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Evaluating Capital Cost

Estimation Programs TABLE 1. CLASSIFICATION OF CAPITAL COST ESTIMATES
Five capital-cost- AACE International Recommended Practice No. 18R-97 cost estimate classification system
Class / type Purpose Accuracy Level of project
completion
estimation programs are Class 5: Order of Initial feasibility L:–20 to –50% 0–2%
magnitude estimates study or screening H: 30 to 100%
compared using a set of Class 4: Study or
preliminary estimates
Concept study
or feasibility
L: –15 to –30%
H: 20 to 50%
1–15%

case studies Class 3: Definitive

estimates
Budget, authorization
or control
L: –10 to –20%
H: 10 to 30%
10–40%

Class 2: Detailed Control or bid/tender L: –5 to –15% 30–70%

Ying Feng and Gade P. Rangaiah estimates H: 5 to 20%

National University of Singapore Class 1: Check

estimates
Check estimate or
bid/tender
L: –3 to –10%
H: 3 to 15%
50–100%

C
apital cost assessment is an in- TABLE 2. PURCHASE COST (CPCS) OF COMPRESSORS
tegral part of process design Compressor CapCost DFP CCEP EconExpert AspenPEA
when building or expanding a Power, kW Material CPCS Δ% Δ% Δ% Δ%
chemical process plant. It is re- CS7-G-101 58 CS 217,350* 278%* –4%* –65%* –27%
quired to provide project analysis and CS4-C-101 183 CS 217,350* 226% –16% –27% –24%
evaluation, to select among alterna- CS5-C-101 364 CS 217,350* 454% 78% 92% 33%
tive designs, to plan the appropriation CS6-C-101 3,100 CS 1,113,200 162% 128% 174% –37%
of funds and to serve as a basis for *cost of minimum size, as size is less than the minimum size
project cost control. Capital cost esti-
mation is also important for an engi- the cost estimates for different types
neerng student’s final design project. of equipment.
The accuracy of capital cost esti- Five programs are discussed here
mates depends on the available de- — CapCost, EconExpert, AspenTech
sign details, the accuracy of the cost Process Economic Analyzer (Aspen-
data, as well as the time available to PEA), Detailed Factorial Method (DFP)
prepare estimates. The generally ac- and Capital Cost Estimation Program
cepted classification of capital cost (CCEP). They were evaluated using
estimates (Table 1) is published by seven case studies taken from text-
the Association for the Advancement books. The selected case studies involve
of Cost Engineering (AACE Interna- petroleum refining, petrochemical and
tional). Currently, several methods biopharmaceutical processes. The cost
and associated computer programs estimates are compared and analyzed
exist for estimating capital cost, and at both the equipment and plant lev-
they provide mainly study or prelimi- els to uncover the relative strengths of
nary estimates (Table 1; Class 4). each of the programs used.
An evaluation and comparison of the
computer programs available for capi-
tal cost estimation provides a better
understanding of both their use and
the methods behind them. This article
arose out of a systematic effort by the
authors to apply and analyze several
programs available for capital cost es-
timation. The goals of this effort were
to evaluate available cost estimation
programs, apply the programs to case
studies of plant design and to analyze