Construction Equipments

Construction Equipment
 Factors to be considered for buying any
equipment
• Nature of project
• Cost of equipment
• Its depreciation
• Possibility of its future uses for other projects
• Resale value
• Saving expected

Repair old equipment

Hire on rent basis
 Standard & Special Equipment
• No clear cut demarcation
• Extent of its use, availability & cost
• Initial investment
• Breakdown periods
• Future use
• Operators availability
• Resale value
 Special Equipments
• Special equipments may be:
– Pilling Rig
– Kerb power machine
– Milling machine

• Should be purchased when total cost with

reasonable amount of profit is recoverable
during its useful life in a project
 Selection of Equipment
• Type, size, and other particulars
• Analysis to be done for purchase, or hire.
• Existing Equipments: maximum utilization to
be done and go for similar type if possible.
• Availability of the equipment: easily avl. In the
market should be preferred to avoid delay in
delivery.
 Cont..
• Standard equipment
• Special equipment : cost should be justified
with its full utilization.
• Operating cost: most economical equipment is
one whose operating cost is minimum.
• Indigenous equipment: it is always advisable
to purchase manufactured in india
• Obsolescence
 Cont..
• Economic life: should not be less than the useful
period of the project.
• Suitability of equipment for future: should be of
versatile nature
• Study of site condition: topographic conditions, type
of soil, existing approach roads, and other working
conditions.
• Size of equipment: it is better to use more than one
equipment of small size than using one of large size.
 Cost of owning and operating
• Cost of possession + cost of fuel
• Estimated on hourly basis
• Similar equipment can have different hire cost

Depreciation cost
Maintenance & repair Cost
Investment cost
Fuel cost
Lubricating oil cost
 Factors affecting the cost of owning &
operating
• Price of equipment, transportation cost,
loading & unloading charges & installation
cost.
• No. of hours will be used/year.
• Care with which it is maintained and repaired.
• Demand of equipment after its useful period
(salvage value).
 Depreciation Cost
Loss of value with time due to wear and tear or
obsolescence.
Methods for determining depreciation cost

• Straight line method

• Declining balance method
• Double declining balance method
• Sum of the year digits method
• Sinking fund method
Annual depreciation = (initial value – salvage
value)/useful life of equipment (yrs)
Initial value = price of equipment+tranportation
cost+loading & Unloading cost+installation charges
 Maintenance & Repair Cost
• Condition under which it is used
• Handling

• Annual maintenance cost = 50 to 100 %of

annual depreciation
 Investment cost
• Interest + Taxes + Insurance premium +
Storage charge
• Annual Investment Cost = 10 to 12% of the
average annual cost
Average Annual Cost :
case 1 : when there is no salvage value
Pav = P*(n+1)/2n
 Cont..
case 2: when there is salvage value of the
equipment.
Pav = (P(n+1)+S(n-1))/2n
 Fuel or energy consumption cost
• Engine factor: Cycle time to be analyzed
• Time factor
Operating factor = Engine factor + Time factor
Fuel consumption (l/hr) :
For gasoline engine = OF + rated HP x .3
For diesel engine = OF + rated HP x .2

Operating factor can be taken as (.6) if details are not

given
 Lubricating oil cost
• Engine must need the lubricating oil for its
smooth functioning
• Qty. of lubricating oil :
rated HP x OF x .003 kg/HP-hr + C
.74 kg per litre t
C = capacity of engine in litre
t = No. of hours between changes