Estimating

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seriously the execution of the project. Owners would be well advised to do the location conversion account by account rather than base it only on the TIC ratios. With luck there will be an estimate. broken down by accounts. of a similar as a startingpoint. Ifnot,the facility, at a US location,thatcouldbeused guidelines and procedures proposed in this book can be used to prepare quickly an in-house estimate ofthe quality and details ofthe case study in Appendix L. The information required for the conversion must be obtained from contractors with actual recent experience in the intended location. All of the major US engineering and/or constructionfirms haveoffices and activepresence in most parts of theworldand would be more thanhappy torespond, as a business promotion, to anyreasonable request. The information required to make a meaningful conversion from US costs to those of another location is of a general nature as well as specific to each of the cost components.

General Information
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Thedegree of industrialdevelopment is averyimportant factor. Many developing countriesare trying to developa manufacturing industry andare capable of fabricating many components ofchemical plants Whetherthequality and price of theirproducts are good or not. the governments protect local industry and enforce the use of national products and/or impose heavy tariffs on foreign imports. The impact on project cost could be major. Labor productivity and total labor cost is another important factor with a heavyimpact on thetotalcost ofthe project. Even if there is a hardworking labor force their productivity could be affected by the lack of the proper hand tools and construction equipment. In some instances anapparently dirt cheap base labor rate can be doubled,tripled. or morebygovernment-imposedfringe benefits that in some cases include food and shelter for the workers and their families.

Specific Information
The availability of equipment and materials of local manufacture must be investigated and typical prices obtained, e.g., vessels, exchangers, pumps, piping and electrical materials, etc. When information on the availability of equipment and materials is not reliable or. worse, is negative, the conservative approachwould be to assume 100% US purchases and apply freight costs and import duties to the cost.

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