Project Management

Project Management


Although the term Project Management is becoming more familiar, it is evident that many people are still uncertain about the nature of services provided. 
Perhaps the most important aspect to point out is that all services stem from the same objective, to represent and protect the client’s interests throughout the entire engagement. 
As the word suggest a project manager is a consultant or company appointed on the client’s behalf to co-ordinate, supervise & control the entire project including all other parties such as architect & contractor, etc.                                                
The project manager also acts as a ‘ one point ‘ contact and takes on the responsibility for ensuring, amongst other things, that all client requests are communicated and incorporated in the works
Apart from an active service, most project management companies and certainly construction consultancies, also offer a single source of information regarding procedures, legalities and costs. The intention of the advisory service is to enable the clients to see an overall view of involvement and expenditure before any commitment is made.                              

In conclusion, it is with little doubt that any client considering a construction project, either private work or development, large or small, would stand to benefit from at least an initial consultation before venturing into the unknown.
This certainly applies to Portugal as in general was not familiar with local procedures, habits and costumes.

The project manager in his capacity as advisor signs with his client an obligation contract and not a building contract, which means that he will try to the best of his knowledge and ability to satisfy the need of his client.

The start:

Project management basically starts when and normally not before the client has become the owner of the building plot of land with planning consent.  At that stage normally one will have made already the decision to purchase the object in individual name(s) or in the name of an off-shore company.
As this phase is part of realestate purchasing procedures you will find info on this subject in other articles.  You really have to make sure before you purchase that you will be allowed that on the plot in mind really building permission can the process:

Where is one allowed to build?

In case one purchases a plot in an urbanization (residential area) it is normally determined and decided already what can be constructed on the plot. The total m² which one can occupy, the total m² one can build and the number of floors and any other additional conditions. These are normally laid down in a license issued by the local town council when the developer has applied to urbanise a plot of land.  (this is called Alvará de Loteamento).

It is basically the duty of the architect to establish this but your agent should be able to tell you as well. He is the one who as a professional will submit the project and he should be aware as to what is possible and what not. In case of doubt he should consult the local town architect for clarification.
The choice of an architect is an important step in the whole procedure as there should be some magic between him and his client.

This first phase is in general a rather time consuming part especially if one builds outside urban areas. On top of that there are differences in procedure between town councils.

A first meeting with the architect is normally to discuss in rough what the ideas are of the client are for the architect to show his style of work. He normally can not do anything without a topographical survey being carried out. This now is compulsory to submit in digital format together with the project. Cost will be around € 500.

Obvious also that the architect should first get an idea of the land in question and its surroundings. After that we could have the following fases during the process:

  • The architect makes a rough sketch
  • The client will get a first idea and impression if the architect translates the ideas of the client into facts.
  • It is not unlikely in case building takes place in a rural area that meetings with the Ministry of Agriculture and/or the Ministry of Environment are necessary to clarify things and/or get their clearance first.
  • Alterations and improvements are discussed and adaptations made.
  • One comes to an agreement on the final concept
  • The architect prepares the final plans and once more shows them to the client for his approval.
  • The project is submitted with the local authorities depending where the property is located.
  • Depending is the property is located in so called Urbanisations or in rural areas the project should be viewed within a certain period se by law.
  • Again depending on the area the Architect has already submitted the specialisation drawings or will be prepare them after approval of the first fase has been obtained. The following projects could be needed
  • Project for iron calculations
  • Project for water, drains and sewage
  • Project for thermic insulation
  • Project for sounds insulation
  • Projects for telephone and electricity
  • Also projects for the safety and hygiene during the construction will be necessary.
  • As from 01-07-2007 it is necessary to submit a Energy project

As mentioned plans should be looked at and approved within certain time frames set by laws or local regulations. One is not allowed to start building before projects are fully approved. In certain exceptional cases one could apply to start earlier.

On top of the above-mentioned it could well be that the Architect or another specialised person will be asked to draw up and submit the following projects:

  • Project for gas or gastank
  • Project for central heating
  • Project for security like alarm systems (one needs permission for the Governador Civil)
  • Project for garden lay-out and irrigation systems
  • Project for tennis court and pool
  • Project for energy control

Once the second fase of approval is under way it is time to start thinking about finding a suitable builder. At this stage all projects are drawn up and with an extensive list of finishing’s we van start asking for quotes. Not always easy to find a good builder when one needs it, as the good builders have normally too much work and people have to be put on a waiting list in case they want to stick to that particular builder.

A decent and comparable quote can only be achieved once all details are known and in general the specifications supplied by an architect are less detailed than one could be used to at home. Also the architect is normally no longer involved during the building project and unless agreements have been made is not automatically on site during the building stage. For that reason one needs in certain cases a project manager who overlooks all aspects of the building from builder to legal site.

Also the architect is normally not the responsible man during the construction. This task is carried out by what is called a Technico Responsável (most of the time a structural Engineer)

Quotes can differ sometimes greatly in price and in general one can say that the most expensive is not always the best and the cheapest in the end not always the cheapest. In Portugal it is not always common practice that the cheapest gets the job (for private dwellings).

Some builders are more expensive due to the structures of their companies. Some have offices with staff other do not. Some have their own equipment. Others have not, some work with so called black laborers others do less. All these factors can have an influence on the price. Some have got their own Engineers depending and the size of the company and the license they have to carry out bigger jobs as well.

Building is not cheap due to the nature of the materials used and in general one can say that at present building will cost between Î 800,00 and Î 1.000,00 p/m², excluding IVA (VAT). As the VAT is 20% this is a figure to take into consideration. The price quoted is normally applicable to covered area construction of single story house. In case a property has a cave of first floor figures could differ also depending on the type of terrain one is building in.

Many times people ask me what it cost to build a 100m² house. If I mentioned Î 750 p/m² people think that they can build a house for Î 75.000, 00

One forgets however all additional costs which are not included in that price, like:

  1. Cost for architects (between ( 5 and 10%)
  2. Cost for building licenses and insurances
  3. Cost for extras like supplying water and electricity to the site during the building
  4. Cost for central heating, normally not include
  5. Cost for a better kitchen and kitchen appliances
  6. Cost for building terraces and walking areas around the house
  7. Cost for building a pool if wanted (easily no less than Î 20.000)
  8. Cost for driveway
  9. Cost for fencing or walls around the property
  10. Cost for entrance gate, maybe with remote control
  11. Cost for landscaping and irrigation
  12. Cost for an Engineer during the construction
  13. Cost for water softener and water treatment equipment
  14. Cost for alarm system
  15. Cost for satellite or audio installation
  16. Cost for project manager
  17. Cost for legalising the property in the end with all the competent authorities
  18. Obtaining habitation license and consequent taxes.

  Quite often during the construction one decides to integrate alterations as for most it is difficult to visualize how it will look like from a plan and reality is sometimes different than a drawing. In case those alterations are major, and involves structural alterations and changing on the outside facades it is likely that one has to have to submit new alteration plans again and have to go through the whole planning consent again.

Just an example:

Suppose one has decide initially that the house will have an oval shaped pool and during the construction one decides that rectangular after all is better, it would mean submitting of the plans for the pool again as the iron calculations will be different for this shape of pool. It will mean a lot of work for everybody and in fact the builder can mot proceed with the building of the pool unless the revised plans are approved. If he still goes ahead without planning consent it could mean that we have great difficulties in obtaining the very necessary habitation license.

Without this document one should not move into the building (although everybody does) and in fact one can not sell without this vital document.

The word habitation license in fact means that the local town council issues a certificate that the house was build according to the plans submitted and approved.

Not all town council are that strict but one should not assume to get away with it easily like in the old days. If you do not things according to the project the Technico may refuse to sign the documents as he is responsible if anything goes wrong in the future.

It may be clear from the above that building your house in Portugal is possible but also that there are strict rules in place and that one should not underestimate this venture. Especially in case one is on a limited budget I would advice clients to think twice before they start as I have never seen a project coming out cheaper than the estimated pricing.

One of the tasks of the project manager is of course to try to control these extra expenses. Also he will be responsible for making the payments to the builder or various sub-contractors. Payments should of course not take place before a stage has been finished. Normally I prefer to integrate 9 or 10 stage payments in the contract thus spreading the risk and it helps to stimulate people to finish a certain stage if they want to receive payment for the finished stage.

It will not be the first time that clients became victim of the promise of the builder that eh would give a discount in exchange for paying a lump sum up front.

In general I would not like to finance the builder; he should be financially sound enough to carry that cost himself. In certain cases we can work with a bank guarantee which however will increase cost for all parties involved.

It is not always due to the builder if he gets into financial trouble, Often because other people are not fulfilling their commitments the problem starts.

The project manager will make weekly or monthly progress reports and especially now with modern communication it is easy to consult the client in case there is some doubt.

What a difference from the days that it took quite often 2 months to get an answer from the client if he was living abroad and mail those days took ages.

One of the duties of the project manager is to keep a sound administration and keeping all the necessary receipt of your building

The end of the story should be that you end up with a 100% legal property registered in your name and with a habitation license in hand.    

Full Project Management:%ageNumberMax:Min of:
Below €50.000%8€4.000€1.000
€50.000 - €125.000%7€8.750€4.000
€125.000 - €200.000%6€12.000€8.750
€200.000 - €275.000%5€13.750€12.000
€275.000 - €350.000%4€14.000€13.750
€350.000 - €500.000%3,5€17.500€14.000
  Above  €500.000%3€17.500

It is the main task of your project manager to take care of that.

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