Preliminary Costing

Chapter 4 PRELIMINARY COSTING

A large sum of money is required to purchase and install the necessary machinery and equipment before the full operation of industrial plant. Land and service facilities must be obtained and the plant must be constructed with all the piping system, controls and services, together with the money for the payment of expenses involved in the plant operation known as working capital Table 10.1: Equipment costs TOTAL PURCHASE EQUIPMENT COST

EQUIPMENT	Qty	PRICE OF ONE UNIT ($)	TOTAL PRICE ($)	Supplier
PRELIMINARY TREATMENT
Receiving Chamber	1	20,903.7	20, 903.7	Personal contacts, local contractor.
Compost/wood chips biofilter	1	4, 924.6	4, 924.6	Personal contacts, local contractor.
Medium mechanically cleaned screen bars	2	12, 642.9	25, 285.8	Wuxi Gongyuan Environmental Equipment & Technology Co., LTD.
Fine mechanically cleaned screen bars	2	12, 642.9	25, 285.8	Wuxi Gongyuan Environmental Equipment & Technology Co., LTD.
Comminutor	1	22, 874.9	22, 874.9	DELUMPER (R) Div., Franklin Miller Inc. - Livingston, NJ
Aerated grit chamber	2	25, 762.0	51, 524.0	Personal contacts, local contractor
Blowers	4	2, 000.0	8, 000.0	Continental Blower, LLC - East Syracuse, NY
Wet scrubber	1	61, 870.5	61, 870.5	Advanced Air Technologies, Inc.
PRIMARY TREATMENT
Primary Settling Tank (reinforced concrete)	4	41, 666.67	166, 666.67	Personal contacts, local contractor.
Circular Scrapper	4	42,000	168, 000	Shandong Jinhaosanyang Environmental Protection Equipment Co., Ltd.
Chemical tank for alum and lime	8	500	4, 000	Hebei Sinta FRP Trading Co., Ltd.
Mixer + Impeller turbine	4	1, 500	6, 000	Jiangyin Fine Chemical MachineryCo. LTD
Dosing pump	8	200	1, 600	Guangzhou Fenlin Sauna Equipment Co., Ltd.
Primary sludge pump	4	1, 000	4, 000	Hebei Gaoxin Pump Industry Co., Ltd.
Equalization tank (reinforced concrete)	3	197, 000	591, 000	Personal contacts, local contractor.
Mixer + Impeller turbine	3	1800	5, 400	Jiangyin Fine Chemical MachineryCo. LTD
Chemical dosing pump	6	200	1, 200	Guangzhou Fenlin Sauna Equipment Co., Ltd.
Distributing Chamber	1	42, 366.67	42, 366.67	Personal contacts, local contractor.
SECONDARY TREATMENT
Concrete for Aeration Tank	1	154, 132.94	154, 132.94
Disk Diffuser	2142	4	8564	KellyShao Jiangyin City Yuanchang Metal Technology Co., Ltd.
Propeller Mixer	70	9, 999	699, 930	Jiangsu Zonre Mechanical Equipment Co., Ltd.
Concrete for Sedimentation Tank	5	17,365.42	86, 827.075
Scrapper	5	5, 598.68	27, 993.4	Wuxi Gongyuan Environmental Equipment & Technology Co., LTD.
Blower	7	2, 000	14, 000	Continental Blower, LLC - East Syracuse, NY
RAS Pump	4	3, 800	15, 200	Ms. Jane Wang Shandong Jinhaosanyang Environmental Protection Equipment Co., Ltd. Shandong, China (Mainland)
WAS pump	1	9530.29	9530.29	Mr. Bella Chu Hebei Tongda Pump Co., Ltd. Hebei, China (Mainland)
Centrifugal Pump	3 (capacity 27805 m3/day )	2, 530.06	7590.19	Shijiazhuang An Pump Machinery Co., Ltd
1 Standard	2, 500	2500
TERTIARY TREATMENT
Sand Filter	4	45, 800	183, 200
Balancing Tank	1	8, 140	8, 140
UV channel	4	12, 500	50, 000
Sand	-	442	442	DongtaiDongjiangShippingAssembly Co., Ltd.
Gravel	-	650	650	DongtaiDongjiang Shipping Assembly Co., Ltd.
Anthracite	-	825	825	Marketing Specialist of Shanghai GDS Industrial co.ltd
Centrifugal Pump	2	865	1, 730	Shijazhuang And pump Co.LTD
UV lamp	1152	100	115, 200	Trojan UV Technologies Inc.
Uv Modules	144	500	72, 000	Trojan UV Technologies Inc.
SLUDGE TREATMENT
Scrappers in thickeners	2	3,500.00	7,000.00	Jiangsu Penyao Environmental Engineering Contract Co. Ltd
Heat exchangers	6	2,500.00	15,000.00	Assumption
Membrane cover for AD	2	7,690.90	15,381.80	Yijin Stage Truss & Case Co. Ltd
Draft tube impeller	4	500.00	2,000.00	Shijiazhuang Woman Industry Pump Co. Ltd
Stirrers for conditioning	2	1,695.00	3,390.00	Shandong JinhaosanyangEnviromental Protection Co. Ltd
Centrifuges	2	26,250.00	52,500.00	Liaoyang xianglong machinery Co. Ltd
First &Maturation tank	1	18,981.1	18,981.1	Zhangjiagang City Runfen Green Build. Support Co. Ltd
Thickener	2	7,017	14,034	Contract
Blending tank	1	1,360	1,360	Contract
Gravity thickener	2	4,012.5	8,025	Contract
Pumps	22	622	13, 684	BPH Pump and Equipment, INC
BIOGAS TREATMENT
Biogas holder	1	150, 000	150, 000	Chengdu Amoco Architecture Technology Co., Ltd.
Biogas Production			333, 333.33
TOTAL PURCHASE EQUIPMENT COST/$	3,304,046.77
TOTAL PPURCHASE EQUIPMENT COST/RS	99, 121, 403.05

Referring to Table 2: Estimation of Capital Investment Cost

1. Direct Cost

1. Installation & painting

From Table 2, the range of installation and painting is usually in the range 25 – 55 %, so an average is assumed since most of the equipment chosen for this plant have been considered with regards to its low installation cost, complex characteristics as well as ease of operation and Painting is preferably used for coding of pipes. Hence an average of 40% is considered.

2. Instrumentation and control

Similarly, from Table 2, instrumentation and controls installed can be assumed in a range from 6 – 30 %. Since for ease of operation and treatment facility, a maximum control is preferred to reduce any hazard especially during the production of biogas, in Activated Sludge Process and Tertiary Treatment as well as to ensure a quality effluent and diminish cost of maintenance. Thus the upper boundary is preferred that is 30%.

3. Piping

During the sludge treatment whereby a gravity thickener is involve, lots of piping is required, as well as in the Secondary Treatment whereby there are 15 channels and 5 clarifier, definitely huge amount of piping is required in this plant. However, the cost of piping is quite low as compared to other equipment involved in this design and also, some units require lots of piping while others do not. Hence an average value is considered in this case. Since the limit lies between 10 – 80%, an average of 45 % is considered.

4. Electrical

Most equipment will be accompanied with electrical installations, however, not heavy installation is required, and an average is assumed. Hence a mean value for Electricals is taken to be 25 % B. Buildings, Process and Auxiliary The building and treatment facility will be constructed while considering adequate safety for employers at workplace as well as safety of the plant itself but this cost is quite low compared to the purchased equipment itself and since the plant is almost fully automated, an average value of 40% is considered whereby the range of buildings, process and auxiliary lies between 10 – 70 % referring to the table. C. Service Facilities and Yard improvements Service Facilities and Yard improvements represent 40 – 100% of the Purchased Equipment Cost, Yard improvement in itself will have a minor cost since a sewage treatment plant needs not to be stylish, it just need to represent the area by asphalting the road and accommodating a small parking area within the treatment area. Howerver, the service facilities with regard to Laboratory constructed on site should be quite representative and equipped with all the necessary equipment to do the required test. Hence, an average value is taken to be 70% of the Purchased equipment cost. D. Land Since a new plant is being built, land requirements is assumed to be high and since the price of land is quite expensive in Mauritius for example; it costs around Rs 25 million per acre for a plot of land in the North and taking for instance the aeration tank as well as the clarifiers, it do require land. Consequently, the maximum value is taken to be 8% of the purchased equipment cost while referring to Table 2. INDIRECT COSTS

1. Engineering and Supervision

To build a new treatment plant and accommodate it with all the necessary instrumentation and control while ensuring safety of the employees at work place as well as safety of the property, also taking into consideration the negative impact it can have to the environment if the process goes wrong and considering the effluent quality as well as some limiting factors such as economy of the country and finally to ensure a highly efficient treatment plant, lots of supervision and engineering skills are required. Hence, a maximum value of 30% is noted.

2. Construction Expense and Contractor’s Fee

The construction expenses and the contractor’s fee for the plant will be quite low as compared to the purchased equipment cost, so in order not to overestimate the expense, an average value of 18% of the direct costs is estimated. Noting that the construction will be effected by the contractors itself, these two factors are considered as one.

3. Contingency

The usual range for contingencies is 5 to 15%. A mean value of 10% is appreciable for a wastewater treatment facility to cater for unforeseen situations such as storm, cyclone or flood. total capital investment

	RANGE, % PE	ASSUMED, % PE	CALCULATION	Cost ( Rs)
DIRECT COST
Purchased equipment (PE)
Installation, including insulation& painting	25 – 55	40	0.40 A— 99,121,403.05	39, 648, 561.22
Instrumentation and controls	6 – 30	30	0.30 A— 99,121,403.05	29, 736, 420.92
Piping	10 – 80	45	0.45 A— 99,121,403.05	44, 604, 631.37
Electrical	10 – 40	25	0.25 A— 99,121,403.05	24, 780, 350.76
Building, process & auxiliary	10 – 70	40	0.40 A— 99,121,403.05	39, 648, 561.22
Service facilities & Yard improvement	40 – 100	70	0.70 A— 99,121,403.05	69, 384, 982.14
Land	1 – 2	8	0.70 A— 99,121,403.05	7, 929, 712.24
TOTAL DIRECT COST	255, 733, 219.90
INDIRECT COST
Engineering & supervision	5 – 30	30% DC	0.30 A— 255,733,219.90	76, 719, 965.97
Construction Expense & Contractor’s fee	6 – 30	18 % DC	0.18 A— 255,733,219.90	46, 031, 979.58
Contingency	5 – 15	10% FCI	0.10 A— FCI	0.10FCI
TOTAL INDIRECT COST	122,751,945.60 + 0.10 FCI
FIXED CAPITAL INVESTMENT	DC + IDC	420, 539, 072.70
WORKING CAPITAL	10 % TCI	46, 726, 563.64
TOTAL CAPITAL INVESTMENT	467, 265, 636.4

Since: FIXED CAPITAL INVESTMENT FCI = DC + IDC FCI = 255, 733, 219.90 +122,751,945.60 + 0.10 FCI FCI = Rs 420, 539, 072.70 TOTAL CAPITAL INVESTMENT TCI = FCI +W.C TCI = FCI + 0.10 TCI TCI = Rs 467, 265, 636.4

Calculating the Total Product cost (from table 1)

• T.P.C = Manufacturing cost + General expenses

• Manufacturing cost = Direct production costs + Fixed charges + Plant overhead

Calculating the Direct Production cost

1. Raw materials No raw materials are necessary hence the cost for raw materials will be zero. 2. Operating labour St Martin Treatment plant has an overall plant maximum capacity of 69 000 m3 wastewater/day which is approximately similar to the one designed for a max flow of 70 000 m3/day. Hence the amount of personnel running the plant will be taken similar to that of the St Martin treatment plant. One employee will work 9 hours per day and there will be shift system. Note: the salary of each personnel member is taken from PRB, 2012

Cite this page