pm final assignment report

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SCHOOL OF ARCHITECTURE · BUILDING · DESIGN

Centre for Modern Architecture Studies in Southeast Asia

PROJECT MANAGEMENT [QSB 4424 / MGT 60704]

GROUP PROJECT (30%)

VOON SZE LUN (0315032)

JAKE SIA CHYI SERN (0314396)

MELVIN LIM WEI JIEN (0315772)

NORBERT VOO HSIEN YUNG (0303748)

MUHAMMAD MUZAFFAR ALLY POOMUN (0310902)

KELLYANN HIEW YAU MEI (0319532)

Lecturer: Mr. Leong Boon Tik

Submission date: 10am, 3rd July 2017

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Table of Contents Page

1.0 Project Background ................................................................................................................................. 3

2.0 Project Justification ................................................................................................................................. 4

2.1 Economical perspective ...................................................................................................................... 8

2.2 Social perspective ............................................................................................................................... 9

2.3 Political perspective ............................................................................................................................ 9

3.0 Project Objectives ................................................................................................................................. 10

4.0 Project Merits/Benefits ......................................................................................................................... 11

5.0 Project Control and Completion ........................................................................................................... 12

6.0 Work Breakdown Structure .................................................................................................................. 16

7.0 Project Cost Estimation ......................................................................................................................... 20

7.1 Data used for estimating project cost ............................................................................................... 20

7.2 Gross Development Cost .................................................................................................................. 21

7.3 Operation and Maintenance Cost ..................................................................................................... 22

8.0 Projected Earnings ................................................................................................................................ 24

8.1 Season Parking .................................................................................................................................. 25

8.2 Food Retails ....................................................................................................................................... 26

8.3 Lecture Theaters ............................................................................................................................... 27

8.4 X-Space Classrooms .......................................................................................................................... 28

8.4 Summary of Project Earnings ............................................................................................................ 29

8.5 Net Present Value (NPV) ................................................................................................................... 30

8.6 Viability of project ............................................................................................................................. 31

8.7 Net Profit over the 20 years .............................................................................................................. 31

9.0 Project Summary/ Conclusion............................................................................................................... 31

10.0 References .......................................................................................................................................... 32

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1.0 Project Background

Taylor’s University is a private university and a member of Taylor’s Education Group

which comprises Taylor’s College, Taylor’s International School, Garden International School,

Australian International School Malaysia, Nexus International School, Putrajaya and Nexus

International School Singapore. However, Taylor’s University was founded in 1969 as a university

which offers courses in tertiary education, from foundation and diploma to degree, post-graduate

and professional programmes.

Source : Google Maps

The work commenced on Taylor's University Lakeside Campus in Subang Jaya cost around

RM450 million in early 2007. The campus, which was completed in 2010, houses all tertiary

programmes under one roof with its mission of becoming a university of 20,000 students renowned

for its teaching excellence and quality of graduates. Taylor's University developed a main campus

called Taylor's University Lakeside Campus in year 2010's to accommodate with the ever

expanding amount of student intake. Alongside the main education facilities such

as laboratories, computer labs and kitchen, they also built a commercial block to help students with

education materials as well as restaurants. It is also the location of the university hostel U-

Residence which can lodge around 900 students and there is a hotel facility called Ruemz. Besides

that, the campus is built on a 27-acre of land, with a 5.5 acre of man-made lake as its focal point.

https://en.wikipedia.org/wiki/Laboratories

https://en.wikipedia.org/wiki/Computer_labs

https://en.wikipedia.org/wiki/Kitchen

https://en.wikipedia.org/wiki/Restaurants

https://en.wikipedia.org/wiki/Hostel

https://en.wikipedia.org/wiki/Hotel

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Other than that, Taylor’s University also provide the students with modern and up-to-date

facilities in the campus which comprises of 3 academic blocks, 22 lecture theatres, 2 blocks of

administration centre and one Grand Hall. Thus, it also included with a residential cum commercial

block and also sports centre like futsal court, tennis court and basketball court.

Nevertheless, due to its rising number of students that the Taylor’s College are moving to

Taylor’s University and the current lecture theater may unable to cater to the demand. Hence,

Taylor’s University has decided to build an extra building to meet the increasing demand.

Taylor’s has decided to rent out a plot of land adjacent to the campus. The size of the land

rented is 1200 m2. The land will be rented out to a developer which will cost RM 15,000.00 a

month for the entire 20 years. Thus, once the developer has build and run a development for a total

of 20 years then they will return to Taylor’s University at the end of their 20 years’ tenure at no

cost.

2.0 Project Justification

It is not easy developing a new business. There are many factors to be considered from the

initial idea and is a complex. A project must first be economically, socially, and politically viable

before the signing of any outlay of money. Risks should be taken into consideration and

outweighed by the advantages of the investment. Therefore, understanding the reasons and validity

of the project is important to ensure the objectives of said project are met. Project justification also

aids the investor to decide whether or not the project will render an ideal return upon completion

and operation. It will be further discussed below about the project justification in terms of

economic, social and political aspect of the project.

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Land Area = 1200 m2

Existing Lecture Theaters Dimension (Approx.) : 15.0m long x 10.0m wide

Existing X-space (Approx.) : 10.0m long x 12.0m wide

Existing Food Retail Shop Dimension (Approx.) : 120 m2

Minimum Parking lot size: 4.80m long x 2.40m wide

(1) Lower Ground Floor 1 (LG1) and Lower Ground Floor 2 (LG2)

Assume Circulation area is about 70%,

Circulation Area = 70% x 1200m2 = 840m2 (Multiply by 2)

Area of 1 parking lot = 4.80m x 2.40m = 11.52m2

No. of parking lots in LG1 = 840m2/11.52m2 = 72

No. of parking lots in LG2 = 840m2/11.52m2 = 72

Total No. of parking lots = 72 + 72 = 144

(2) Ground Floor (Food retail shops)

Assume usable area is about 60%,

Usable Area = 60% x 1200m2 = 720m2

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Area of 1 food retail shop = 120m2

No. of food retail shops= 720m2/120m2 = 6 units

(3) 1st,2nd, and 3rd Floors (Lecture Theaters)

Assume usable area is about 65%,

Usable area = 65% x 1200m2 = 780m2 (for each floor)

Area of 1 typical lecture theaters = 15m x 10m = 150m2

No. of LTs on each floor = 780m2/150m2 = 5

(4) 4th floor (X-space)

Assume usable area is about 75%

Usable area = 75% x 1200m2 = 900m2

Area of 1 typical x-space classroom = 10m x 12m = 120m2

No. of X-space = 900m2/120m2 = 7

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Floors Usable Areas Circulation Areas Remaining Areas Total Area

Lower Ground

Floor 2 (Car park)

840 m2 (70%) 360 m2 1200 m2

Lower Ground

Floor 1 (Car park)

840 m2 (70%) 360 m2 1200 m2

Ground Floor

(Food retail shops

720 m2 (60%) 480 m2 1200 m2

1st Floor (Lecture

Theaters)

780 m2 (65%) 420 m2 1200 m2

2nd Floor (Lecture

Theaters)

780 m2 (65%) 420 m2 1200 m2

3rd Floor (Lecture

Theaters) 780 m2 (65%) 420 m2 1200 m2

4th Floor (X-space) 900 m2 (75%) 300 m2 1200 m2

NOTE: The remaining area is to be devoted to ancillaries such as toilets and circulation spaces such

as corridors, stairs and lift respective live.

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2.1 Economical perspective

As in many project undertakings, the main objective is to obtain financial profit upon its

operation. As mentioned prior, the client will obtain a land from Taylor’s University for 20 years

on a monthly rental of RM15,000. It means that the developer will have to generate its income

through the operation of the multipurpose facility block upon completion of construction during

the 20-year lease.

As observed over the years, the number of students at Taylor’s University has increased

exponentially leading to scarcity of lecture theatres. Lecture theatres are generally easy to construct

as it follows the same design throughout the campus thus saving on design cost. Consequently,

the client will be able to rent the lecture theatres during the 20-year lease. Significant amounts of

revenue will be generated for the developer as he can recover the cost incurred as well as make a

profit.

Apart from that, more X-space classrooms will be constructed along with the additional

lecture theatres. Similarly, X-space classrooms do not vary much in design and can save on design

cost as well. Seeing as how there can be a lack of classrooms at Taylor’s University, the demand

for more work space is bound to be high. The developer can maximise profits of these X-space

classrooms in the duration of the 20-year lease.

Another component of the building will be the retail shops. As the population at Taylor’s

University continues to grow, the restaurants and eateries are getting more congested especially at

peak hours. Providing more retail shops will also expand the otherwise limited food choices of the

students and employees alike. The developer will be able to generate financial profit through the

rental of these retail shops during the 20-year lease.

The last component of the building is the basement car park. Taylor’s University, like any

other university, suffer from a lack of parking spaces. The problem has been made worse due to

the increasing number of enrolment. However, in the developer’s perspective, this is an

economical benefit as the demand for car parks are very high. Revenues from car parks will be in

the form of seasonal parking charge. The developer can maximize profits since car parks are

relatively cheap and require low maintenance.

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2.2 Social perspective

Social Feasibility points the impacts that a proposed project may have on the social system

in the project environment. This proposed project is geared towards enhancing the environment at

Taylor’s University. By building more X-space classrooms, lecture theatres and retails the

crowding problem will not be as apparent. This will promote a calmer and spacious environment

for the benefit of the students. A project with such goals will surely be socially feasible.

The proposed basement car parks will prove beneficial to the students. With limited car

parks, students have to hunt for a parking space sometimes for hours on end during peak hours.

This in itself is a waste of time for students that rushing for assignments or studying for

examinations and do not want to be distracted. By providing the seasonal basement car park,

students now have less to worry about and will be more focused on the work at hand.

Considering the facts above, the proposed project is considered to be socially socially

reasonable as it will helps the students in obtaining higher grades, expectations and attainment,

more calm and focused minded, stronger peer relationships and more academically oriented

friends.

2.3 Political perspective

Political bodies always have an upper hand of most of the project being proposed. This

means that the goals and objectives of a particular project need to be in strict conformity with the

political goals and requirements. Since in this case it relates to a university project, all rules set by

the Malaysian Education department must be met. In order to do so a political feasibility analysis

need to be conducted to ensure that the requires goals and objectives fulfil the rules set by this

department which is a governmental body.

The Malaysia Education department have stated that the average income to high income

status will need to be fuelled more by talent particularly that of leaders and knowledge workers

rather than unskilled labour. It is therefore imperative for Malaysia to have a globally competitive

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education system that produces globally competitive talent. Furthermore, globalization demands

that Malaysia’s talent needs to compete with the best internationally.

Taylor’s University has a core purpose of educating the youth of the world to one day take

their place as leaders in global community, surely better education will be provided which will

indirectly contribute in achieving the vision set up by the Malaysian government in the education

sector. More students will be shaped for the future in order to complement the persons in middle

income to high income status as predicted. Therefore, such project is politically feasible as it helps

in concretizing the Malaysian government political goals.

3.0 Project Objectives

Project’s outcome is determined by the project objectives whether it is mend to be intended

and direct, and to see if it affects the targeted group. Furthermore, it must lie within the scope of

the project and must be able to directly attribute the effects to the project. Mentioned below is the

list of objectives which will be achieved when constructing this multipurpose building project for

Taylor’s University:

1. To be able to help with the students regarding the issue of overcrowdings in the campus

by constructing this multipurpose building.

2. To provide Taylor’s University with more Lecture Theatres and X-Space classrooms to

cater to the students’ needs, to in addition might help with the better allocation of class

schedules hence able to avoid weekend and late night classes.

3. To resolve the well-known parking issues in Taylor’s University by providing

underground season parking to the students.

4. To provide more choices and variety of eateries with the food and beverage retail shops

on the lower floors to the students in Taylor’s University.

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4.0 Project Merits/Benefits

The construction of this multipurpose building will trigger development in its

surrounding as financial landowners will now be interested in using their land due to its increase

in value. Furthermore, addition of commercial or residential buildings may be built in the near

future.

Besides that, the established lecture theatres and classrooms may be very helpful to

Taylor’s University as it provides opportunity to have more postgraduate degree courses.

Eventually, there will be creation of employment as more lecturers will be needed. Moreover,

non-academic staff such as computer technicians, cleaners will be required to maintain the

operation of the multipurpose building. In addition, these facilities will definitely reduce one of

the major issue, which is the overcrowdings in the campus.

The academic performance may surprisingly have a positive impact through the provision

of underground season car parks. This is due to the fact that it has been observed recently, that

students tend to waste lots of time just by finding a car park and eventually end up missing half

of the class. Correspondingly, students are discouraged easily to come to the university when

they have only one or two classes due to difficulty in finding parking.

The addition of retail food outlets will also be a help as students can have more variety to

their choice or selection when it comes to dining. It is also observed that students tend to get

bored fast with the choices, when it comes to choosing a place to eat on campus. Additionally, it

is also found that there is no vegetarian or more halal food shops in Taylor’s University, thus,

this might give the opportunity and the idea to the people that is renting the shop retail place.

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5.0 Project Control and Completion

A construction project is scheduled with the constraints of time, cost, and quality, where

crashing or excessive saving may lower project quality. The 3 factors time, cost and quality are

called the triple constraint that must be managed correctly in a project for it to be successful. The

Iron Triangle or the Project Triangle expresses the triple constraint of time, cost and quality or

scope and the relationships between them.

The iron triangle demonstrates that time, cost and quality are interrelated. This means that

if one of the factors is fixed, the other might have to be decreased or increased. Time is the available

time to deliver the project. Cost represents the amount of money available. Quality represents the

fit to purpose that the project must achieve. But a there can be a compromised between them call

the tradeoff.

To help us find out how to complete the SOH and achieving the goals on time cost and

quality, the PMBoK framework was used as a guide. The table below summarizes the

framework.

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Knowledge

Areas

Planning Process Executing

Process

Monitoring and

control Process

Closing

Process

Project

Integration

Management

Develop Project

Management Plan

Direct and

Manage Project

Works

1. Monitor and

control Project

work

Close Project

Phase

2. Perform

Integrated

Change Control

Project Scope

Management

1. Plan Scope

Management

1. Validate

Scope

2. Collect

Requirements

2. Control Scope

3. Define Scope

4 Create WBS

Project Time

Management

1. Plan Schedule

Management

Control Schedule

2. Define Activities

3. Sequence

activities

4. Estimate Activity

Durations

5. Develop Schedule

Project Cost

Management

1. Plan Cost Cost Cost

2. Estimate Costs

3. Determine Budget

Project Quality

Management

Plan Quality

Management

Perform Quality

Assurance

Control Quality

Project Human

Resource

Management

Plan Human

Resource

1. Acquire Project

Team

2. Develop

Project Team

3. Manage Project

Team

Project

Communication

Management

Plan

Communications

Manage

Communications

Control

Communications

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Project Risk

Management

1. Plan Risk

Management

Control Risk

2. Identify Risks

3. Perform

Qualitative Risk

Analysis

4. Perform

Quantitative Risk

Analysis

5. Plan Risk

Responses

Project

Procurement

Management

Plan Procurement

Management

Conduct

Procurements

Control

Procurements

Close

Procurements

PMBoK Framework (Source: Fichtner, C. (2017). PMBOK Knowledge Areas for Project

Management Guide 5th Edition - Process Groups and Processes - The Complete Guide.

[online]

All the 9 knowledge areas mentioned above are very important for a project to be completed

on time. But for this assignment, only the four following knowledge areas will be discussed below

as stated in the PMBoK.

(1) Project Integration Management

This management emphasize on the development of a clear and precise project plan. For this

purpose, all aspects for the project requirements must be clearly set together with the client, as

discussed in the project justifications, project objectives and project benefits.

(2) Project Scope Management

This knowledge area includes the project scope, that is, the work that is comprised within the

project. Since scope changes are one of the top causes of project changes and grief in general, it

is very important that the boundaries of the project be well defined from the outset and monitored

rigorously. It is very easy for people to insert unauthorized work into the project when the project

appears to be big enough to absorb it, but most projects are estimated with the minimum cost.

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This management involves

a) planning the scope

b) Defining the scope

c) Create a work breakdown structure

(3) Project Time Management

This is usually the most time consuming of the knowledge areas. During planning, the project

manager must divide the project into tasks and create both a schedule (start and finish dates for

each task) and budget for each task. During the project, earned value management determines the

project status at regular status intervals. Because most project changes involve a change to the

schedule, it must be continuously re-baselined and the project management plan updated.

This management points out the importance of time allocation for the various construction stages

in a project. There are:

a) Activity definition

b) Activity sequencing

c) Activity resource estimation

(4) Project Cost Management

Cost management is of utmost importance in the construction field. It will help in preparing

and forecasting the budget needed for the project to avoid any overspend. A correct and accurate

estimate of the cost and a budget plan can help out in reducing potential cost overrun.

http://www.projectengineer.net/the-earned-value-management-system/

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6.0 Work Breakdown Structure

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ID Activities Duration Start Finish

1 Feasibility 16 Tue 1/8/17 Wed 16/8/17

1.1 Conceptual design 14 Tue 1/8/17 Mon 14/8/17

1.2 Criteria development &

conceptual design reviews

2 Tue 15/8/17 Wed 16/8/17

2 Construction Preparation 30 Mon 21/8/17 Wed 20/9/17

2.1 Mobilization 21 Mon 21/8/17 Sun 10/9/17

2.1.1 Site possession 0 Mon 21/8/17 Mon 21/8/17

2.1.2 Site survey 7 Mon 21/8/17 Sun 27/8/17

2.1.3 Plant & Machinery 14 Mon 28/8/17 Mon 11/9/17

2.2 Site Preparation 9 Tue 12/9/17 Wed 20/9/17

2.2.1 Site clearing 3 Tue 12/9/17 Thu 14/9/17

2.2.2 General excavation 3 Fri 15/9/17 Sat 16/9/17

2.2.3 Grading general area 3 Sun 17/9/17 Wed 20/9/17

3 Construction 430 Mon 25/9/17

3.1 Substructure 176 Mon 25/9/17 Sun 1/4/18

3.1.1 Basement 176 Mon 25/9/17 Fri 1/4/18

3.1.1.1 Excavating for basements (B1

& B2)

78 Mon 25/9/17 Thu 14/12/17

3.1.1.2 Retaining walls 65 Mon 18/12/17 Tue 27/2/18

3.1.1.3 Damp proof course 65 Mon 18/12/17 Tue 27/2/18

3.1.1.4 Basement structures 33 Wed 28/2/18 Sun 1/4/18

3.1.1.5 Ramps 26 Wed 7/3/18 Sun 1/4/18

3.1.2 Foundation 38 Tue 2/1/18 Sun 11/2/18

3.1.2.1 Piling 38 Tue 2/1/18 Sun 11/2/18

3.2 Superstructure 254 Mon 2/4/18

3.2.1 Frame 58 Mon 2/4/18 Wed 30/5/18

3.2.1.1 Columns 48 Mon 2/4/18 Sun 20/5/18

3.2.1.2 Beams 43 Tue 17/4/18 Wed 30/5/18

3.2.2 Upper Floors 30 Sat 2/6/18 Sun 1/7/18

3.2.2.1 Floor structures 30 Sat 2/6/18 Sun 1/7/18

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3.2.3 Roof 25 Sat 2/6/18 Tue 26/6/18

3.2.3.1 Roof structures 15 Sat 2/6/18 Sat 16/6/18

3.2.3.2 Roof covering 10 Sun 17/6/18 Tue 26/6/18

3.2.3 Vertical Transportation 30 Sat 2/6/18 Sun 1/7/18

3.2.3.1 Stairs structure 30 Sat 2/6/18 Sun 1/7/18

3.2.3.2 Lifts pit 12 Sat 2/6/18 Wed 13/6/18

3.2.4 External Walls 76 Sat 2/6/18 Sat 18/8/18

3.2.4.1 Masonry work 76 Sat 2/6/18 Sat 18/8/18

3.2.5 Internal Walls 46 Wed 27/6/18 Mon 13/8/18

3.2.5.1 Masonry work 43 Wed 27/6/18 Fri 10/8/18

3.2.5.2 Partitions 31 Fri 13/7/18 Mon 13/8/18

3.2.6 Doors and Windows 26 Mon 20/8/18 Sat 15/9/18

3.2.6.1 Door & window frame 22 Mon 20/8/18 Tue 22/9/18

3.2.6.2 Door & window leaves 17 Wed 29/8/18 Sat 15/9/18

3.3 Building Finishes 80 Tue 14/8/18 Mon 5/11/18

3.3.1 Internal wall finishes 15 Tue 14/8/18 Thu 30/8/18

3.3.2 External wall finishes 15 Mon 20/8/18 Tue 4/9/18

3.3.3 Floor finishes 20 Fri 31/8/18 Thu 20/9/18

3.3.4 Ceiling finishes 20 Fri 21/9/18 Wed 10/10/18

3.3.5 Staircase finishes 20 Fri 31/8/18 Thu 20/9/18

3.3.6 Basement finishes 25 Thu 11/10/18 Mon 5/11/18

3.4 Furnishings and Fittings 25 Tue 6/11/18 Sat 1/12/18

3.4.1 Furniture 10 Tue 6/11/18 Thu 15/11/18

3.4.2 Equipment 25 Tue 6/11/18 Sat 1/12/18

3.4.3 Sanitary wares 16 Tue 6/11/18 Thu 22/11/18

3.5 M&E Works 45 Tue 6/11/18 Fri 21/12/18

3.5.1 Plumbing 45 Tue 6/11/18 Fri 21/12/18

3.5.2 Electrical 34 Sat 17/11/18 Fri 21/12/18

3.5.3 Air-conditioning 27 Sun 25/11/18 Fri 21/12/18

3.5.4 Fire protection 29 Fri 23/11/18 Fri 21/12/18

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3.5.5 Lift 10 Wed 12/12/18 Fri 21/12/18

3.6 Infrastructure Works 57 Tue 6/11/18 Sat 5/1/19

3.6.1 Sewerage works 57 Tue 6/11/18 Sat 5/1/19

3.6.2 Surface water drainage 55 Thu 8/11/18 Sat5/1/19

3.6.3 External reticulation works for

M&E

24 Fri 21/12/18 Thu 17/1/19

3.6.4 Road works 33 Tue 6/11/18 Thu 20/12/18

3.6.5 Road kerbs 24 Thu 20/12/18 Tue 15/1/19

3.6.6 Walkway 20 Mon 24/12/18 Tue 15/1/19

3.6.7 Underground cable services 25 Tue 6/11/18 Sat 1/12/18

3.6.8 Fencing 30 Wed 14/11/18 Fri 14/12/18

3.6.9 Landscaping 20 Thu 13/12/18 Sat 5/1/19

4 Demobilization 30 Mon 7/1/19 Fri 1/2/19

4.1 Testing and Commissioning 20 Mon 7/1/19 Sat 26/1/19

4.2 Cleaning and Clearing 10 Mon 28/1/19 Fri 1/2/19

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7.0 Project Cost Estimation

Project underestimation of resources and costs is one of the most common contributors to

project failure. Thus, project managers should have a sound knowledge of the various construction

techniques and tools in the defining and executing the project cost estimation. As defined by the

Project Management Body of Knowledge (PMBOK), cost estimation is the iterative process of

developing an approximation of the monetary resources needed to complete project activities.

The cost that is associated with this project include both the initial capital cost and the

subsequent operation and maintenance costs. As always, the client will want to achieve the lowest

possible net project cost keeping in mind the investment cost and how to recover his money. But

the scale of these cost components will be subjected to the nature, size and location of the project

itself.

In order to accurately produce a cost estimate for this project, construction cost handbook

for like JUBM and Langdon Seah Construction has been used to obtained the relevant cost data

which are up to date. Construction cost data fit for this project are related to underground car park,

medium rise offices and retail outlets. Other costs like for example the development cost which

includes numerous cost like professional fees, legal fees, administrative fees, planning fees and

contingencies are based on percentage of the total construction cost.

7.1 Data used for estimating project cost

(1) Construction Cost (L&S cost handbook related to Kuala Lumpur)

i. Average Standard offices (Lecture Theaters) RM 2470/m2 (inclusive of services)

ii. Average Standard offices (X-space) RM 2470/m2 (inclusive of services)

iii. Food retail outlets RM 2760/m2 (inclusive of services)

iv. Basement carparks (less than 3 levels) RM 1475/m2 (inclusive of services)

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(2) Development Cost

i. Professional Fees : 8% of construction costs

ii. Administrative Fees : 2% of construction costs

iii. Plan Fees : 2% of construction costs

iv. Legal Fees : 1% of construction costs

v. Contingencies : 5% of construction costs

7.2 Gross Development Cost

(a) Construction Cost

No Type No. of

Floors

Net

Build Up

Area

(m2)

Construction Cost

(RM/m2) from L&S

Construction

Cost

(RM/m2) for

this project

Construction

Cost (RM)

1 Basement Car

Parks 2 2400

1,475.00

1,475.00

3,540,000.00

2 Food Retail

Outlets 1 1200

2,760.00

2,760.00

3,312,000.00

3 Lecture

Theaters 3 3600 2,470.00 (subjected

to 10%)

2,717.00

9,781,200.00

4 X-space

classroom 1 1200 2,470.00 (subjected

to 10%)

2,717.00

3,260,400.00

NET TOTAL 7 8400

19,893,600.00

Assumption: Increase the price for the lecture theaters and the X-space classroom by 10% due to

the special furniture and digital accessories.

Assumption: The cost data include circulation spaces and ancillary services like toilets, staircases,

lifts and walkways.

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(b) Development Cost

No. % Allocation

Construction Cost

(RM)

Development Cost

(RM)

1 Professional Fees 8%

19,893,600.00

1,591,488.00

2

Administrative

Fees 2%

397,872.00

3 Plan Fees 2%

397,872.00

4 Legal Fees 1%

198,936.00

5 Contingencies 5%

994,680.00

NET TOTAL

3,580,848.00

Gross Development Cost (GDC) = Construction cost + Development Cost

= RM 19,893,600.00 + RM 3,580,848.00

= RM 23,474,448.00

7.3 Operation and Maintenance Cost

A building like this project which is dedicated to the students of the Taylor’s University

would carry a consequent cost for operating and maintaining the whole building . Since the

client will rent the land for RM 15,000 per month for a period of 20 years and that he will do the

whole development under his expense, it is assumed that the client should bear the whole operation

and maintenance cost without any help from Taylor’s University. But without proper

communication with the management of university, the client will not be able to accurately

estimate the monthly operation and maintenance cost. It is imperative that the client liaise with the

university. Also, to cater for any inflation in prices, it is assumed that the monthly expenses should

be subjected to a 5% increase every 5 years. The monthly expenses obtained for 1 block are as

follows:

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Electricity and water : RM 100,000

Repairing cost : RM 20,000

Cleaning cost : RM 20,000

Now these costs are for one block which contains operating and maintaining costs for 11

fully operated floors. Using the prices above, the expenses for the new academic block are

calculated accordingly and it will also include the monthly rental for the land bearing in mind that

there will not be any cleaning cost and repairing cost at it is the construction period.

Monthly expenses

for new building

Electricity and

water

60,000.00

Repairing cost

10,000.00

Cleaning cost

10,000.00

Land Rental

15,000.00

NET TOTAL

95,000.00

%

increase

Monthly

Expenses for

new building

(RM)

Yearly

Expenses

(RM) TOTAL

Expenses (RM)

Year 1 (12months) 15,000.00 180,000.00 180,000.00

Year 2 to 5 (48 months) 95,000.00 1,140,000.00 4,560,000

Year 6 to 10 (60 months) 5% 99,750.00 1,197,000.00 5,985,000.00

Year 11 to 15 (60 months) 5% 104,737.50 1,256,850.00 6,284,250.00

Year 15 to 20 (60 months) 5% 109,974.38 1,319,704.50 6,598,462.50

NET TOTAL 23,607,712.50

Page | 24

Therefore, the following outlines the whole estimated project cost;

Gross Development Cost RM 23,474,448.00

Operation & Maintenance

cost RM 23,607,712.50

Total Estimated Project

cost RM 47,082,160.50

8.0 Projected Earnings

In this section, it will be clearly stated how the yearly earnings will be calculated as this will

determine the income of the client over the period of his 20 years’ contract with Taylor’s

University. The following earnings which the client will benefit while renting the mentioned

facilities of the new building:

(1) Season paring charges only

(2) Monthly rental of the lecture theaters

(3) Monthly rental of the X-Space classrooms

(4) Monthly rental of the food retail outlets

Below are the projected earnings for the season parking, the food retail outlets, the lecture

theaters and the X-space classrooms respectively. It is to be noted that the first year is dedicated

to the construction period, thus there will not be any earnings in the first year.

Page | 25

8.1 Season Parking

The current season parking fee for Taylor’s University is RM 120/month. To maintain consistency

along with Taylor’s University charges, the season parking fee will also be RM 120/month. The

projected earnings are as followed:

Season Parking charge/lot = RM 120/ month

Number of Parking Lots = 144 lots (2 levels x 72 lots/level)

Monthly Earnings = RM 120 x 144

= RM 17,280

Yearly Earnings = RM 17,280 x 12

= RM 207,360.00

Year Remarks Yearly Earnings

(RM)

Total Earnings (RM)

2 - 5 - 207,360.00 829,440.00

6 - 10 Fees increases by 5% 217,728.00 1,088,640.00



NET TOTAL 4,261,375.00

Page | 26

8.2 Food Retails

It is assumed that the rental price for the retail on the ground floor will be RM 7,000. This rate is

obtained after comparing with the different rental of retail in the area. The rental price does not

include the utility bills as the retailers are expected to pay for it on their own. The projected

earnings are as followed:

Rental Fees/Retail Lot = RM 7,000/ month

Number of Retail Lots = 6

Monthly Earnings = RM 7,000 x 6

= RM 42,000


= RM 504,000

Year Remarks Yearly Earnings (RM) Total Earnings (RM)

2 - 5 - 504,000.00 2,016,000.00




NET TOTAL 10,357,215.00

Page | 27

8.3 Lecture Theaters

The rental for the Lecture Theaters will be priced at RM 9,000 each month. The rental is high

due to the amount of electricity that would be used daily for the air conditioning, lighting and the

projector. The projected earnings are calculated:

Rental Fees/Lecture Theater = RM 9,000/ month

Number of Lecture Theaters = 15


= RM 135,000


= RM 1,620,000


2 - 5 - 1,620,000.00 6,480,000.00

6 - 10 Fees increases by 5% 1,701,000.00 8,505,000.00



NET TOTAL 33,292,012.50

Page | 28

8.4 X-Space Classrooms

The rental for the X-Space classrooms will be priced at RM 9,000 each month. The rental is high

due to the amount of electricity that would be used daily for the air conditioning, lighting and the

projector. The projected earnings are as followed:

Rental Fees/Lecture Theater = RM 9,000/ month

Number of Lecture Theaters = 7


= RM 63,000


= RM 756,000


2 - 5 - 756,000.00 3,024,000.00




NET TOTAL 15,536,272.50

Page | 29

8.4 Summary of Project Earnings

Season Parking = 4,261,375.00

Retail = 10,357,215.00

Lecture Theater = 33,292,012.50

X-Space = 15,536,272.50

TOTAL = 63,446,875.00

Page | 30

8.5 Net Present Value (NPV)

Year Inflow Outflow Net Cash Flow PV Factor @ 5% PV Value @ 5%

0 23,654,448.00 -23,654,448.00 1 -23,654,448.00

1 3,087,360.00 1,140,000.00 1,947,360.00 0.9524 1,854,665.66

2 3,087,360.00 1,140,000.00 1,947,360.00 0.907 1,766,255.52

3 3,087,360.00 1,140,000.00 1,947,360.00 0.8638 1,682,129.57

4 3,087,360.00 1,140,000.00 1,947,360.00 0.8227 1,602,093.07

5 3,087,360.00 1,197,000.00 1,890,360.00 0.7835 1,481,097.06

6 3,241,728.00 1,197,000.00 2,044,728.00 0.7462 1,525,776.03

7 3,241,728.00 1,197,000.00 2,044,728.00 0.7107 1,453,188.19

8 3,241,728.00 1,197,000.00 2,044,728.00 0.6768 1,383,871.91

9 3,241,728.00 1,197,000.00 2,044,728.00 0.6446 1,318,031.67

10 3,241,728.00 1,256,850.00 1,984,878.00 0.6139 1,218,516.60

11 3,403,814.00 1,256,850.00 2,146,964.00 0.5847 1,255,329.85

12 3,403,814.00 1,256,850.00 2,146,964.00 0.5568 1,195,429.56

13 3,403,814.00 1,256,850.00 2,146,964.00 0.5303 1,138,535.01

14 3,403,814.00 1,256,850.00 2,146,964.00 0.5051 1,084,431.52

15 3,403,814.00 1,319,704.50 2,084,109.50 0.481 1,002,456.67

16 3,574,005.00 1,319,704.50 2,254,300.50 0.4581 1,032,695.06

17 3,574,005.00 1,319,704.50 2,254,300.50 0.4363 983,551.31

18 3,574,005.00 1,319,704.50 2,254,300.50 0.4155 936,661.86

19 3,574,005.00 1,319,704.50 2,254,300.50 0.3957 892,026.71

NET PRESENT VALUE 1,152,294.82

*First year cash outflow = RM 23,474,448 + RM 180,000 (rental for first year)

= RM 23,654,448.00

*The reason to why we have only 19 years while calculating the NPV is that the first financial year

is accounted as the year 0 in the NPV table.

Page | 31

8.6 Viability of project

The reason why the NPV was calculated is to find whether this project will benefit the client or

not. By having a positive NPV at a PV factor of 5%, Its shows that this project is acceptable and

can proceed with the development.

8.7 Net Profit over the 20 years

Estimated project earnings for 20 years RM 63,446,875.00

Invested GDC -RM 23,474,448.00

Operation and maintenance cost for 20 years -RM 23,607,712.50

NET PROFIT RM 16,364,714.50

9.0 Project Summary/ Conclusion

As a summary, the proposed project is an additional block which comprises of 7 floors with 2

levels of basement parking spaces, 1 floor of food retail outlets which located on ground floor, 3

floors of lecture theater units and X-space units that located on 4th floor. This project is to make

sure that it can help Taylor’s University in solving the issues such as insufficient parking spaces,

retails and lecture units. Besides that, it also will ease the ascension of Taylor’s University to the

most preferred university in Malaysia.

For the estimation part, it proved extremely profitable to the client as the estimation above

shows that within 20 years of the additional block, the client will be able to make a profit of RM

16,364,714.50. Besides that, this will facilitate the client in term of finances on funding other

projects which can lead him to a higher level of success. The students in Taylor’s University can

also have a chance to live and study in a better environment through the access of such facilities.

Page | 32

10.0 References

Anon, (2017). [online] Available at: http://http//doit.maryland.gov/sdlc/documents/cost

estimating.pdf

Anon, (2017). [online] Available at: https://www.projectsmart.co.uk/project-management-scope-

triangle.php

Anon, (2017). [online] Available at: http://www.langdonseah.com/en/sg/files/download/3796

Iproperty.com.my. (2017). Cite a Website - Cite This For Me. [online] Available at:

https://www.iproperty.com.my/propertynearby/16879/S/Sunway_Pyramid_ForRent

Fichtner, C. (2017). PMBOK Knowledge Areas for Project Management Guide 5th Edition -

Process Groups and Processes - The Complete Guide. [online] Project-management-

prepcast.com. Available at: https://www.project-management-prepcast.com/pmbok-knowledge-

areas-and-pmi-process-groups

Hartney, J. (2017). The 10 PMBOK Knowledge Areas. [online] ProjectEngineer. Available at:

http://www.projectengineer.net/the-10-pmbok-knowledge-areas/

Padu.edu.my. (2017). PADU | MEB. [online] Available at: http://www.padu.edu.my/meb

Pmbook.ce.cmu.edu. (2017). Project Management for Construction: Cost Estimation. [online]

Available at: http://pmbook.ce.cmu.edu/05_Cost_Estimation.html

Costengineering.eu. (2017). Which are the best techniques for project cost estimating?. [online]

Available at: http://www.costengineering.eu/blog-article/which-are-the-best-techniques-for-

project-cost-estimating