Cost estimation plays an important role in order to keep a check on a ship’s dry docking budget

and to ensure a sensible quotation for the whole repair work. There are three important aspects of
ship repair cost estimation:

 Cost Groups

 Cost Parameter

 Work Breakdown Structure

Let’s take a look at each of these aspects in detail.

Cost Groups:

Cost grouping in an integral part of cost estimation wherein the whole repairing process is
divided into parts for the ease of cost quotation and work completion within the stipulated time.
Cost groups also help to divide and assign work to different segments of the repair yard and to
get individual quotation for each one of them, making the whole process smoother and
manageable.

Cost grouping is mainly done on the basis of ship’s department. For e.g. deck, engine, electrical
etc. Details of things included in each of these department are as follows:

Engine Room

 Main engine and propulsion machinery

 Boilers
 Engine room tanks
 Auxiliary Machinery
 IG System

Deck

 Accommodation area
 Navigation equipment
 Anchor and deck machinery
 Cargo gear
 Hull, rudder and tail shaft
 Cargo tanks, fuel tanks ,ballast tanks , and slop tanks

Automation

 Controls and automated systems

 Instrumentation jobs

Electrical
  Motors
 Panels
 PLC’s
 Main Bus Bar modification

Electrical jobs in all areas of the ship

Cost grouping is an excellent way to stream line the process of cost estimation and to avoid
errors related to costing while planning a dry dock.

Cost Parameters

Cost parameter is an aspect of cost estimation which defines the total number of elements that
are to be included for the final project cost. Cost parameters specify the limit and scope of
activity during the repair work.

Cost parameters help in analyzing the scope of the work and also helps in considering each and
every aspect taken into consideration for the dry dock.

Examples of cost parameters are:

 Dry docking fees and repair yard cost

 Agency cost
 Classification surveyors’ cost
 Cost of the stores
 Repair and maintenance cost
 Damage repair cost
 Cost of necessary spares

Work Breakdown Structure

Work breakdown structure is an extension of cost grouping which further helps in distribution of
jobs and procuring cost estimation for each job.
Work breakdown structure helps estimating the time needed for whole process, including period
of repair, dry docking period and lead time. It helps to figure out additional job quotations that
would be required during the repair work. Based upon these parameters, quotations are asked for
repair and spare from different agencies/yards, and eventually the best suited quotation is
selected.

The work breakdown structure also helps the chief engineer to decide what all jobs can be
handled by the ship’s staff within the stipulated time in order to save repair costs. This eventually
helps in making the final quotation that is to be sent to ship yards.

A general breakdown of the structure would include

Engine room

 Maine engine and turbine

 Jobs on auxiliary machinery including generators, auxiliary condensers, steering system
and engine room pumps and pipes.
 Work on auxiliary boiler without re-tubing
 Boiler survey, soot blowers, and chemical cleaning
 IG System
 COP control and valves
 Safety equipment
 Radio and navigation equipment
 Machinery and instrumentation controls
 Electrical work including motors and switch boards

Deck Side
  General expenses
 Anchor and chain
 Hull anodes and sea chests
 Tail shaft
 Painting
 Steel / shell
 Ballast tanks internal inspection / survey & anodes
 Accommodation
 Cargo gear, deck machinery
 COP and stripper pumps
 Tank washing machines and pipes
 Hydraulic pipes and valves
 Steel damage

By taking all the three parameters mentioned above into consideration, optimum ship repair cost
estimation can be reached using the resources and manpower available on board ship.

Definition
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An approximation of the probable cost of a product, program, or project, computed on the basis
of available information.

Four common types of cost estimates are: (1) Planning estimate: a rough approximation of cost
within a reasonable range of values, prepared for information purposes only. Also called ball
park estimate. (2) Budget estimate: an approximation based on well-defined (but preliminary)
cost data and established ground rules. (3) Firm estimate: a figure based on cost data sound
enough for entering into a binding contract. (4) Not-to-exceed /Not-less-than estimate: the
maximum or minimum amount required to accomplish a given task, based on a firm cost
estimate.

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