Engineering Economics

Financing of Projects | Economics related to Architecture and Engineering

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Financing of Projects | Economics related to Building Industry

Financing of Projects is the most important factor determining the success of the project. Various factors influence the success of a project.

In this article, we are going to study the major factors that are responsible for the success of the Building project…

Here are the four factors:

  1. Sources
  2. Total Cost Estimation of the Project
  3. Utility in Financing
  4. Agencies and Institutions directly and indirectly influencing the economic aspects of  a project

Sources

Loans are available for both purchasers and Builders from:

All Nationalized Banks,

Co-operative Banks,

Private Banks,

LIC HFL,

Finance Companies,

Insurance Companies like General Insurance Co (GIC), United India Insurance Co Ltd, National Insurance Co Ltd, Oriental Insurance Co Ltd, New India Assurance Co Ltd (for the employees), Foreign Direct Investment FDI, 20 Nationalised Banks along with Regional Rural Banks come under Public sector.

Commercial Banks, Cooperative Banks operate under provisions of Cooperative societies Law of states – for credit and non-credit purpose.

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Introduction to Building Economics as related to Architecture

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Introduction to Building Economics

Building economics is concerned with production and consumption and services and the analysis of commercial activities –

As it is related to architecture and building activity – all types of buildings for all types of functions by the builders (production) and consumption i.e., the ones who either buy or hire those buildings for various functions with the services offered by professionals like architects, planners, engineers etc.

Ends – scarce means

The scarce means like land, building materials, and allied services result in failing to meet the deman in housing sector.

Basic concept – any activity (legally permitted) which shall result in building activities to serve people for which the people are ready to pay the price directly or indirectly by buying or hiring the spaces can be treated as an economic activity.

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Basic Inputs into Building Construction | Engineering Economics

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Building Construction Economics

We will be discussing Inputs into Building Construction in terms of four important factors:

  1. Land
  2. Labour
  3. Capital
  4. Materials

Land

Marshall defines Land “Land means the materials, and the forces which nature gives us freely for the human beings (other creatures as well), in land, in water, in air, light and Heat”.

  • Land is nature’s gift
  • Land has no supply price (supply remains same) whether price of land is high or low
  • Land is permanent (lack of mobility)
  • Land lacks mobility in geographic sense
  • Provides infinite variation in fertility, utility, situation etc

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Public versus Private Participation relating to Architecture and Engineering

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Public Participation versus Private Participation

Public sectors like HUDCO, Hindustan steel, Heavy Engineering corporation etc are controlled by Central Government, Nizam Sugars, Allwyn Ltd, Praga tools etc are controlled by the State Government of AP (Andhra Pradesh).

As far as Building Industry is concerned, materials like cement, steel, wood, aluminium, brick manufacture, variety of floor tiles, wall tiles, electrical materials, plumbing and sanitary ware and fittings etc (to mention only few) are produced in India resulting in quality products, at various price levels to suit different economic levels of social strata.

Only Housing meant for central/state government employees is controlled by central or State governments. The housing for weaker sections are taken care of by State governments as a policy of Government.

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