Page 122 - Challenges in Corrosion Costs Causes Consequences and Control(2015)

100 CORROSION COSTS

8. Previous feedback on service performance.
9. Improved specifications for protective treatments.
10. More basic research on corrosion mechanisms.
11. Improved communication between government departments.
12. Improved storage facilities.
13. Information on corrosion sensitivity of equipment.
14. Better nondestructive testing techniques.
15. Standardization of components.
16. More frequent or longer duration maintenance periods.

The single most important factor considered to be of great importance in the
reduction of corrosion costs in the United Kingdom involves better dissemination
of existing information on corrosion control. The effect of taxation in the United
Kingdom on the costs of corrosion may play an important role. The UK taxation
system encouraged a low capital investment and a high maintenance cost approach
in some industrial sectors. Maintenance costs qualified for tax exemption since these
costs could be expensed in the year in which they were incurred. Thus a company
may choose to deliberately select inferior material for plant construction, resulting
in a reduced capital investment but increased maintenance costs. From the foregoing
discussion it is clear that the nature of the tax system results in an increase in
corrosion costs.

2.2.3 Report of the Committee on Corrosion and Protection (Japan, 1977)

Japan conducted a survey of the cost of corrosion to its economy in 1977 through
the Committee on Corrosion and Protection (3). The committee was chaired by G.
Okamoto and was organized by the Japan Society of Corrosion Engineering and the
Japan Association of Corrosion Control. The studies were supported by the Ministry
of International Trade and Industry.

2.2.3.1 Total Costs The survey determined that the annual cost of corrosion to
Japan was approximately 2.5 trillion yen (US $9.2 billion) in 1974. Estimated GNP
of Japan was 1.36 trillion for the year 1974 and the cost of corrosion was about 1–2%
of Japan’s GNP. This study included only direct costs. The total costs would be much
higher if indirect costs were included.
Method to Estimate Costs of Corrosion: Japan’s committee estimated the cost of
corrosion by:

1. Corrosion protection products and services
2. Corrosion cost by industry sector
3. Questionnaires and interviews, which were used to gather data from industrial
personnel, who are well-informed experts.