignment, I have tried to identify broadly the direct and indirect cost associated with the execution

of works for the construction of sewer networks and house connections

The sewer construction and house connection works result in certain costs while the project globally results in a huge spectrum of costs.

Direct cost
The direct costs involved are in executing the works. What are the works? The works are to construct a sewer network as well as the house connections. For the construction of a street sewer line and adjoining house connections, we need: i. Equipment An excavator To be able to excavate the trenches, sometimes up to 6m, an excavator (size may vary for different situations) is needed. Without it, excavating is impossible. The cost of buying and rent being paid for the excavators are a direct cost to the works.

Compacting equipment and bobcats. When backfilling, whackers and rollers are used for compaction. Without them, executing the works is impossible. So the costs of buying these equipment are considered as direct costs. Renting of steerloaders is also a direct cost as the use of the steerloaders is indispensable to carry crusher run, bedding material and soil.

Miscellaneous equipment The equipment mentioned above are elemental to the pipe laying process. But other equipment also come into play such as tar cutter used when setting out of trenches, lorries to transport materials, compressors with hoses and breakers and water pumps to empty inundated trenches. All these are considered as direct costs.

ii.

Materials Pipes

For this project, pipes of several diameters are being used to build the sewer network. These pipes are the most vital part of the works and they bear a cost to be manufactured, imported and transported. Alongside with the pipes, accessories such as Y-branch pipes, tees, bends and couplings are required. These are perhaps the most clear direct costs of the project.

Bedding Upon the formation, 150mm of bedding needs to be placed prior to laying of the pipes. This specification is clearly stated in the contract. Also the pipes need to be buried into bedding material before backfilling with soil starts. Buying this material is essential to building the sewer and this counts as a direct cost as it goes straight into the works.

Selected fill To backfill the trenches, selected fill has to be used whereby the excavated soil is removed of all oversized debris such as broken asphalt and big rocks to obtain a rather homogeneous soil capable of being rightly compacted. To perform this task, a dump has to be operated where the soil has to be sieved. This accounts as a direct cost as completing the works without the selected fill is impossible.

Road reinstatement Double Binder Surface Treatment (DBST) is used as a temporary road reinstatement, in waiting of final reinstatement. It is a successive laying of crusher run and a bituminous binder. As it is an obligation under the contract, it forms part and parcel of the works and therefore is a direct cost to building the sewer. Following DBST, final reinstatement is done using asphaltic concrete surfacing. The cost involved is a direct cost for the works.

Manholes Manholes are of two types, namely precast and cast-in-situ. Both require concrete and steel reinforcement. After being placed, the finish is done by masons who do the plastering, placing of steps and benching. As manholes are components of the sewer system, the cost of the construction materials is considered to be a direct cost.

iii.

Labour To be able to build the sewer line, skilled and unskilled workmen are needed. We need operators for excavators, jcb, bobcats and rollers

plumbers masons for finishing of manholes labourers for digging.

All these persons need to be paid salaries and account as a direct cost to the works. iv. Subcontractors Subcontractors also account as direct costs.

Indirect cost
Having broadly identified the direct costs involved in executing the works, I will now concentrate on the indirect costs. Indirect costs concern goods and services which are not directly linked to the execution of the works but indirectly contribute to the works being done. It is just like a computer where the most important component is the CPU which, in turn, cannot be useful unless peripherals like mouse, keyboard and keyboard are present. In analyzing the project, I have come across several indirect costs which I will list. i. Transport and associated cost Vehicles have to be provided both to the Engineer and the Employer. From the Contractor side, vehicles are provided to many persons such as the Site Agent, General foreman, Head of surveying department, Head of Public Relations department. Moreover mini-trucks have to be provided for the transport of employees. To all the vehicles, additional costs are associated such as fuel costs, insurance premiums, road taxes, repair and maintenance and mechanics fees. All these vehicles and the parallel costs are not physically involved in the laying of the pipes and manholes but they contribute indirectly to the construction of the sewer network. All the parties and persons listed above do not physically lay the sewers but they need to be present for the proper management of the project. So the costs of the above are indirect costs to the works.

ii.

Workers safety and other costs We need workers to build the sewer network but there are other costs leaving apart the salaries. To provide safe working conditions, workers need to be given helmets, uniforms, fluorescent jackets and site shoes. Moreover the workers have to be insured as per the contract demand and this has an impact on the costs. Compensation also needs to be paid as and when required. These costs count as indirect costs to the works.

iii.

Site office and accommodation Office accommodation needs to be given to the Engineer and the Employer. These offices must be fully furnished with desks, chairs, conference tables, computers must also be offered. For the Contractor, a site office has been built where several containers have been placed as offices and others departments are present such as mechanical workshop and store. All these contribute to the proper management of the project but are indirect aids to the construction process and therefore are considered as indirect costs to the works.

iv.

General and administrative expenses Any project needs to be properly managed and this is impossible without non-technical personnel. At the site office, we have a timekeeper, a storekeeper, a quantity surveyor and many other non-technical persons. At the head office, there are other persons such as costing analysts and accountants which contribute to the proper administration of the project. As these persons do not contribute physically to the placing of pipes and manholes but still they contribute to the project, so the costs associated with these persons and their services are indirect costs to the works.

v.

Communication As per the obligations under the contract, communication means such as fixed telephones, mobiles, internet and fax facilities must be offered to the Engineer and the Employer. All the bills must also be paid monthly. For its own personnel also, Contractor provides mobile phone and settles the bills also. These communication means do not physically intervene in the works but they are essential for the project and the works to move on, therefore all their costs are taken as indirect costs to the works.

vi.

Overheads For the contractor, employing experienced persons to head and manage a project is crucial. There is a Contract Manager and also a Site Manager which head the project from the companys side. Many other persons are involved in the managerial system including engineers. They do not physically construct the sewer lines and house connections but they manage things to make the project progress and reach its target. All the costs involved with these people are therefore classified as indirect costs to the works.