Budgeting and costing in international construction projects

The construction sector is one of the leading sectors to shape the world economy. The sector is also called locomotive sector due to its input-output relationship with more than 200 sub-sectors. As in other countries, the main indicator of development in our country is the construction sector. The success achieved both at home and abroad proves the development of our country in the construction sector. Turkish contracting companies were ranked second after China in 2017 with the number of companies which are among the biggest companies in the World with 250 contractors. Considering total project cost of international contracting companies, 19.5% of this share is composed of the work load of Turkish contractors doing business in the Russian Federation. In this study, the comparison of bid budget and closing budget data of a construction project carried out in Moscow city center by a Turkish contracting company operating in many countries and Russian Federation was performed by using the cost variance analysis method. It is aimed to investigate the causes of the differences. In the first chapter, the basic concepts of construction, the importance of the construction sector in the world and in our country, the position of our international contracting services and the Russian construction market are briefly introduced. In the second chapter, construction projects and project management stages are explained. Budgeting that is interpreted as the need of successful planning for a good project management and the numerical expression of planning are considered as the most important stages that carry the project to success. The construction cost items and budgeting process are explained in detail and the deviations in the cost items forming the budget are discussed. In the third chapter, the forecast budget which has been generated as a result of analysis of the sample company during the project preparation stage and the closing budget seen after the project has been completed were compared and the reasons of the cost variance were explained, and suggestions were made on the measures to be taken by the companies. Keywords: International Construction Projects, Budgeting, Analysis of Variance.