What cost tables are for
During preparation, the design team costs every activity, year by year, before the financing is agreed. The result feeds the project appraisal document, the financing plan and the disbursement categories in the financing agreement. During implementation, the same tables are the reference point for the first annual work plans and for any restructuring.
The method is shared by many financiers and design teams, though each one has its own conventions. Check the guidance of the financier you are preparing for.
Base costs
Base costs are what the project would cost if everything were bought at prices on a fixed base date, with no allowance for surprises. Each line is quantity × unit cost, by year, in a stated currency. Typical detail per line:
- Item and unit (e.g. vehicle, training day, km of road).
- Quantities per year.
- Unit cost at the base date, and its source.
- Share in foreign exchange and in local currency.
- Taxes and duties, where they must be shown separately.
- Expenditure category and financier.
Physical contingencies
Physical contingencies allow for changes in quantities or methods that could not be foreseen at design: more earthworks than surveyed, extra training sessions. They are a percentage of base costs, set item by item according to how uncertain the estimate is. Off-the-shelf goods often carry a low rate or none; civil works usually carry a higher one. The rates are a design judgement, to be justified to the appraisal team.
Price contingencies
Price contingencies allow for inflation between the base date and the time money is actually spent. They are calculated year by year, using an expected inflation rate for local and foreign costs separately where they differ.
A common convention is to assume each year's spending happens evenly across that year, so it is treated as if it all happens at mid-year. The inflation factor is then compounded from the base date to the middle of the spending year:
Conventions differ. Some teams apply price contingency to base costs only; some use a different base date or quarterly compounding. Use the one your financier's guidance requires and state it.
Worked example (fictional numbers)
A component has base costs of 100,000, spent 40,000 in year 1 and 60,000 in year 2. Physical contingency is 10%. Expected inflation is 6% a year.
| Year 1 | Year 2 | Total | |
|---|---|---|---|
| Base cost | 40,000 | 60,000 | 100,000 |
| Physical contingency (10%) | 4,000 | 6,000 | 10,000 |
| Base + physical | 44,000 | 66,000 | 110,000 |
| Price factor (1.06)^(n−0.5) | 1.0296 | 1.0913 | — |
| Price contingency | 1,301 | 6,028 | 7,329 |
| Total project cost | 45,301 | 72,028 | 117,329 |
Year 1: 44,000 × (1.06^0.5 − 1) = 44,000 × 0.0296 ≈ 1,301. Year 2: 66,000 × (1.06^1.5 − 1) = 66,000 × 0.0913 ≈ 6,028. Note how the contingency grows with each year of delay. A project that slips one year needs more than its original price contingency.
Expenditure categories and the financing plan
Each cost line is mapped to an expenditure category, such as works, goods, consulting services, training, or operating costs. These usually become the disbursement categories in the financing agreement, each with its own allocation and percentage financed.
The financing plan then splits every line between financiers: the main financier, co-financiers, government counterpart, and beneficiaries where they contribute. Rules on what each financier will pay for, including taxes, differ. Check them before you allocate.
Summary tables commonly produced
- Project costs by component, with base costs, contingencies and totals.
- Project costs by expenditure category.
- Costs by year.
- Financing plan by financier and by component.
- Financing plan by financier and by expenditure category.
- Foreign exchange and local currency shares, and taxes and duties.
Pitfalls
- No unit cost sources. Appraisal teams and later auditors will ask.
- One contingency rate for everything. Works and off-the-shelf goods carry different risks.
- Optimistic phasing. Spending in year 1 before staff, systems and procurement are in place inflates early years and understates price contingency.
- Exchange rate assumptions not stated. State the rate and its date.
- Tables that do not agree. The total by component must equal the total by category and the total of the financing plan.
- A spreadsheet only one person understands. Hidden links and hard-coded totals break at the first revision.
Cost tables in projectsmanager.ai
The cost tables module is partly available. You can try what exists today in the demo with fictional data. Some summary views and exports are still being built. Ask us what is ready before you rely on it for a submission.
Every total opens to the lines it was added up from. A unit cost with no source, or an inflation rate not yet entered, is shown as "not recorded" rather than filled in with a guess.