Grey structure vs turnkey vs labour-rate: which contract model suits you?

The three models, plainly

Grey structure. The contractor builds the shell: excavation, foundation, DPC, RCC frame, brickwork, roof slab, stairs, and concealed plumbing and electrical conduits. You take over at plaster stage and arrange finishing separately — flooring, woodwork, kitchen, bathrooms, paint, fixtures. Lahore grey structure rates in 2026 run roughly Rs 2,800–3,500 per sq ft of covered area (up to Rs 3,600 for A-grade specification).

Turnkey. One contract, one contractor, one price for a ready-to-live house: grey structure plus all finishing. Standard turnkey in Lahore in 2026 runs roughly Rs 6,700–8,800 per sq ft; premium and luxury run Rs 10,000–15,000. You approve the drawings and the specification, then — in theory — you collect the keys.

Labour-rate (labour-only). You buy every material yourself — cement, steel, bricks, sand, crush, tiles, fittings — and the contractor supplies only labour and supervision of his crew, at roughly Rs 550–700 per sq ft in 2026. You are, in effect, your own procurement department and your own site manager.

The arithmetic first

Grey structure plus finishing, bought separately, lands in almost exactly the same place as turnkey: Rs 2,800–3,500 for the shell plus Rs 3,900–5,300 for finishing gives roughly Rs 6,700–8,800 — the standard turnkey range. Nobody is giving you a discount for splitting the contract, and nobody is charging you a large premium for combining it. Anyone whose turnkey quote is far below grey-plus-finishing is not cheaper; something is missing from the scope. Anyone far above it is charging for a brand name or a specification you should ask to see itemised.

Labour-only looks dramatically cheaper until you add the material bill back in — which is the whole grey structure cost minus the contractor's margin and overhead, plus your own time, transport, wastage and the occasional bad batch you have to eat yourself.

On typical Lahore plot sizes, the same totals apply whichever model you choose: 5 marla, double storey — grey structure roughly Rs 5–6 million, complete turnkey roughly Rs 10–14 million; 10 marla, double storey — grey roughly Rs 9–12 million, turnkey roughly Rs 17–22 million, up to Rs 30 million at the high end; 1 kanal, double storey, no basement — grey roughly Rs 15–20 million, turnkey roughly Rs 30–40 million, with expensive ones going north of Rs 60 million. The model changes who carries the risk, not the size of the bill.

Who each model actually suits

Turnkey suits you if you live abroad, travel constantly, or simply cannot be on site every week. One throat to choke, one payment schedule, one specification to approve. It is the right model for overseas Pakistanis building from another country — provided the specification is nailed down in writing before work starts, and provided someone independent checks each stage before each payment is released.

Grey structure suits you if you are in Lahore, you enjoy the process, and you have a finishing team you trust — or you want to spread the spending over a longer period. Building the shell first and finishing later is also how many families manage cash flow: lock the structure while material prices are known, finish when funds allow. The cost is your time and the coordination between two contractors.

Labour-rate suits you if you can genuinely buy materials at trade rates, you know what Grade 60 steel and first-class bricks look like when they arrive on a truck, and you can be on site most days. It suits retired engineers, builders' families, and owners with a trusted munshi. It punishes everyone else: material theft, 10–15% wastage instead of 5%, and nobody to blame when a batch of weak concrete is already in the slab.

The trap hidden in each model

Turnkey's trap is scope. The quote says "branded fittings" and "or equivalent" — and the equivalent is always cheaper than the brand (more on this in 3 questions to ask before hiring a contractor). The defence is a specification sheet that names brands, grades and models for steel, cement, tiles, sanitary and wiring, attached to the contract, with a written rule that any substitution needs your signed approval and a price adjustment.

Grey structure's trap is the handover gap. The shell contractor leaves; the finishing contractor arrives and finds a wall out of plumb, a slab level off by an inch, a conduit in the wrong place. Each blames the other, and you pay for the fix. The defence is a written snag list at handover, signed by both contractors, before the finishing contract starts — and a small retention held back from the shell contractor until the snags are closed.

Labour-rate's trap is ownership. When you buy the materials, every price rise is yours, every theft is yours, and every quality failure is yours to discover. Brick and sand are the worst of it: both move heavily with weather, the smog season and transport regulations, so a rate that held in one season may not hold in the next. The defence is daily presence or a trusted, independent pair of eyes on site, delivery challans matched against the BOQ, and cube tests on concrete you paid for yourself.

The one thing that protects you in all three

Whichever model you choose, four things decide whether you end up with a good house or an expensive lesson: an itemised bill of quantities before you sign; the specification (steel grade, brick class, brands) in writing; stage-wise payments released only after the work is checked; and someone independent checking it who is not paid by your contractor. The model is a preference. Those four are the protection.