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Badger Lt. V., Primes Beatrixlaan 9. The Hague (The Netherlands)
Badger Lt. V., Primes Beatrixlaan 9. The Hague (The Netherlands)
Abstract
Present days cost estimating with multicurrencies becomes more and more complex
due to the wild and frequent fluctuations of exchange rates and different inflationary trends
of various countries. The preparation of quite
accurate preliminary cost estimates, based on
world-wide procurement, overseas constr.tct.on
and engineering, became a major problem fcr
companies, like Badger, with international activities. To maintain an acceptable accuracy, the
traditional way of cost factor estimating has to
be supplemented with a quantity and manhotir
ratio method.
INTRODUCTION
Today cost factor estimating is no longer a
novelty. The techniques, as developed by Lang,
Guthrie Miller, Hirsch & Glazier and others
have proven to be use%1 in generating Capital
Cost Estimates for Prc lcess plants. Preparing
preliminary cost estimates in this manner is
very effective and widely accepted within
certain accuracy limits. While there are various
types of factor estimates known by different
descriptions, this article refers only to the one
based on a detailed estimate of major equipment and implementing cost factors for the
bulk items such as piping, instruments, electrical work, civil work and for erection labor.
Standard Cost Factor Estimating Systems
presently used by many companies in Europe
are derived from the various techniques and
cost factors published in the U.S.A., this obvi-
ously after some adjustments and reconciliations required to comply with a companys
own design concepts, procedures, etc. and with
local requirements. When such a Cost Factor
Estimat,ng System has been developed, introdzlced and utilized in a company for probably
many years with satisfactory results, it almost
seems superfluous to aim for a second factor
estimating method. Why then introduce a
Quantity Ratio Method? There are two main
reasons for this: The primary objective is obviously to obtain a more accurate estimate,
particularly when confronted with multicurrency cost factor estimates. The second
motive is to change the image of cost factor
estimating systems, an image which in our experience is ill-defined by some people as an
m,
m,
.
)
m=zmj
.(f=30)
............
(rate = $13.50)
. . .
..
....
pq.:F
8.
[ 1
......
..........................
H Y all-in rate
........................
alternatively
h,=,:
...
milhi
ma/h,
)
q/h, )1
m&h,
MANHOURS
TOTAL FIELDCONSTRUCTION
-Piping
- Instrumentdon
- Electrical
etc .........
.............
.......
BULK ITEMS:
one factor m,
alternatively
. , . . . . . . . . . .
mi
FIELD CONS
. . . . . . . m, )
.
-Instrumentation
-Electrical
etc. . .
-Piping.
.......
120-42~
(= 6.8)
=0.8)
&M:,
.v c L
L = H x rate
(= 80)
(- 267)
195
TABLE 1
Estimated plant cost of a batter) Limit~process plant (1971)o
Major equipment
1.00
1.00
Bulk items
Total materials
0.75
1.75
0.71
1.71
Labor
0.75
To&u installed
2.50
Engineering, overhead,
fee, etc.
Ratio
0.62
2.32
1700
1700
x 2.50
x 2.50
x 2.32
1
25
1
4250
1
3950
1.08
1.00
10
* 4350
Not inchlded
1.10
Dutch Guilder
Belgian Frr.nk
French Frank
Italian Lie
English Pound
US Dollar
South African Rand
German Mark
1972
1976
1.00
13.89
1.53
174
0.116
0.278
0.198
1.017
1.00
14.44
1.74
322
0.204
0.372
0.333
0.943
Change
--___
+ 4%
+ 14%
+ 85%
+ 76%
+ 34%
+68%
- 8%
196
TABLE 3
Estimated plant cost of a battery limits process plant (1976)o
____.
-. - .
________
.___~
Actual
cost factors
____
Holland Italy
Plant cost
in Holland
in Dfl. x 10
__--Major equipmen:
1.00
1.00
15.5
4400
4400
Bulk items
0.83
0.66
rota1 materials
1.83
1.66
x 2.18
x 2.78
x 2.42
Labor
0.95
rota! installed
2.78
Engineering, overhead,
fee, etc.
Ratio
Changes since 1971
1.11
0.76
2.42
I
43.1
J*
12.230
1
10.650
1.15
1.00
2.70
(1) Dutch
plantcost
converted
(2) Italian
eqpt. cost w.
Dutch factors
---
+ 13.870
Not included
1.30
1.04
1.72
Remarks
(3) Italian
eqpt. cost w.
Italian factors
WHAT IS A QUANTITY
RATIO?
TABLE 4
Typical quantity data required for major equipment
______________
~~____
Cost item
Pieces
Quantity
Weight in
tonne
Towers
Trays
Other internals
Drums and tanks
Pumps and drivers
X0
m3
xm
X
X
x
X
m3
kW electrical
x kW non-electrical
x kW electrical
x kW non-electrical
xm
x kW electrical
x m2
X = Lapacity
x =
kW electrical
x
x
x
x
X
X
X
_~___
198
Total
Pipin
a
Weigh
in kg/ IS0
2000
300
2
3
--*Average
156
pipe dia in inch
Instrumentation
For all instrumentation work including
instrument wiring and instrument piping, the
parameter is the total number of control valves.
The quantity ratio between the number of
control valves and the total pieces of major
equipment is indicated in Table 8.
The all-in unit cost and manhour requirements per control valve for all instrumentation
work should not include special items, such as
computerized instrumentation, analyzers,
special safety systems, etc. A separate allowance
should be made for these items.
Electrical work
TABLE 8
Quantity ratios for control valves
Plant type
Refinery
Chemical
0.9-1.2
0.4-0.5
-I_
For all electrical work, i.e. power distribution excluding transformers, communication
and plant lighting, the parameter used is the
average electric power requirement per user in
kW. This quantity ratio is obtained by dividing
the sum of all electrical power required, ex-
199
pressed in kW, by the total number of electric
users (see Table 4).
The parameter for plant lighting is the total
number of lighting fixtures. The median
quantity ratio to determine the number of
lighting fixtures is 2.5 fixtures per major piece
of equipment.
If transformers and communication systems
are required, a separate cost estimate of these
particular items must be added.
Civil work
202
HOW TO IMPLEMENT QUANTITY
RATIOS
Step2: Piping.
Determine the number of
isometrics per piece of equipment (see Table 5).
3.4 isos/pc x 170 pcs= 578 isometrics.
,(2b) Select average pipe diameter (see
Tables 6 and 7) being 6 inches.
(2~) Read total weight per isometric of all
piping components from Fig. 2. For an average
pipe diameter of 6 inches this is 1,800 kg/iso.
Total weight = 578 isos x 1.8 tonne/is0 = 1,040 tonne.
m3 concreta
hours of quantities
S&p 7. Insulation
and painting.
= US $133.000
8,90014f11
= US$ Sl.O@O
= 16,10O1W!
t=
(7a)
Calculate
to
(Zd).
29,700 m.
t x40 m/t
= 2,550 mZ.
t x30 m/t
= 1,110 m*.
Step 6: Structures.
(6a) Pipe racks, calculate
number of concrete portals of pipe rack:
280
7
+ 1 = 48 pieces, two layers.
beams:
(6b) Srlpporting
structures:
(6~) Platforms and ladders: steel for platforms en.3 ladders is:
13 towers x 7 t/tower = 91 tonne.
The results of this exercise, including the detailed estimate of Major Equipment are summarized
in Table 10 and supplemented with
the various factors and overall average labor
costs.
For convenience a scheme outlining the
QR estimating procedure is shown in Fig. 4.
As a final remark we would like to emphasize
some basic rules, which should be adhered to in
developing quantity ratios and parameters.
-- Use your common sense and your professional judgement, dont be too academic.
- Be specific and above all be very consistent.
- Dare to make assumptions, these assump
tions can be discussed.
7s
30
19
12
6
2
I
4
1
12.4
12.5
22.4
19.6
6.3
14.9
5.0
7.0
4.0
121
422
129
267
800
82
133
325
m
ma/1075 kW
kW
kW
kW
538 m3
3900m+ 1Skm
17470 mr + 14.7 km
91 McaL/h
6820
1060
-kW
- kW
12100
8070
280
-
3216 ma trays
Quantities
1.190
1.040
150
2,830
452
760
81
10
675
617
110
120
S
Weight
(tonne)
S247.000
422,100
12,247.OOO
2,080,OOO
1,300,000
841,000
439,000
133,000
81,000
313.000
60,000
7,000,000
1,160,OOO
1,420,OOO
240,000
40,000
1,230,OOO
___
1,570,ono
240,000
840,000
260,000
Materials
00mus.9
166,400
58,000
43,000
69,700
8,900
16,100
45,000
15,000
58,000
2,750
11,000
900
50
lS,OOO
18,800
2.400
6,300
800
Manhours
(H)
Total iustaUed
17s
25.5
4,020
480,100
__~
-cUti ra&s are valid for Dutch conditions, early 1976. bFor abbreviated items see Table 4.
Piping
Instruments
Electrical
Civil
Structures, steel
Structures, concr.
Insulation
Painting
output
__
100
84
(m/E)
22
3
12
4
_ _.(m/A)
Factors
__
!70
PCS
17
20
3
1
18
_-_pp
Input
Cost itemB
Estimate summa#
TABLE 10
6.481.000
-~-
Labor
(L)inUS$
18.728.000
Total
(T)ir.US$
205
Abbreviations:
mh
;$+I)
pc
is0
cv
CD
STEP 1
STEP 2
STEP 3
STEP4
STEP 5
. . .
. . . . . m$
and mh
. . . .
. . .
. m$andmh
.m$ and mh
. m$and mh
. . . m$
. . . . . m$
and mh
. . . .
.
.
.
.
.
. . .
. . . . .
. . .
. . . .
. . . .
. . . . . .
.
and mh
. m$ and mh
.m$andmh
.m$andmh
. m$ and mh
. . . . . . .m$andmh
. . . , . . . . m$ and mh
ofsystemsxCD
(d) Fireproofing = individual estimate
STEP6
= Structures:
(a) Pipe racks: rack length divided by 6 plus 14 number of portals
Number cf portals X 6 m3/porLal* mr/concrete
Rack length X 150 kg/m + kg steel
(b) Supporting Structures: Structure volume X 0.1 m3/m*m3 concrete
structure volume X 6 kg/me -kg steel
tc) Platforms & Ladders:
Number of towers X 7 t/tower + kg steel
(d) TotalmcoscreteXCD
-+ .
TotalkgsteelXCD
+ 1.
= Insulation & Painting:
(a) Equipment sizes + m* insulated and -t m painted
(b) Piping weight from step 2, divided by total weight
at average pipe dia + m pipe, estimated y%
insulated, balance painted + m insulated and
-t m painted
. . . . . . . . . . . .
. . . . . . . . . . . . .
STEP 7
62)
. . . . m $ and mh
. . . . .
. . . . .
mS and mh
m$ and mh
x CD -+ . ..mS and mh
. . . . .
m$ and mh -
. . . . . . . . . . . . . . . . . m$aadmh
. . . . . . . . . . . . . . . . m$andmh
(in+l)S
+ (m+l)$
* (m+l)$
206
- Adapt your cost data file to fit with the
established parameters.
.- Calculate or obtain ac::ual quantities most
accurately.
-- Obtain detailed field manhour expenditures
and productivities.
-- Do not create too many parameters per cost
component.
Conclusion
This paper is based on, and has been devetoped from, a presentation by the authors at the
1976 Boston Meeting of the American Association of: Cost Engineers, which has appeared in
the AACE Transactions.
BlOGRAPHlCAL NOTE