Friday, December 15th, 2017

Isabela House (Construction Log 3) Construction Bids & Building Permits

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We received the first eBids for our building project on Saturday. Both were higher than expected although the smaller house was the worst coming in at the high end of the average per square meter. So we decided to do all the internal finishing ourselves with family assistance as we have all the skills represented. We will just ask the construction management company to put up the shell, the walls, the floor, the windows, the roof, and leave all the internal stuff to us. We also agreed to acquire all the internal fittings, floor and wall tiles, internal doors etc. locally here in Santiago City. The only exception will be the sanitary bits and pieces. Hopefully this will get the cost down nearer what we budgeted. In the case of the main property, the quote was still high but, to be fair, the average per square meter was actually within the range we had been advised for a quality finish, which is what we want. We now have to consider whether we might still do all the internal finishing ourselves to bring the cost down. We anticipated this negotiating stage so will discuss both quotes with NorthCon Construction to see if we can bring down their own cost loadings. Our Dutch contact seems very pleased with what they did for him although he emphasized that we would pay more for the project. But if the quality is right we think this is reasonable. The alternative is the badly cemented hollow block route and the risk that it will all fall down with the first major typhoon or earth tremor. We think we prefer the concrete and steel option even if it costs more.

This morning we signed the contract for the construction project having negotiated a substantial reduction in the previous bid price to compensate us in part for the appreciation of the peso against the UK Pound. The alternative was we deferred starting construction until possibly even 2011 and extended the lease on our rented house. The compromise pegs the peso price nearer what we originally budgeted when the UK pound stood at 80 pesos, although any decline from now on is still our risk. With the US Dollar down to 46.2 pesos, businesses here that depend on foreign customers will face tough times and will need to be flexible on their margins if they want to maintain their order book.

We are still waiting for the engineer/surveyor to complete the Bureau of Inland Revenue filing. Partly it is because the BIR requested some additional proof of ownership in the form of birth and death certificates, partly because the engineer is responsible for the whole of Region 2, a massive area for one person to cover, which necessitates him traveling much of the week to conduct surveys and attend meetings, and partly because the last time he went to the BIR none of the officals he knows were there and he didn’t want to leave documents with a stranger or so-called “fixer”. In his absence yesterday, his wife has accepted our offer take the engineer up to the BIR in Illagan on Wednesday to try again to deliver the certificates. They should then calculate the taxes due which means yet another visit to pay and collect the card receipt which has to be submitted together with the other papers in order to obtain the building permit. In the meantime the contractor has had approval from city hall to back fill our lot, to raise the height of the land above the barangay road (to prevent flooding), but is not allowed to pour concrete until the building permit has been granted.


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