Self-Construct (Labour Rate) vs Turnkey (Overseas Pakistani)

Construction & Materials Architects
#1

What is the most advisable approach for Overseas Pakistanis to construct a house in Pakistan?

Let us assume they have no brothers or sisters in Pakistan who can devote the time to construct or supervise the project.

Option 1:- Turnkey:- they can go for a turnkey contractor supervised by a different architect. How much extra will they pay for this option? And what if architect and contractor become friends to hide each other's faults?

Option 2:- Designer Brand:- give the whole house project including design and construction to one party (Foe example DSA, H-T, Mohsin, Amer Adnan etc). If the party is a designer brand with plush offices etc then most likely they will charge a huge margin from the hard working overseas Pakistani (who earns by his sweat and blood to save money for house construction).

Option 3:- Open Book Contract:- the house owner and contractor do not agree any per square foot rate. The contractor proceeds with top class solid construction. He records every expense, keeps every voucher in file and earns a commission on percentage basis. But for this you need a very honest contractor otherwise he may actually inflate costs or show higher costs just to earn a bigger amount in commission.

Discussion points:-

I. What are the pros and cons of each of these options?

II. Which Option will work and which Option will not work well?

III. Any other suggestions, opinions, experience of overseas or local Pakistanis?

IV. Does it make a difference between construction in Lahore or construction in Islamabad?

#2

Thanks for this PK

I have grave concerns regarding the Open book Contract. If the contractor is to earn a certain percentage of the whole built price, from gray structure to the top finishing, then the poor house owner becomes the author of his own bankruptcy.

Say for example I want to put on a better quality door, that costs more , I end up paying more percentage of the total cost to the contractor, even though his labor cost is not increased, he is simply putting on a bloody door, but since the bloody door is more expensive he is automatically getting more money.

So either you settle for relatively poor quality construct to save money or end up being punished for asking for a good quality one.

This does not make any sense to me. It would be ideal if the contract was mixed , i.e if the labor cost goes up due to the stuff that I am requesting then fair enough the contractor gets more , but his share should not go up simply bc I want to use better material for my home.

Even if you have an honest contractor this is a bad deal for the home owner

#3

Very difficult question to answer because answer is Honest Contractor.

#4

Well brother PK1 ,i wish this topic is discussed extensively by senior members ,plus the experienced ones,

this is the real headache of overseas Pakistanis.

I think contractor is the answer to solution ,but again its like,tasting chilies inside the sweet dish,but the dish cannot be discarded as you desire it,but you can also avoid it,

I have some experience with a contractor.

Back in 2006 i hired a contractor, to complete the small part 2 rooms plus bathroom plus their front ,of our house upper portion,

Some one praised a local man to be very nice[name i avoid]

I was inexperienced so were my brothers , we made a verbal contract in front of a third person,the contractor looked very honest ,but later on proved himself a very nasty one,

he always asked in innocence ways for advance,

he used laborers and mistries from common ppl sitting in choak for work ,

he was always late,

he had taken 2-3 other contracts simultaneously ,so used to be absent for days,and the work halted for long,

in short we ended up paying 40 % extra than we had promised him, in order for due completion of work, but result was again devastating ,

i was on vacation for 25 days ,so got back abroad, my brother was a bit low temper so argued with him harshly ,

AND for that a bit harshness, we paid a huge price ,

he [contractor] intentionally put the comode of bathroom half in and half out of the exit,

after a month we noticed our walls wet ,and never drying even in hot summer,

After 1 year when i was back in Pakistan , i asked an other experienced contractor for this problem , and we ended up in breaking entire bathroom set up,

LESSON,

we were able to pursue him in court, but our mother asked us ,not to do so ,in order to avoid enmity ,

so, ,,,,have your say ,i will come back after iftar party,,,and will have my ideas INSHA ALLAH

#5

I had same experiences though I am not overseas. But the difference is that I remained ice cold. Seeing people wasting my money isn't an easy thing.

Workers including contractor keep grudge and they leave a defect.

#6

Option 1= Turnkey and option=3 open book contract are not good for overseas

,they[ overseas] are absent and its the open hand ,handover to others.

,

option no=2 if some one is or can have some look at them,its ok ,other wise at least start construction ,while on vacation in Pakistan,and direct observation for at least a month ,to have some idea

#7

In my view, one should still try to find an honest contractor. Get help of as many friends as you can. If any of your friend happens to be civil engineer, he would be very helpful.

Its not possible that anyone of owner's representative is not present. Friends are better than relatives in my view regarding financial matters. Reason is that by default we over-trust relatives.

As pointed out by Pk1, architects and contractors hide each other's mistakes. I fully agree unless an architect is of good repute. One can search on Iapex website.

In any case, all contracts should be labour contracts. It would be better to buy builder house instead of with material contracts.

Its still not impossible to find a good contractor of good repute. But somehow humans want to trust the people which we should not.

Stay away from typical shareef looking bearded contractors. Its unfotunate to say like this. I also have long beard. But somehow I have noticed that these contractors deliberately make such get-up to win confidence.

#8

Some professionals are offering excellent construction choices but unfortunately their charges are a rip off. Granted its their rozi roti and nobody should work for free but i think the charges are unjustified .

Normally there are two business models, 1. Keep your margins low and get more business 2 keep you margins high and as a result get less business but never mind you can rip off that one unfortunate guy who happens to step into your office. But I am observing , that people are trying to get more business yet keeping their margins very high.

There is a huge gap, rather a huge black-hole in the market for professionals who offer comparable construction with reasonable charges and I am sure if someone does this, he will get tremendous amount of contracts.

#9

This is all very good advice brothers. So the advice overall is that we should find someone honest, experienced and who charges low margins. Very,difficult I would say; isn’t it? Is anyone offering very decent construction services in Lahore at low profit margins?

#10

For All Overseas:

If you have worries in Mind you cannot be satisfied on any of the option. Main rason behind this are....

1- No experience

2- No actual cost idea

3- Never trust on other

4- Society Nagative role

So you have to have trust some1 who can take care of the whole works than you can see many angles/ppls at one time.

Easy solution.

You select the person and visit the works and have meeting with the owner of the project to ask about them......

Regards

dSA

92-333-4220989

#11

What if one contract give you all written black and white well before start of project??

Each and everything like scope of works,specification,price,schdule of payment,time completion,No escalation letter,Penalty on delay of project? Leagal contract done by both parties then what else you can even think if a contractor or Architect can do?

Further if you personally visit his projects and meet the owners of the projects to know him actually??

What else you want to do?

If you cannot satisfied even then you cannot be in peace during and after completion of your house.

We can sincerely offer to all Overseas to come and get our services with peace of mind and visit your project like visitor.

Regards

dSA

92-333-4220989

designsource99@gmail.com

#12

@brother[s] DSA

you looks to me quite sincere, so please allow me some questions and queries to be cleared,

1=how can we[owner] be sure that ,the builders [mistries ,laborers ], used by contractor are well professional ,and not common choak vendors

2=will the quality assured in contract , be checked by owner via practically watching mistries and laborers , and if they [ mistries] are rough and dandi mar ,then the owner having a preserved right to object and ask for proper professional,,

3=roughness of mistries and laborers be checked properly,

4=VERY IMPORTANT,,,,,during construction the walls needs daily water spray how can that be assured ,,,,plus new slab[roof] needs water 3-5 days properly ,,,,,bcz YOU spend millions but if this is not done properly ,then all the cement and concrete and steel is useless ,bcz they will not bind properly,

5=what about the material agreed upon , be used properly and completely ,,,,i mean if 50 ton steel is specification ,, and agreed upon ,,, but later on in absence of owners eyes , only 25 ton is used and remaining hidden or [ in inappropriate words with excuse ,stolen]

6= what are the final charges for A CLASS construction ,,, including ,,,MATERIAL,,, PLUS,LABOR,,PLUS DESIGN,,,PLUS ARCHITECT,,PLUS OBSERVATION, AND GUARANTEED TIMELY COMPLETION WORK,,,

WITH REGARDS,

#13

Dear DK

Long questionair....

For question 1-4 the reply is for all these Contractor will be responsible and you should not worry for the labourers if they are skilled or not....You should see the quality of works which you have contracted with the contractor....

For Question 5- Again this is Contractor responsibility but at the pouring of slab you or your representative should be there to see the steel binding and quantity and the ration of mixing the cement and sand. This is important to see by yourself or you should relay on your contractor if you do....

For price it is Rs.3000/sq ft for covered area (open areas will be decieded on item rates once specs finalized) It will be includes all design,supervision and construction with material.

Before start it will be done an agreement which will be mentioned on paper each and every thing like specs,scope of works,completion time....

Looking forward to hear

Regards

dSA

92-333-4220989

We assure you that you will be the reference to all other Overseas here on forum for us if you got our services for your project.

#14

How about installing few cameras on site?

#15

DSA

As I told you before your work is really good as I can see from the pics. The price was and sill is a worry. Not talking specifically about you, but generally speaking, 3000/square foot is a bit over the top for what I can see.

A moderate size construct of 4500 square f will cost 13 million plus and add some 1-2 million more into that to cover rest of the stuff.

That what i was talking about. Please dont get offfended by this as I ts just a general thought . Not about your work, but I feel that if someone is charging about 15 millions for a 4500 sf construct , they are charging at least 2-2.5 million as their service fee. That to me is just too much, a very high margin.

Mind you the contractors are not just supervising only one house at a time.

My calculations could be totally worng and I would appreciate input from others.

#16

3000/- is very high.

Also copies of almost all material available in market.

Locks, tiles, ICI paint, Philips, All hardware items especially.

Cement, crush etc are cheap items. No one make its copies.

Shops are available in market which gives 30% discount to builders. Owners never know. If anyone wants, I can tell you about those companies and shops atleast in Pindi/Islamabad.

#17

Malik sahab

I am not concerned about the honesty of DSA or anyone else for that matter, he is a professional and I am sure will use aproper material. Bit I take your point regarding materils available in the market.

My concern and the question is ,am I right in assuming the amount of services charges and the fee that they charge ? and is it right /justified to charge such money?

#18

Yes. Amount is quite high since I just shifted in my new home and cost is not that much high. Finish quality is also high.

Better to buy ready house instead of involving oneself in so many issues. I am comparing between Rs 3000 and built up house.

But I think proper senior architects can really help a lot. Spending on architects is better and contractor should be under him probably. Architects know the costs in my limited view.

I haven't tried myself, but I think if they can make BOQs and cost estimate, things will be improved. But contractors are still needed.

Architects are usually decent people. They stay away from getting contract with material. Finding a good architect is easier than finding a good contractor. One can download DHA architects from web. IAPEX also give you list probably.

#19

Yes agree with Zafar ullah and B.R Malik,

no offence intention , but my expectation of price for A class was bet 2000-2400 per sq foot,

bcz i have seen good homes in bahria phase 8, with good quality [ A]class construction ,and their prices , if land value is subtracted ,demand for building price will come to bet 2000- 2400 rs per sq foot,

you can have some idea from defense villas sector f dha 1 as well

i hope the answers be fair to such queries,

#20

Thanks Malik sahab and DK

yes one can get fair idea of construction cost by substracting the land value from the total price of a ready to move in house , mind you the seller is also making some profit which could be anywher between 1-3 million depending on the size and the price.

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