Page 86 - Chemical process engineering design and economics

Production and Capital Cost Estimation 71

TOTAL CAPITAL COST

The total capital cost consists of the depreciable capital cost, land cost, land or site
development cost, startup cost, and working capital. In theory, land cost is com-
pletely recoverable when a plant shuts down, and LJherefore is not depreciable.
Land cost varies from 0.01 to 0.02 times the depreciable capital cost. Use an aver-
age value of 0.015.
Land development cost, which is not depreciable, consists of such items as
site clearing, construction of roads, walkways, railroads, fences, parking lots,
wharves, piers, recreational areas, and landscaping. Presumably, these items im-
prove the value of the land, and their costs, to a certain extent, are recoverable.
Table 2.17 lists land development cost for three process types as a fraction of the
depreciable capital cost.
To startup a plant requires additional capital. It is expected that some
equipment will not work after it is installed. Each process unit requires testing
because of possible leaks, incorrect wiring of electrical equipment, and many me-
chanical problems. Humphreys [5] divides startup costs into two parts, those costs
resulting from technical difficulties and those costs associated with personnel,
which we will call operations startup. The technical costs are associated with proc-
ess modifications and consists of equipment alterations, modifications, and ad-
justments to make the process operable. The operations startup consists of such
items as operator training, extra operators and supervisors, raw materials that re-
sult in off-grade products, and several other items. Humphreys [5] gives a detailed
list of the many items contained in startup costs. Startup occurs continuously over
time as equipment is installed, and it overlaps the constructional and production
phases of a plant. It is usually not clear at what time construction ends and pro-
duction begins. Startup is usually defined as the period between the completion of
plant construction and when steady-state operation begins. According to Humph-

Table 2.17 Factors for Estimating Land-Development Cost

Plant at an Existing Site
Fraction of Depreciable Capital Cost, f L

Solids Solids-Fluid Fluid
Processing Processing Processing
Plant Plant Plant

0.0285 0.0249 0.0211

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