ZSL Capital & JB Cost Associates on Planning and Due Diligence to prevent Project Overruns
Q - “Jay as a QS how often do you see Developers hitting their deadlines?”
A - It’s rare to see a construction site being delivered on time. Many of our clients are rushing to get on-site and often start without doing their upfront due diligence or upfront planning or design. - Jay Bhudia, Director of JB Cost Associates.
Q - “How can Developers assure Brokers and Lenders that their business plans and timeframes are realistic from the outset and throughout?”
A - Many people spend time on ‘cost contingency’ but ‘time contingency’ is just as important, as it has a cost associated with it, that must be factored in.
As a Developer, it’s extremely important to make sure you have the correct planning. It is key to pre-plan upfront all counterparties including lawyers, contractors, lenders etc. Understand who you are going to be working with and do your due diligence on each counterpart.
The core aim is to minimise and mitigate the risk of something happening with them - The contractor ‘going pop’. We’ve seen examples over the years and I am sure a lot of us have worked with Developers who have had a lender ‘go pop on them’ - It has happened to big names. Who would have thought that a few years ago that your lender could ‘go pop’? Imagine the impact that would have. Therefore these factors must be considered. – Daryl Thorpe, Co-Founder and Principal ZSL Capital.
“It’s about constantly monitoring. There is always going to be warning signs on-site when a contractor is not performing according to their plan. As a Developer and Project Manager, you must be aware of the early warning signs and interrogate what’s happening at that point.
In 2018, we had contractors ‘go under’, this got me thinking about how we can do more due diligence whilst we are on the site.” - Jay Bhudia, Director of JB Cost Associates.
Watch the full table discussion HERE