doi.org/10.52340/eab.2025.17.03.13

In Western Europe and North America, the state regulates from 5 to 20% of prices. In the free price sector, the development of competitive pricing critically important. To mitigate financial risks associated with construction investments, companies conduct preliminary technical and economic analyses - initially using aggregated prices for similar projects, followed by detailed estimates based on working documentation. In these countries, emphasis is placed on both internal experience and the practices of other construction companies. Current cost indicators are used in this process, collected, recorded and regularly updated by specialized organizations. These entities provide stakeholders with essential data on wages and the costs of implementing construction projects at specific price points. A different approach to preliminary cost calculation is employed by construction companies in Georgia. Here, outdated Soviet-era standards from 1982-1986 – primarily SNiP, ENIR and other norms for labor time (man-hours) and equipment operation – are still used as the basis for cost estimation. However, over the past 40-45 years, construction technologies have evolved significantly, with new machinery and materials rendering these standards increasingly obsolete. This creates a dual challenge: 1) outdated norms for resource consumption per unit of work volume and 2) current market prices for these resources. In other words, the standardized labor and equipment costs no longer reflect the actual specifics or scope of modern construction work. For example, the operation of an excavator in a gravel quarry is treated the same as its use in installing power transmission lines in current reference materials. A similar issue exists in the accounting of standard worker wages. Moreover, construction or electrical work estimates are often prepared using Excel, without proper automation of processes. To address this, JSC "Telasi" – a company responsible for electricity distribution in Tbilisi – has developed a specialized software program called Telasi-Smeta (TS). This tool significantly accelerates the preparation of estimates for construction and installation work. TS comprises two main components: precompiled unit prices based on updated labor and machine-time standards. Unit cost estimates for Telasi workers’ hourly wages and the current operating cost of machinery and equipment. Current prices for materials are sourced from the SAP database or quarterly price collections published in Georgia. This system includes cost estimates for over 2,500 types of work and operations relevant to Telasi\\'s activities. Estimates are compiled by entering codes or keywords, which retrieve and insert individual cost items into the estimate. Each item occupies a separate line, with only the work volume entered manually. Overhead costs (by type of work), planned profit and final calculations are processed automatically. TS also allows printing a register of all resources included in each cost item. With regular updates to resource prices – including wages – new data is easily entered into the database, automatically adjusting all related cost indicators. Mathematical operations, including expense breakdowns, are performed automatically. If needed, TS can apply correction factors for challenging working conditions and generate a complete list of resources for each project. The program is hosted on a central server accessible to all Telasi estimators. TS has been in use for over 8 years, with the database updated annually or as needed – both in terms of item names and resource costs. Its use has proven efficient, reliable and relevant. Based on working drawings, technical specifications, or defect reports, Telasi performs an average of 700 estimate calculations annually using TS. These estimates are stored in an electronic archive and can be accessed at any time. However, TS has not yet automated certain technological factors, such as worker transportation, material delivery, and equipment movement to and from the sites. Work is underway to address these gaps. Plans also include making TS portable via USB flash drive and introducing a correction factor for relatively small-scale work (the "scale factor"). Non-standard tasks, one-off structures, and work outside Telasi\\'s core competences often incur additional resource costs, leading to higher expenses in certain areas. These costs are also accounted for in the estimates. Given that TS is tailored specifically for the needs of Telasi, it is proposed to develop 3-4 similar, compatible universal programs for automated preparation across other sectors – industrial and civil construction, hydraulic engineering, energy, transport and underground construction. The development and implementation of such standardized programs in Georgia would accelerate the calculation of justified costs for various types of work and services, thereby reducing investment risks across multiple industries.

Keywords: Energy companies, Construction, cost, unit prices, evaluation, cost estimate, expenses.
JEL Codes: L74, H54, H57, O33, L11, D24

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