Montag, 14. Januar 2013

Construction came to a halt again!

Unfortunately it has become very quiet on our building site about middle of December. This is a shame considering that the guest bungalow is finished, the main house is nearly there (only a few things need doing like water and electricity connection, some painting) and the garden needs to be created.  We h d a stop of construction already in the summer of 2012 when the main contractor had to be terminated due to bad quality and time frame problems.

This time the problem is with the PM (project management). When the architect got in bids from contractors on the basis of the BOQ (bill of quantity), these were substantially above the budget that he had suggested. He convinced us that our house could be built for the price he had quoted. We hired him to do the project management, worked out a contract on the basis of his BOQ while he set up a new company for the PM work.

The wisdom of hindsight! Because this was the first time the architect had embarked on such a project and in addition did not have enough qualified personnel to pull it through, it was disastrous:  
On one hand the quality of the project suffered considerably. Fortunately we were able to actively intervene on numerous occasions because we visited the site regularly. Additionally, it seems that there was never any cost control, just paying whatever the various contractors asked for.
When we had paid 95% of the agreed total sum (based on the BOQ), we stopped further payments to the PM because it had been agreed that we would keep 5 % of the agreed sum as a guarantee. But there were substantial further requests for payments which went well above the BOQ.

Various meetings during the last weeks did not get us anywhere. The PM is of the opinion that they need more money to finish the project. We are willing to bear some of the cost but not everything because the PM is not able to justify the extra cost!

Fortunately we have personally kept a strict control of all the extra cost known to us. Any changes to the BOQ were immediately registered in that list. Therefore we are in a position to show the actual construction cost. Our lawyer has confirmed our position and has now started discussions with the PM.

We hope to be able to post better news soon.