Costing and Project Evaluation

Cost estimation is a specialised subject and a profession in its own right. The design engineer, however, needs to be able to make quick, rough, cost estimates to decide between alternative designs and for project evaluation. Chemical plants are built to make a profit, and an estimate of the investment required and the cost of production are needed before the profitability of a project can be assessed. 

In this chapter the various components that make up the capital cost of a plant and the components of the operating costs are discussed, and the techniques used for estimating reviewed briefly. Simple costing methods and some cost data are given, which can be used to make preliminary estimates of capital and operating costs at the flow-sheet stage. They can also be used to cost out alternative processing schemes and equipment. 

For a more detailed treatment of the subject the reader should refer to the numerous specialised texts that have been published on cost estimation. The following books are particularly recommended Happle and Jordan (1975) and Guthrie (1974), Page (1984), Garrett (1989). 

---

R.K. Sinnott (ed), Butterworth-Heineman, 1999 (4th Edition), (Coul-son and Richardson s) Chemical Engineering, Volume 6, of which Chapter 6 covers Costing and Project Evaluation ... 

---