DE Plan 10 Nov 04

WORSLEY ALUMINA PTY LTD
Definitive Estimate Plan

Worsley Development Capital Projects
150/06705 R-000-GE-35001
10-Nov-04
Projects
Mining & Metals
Level 3, QV1 Building
250 St Georges Terrace
Perth WA 6000 Australia
Telephone +61 8 9278 8222
Facsimile +61 8 9211 8484
Web www.worley.com.au
Worley Minerals, Metals & Chemicals Pty Ltd
ABN 61 001 279 812
WORLEY ESTIMATING PLAN
DEVELOPMENT CAPITAL PROJECTS
CONTROLLED COPY HOLDERS

NO. NAME COMPANY NO. NAME COMPANY
1 5
2 6
3 7
4 8

REV DESCRIPTION ORIG REVIEW WORLEY DATE CLIENT DATE
APPROVAL APPROVAL
A Issued for internal review 25-Oct-04 N/A

T. Stackpole P Berdal H Hickling S Magee
B Issued for Estimate 10-Nov-04 N/A

T.Stackpole
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CONTENTS
1. Introduction..............................................................................................3
2. Estimate Planning....................................................................................3
2.1 Purpose........................................................................................................................ 3
2.2 Methodology................................................................................................................. 4
2.3 Responsibilities............................................................................................................ 4
2.4 Procedure..................................................................................................................... 5
3. Estimate Introduction..............................................................................5
3.1 Scope of Project........................................................................................................... 5
3.1.1 Permanent Facilities................................................................................................ 5
3.1.2 Temporary Facilities, Construction Services and Equipment..................................6
3.1.3 Scope of Estimate................................................................................................... 6
3.2 Estimate Detail............................................................................................................. 7
3.3 Key Personnel.............................................................................................................. 7
4. Estimating System...................................................................................9
4.1 System Overview......................................................................................................... 9
4.2 System Execution......................................................................................................... 9
5. Coding and Work Breakdown Structure................................................9

6. Basis of Estimate...................................................................................10
6.1 Pricing General........................................................................................................... 10
6.2 Quantities................................................................................................................... 10
6.3 Equipment and Material Pricing..................................................................................11
6.4 Allowances................................................................................................................. 11
6.5 Construction Plan....................................................................................................... 12
6.6 Manual Labour Rates................................................................................................. 12
6.7 Manual Labour........................................................................................................... 13
6.8 Manual Labour Productivity........................................................................................13
6.9 Contractors’ Distributable Costs.................................................................................13
6.10 Construction Facilities & Services..............................................................................14
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6.11 Construction Support.................................................................................................. 14
6.12 Freight........................................................................................................................ 15
6.13 Engineering, Procurement and Management of Construction....................................15
6.14 Escalation................................................................................................................... 15
6.15 Contingency............................................................................................................... 16
6.16 Owner’s Costs............................................................................................................ 16
7. Engineering Input to Estimates............................................................16

7.1 Mechanical Discipline............................................................................................16
7.2 Civil discipline............................................................................................................. 16
7.3 Piping......................................................................................................................... 17
7.4 Electrical................................................................................................................ 17
7.5 Instruments........................................................................................................... 17
8. Estimate Deliverables............................................................................17
9. Estimate Schedule Dates.......................................................................17
10. Schedule Impacts...................................................................................18
A baseline schedule has been developed and approved on the 25 May 2004.
As part of the deliverables for the DE, a revised baseline 2 schedule
will be developed and issued for approval..........................................18
11. Responsibility Table.................................................................................18
Appendices
Appendix A1 Facility Listing
Appendix A2 Commodity Listing (Summary)
Appendix A3 Work Packages
Appendix A4 Construction Contracts
Appendix A5 Procurement Packages

1. INTRODUCTION
In accordance with an agreement with Worsley Alumina Pty Ltd (WAPL) during the preparation of the
Feasibility Study Estimate in 2003, Worley proposes to prepare a Definitive Estimate for the Project to
update our knowledge of the Project’s scope, cost and schedule to ensure that management action and
control can be refocussed from now through to the completion of the Project.
This Plan sets out procedures for the development of the estimate which is expected to have an
accuracy of better than +/-10%. The Estimate is to be completed by the 10th of December 2004.
This estimate will use a Monte Carlo simulation to perform a risk analysis to derive a contingency for the
assessed risks, at the required confidence level. This process will assign a specific level of accuracy, for
the defined scope using the @Risk software within a range of +/- one standard deviation.
The estimate will be coded to allow sorting of data, ease of review and visibility of all estimate elements
i.e. areas, facilities, commodities, scope, quantities, job hours, labour costs, plant equipment & bulk
material costs, freight, contractors’ and common indirect costs, allowances & contingency. Coding will
identify work packages, procurement and contract packages, equipment tag numbers and the like.
A list of key personnel is included with phone numbers. The estimating methodology shows how
Worley’s computer based estimating system will be applied for this estimate. The final output is
described in the section on estimate deliverables. The program for the preparation of this estimate is
discussed in the section on Estimate Schedule.
Any suggestions for revision and update of this plan are welcome and should be referred to the Lead
Estimator.
2. ESTIMATE PLANNING
2.1 Pur pose

A Definitive Estimate is usually prepared to reassess the Project’s scope, cost and schedule when:
 The scope of work is approaching finality,
 Engineering is at least 40% complete,
 Construction is at least, 10% complete, site labour costs/agreements are in place, major
contracts and purchase orders are either bid or awarded and site labour productivity
established,
 Baseline schedule, progress projections, scope changes and the like need to be adjusted to
reflect changes to the current and future status of the project.
A Definitive Estimate is a major milestone in the life of a project as it goes beyond the Trend
Programme by reassessing the costs of completed work, work in progress, all unawarded work, as
well as any known and potential claims. It provides a new baseline for costs, quantities and
manhours to update the project’s current status, progress projections and schedules.

The DE process will involve the consolidation of all scope changes to date so that the current budget
reflects adjustments for the addition and deletion of scope through the DE cut off date. The estimate
plan is designed to ensure that the receipt of information by Estimating is timely; that details for
scope and pricing inputs are agreed by the team; so due dates can be maintained; and that all study
team members understand the estimate strategies, time frame and objectives.
 Engineering cut off for Scope 5 Nov. 2004.
 Contracts, Proc. & Const’n. cut off 5 Nov. 2004
 Project Controls cut off for costs, commits, EAC’s. 5 Nov. 2004
 Accounting cut off for actual costs. 29 Oct. 2004
2.2 Methodology
Prior to the estimate kick-off meeting, the Lead Estimator, senior Project Personnel and WAPL, will
review the Definitive Estimate Plan to suit the current status of the Project, timing, resources,
progress implications and the like, in order to determine the following:
 Type of estimate required,
 Intended accuracy desired,
 Purpose of this estimate,
 Estimate time frame and budget,
 Engineering input required,
 Engineering cut-off-off date,
 Costs and commitments cut-off date
 Procurement input required,
 Contracts input required,
 Construction input required,
 Project Management input required,
 Management review requirements and approval levels,
 Levels of contingency, risk, and fee,
2.3 Responsibilities
The type of information required to develop the estimate will be established by the Lead Estimator,
Project personnel and WAPL
The Lead Estimator is responsible for estimating a job hour budget and staffing plan required to
accomplish the estimate. The project team and the Lead Estimator will arrange the estimate kick-off
meeting.
The lead estimator is responsible to determine if the scope definition is sufficient to complete a
Definitive Estimate and that the Estimate can be accomplished by the schedule dates with the
proposed staffing.

2.4 Procedure
Following completion of the budget, staffing requirements and the estimate plan, a kick-off meeting
will be held to discuss and agree the following items with all participants in the estimate process:
 Overall plan and objectives,
 Estimate preparation guidelines,
 Estimate schedule showing staffing and responsibilities,
 Project goals and deliverables,
It is proposed to do the Estimate in Quest with input from CMS, In Control and other Project Cost
Control Systems.
The Project team will decide on the final Estimating System/s to be used.
The Lead Estimator will define the estimating process, which will include the following:
 Estimate preparation elements:
 Methods are to be used,
 Major categories to be contained in the estimate,
 Responsibility tables (scope/responsibility matrix)
 Pricing basis,
 Directives or assumptions to be used,
 Scope of estimate - how transmitted and in what format,
 Estimate requirements - level of detail,
 Estimate summary formats,
 Code of accounts (consistent with the level of detail planned for control requirements),
This process is to be agreed by the Project Team, reviewed by the Corporate Estimating Manager
and approved by the DCP Project Manager, by signing off the appropriate approvals box.
3. ESTIMATE INTRODUCTION
3.1 Scope of Project

WAPL is upgrading and de-bottlenecking their Alumina plant facilities, at Worsley located near Collie
in Western Australia. This project is expected to produce an additional 250 000 tpa of alumina.
The project scope will be represented in the Definitive Estimate as follows:
3.1.1 Per manent Facilities
34 work packages for the permanent facilities as follows:
024-1 Shuttle Conveyor Upgrade through to
410-1 Mine-site Improvements.
The scope of these work packages will be defined by the following:

 Mechanical Equipment Lists;

 Electrical Equipment Lists;
 Instrument Lists;
 Civil MTO’s
 Structural MTO’s from model;
 Building and architectural finishes MTO’s;
 Piping and valves MTO’s from model;
 Electrical cable schedules;
 Cable ladder MTO’s from model:
Equipment and bulk materials that are not included in either equipment lists or the model are to be
specified by the Package Engineer.
Equipment lists and downloads from the model that are issued for the Definitive Estimate to be tagged
as issued for estimate.
3.1.2 Tempor ar y Facilities, Constr uction Ser vices and

Equipment
The Scope of work is to be defined by Construction based on existing and future needs for temporary
roads, carparks, compounds, laydown areas, fire protection, water, sewer, electrics, communications,
IT and the like.
Construction is to define requirements for construction services i.e. Clean up, waste disposal, material
handling, testing of materials, surveying, safety, security and first aid services and the like.
Construction is to define requirements for construction equipment, tools, consumables, medical

supplies, purchased utilities, and the like.
This scope represents those facilities and services provided by the project for the use of construction
contractors, the EPCM contractor and WAPL. These are additional to those normally supplied by
construction contractors.
3.1.3 Scope of Estimate
The Development Capital Projects Definitive Estimate is to be completed in PDF and bound form on
10th December 2004. The bound copy of the estimate will include the full estimate detail, a facility and
commodity summary and the like. The estimate detail will be able to rolled up into the Project’s cost
control format.
The estimate summary formats will include:

 Summary by facility and major commodity
 Facility summary (work packages)
 Commodity summary
 Major commodity summary
 Procurement packages
 Contract packages

3.2 Estimate Detail

The estimate will be prepared in accordance with the project code of accounts for areas, facilities and
commodities. Estimates will consist of the following major cost elements:
 Direct cost by Work Packages for all permanent facilities
 Distributable costs for temporary construction facilities, construction & commissioning
services, freight etc..
 Cost of field construction management and commissioning services.
 Costs of project and home offices for engineering, procurement and other project
services.
 Escalation
 Contingency
Each estimate line item will show quantities, man hours and costs which will be further sub divided
into: plant equipment, vendor representatives, bulk material, freight, labour, sub contractor
distributables and, where appropriate, construction equipment, in accordance with area and facility
codes.
Each estimate line item will be flagged to indicate completed work, work in progress, other awarded
work and all unawarded work.
3.3 Key Per sonnel

Worley will provide the estimating services and personnel to execute the scope of the capital cost
estimate.
This work will be completed by a small, dedicated estimating team located in Worley’s Perth office
with part time support from the Worley Melbourne office.
Below is a list of the key personnel, together with their contact telephone numbers:
Name Position Telephone
Harold Hinkling Project Director 08 6263 8936
0438 919 225
Les Gillan Deputy Project Director 08 9211 8577
0402 270 686

Engineering
Paul Smithall Engineering Manager 08 9278 8273
Alan Kerr (Perth) Design Manager 08 9211 8428
Mike Reagan Area Manager – Red Side 08 9211 8723
Oscar Cronk Area Manager – White Side 08 9278 8253
Bryan Pearce Area Manager – Electrical & Infrastructure 08 9211 8505
Estimating Team
Andris Drulle Corporate Estimating Manager 03 9205 0415
Terry Stackpole Lead Estimator 0419 901 308
08 9278 8604
John Hilhorst Elec/Inst. Estimator 0414 286 250
Paul Berdal Project Controls Manager 08 9278 8612
Simon Babich Lead Planner 08 9278 8194
Shaun Anderson Cost Engineer 0402 410 227
Procurement & Construction
Sean McGarry Contracts 08 9211 8726
Greg Delore Procurement 08 9278 8162
Graeme Stevenson Construction 08 9734 8037
WAPL
Scott Magee Project Director 0407 440814
Brian Handy Project Controls Manager 08 9211 8701

4. ESTIMATING SYSTEM
4.1 System Over view

The estimate will be prepared using “Quest”, Worley’s computer based estimating system.
Quest is a flexible tool that allows changes to quantities, unit pricing, unit job hours and the like, at
any time during the preparation of the estimate. The system provides for the development and
storage of “tables” of standard estimating information. The tables comprise a set of files which store
the following information:
 Facility and commodity descriptions
 Standard material unit prices
 Standard installation unit man hours
 Freight bulking factors
 Labour rates and productivity factors for each trade
 Labour crews and labour trade composition
 Currency codes, descriptions and exchange rates
 Port of export details and freight rates
 Work packages
 Procurement packages
 Contract packages
The system will be operated in a shared multi-user environment. The estimating system interfaces
directly with “CMS” and “In Control” cost control systems which provides for transfer of estimates, to
become control budgets at a consolidated level of detail. Excel spreadsheets will be imported as
required.
4.2 System Execution

The Perth Terminal Server, which will enable more than one person to share data at any one time, in
any of the Worley offices. This allows the estimate database to be secure and only allow access to
people on the project who have signed a secrecy agreement.
5. CODING AND WORK BREAKDOWN STRUCTURE
The estimate data will be coded in accordance with the current plant facility codes shown on WAPL
Project key plans with supplemental codes for common distributable costs and indirect costs as
recommended by Worley and agreed to by WAPL.
The facility and commodity codes to be per Appendices A1 & A2.
In addition estimate data can be assigned additional coding as follows:-

 Work pack numbers
 Contract numbers
 Bid Request numbers

 Procurement package numbers

 Equipment tag numbers
 Source country/port
 Selective sort codes
Equipment tag numbers will be taken from Engineering's equipment list and/or tag numbers shown on
drawings. Piping will be identified by line number and tie ins will be grouped by size, type, complexity
and by plant operations impact. Use of selective sort codes in the estimating system provides a
flexible method for free form coding of estimate items. Use of certain selective sort fields is pre-
defined and generally used by Estimating.
6. BASIS OF ESTIMATE
Estimated job hours and costs will be developed based on recent awarded or bid contracts and
purchase orders, historical industry norms, budget prices, telephone quotes (if required) and in house
data. Where quantities are not available, factoring techniques may be used. Sort codes will be used to
define the quality of the input data, which will be used to assess the accuracy of the completed
estimate.
6.1 Pricing General

All Estimated Costs will at 1 November 2004 price levels, in Australian dollars, with escalation through
Project completion shown separately.
Foreign currencies will be expressed in Australian dollars, based on foreign exchange rates set in the
Feasibility Study. The estimate will reflect foreign currencies in “native” currencies i.e. $US, Yen,
Euros etc. expressed in Australian dollars. Foreign currencies will be managed in Quest’s currency
data base. The following Table represents the likely foreign currencies, based on the Feasibility study.
Australian Dollar Other Currency

A$1.00 = 0.66 US Dollars
0.59 Euros
6.2 Quantities
Estimating & Engineering will establish the level of detail for quantity development required for the
estimate, for each major commodity. This is expected to be similar to Feasibility Study requirements.
All quantities will be based on the detail model and MTO’s as of 4 November 2004 cut off.
Where quantities are extracted from the model they will be translated into quest commodity codes,
summarised and input to Quest via an excel spreadsheet.
Quantities by commodity code will be developed based on the Contract pay item schedules for those
items already awarded/bid, and by Engineering from detailed design model or drawings currently
being developed. Feasibility documents will not be used. All bulk material quantities shall be given to

Estimating by work pack, facility and commodity. These quantities will be compared with Feasibility
Study quantities, and historical data as a sanity check. Estimating will verify the completeness and
accuracy of the data received, before entering it into the estimating system.
6.3 Equipment and Material Pricing

The estimate is to be based on of the Procurement Plan. The equipment and material estimate bases
are:
 The Project is to supply all long lead items, major equipment, major instruments and
some bulk materials based on the Procurement Plan as of 4 November 2004.
 Construction contractors to supply the remaining equipment and bulk materials.
 Construction contractors may source diesel from WAPL.
 Project supplied items will be delivered to the Project site warehouse and free issued to
installation contractors. Contractor will manage their own supply and warehousing needs.
 Estimates for precipitators, desilicator tank, deep cone washers with rakes, and the
shuttle conveyor to be based on current awarded contracts.
 Estimates for the supply of major mechanical and electrical equipment, major instruments
and all angle/butterfly valves that will be supplied by the Project. i.e. slurry pumps, filters,
blowers, gas insulated switchgear, transformers, MCC’s, VSD’s, BMS, DCS, PLC, flow
and density meters, control valves, cabling, structural steel etc. will be based on awarded
purchase orders.
 Estimates for minor equipment and bulk materials that will be supplied by contractors will
be based on prices from awarded contracts, bids, or current PO values + 10% to cover
the costs of contractor procurement.
 Construction and Estimating work together to develop prices for Project supplied
temporary facilities and construction services.
6.4 Allowances
Costs associated with wastage, over pours, loss and damage will be added to estimated unit rates for
the supply of materials by adding a % to cover these items. These allowances are not to be included
in MTO measured quantities, supplied by Engineering.
Design allowances will be added to contractor and vendor bids, and MTO’s based on assessments by
Engineering. These will be identified in the estimate by a separate commodity code.
Percentage allowances will be used to estimate the quantities and costs of pipe supports, pipe testing
and inspection, mechanical bulks and the like.

Cost growth associated with design development, scope and estimating errors and/or omissions,
quality of bids and budget pricing, market forces and the like are covered by contingency; not
allowances.
6.5 Constr uction Plan

The estimate will be based on the Construction Plan as of the 4 November 2004 cut off. This plan is
represented in the estimate basis as follows:
 Brownfield plant site with significant, +/- 1 600 Tie Ins.
 Plant to be stick built.
 The Worley EPCM project delivery process, the WAPL Owners Team and other
participants to supplement and manage the overall project.
 Subcontract all site work; no direct hire labour.
 Major equipment and limited bulk materials to be supplied by the Project per the
Procurement Plan as of the 4 November 2004 cut off. All other equipment and bulk
materials to be supplied by contractors.
 No construction camp.
 Early construction labour costs to be based on Contractors’ Enterprise Bargaining

Agreements.
 Later site works to be based on Tender Rates per CCI Rev.2, dated 29 October 2004.
 The Project will provide an unfenced level work area for each Contractor with limited
power, water and telephone services available for connection by contractors. Contractors
to provide buildings, hard-standing, fencing, lighting, fire protection and the like, as
appropriate.
 Contractors to operate and maintain their own temporary facilities, except for toilets
provided and maintained by EPCM contractor.
 Contractors to be responsible for bussing and site cleanup.
 The Project will arrange for garbage collection and portable toilets.
6.6 Manual Labour Rates

 Manual labour costs will be based on information provided by WA Chamber of Commerce
and Industry, via WAPL, Rev 2 dated 29 October 2004 which defines weekly wage rates,
trade classifications, definitions, allowances and the like. It defines new rates from 5
January 2005 when the base work week will change from 38 to 36 hours per week. It is

proposed that the DE will use the 36 hour week rates to estimate the remaining field work
beyond November 2004. Labour rates will also be based on recently ratified agreements
for work in the Alumina industry for base rates, tool allowances, project completion
incentive, site allowances, LAFHA and the like.
 The work cycle will be developed by WAPL, IR, Estimating and Construction. Workers
compensation insurance to be based on a blanket agreement for the Project.
6.7 Manual Labour

 30% non local.
 70% local.
 Base 54.4 hour work week, 5 x10 or equivalent, + 5% casual overtime. Tie In work to
work extended OT, on a basis to be decided.
 Work two 10 hour Saturdays per month.
 One RDO per month taken plus 13 additional RDO’s/year accrued as part of the 36 hour
week changes.
 Crafts and work crews to be based on current WAPL and Australian work practices.
 Supervisory ratios to be based on industry norms.
6.8 Manual Labour Productivity

Manual labour productivity to be based on Australian norms for Greenfield projects, with unit man-
hours set at 1.0. The estimate uses different PF’s for the Brownfield and tie in work at Worsley in the
trade and crew mixes, based on Australian norms, Page and Nation data, and recent WAPL on site
experience. PF’s range from 1.0 for earthworks to 2.0 for tie ins.
Contractors’ non productive man-hours associated with inductions, safety/toolbox meetings, drills,
emergency procedures, bomb threats, wet weather, IR issues and the like, to be included in direct
labour man-hour estimates, as a component of the productivity assessment. Non productive labour
costs are not to be included anywhere else in the estimate.
Estimates will include man-hours to maintain mechanical/electrical equipment, after installation until
mechanical completion. Costs to be included in direct costs associated with the installation of that
equipment.
Unit man-hours for installation of equipment and materials will be developed for each commodity by
Estimating with support from Construction. Unit man-hours will be based on awarded and bid contract
rates as well as industry norms and history from similar projects.
6.9 Contractor s’ Distributable Costs

Contractors’ distributable costs i.e. those contractor costs apart from labour and permanent materials
will be developed by Estimating based on experience at Worsley, input from current WAPL
contractors, and Australian industry norms. These costs will be developed for each type of contractor
i.e.

 Structural earthworks and concrete,

 Structural steel, mechanical and piping.
 Buildings and architectural finishes,
 Tankage,
 Electrical and Instrumentation,
 Others including insulation, painting, refractory.
Typical Contractor Distributable (Indirect) Costs

 Temporary Facilities (office, warehouse, lay down etc)
 Temporary Materials
 Manual Indirect Labour (Peggy, maint mechanic, refueler etc.)
 Non Manual Labour (site supv, site ops & site mgmt)
 Plant & Equipment (cranes, welders, vehicles, scaffold etc)
 Small Tools & Consumables incl Safety Equipment
 Camps & Accommodation,
 Mob & Demob
 Other
 Contractors O/H, Profit
6.10 Constr uction Facilities & Ser vices

Engineering/Construction/WAPL to define the scope of:
 Temporary work areas, roads, lay-down areas for all contractors and the Project,
including car-parking.
 Temporary utilities and services to be provided by the Project i.e. power, water, and
communications.
 The set-up, operation and maintenance of portable toilets on site.
 A fully equipped warehouse facility including yard crane, forklift, and light vehicles for the
management of Project supplied equipment and materials
 A fully equipped site office for Project personnel.
 Quantities, of power and water required during construction. Costs of these purchased
utilities to be included as Owners’ costs. Refer to WAPL’s J. Bargiev.
6.11 Constr uction Suppor t

 The cost of contractors’ construction equipment, tools and consumables etc. to be
estimated as contractors’ distributable costs, referred to in Section 6.7. These will be
direct costs in the estimate.
 The cost of the Project’s construction equipment, tools and consumables etc. to be
included as indirect costs in Facilities 5100 (Temporary Buildings and Infrastructure) and
6100 (Site Services Support).
 Drug and alcohol testing. (Owner cost).
 Additional security services required. Chubb, allow 16 hour, 2 shift cover.(Owner’s cost)
 Additional medical services required. (Owner’s cost)
 IT Support & Infrastructure & Software (Owner’s cost)

 Monthly Magazine, Celebrations, Milestones/Christmas. (EPCM

 cost)
 Costs of inductions. (EPCM cost), but time is to be allowed for by contractors.
 Fuel and lube facilities to be supplied by contractors.
 Coates Hire or equal may set-up on site to provide scaffolding, equipment and tools to
contractors. These will not be free issue.
6.12 Freight
Freight costs to be shown separately from equipment and material prices in the estimate, where these
are known. All bid requests to ensure that freight costs are clearly identified, together with any
customs duties.
Where applicable, freight tonnes may be developed by the estimating system as the product of the
estimated quantity and a commodity bulking factor. Alternatively, freight tonnes may be developed
and entered directly for any estimate item.
6.13 Engineering, Procurement and Management of

Constr uction
Estimates of Engineering and home office services costs will be based manhours and cost to date
through the cutoff date. To go manhours to be based on manning charts developed to complete the
detail design phase of the project. Manning charts will be developed by department, discipline and
grade of personnel, over the expected time frame. Man-hours will be reconciled with the required
Engineering deliverables. Costs will be based on Project employment conditions.
Separate estimates will be prepared for office communications, reproductions and supplies, office
rental, furniture and equipment, computer hardware and software, vehicles, outside services and the
like to match the above organisation. These estimates will be based on costs to date and a forecast of
the remaining work. These estimates will be summarised and included in the Quest data base at a
level of detail to suit the Project WBS for ongoing monitoring and control.
Field construction management costs to be based on the recently completed estimate of the scope
and cost of these services, through to project completion. The scope of this work includes all
personnel, including owner’s personnel for procurement, construction, accounting, commissioning,
maintenance information entry, training, document control for close-out and the like. The field office
and warehouse costs are to be included under 6.8 construction facilities.
6.14 Escalation
The estimate base for pricing is 4th Quarter 2004 with construction labour based on the 36 hour week
which comes into effect in January 2005. Escalation of costs beyond that date through to the
scheduled completion of the project will be based on input from WAPL.

6.15 Contingency
Contingency will be developed for the range of risks assessed during the preparation of the estimate.
A Monte Carlo risk analysis-contingency program will be used to assess the accuracy of the estimate
and to calculate the contingency necessary to provide the required probability of achieving the
estimated costs. Estimating will facilitate the risk process, with input from Engineering, Procurement,
Construction and WAPL.
6.16 Owner’s Costs

Owner’s costs to be included in the estimate under Facility 9200 include the following:
 Commissioning including vendor reps, and ramp up costs to full production,
 Demobilisation of site construction facilities and rehabilitation of those areas,
 Owner’s team cost except for those included in the Worley EPCM team.
 Pre-production operating costs,
 Initial fills,
 Working capital,
 Sunk costs,
 Financing costs,
 Insurance including - Contractors’ All Risk, Construction Liability, Workers’
Compensation, Marine Transit, Contractors’ Automobile, Public Liability,
 Australian Fringe Benefits Tax (FBT),
 Custom’s duties,
 Security services,
 All medical and first aid services.
 Operational spares.
 Foreign currency exposure,
7. ENGINEERING INPUT TO ESTIMATES
The following inputs to be based on a scope cut off of 5 November 2004.
7.1 Mechanical Discipline
 Mechanical equipment lists.
7.2 Civil discipline

Activities
 Provide MTO’s for all unawarded work.
 Earthworks
 Concrete
 Structural steel
 Architectural finishes

 Buildings with layout drawings, sketches and specs.
7.3 Piping
 MTO from model. Show rack and plant piping separately,
 MTO for all small bore and service pipe not on model, pipe to be demolished etc.
 MTO for piping specials i.e. safety showers, crab-pots, strainers etc.
7.4 Electrical
 Electrical equipment list.
 Cable ladder MTO from model.

 Cable schedules for power, control and instrument cables,
 MTO for items not on model i.e. conduit, lighting, earthing etc.
7.5 Instr uments

 Instrument Index,
 MTO’s for instrument cabling & standard hook up drawings for bulks,
8. ESTIMATE DELIVERABLES
At the completion of this estimate the following co-ordinated documents and data will be available for
the ongoing management and control of the project.
 Client presentation,
Estimate detail, coded to provide sorting of the following:
 Facilities, Commodities, Work-packs, Contracts, Purchase Requisitions, Tag Numbers,

Currencies,
 Materials, man-hours, labour, and the like,
 A list of estimate qualifications and exclusions, and a definition of the project risks,
 Support drawings, equipment lists and any other relevant estimate backup,
 Baseline 2 schedule,
 Revised Project progress S-curves for engineering, procurement and construction.
9. ESTIMATE SCHEDULE DATES
In the attachments is the expansion estimate schedule. Preliminary key dates from this schedule are
shown below:
 Approval of Estimate Plan 10 November 2004

 Estimate plan Kick-Off Meeting 4 November 2004
 Financial cut off 29 October 2004
 Engineering cut off 5 November 2004
 Estimating review 1 December 2004
 Start engineering reviews 29 November 2004
 Worley review 8 December 2004
 Issue final estimate and report 10 December 2004
10. SCHEDULE IMPACTS
A baseline schedule has been developed and approved on the 25 May 2004. As part of the
deliverables for the DE, a revised baseline 2 schedule will be developed and issued for approval.
During the project executions, the baseline schedule has been updated with actual progress of all
activities along with changes to the project scope or execution strategies. At the completion of the
DE, all past statused activities will be updated into the revised baseline 2 as actual, with all future
planned activities through to the completion of the project becoming the new forecast for the revised
baseline 2 schedule.
Immediately post approval of the revised baseline 2 schedule, all baseline bar charts and progress s-
curves will be reset and reissued and will form the basis for the project progress measurement
through to the completion of the Project. Original baseline 1 curves will be retained on the plots as a
reference but progress measurement and performance will be compared against the baseline 2
curves.
All cash flow and commitment curves will be reset and reissued according to the revised baseline 2
schedule.
Impacts of the revised schedule on the dates for incentive under the EPCM contract will be assessed
and agreed as a separate process outside of the scope of the DE.
11. RESPONSIBILITY TABLE
Below is a responsibility matrix for the estimate. It lists the data required for the successful completion
of the estimate and the responsible department/person for supplying that data.
The data to be transferred to Estimating will include:

 Scope descriptions,
 Material take offs (MTO’s) for bulk materials,
 Bid summaries for equipment and contracts,

 List of reference drawings and sketches,

 Correspondence,
 Equipment lists,
 Firm and budget pricing (where applicable)
Scope Responsibility
1. Scope definition and documentation, Project Manager\WAPL
execution strategy
2. Quantity and pricing development -
Major equipment.

Equipment list of all process, utility, Engineering
and specific site support plant
identifying necessary information and
design data, design allowance
percentage for quoted items and spare
parts. Prepare existing data sheets to
issue to Procurement for
reconfirmation of equipment pricing.
Prices quoted by vendors, current Procurement

market pricing information, inland and
ocean freight rates and related data for
shipment of equipment, import duties if
required, vendor representative rates
and expenses
Construction and installation methods Construction
and schedules, labour availability and
productivity information.
Labour rate information. WAPL Industrial Relations Consultant\
Estimating
Sales and other taxes, foreign WAPL, Procurement\Estimating
currency issues and import duties.
Major equipment estimate, including Estimating
review of scope, material and labour
pricing.
Bulk Quantity Development
Development of the various levels of Engineering
scope including take-offs.
Methods used to develop quantities Estimating
Contracts
Contracting Plan Construction\Contracts
3. Field Manual and Labour Pricing
Establishing and updating field Estimating/Construction/WAPL
installation labour hour standards.
Manual labour productivity, wage rates Estimating/Construction/WAPL
and craft mixes evaluation.
Establishing work crews, composite Estimating/Construction
wage rates and the application of
standard labour hours and productivity.

4. Contractors and Common Distributable

Preparation of Distributables Estimate. Estimating
Definition of temporary field facilities, Construction\Engineering
utilities, construction support services,
construction equipment, tools and
consumables, field non-manual staffing
requirements, manual labour rates and
productivity.
5. Services Estimate All
Engineering job hours, other direct Engineering

costs.
Department Estimate of hours and Department Managers
other direct costs.
Total cost of EPCM. Study Team/Estimating
6. Escalation Analysis
Escalation rates WAPL
Instructions and information to the Estimating
estimating team concerning operations
policy on escalation rates, indexes and
projections.
7. Contingency Analysis
Development of estimate and the best Study Team
measure of potential variance in
project costs.
Final estimate figure. Management
8. Estimate Reviews See below
Engineering Reviews 1 (Quantity/Scope)
The Quantity Review meeting is held to ensure the estimate detail has been completely and
correctly quantified for all direct account categories according to the scope document. This
meeting is a study team review of scope and quantity details for each account, and it is a key
review of the direct account quantities where agreement on the total package must be
reached among all attendees.
The estimate detail sheets that are to be reviewed must be issued to engineering at least two
working days before the meeting, to provide sufficient time for independent reviews.

Worley Management Review
This meeting is chaired by the Project Manager, with Worley’s management and the lead
estimator as participants. The estimate package is presented to the Worley senior
management, using the estimate presentation package as the approved by functional
management. This meeting results in the final package that will be presented to WAPL.

DE Plan 10 Nov 04

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WORSLEY ALUMINA PTY LTD

Definitive Estimate Plan

CONTROLLED COPY HOLDERS

WORLEY ESTIMATING PLAN

A Issued for internal review 25-Oct-04 N/A

B Issued for Estimate 10-Nov-04 N/A

3.1.1 Permanent Facilities................................................................................................ 5

3.1.2 Temporary Facilities, Construction Services and Equipment..................................6

3.1.3 Scope of Estimate................................................................................................... 6

3.2 Estimate Detail............................................................................................................. 7

3.3 Key Personnel.............................................................................................................. 7

4.2 System Execution......................................................................................................... 9

5. Coding and Work Breakdown Structure................................................9

6.3 Equipment and Material Pricing..................................................................................11

6.5 Construction Plan....................................................................................................... 12

6.6 Manual Labour Rates................................................................................................. 12

6.7 Manual Labour........................................................................................................... 13

6.8 Manual Labour Productivity........................................................................................13

6.9 Contractors’ Distributable Costs.................................................................................13

6.10 Construction Facilities & Services..............................................................................14

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6.11 Construction Support.................................................................................................. 14

6.13 Engineering, Procurement and Management of Construction....................................15

6.16 Owner’s Costs............................................................................................................ 16

7. Engineering Input to Estimates............................................................16

7.2 Civil discipline............................................................................................................. 16

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2.1 Pur pose

 The scope of work is approaching finality,

 Engineering is at least 40% complete,

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 Contracts, Proc. & Const’n. cut off 5 Nov. 2004

 Accounting cut off for actual costs. 29 Oct. 2004

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3.1 Scope of Project

The project scope will be represented in the Definitive Estimate as follows:

3.1.1 Per manent Facilities

34 work packages for the permanent facilities as follows:

024-1 Shuttle Conveyor Upgrade through to

410-1 Mine-site Improvements.

The scope of these work packages will be defined by the following:

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 Mechanical Equipment Lists;

3.1.2 Tempor ar y Facilities, Constr uction Ser vices and

Construction is to define requirements for construction equipment, tools, consumables, medical

3.1.3 Scope of Estimate

The estimate summary formats will include:

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3.2 Estimate Detail

3.3 Key Per sonnel

Name Position Telephone

Harold Hinkling Project Director 08 6263 8936

0438 919 225

Les Gillan Deputy Project Director 08 9211 8577

0402 270 686

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Paul Smithall Engineering Manager 08 9278 8273

Alan Kerr (Perth) Design Manager 08 9211 8428

Mike Reagan Area Manager – Red Side 08 9211 8723

Oscar Cronk Area Manager – White Side 08 9278 8253

Bryan Pearce Area Manager – Electrical & Infrastructure 08 9211 8505

Andris Drulle Corporate Estimating Manager 03 9205 0415

Terry Stackpole Lead Estimator 0419 901 308

John Hilhorst Elec/Inst. Estimator 0414 286 250