The use of ratio conceptual cost estimation for petrochemical construction projects in South Afric

[摘要] English: The fast pace in which construction projects are being executed and the fact that almost all green field projects in the petrochemical industry are constructed by means of fast-track methodologies, has the effect that financial management becomes increasingly difficult. The congested construction program together with the increased emphasis on accurate financial reporting, created an opportunity to improve forecasting methods without spending too much time on such exercises.In my personal capacity, I found the current typical procedure of allowing for additional scope of work, inadequate. The time allocated to come up with estimated costs for new scope / additional scope does not allow for comprehensive measurements to conduct detailed estimates. The only alternative was therefore to find other means of obtaining fairly accurate estimated costs for proposed new scopes of work.Construction time will not be increased to allow for exercises like these, in fact, future construction periods will rather decrease, which will lead to a compounding effect of the problem. To me the only solution is to employ an estimating method that has proofed itself in the industry over many years. The quickest estimating methods are the conceptual estimates of which ratio conceptual estimating will probably take the least time. The downside of this form of estimating is that it is also not as accurate as detailed estimates, but if it is based on good historical data, one can get good results that will be more than adequate for this purpose.My discussions with clients and other professionals in the field over the past couple of years reiterated the urgency of an improved financial forecasting procedure, especially when dealing with larger additions to the scope of work. Should ratio conceptual estimating be used, it must be clearly understood that this form of estimating is very dependable on the accuracy of the database on which it is based. A significant effort should be instilled in deriving at a good quality database. This takes a lot of time and it will not come cheap, but the benefit of this investment will be realized in future projects and will increase as the number of newly finished projects are added to the database.

[发布机构] University of the Free State