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The choice of the most economical defence against corrosion cannot be precise, because neither the timing nor the cost of future maintenance can be predicted accurately and rates of taxation change from time to time. Nevertheless, an overall
economic appraisal should be made, for it may help to influence a decision when there is uncertainty regarding the choice of protective system or products that require a protective system. Each product or protective system has its own pattern of capital and running costs. Choosing the optimum alternative requires care because some of the factors involved can be measured precisely whilst others can not, and the costs arise at different times.
A quick comparison of systems can be made by comparing present first costs plus maintenance costs at present values in each case. (Access and
Step 1. Set out the alternatives, ensuring that they
have the same basis of comparison. Write down the extra capital cost (if any) arising from the need to make the product from more expensive materials, to protect the product or structure, or to increase the thickness of steel to allow for wastage by corrosion. This capital cost may be a direct quotation or may be calculated (see note (c) below) but make sure that quotations or calculations are on the same basis.
Step 2. Add extra transport costs (e.g. when work
goes to specialist processing plant instead of direct to customer or to site), extra mark-up (the main contractor may add a percentage on sub-contracted work) and extra administrative costs where
appropriate and where not included in step 1.
Step 3. (Not relevant to private individuals.)
Deduct tax allowances. Typically, for limited liability companies in the United Kingdom these comprise initial grants for certain projects in development areas plus first-year allowances, adjusted for corporation tax.
Step 4. Estimate the time that will elapse before the
product or structure is available for use. Write down the cost in interest of any such delay assuming the capital sums involved could have been otherwise employed during the extra time required (compared with the product or system most speedily available).
Step 5. Estimate maintenance costs (after making
an appropriate allowance for tax relief) during the life of the structure, including access costs such as scaffolding. In general, the future maintenance costs have to be estimated, making allowance for inflation and then discounted to present values (see maintenance terms in the equation below).
Step 6. Estimate cost of disruption during
maintenance (or initially). As with maintenance costs, these have to be estimated, making allowance for inflation, and then discounted to present values. The maintenance costs plus the initial cost are frequently assessed as the Net Present Value (N), which represents the sum of money that has to be set aside now to cover both initial and maintenance costs over the total life required.
where
F is first cost of the protective system;
M1 is the cost of maintenance in the year P1;
114 © BSI 11-1998 Maintenance costs are steadily rising and so have to
be adjusted at present-day values (M) to allow for inflation at an annual rate r1: (r1 is expressed like r).
M1 = M(1 + r1)P1 etc. Therefore:
In the simplest case, where the rate of inflation of maintenance costs is the same as the interest (or “discount”) rate available on money (i.e. where there is no time-value of money), then r1 = r and the formula is simplified to:
Other costs can be treated as for the maintenance costs or for the first cost as appropriate. Table 13 illustrates a model cost-calculation table.
The following points should be borne in mind when making the necessary calculations.
a) For many protective schemes the initial cost in the factory is roughly proportional to total thickness, but life to first maintenance is not necessarily proportional to thickness;
e.g. relatively thin metal coatings in certain environments often have the longest lives to first maintenance.
b) Calculation of protection costs from fundamentals has been dealt with in
industry-oriented handbooks, e.g. “Galvanizing for profit”, Galvanizers Association, London, UK. In principle, first costs include:
materials labour
overheads (including inspection, access equipment and tools for painting). These are usually of the same order of
magnitude, with materials being most costly for metal coatings and labour most costly for paint coatings.
c) Surface preparation for painting is often analysed separately, for its cost frequently amounts to about one-third of the total cost. Acceptance of poor surface preparation may save 20 % or less of the total capital cost, but is likely to reduce the life expectancy of a coating by more than half, so adding more than 100 % to the total life cost. Incorrect choice of blasting
equipment (e.g. size of nozzle, grade of abrasive, etc.) will increase the cost of surface preparation and may even double it.
d) In calculating paint quantities, the theoretical dry-film requirement should be increased by up to 50 % to allow for locally thick coatings, wastage, repairs and losses (typically 30 % for air spray, 15 % for airless spray, 10 % for
electrostatic spray, 5 % for roller or brush application) etc. Manufacturers should be asked to quote the percentage of solids by volume in their paints to facilitate calculations.
e) Labour costs for the application of paint increase in an approximate ratio in the following order:
f) Comparative costs, unlike actual costs, change little with time. When labour costs are rising more rapidly than material costs, painting will become slightly more expensive relative to metal coatings and vice versa.
NOTE 12 % rate is written 0.12, etc. r can also be the expected rate of return on capital employed in the business.
P1 denotes the number of years to first maintenance;
P2 denotes the number of years to second maintenance, etc.
N = F + the sum of all maintenance costs at present-day rates
= the aggregate of all initial and
maintenance costs at present-day rates
airless spray : normal air spray : roller : brush
1 : 2 : 3 : 4
Figure 10 — Shop coating costs relative to thickness of steel
Table 13 — Suggested layout of a cost-calculation table
g) Sprayed-metal, paint, powder, and tape coatings are usually costed by the area covered, which should be known reasonably accurately. Galvanizing is costed by the weight of steel coated, i.e. by the thickness of steel. Costs also vary by product. The qualitative relation for structural steel is shown in Figure 10.
h) The most economical system for one job is not necessarily the most economical for another, e.g. galvanized steel may be best for a bolted job but not where much site welding is necessary. i) First costs include access costs, e.g. scaffolding. Surfaces treated before erection do not require scaffolding.