Component ratios of new building costs in Nairobi: a contractors' perspective
Date
2012Author
Masu, Sylvester M
Gichunge, H.
K'Akumu, O A
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Abstract
Purpose - The aim of this paper is to use the case study of Nairobi in Kenya in order to fill the gap of
knowledge on the component ratios of new building costs that has been missing from international
literature.
Design/methodology/approach - Using survey methodology that considered firms of contractors
registered and operating in Nairobi Kenya, the paper compares its findings rendered in terms of
percentage ratios: with theoretical propositions (e.g. Wood), with past studies (e.g. Knowles) and with
practice guidelines in Kenya.
Findings - Overall it finds that there is no significant change in percentage component ratios
considered from past studies and practice guidelines in Kenya leading to the conclusion that the
building industry has not undergone any significant technical change during the periods under study,
i.e. 1980·2006. "
Research limitations/implications - The study is limited by the fact that it only manages to
capture the contractors' views of the component ratios. Contractors may be inclined to hide their
profits which can be a sensitive issue in the Kenyan market, which as a developing economy, may be
riddled with corrupt practices such as tax evasion and imperfect business competition. However, the
issues raised here can be used as base information for further studies on the topic. Additionally an
analysis of variance was performed on the data to ascertain its credibility. Second, the data used to
argue the paper's case is partially dated but remains usefuL The trend shows that there has been no
significant change in the composition of component ratios hence the data remains relevant to date.
Practical implications - The paper's findings would be useful to international readers especially
now that international contractors are bidding for work in Kenya. The data would give these
contractors a glimpse into the structural composition of building cost components in Nairobi.
Originality/value - The paper's original contribution concerns the component ratios of building costs
that has been neglected in the existing literature. In Kenya some work had been done by Knowles, but this
was restricted to officeblock buildings only, while this paper considers all buildings as shown in Table V.
Citation
Journal of Financial Management of Property and Construction Vol. 17 No.3, 2012 pp.222·234Publisher
Department of Real Estate And Construction Management Department of Architecture and Building Science