Cost Management Report: Al Batinah Expressway – Package 4

Running head: COST MANAGEMENT REPORT
Cost Management Report:
Al Batinah Expressway – Package 4
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Table of Contents
Introduction......................................................................................................................................2
Project Background.........................................................................................................................3
1. Principles of Preparing cost budgeting........................................................................................4
2. Critical Discussion of cost estimating technique.........................................................................7
3. Critical Analysis of impact of construction methods on project cost........................................10
4. Evaluation of analytical estimating methodologies and NRM2 standard.................................12
5. Application of cost management tools for the project...............................................................14
6. Application of value engineering concept...................................................................................0
Conclusion.......................................................................................................................................2
Recommendations............................................................................................................................3
References........................................................................................................................................4

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Introduction
Cost Management holds an integral role in the development of the effective information
processing for the project (Francis, Cervera and Frazeri 2017). The implementation of the cost
management would help in easing the deployment of the extensive and operative development of
the operations. The deployment of the cost management would allow the formation of the
effective and improved management of the activities. The cost management holds an integral
part in the development of the effective operational development. According to Claxton et al.
(2015), the integration of the cost management would allow the formation of the successive
development and integration for the overall calculation of the cost. The contract of constructing
the Oman’s 272km long expressway had been assigned to Galfar Engineering & Contracting Co.
The completion of the project would tend to form the deployment of the effective documentation
and alignment of the operations. The project development would allow the integration of the
construction activities for forming the final project deliverable.
The following assignment would provide the management of the cost factors for the
project. The project taken for study is Oman’s Al Batinah Expressway – Package 4 which is a
construction project and it involves the development of the Oman’s expressway. The project had
included a number of cost expenses for the resources used. The integration of the operations
would allow the formation of the effective operation development. The report is developed for
the analysis of the project cost budgeting and the alignment of the improved estimation reports.
The report would highlight the project background for the project of Al Batinah Expressway as it
a construction project and the cost estimation would be widely based on the activities and the
resources used for the project. The various cost estimation principles and techniques would be
critically evaluated in this report for the provided case study of Al Batinah Expressway.

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Project Background
The project of Al Batinah Expressway would be helpful for the alignment of the
improved operation development. The expressway is 272km long and it is built for the developed
for the construction of the long expressway (Ascione et al. 2015). It would include huge amount
of RO26 million or $68 million for completing all the construction works and alignment of the
expressway. The project is formed for the alignment of the effective management of the project
activities. The contract of constructing the Oman’s 272km long expressway had been assigned to
Galfar Engineering & Contracting Co. The completion of the project would tend to form the
deployment of the effective documentation and alignment of the operations. The project
development would allow the integration of the construction activities for forming the final
project deliverable (Muennig and Bounthavong 2016). The activities that are listed for the
alignment of the construction of the expressway for the organization are being included in the
project.
The project had considered the usage of the resource optimization for fixating the budget
and accommodating the project activities within the fixed budget allocated for the project. The
employment of the effective project management would help in easing the flow of the operations
and develop effective management of the operations (Yet et al. 2016). The alignment of the
project development operations would help in easing the construction of the expressway at
Muscat, Oman. The project had been scheduled for completing in 426 days and there had been
ad addition of 30 more days for the mobilization activities of the project. The alignment of the
project activities would help in easing the development of the system development and the
alignment of the operations for the integration of the activities. The project development would
be supported by the integration of the operations.

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1. Principles of Preparing cost budgeting
The preparation of the cost budgeting is developed for the alignment of the expense
listing and the calculation estimation of the project expenses. The preparation of the cost budget
preparation would be based on the 4 factors like conservative approach, consultation, time
management, and excellent documentation (Gregory et al. 2016). These four factors would help
in easing the development of the cost budget preparation and the alignment of the successive
project development operations. The construction project of Al Batinah Expressway would
require the use of the mentioned principles for developing the cost budgeting by considering all
expenses that would be incurred in the project. The explanation of the principles for the project
of Al Batinah Expressway is given below,
Conservative Approach: The conservative approach is the most suitable approach for
the development of the cost budgeting (Brodszky et al. 2014). The implication of the
conservative approach would help in considering all factors of the cost that would or could occur
during the course of project work. The conservative approach does not lets the cost budgeter to
be optimistic and it helps in considering all the factors of project development and the alignment
of the operations for forming the final project deliverable (Sears et al. 2015). The conservative
approach would allow the budgeter for integration of the effective integration management. The
integration would align with the formation of the operations and the alignment of the successive
development operations. The analysis would be helpful for the deployment of the effective
integration management. The deployment of the conservative approach would help in
considering the surrogate expenses that can form the impact on the project of Al Batinah
Expressway project. The material shortage, machine equipments failure, and any additional costs
would be considered as provisional cost while estimating the project costs. The formation of the

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conservative approach would help in addition of the effective development of the project budget
(Harrison and Lock 2017). It would ensure that in case of emergency, the project would have
some resources for overcoming the expense for the project.
Consultation: The consultation approach would help the budgeter for making the final
project cost estimation by aligning with the formation of the operations (Boardman et al 2017).
The process of consultation would help the project team or steering committee for providing
some specific ideas for the development of the project budget. The consultation is the process of
getting some information on the any topic from various persons so that a detailed inference can
be made. The consultation of the cost budgeting method would work in the same way and it
would help in accumulating information before development of the project budget. The
development of the project budget for the project of Al Batinah Expressway would help in
consulting with experts about the cost estimation. The budgeter would be able to get acquainted
with the types of expenses that are probable for the project and form accurate project budget. For
example- the consultation with the market expert would help the budgeter for getting idea of the
costs that would be required for the development of the raw material cost summarization (Greene
et al. 2016). The integration of the effective cost budgeting would help the integration of the
smart project deliverable operations. The consultation would help in reducing the probability of
missing any vital point while development of the final cost budget.
Time Management: The time management is another crucial factor that would form the
impact on the development of the cost budget. According to Chhatwal et al. (2015), time plays a
vital role in the development of the cost budget. The alignment of the cost estimation budget
would help in forming the final project deliverable for the project. The time management is
deployed for considering the project for alignment with the effective project cost estimation. The

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management of time would help in forming the final project deliverable and the alignment of the
improved functional development. The management of the time factor would help in forming the
effective development of the operations. The integration of the time management would help in
considering the management of the cost budget too (Greene et al. 2016). The construction project
of Al Batinah Expressway would require time management for the development of the
successive integration management. For example- the time management would help in vitalizing
the project of effective development model. The analysis would also help in dealing with the
development of the cost estimated budget for the alignment of the final project deliverable.
Excellent Documentation: The development of the excellent documentation would be
helpful for the alignment of the effective development model (Trautman et al. 2016). The
documentation of the cost budget would be helpful for forming the consideration of the advance
project management operations. The documentation technique is very crucial as it would result in
marking whether the developed project had covered the crucial project requirements. The
development of final documents would help in easing the flow of the information for developing
the effective and final project documentation. The documentation is the reporting of the
outcomes in a proper structured way so that it can be used in future (Trautman et al. 2016). The
documentation would be carried on for the alignment of the effective operation development.
The documentation would help in easing the flow of the information for further usages. The
proper documentation methods are aligned with the formation of the improved final report
documentation. For example- the documentation of the cost budget would help in forming the
final project deliverable successful for the alignment of the operations (Hong et al. 2016). The
documentation approach is helpful for the alignment of the operations and development of the

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activities. The deployment of the operations would be helpful for carrying out the alignment of
the successive development processes.
2. Critical Discussion of cost estimating technique
According to James et al. (2017), there are four types of cost estimation methods that can
be implied for the calculation of the final cost of the project of Al Batinah Expressway and they
are analogy, parametric, engineering, and actual costs. The cost estimation is implied for the
development of the successive management operations. The cost analysis and program
evaluation would help in easing the calculation for the project of Al Batinah Expressway. The
cost estimation is done for the future costs that may incur for the project of Al Batinah
Expressway. The cost estimation is largely based on the historical performance, cost prevailing,
technical data, and schedule for the project. The study of literature by Armstrong et al. (2015)
has helped in understanding that the alignment of the operations can support the development of
the effective operations and development. The four estimation methods of costs had been
explained below,
Analogy: The analogy is the most appropriate method of calculation of the cost for the
initial period of the project (Sullivan 2014). The deployment of the operations was supported by
the project lifecycle analysis. The analogy is a primitive calculation of the cost by the help of
taking the cost estimated from a single point source. The method is highly efficient for the
calculation of the costs in early stages of the project. The analogy cost estimation is done by
adjusting analogous cost system and creation of cost factor for the overall calculation of the cost
budget. The project of Al Batinah Expressway can use the calculation of the initial costs by the
use of the analogy cost estimation methods. In this method, the project budgeter would have to