Standard Contingency Allocation
A contingency budget accounts for unexpected costs such as delays, price hikes, or design changes. It is a critical buffer in project planning.
- Typically ranges from 5% to 10% of the total project cost
- Used to manage risks without affecting core project execution
Common Unforeseen Expenses
Contingencies cover items not accounted for in the base budget but are likely to arise during development.
- Soil or drainage problems, utility rerouting, or design modifications
- Permit delays, material cost escalation, or contractor rework
- Unexpected legal, environmental, or logistical issues
Example Estimate
For a project with a total development budget of ₹5 crore:
- A 5% contingency = ₹25 lakh
- A 10% contingency = ₹50 lakh
- Higher contingency recommended for projects in new or untested locations