Project Cost ControlBy Saleem Akram

Introduction - Overview of estimation methods

Cost estimating is essential for cost planning and budgeting, both

of which lay the basis for cost monitoring and control, as explained

in the following CPD. Cost estimating takes place in the project life

cycle, that is to say, in all stages of the project development.

Methods for cost estimating vary as the project evolves from the

early stages of conception to the construction phase, and then to

the operation phase. In principle, as the project develops, more

information becomes available thus estimating methods ought to

be more accurate. Accordingly, estimating methods may be

grouped as follows (the expected precision of project’s investment

costs calculation is indicated in brackets):

• Estimation methods at the inception stage (30% to 50%);

• Design phase estimation methods (15% to 30%);

• Construction phase estimation methods (5% to 15%).

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