DBPapers
DOI: 10.5593/sgem2017H/63/S26.077

PRICE AS THE BASIC VALUE OF PROJECT MANAGEMENT OF BUILDING GREEN CONSTRUCTIONS

M. Novy, J. Novakova, M. Waldhans, J. Zacpal
Thursday 23 November 2017 by Libadmin2017

References: 17th International Multidisciplinary Scientific GeoConference SGEM 2017, www.sgemviennagreen.org, SGEM2017 Vienna GREEN Conference Proceedings, ISBN 978-619-7408-29-4 / ISSN 1314-2704, 27 - 29 November, 2017, Vol. 17, Issue 63, 611-618 pp; DOI: 10.5593/sgem2017H/63/S26.077

ABSTRACT

The basic contractual instrument among all involved parties of construction projects in the Czech Republic is a contract for work according to the Civil Code of the Collection of Law of the Czech Republic. The contract is further supplemented by provisions based on long-term business experience and needs of contractual partners. An essential part is the type of price, its amount and the method of determining or adjusting the price. For green constructions in general and green buildings in particular it is customary that the price is higher than the price of non-green buildings. This is due to the use of more expensive environmental-friendly materials, environmental-friendly processes and more efficient technologies with minimal environmental impacts. The immediate higher purchase price then results in lower operating costs over many upcoming years. Realization cost is the decisive factor for many investors in the Czech Republic and unless they are forced by legislation or supported by subsidy programmes, they choose lower price, which is a price of non-green building. However, realization price of a new building may be reduced using another procedure, for example by using floating price in the contract for work. The tools for adjustment of fixed price to floating price due to the inflation are the price indices. The procedure for adjusting the initial price from the budget is described in the FIDIC contractual terms and conditions. The most suitable source of data in the Czech Republic is the state price statistics carried out by the Czech Statistical Office. In the area of industrial production, which includes materials and products used in construction, price development is monitored on the monthly basis. Price monitoring in the construction sector is carried out quarterly. Monthly data on wage development, energy, transport and selected business service prices are also available. Using a floating price in a contract for work reduces contractor’s risk surcharges due to unknown future economic impacts. Investor can then invest saved money back into the newly constructed building to improve its ecological standards.

Keywords: construction project management, green constructions, price statistics, price index, floating price