Comments on: Capital Cost Estimating – Owner’s Costs in an EPC Project Delivery Method

By: Aziz

Aziz — Thu, 27 Jul 2023 22:43:36 +0000

I think, the Total Investment of any project comprise of 4 main items:
1. Capex (i.e. EPC cost)
2. Working Capital
3. Pre-operating Expenses
4. Financing Cost

The Owner Cost is part of the Pre-Operating Expenses.

By: Rajendra Khanvilkar

Rajendra Khanvilkar — Sun, 12 Dec 2021 09:05:41 +0000

Hellow Diana
What would be % cost considered for Design as compared to overall cost estomate of the project.
Rajendra Khanvilkar

By: Larry Felder

Larry Felder — Tue, 05 Jan 2021 10:42:08 +0000

In reply to Marino Martinez.

There are several key cost that you did not consider in estimating commissioning cost.

Like EPC, commissioning when the process is understood, the likelihood of costs overruns are minimized. Any time spent regarding commissioning activities when not recognized adds cost impact to construction schedule, commissioning mobilization /demobilization, commissioning organization, contract scope and Division Of Responsibilities (DOR). Any of these key activities not included in your estimate affects your overall costs on the backend as Change Orders:

1. developing commissioning schedule
2. planning for commissioning
3. document development (extensive)
4. execution plans
5. turnover/handover
6. Vendor Coordination
7. Licensor Technology Acceptance
8. Project Closeout

I have been developing detail estimates for commissioning for 48 years and held positions senior management roles both in office and projects.

By: Ariel Wylie

Ariel Wylie — Wed, 02 Dec 2020 03:03:49 +0000

Thank you for confirming what constitute owners cost for a construction project.
I have a question. The EPC cost for constructing the project which is part of the Plant Cost as you mentioned in your slides,,,, before COD (Commercial operation date) we recognize these plant cost in the books as Construction in Progress (an asset item). However, after COD, do we convert this Plant cost into fixed assets?

If yes, how many % of the Plant Cost is depreciated? Is there a specific requirement for example , certain asset have salvage value

By: Abe Perez

Abe Perez — Fri, 22 Feb 2019 06:03:59 +0000

One thing to consider to include in the estimate is the owner’s cost from completion of FEL3 to EPC Phase. This period is knows as “bridging” or Investment Funding Decision. This sometimes takes 4-6 months where the owner works on EPC phase PEP’s and EPC contract finalization (back and forth redline T&C’s).