Use of cost analysis, estimation and risk management in making project management decisions in construction projects

[eng] This research was conducted in a construction consultancy company located in Madrid. Scenario of Spanish construction company entering Balkan market was created and suggestions were given in that direction. Firstly, cost estimation framework used in Planet Cluster company is improved and presented. Interviews with project managers in Serbia and Spain were conducted and conclusions are obtained. Secondly, definition of key costs in construction projects is done. Costs are identified in three main categories: materials, labour and machinery. After that, market cost analysis of identified key costs in the markets of Serbia and Montenegro and Spain was done. Impact on the total budget of the project is measured, and it is calculated that construction projects in Serbia are around 25 % cheaper than in Spain. This analysis created an improved base for cost estimation, and project management implications in projects executed in the Balkan area. Moreover, list of expected types of risk in the market was created, based on interviews with the experts and on the experience of Planet Cluster company. Finally, the aim of this paper is to improve project management in construction projects by proposing a cost estimation procedure, analysing cost differences between Spain (European Union) and Serbia (non-European Union member), and identifying the construction risk present in the markets