PIPING COSTING

Presented By
Rajendra M. Bharate (CEO & Managing Director)
CONCEPTS CLEARANCE COMPANY PVT. LTD., 18/B3, Bandal Complex, Near PMT
Depot, Paud Road, Pune 38

BUSINESS PERFORMANCE PARAMETERS
1) Minimum Cost 2) Quality 3) On time Delivery 4) Profits Return On Investment ( ROI )
5) Meeting Customer Expectation & Satisfaction 6) Competitive Advantage 7) Information (
All Right Factors ) 8) Benchmarking Adherence World Standards

PARTIES INVOLVED IN PROJECT 1) Owner (Client) 2) Shareholders 3) Financer 4)
Licensor 5) Government (Statutory) 6) EPC Contractor (Equipment Vendor) 7) Various
Contractors 8) Consultants 9) Detailed Design & Engineering etc..

PROCEDURE FOR TENDERING
1) Advertisement @ Intention 2) Submission of PQs 3) Evaluation of PQs 4) Issue of Tender
to Pre-qualified Bidders (Techno-Com) 5) Submission of Technical Bids 6) Evaluation of
Technical Bids 7) Submission of Commercial Bids 8) Evaluation of Commercial Bids 9)
Finalization of Contractor & Issue of LOI 10) Contract Agreement

PRE-QUALIFICATION
1) Company Information 2) List of Directors, Management & Organization Chart 3) List of
Clientele 4) Types of Work Done & Same Type of Experience 5) Work Completion
Certificates 6) Details of Staff & Workforce 7) Details of Construction Equipments 8)
Financial Capabilities from the Bankers 9) Memorandum & Articles of Association (Limited
Co.) 10) Balance Sheet for Last 3 Years

TENDER / BID / PROPOSAL / QUOTATION
Technical Part 1) Technical Terms & Conditions with Deviations 2) Work Methods & Detail
Technical Specifications 3) Equipment & Organizational Deployment 4) QA Plans, Planning,
Control & Reporting Systems 5) Overall Schedule (Bar Chart) 6) Original Bidding
Documents Stamped & Signed Commercial Part 1) Price Schedule (Schedule of Rates) 2)
Commercial Terms & Conditions 3) Rates for Extra Work

TYPES OF GUARANTEES
1) EMD (Alongwith Tender) (% or Fixed Amount) 2) Advance Payment (10 %) 3) Security
Deposit (10 %) 4) Retention Money (5%) 5) Performance Guarantee (10%)

TURNKEY ASPECT ( LSTK / EPC / EPIC CONTRACTS )
Concept to Commissioning : Single Point Responsibility 1) Project Management 2)
Engineering 3) Procurement 4) Quality Assurance 5) Construction 6) Commissioning

FEW BASIC REQUIREMENTS
1) Types of Projects (Fertilizers, ..) 2) Types of Disciplines (Civil, ..) 3) Types of Works
Involved (Piping, ..) 4) Types of Piping (Offsite, ..) 5) Piping Materials (CS, ) 6) Piping
Schedules & Weights 7) Pipe Fittings & Valves 8) Fabrication of Pipes from Plates 9)
Painting Works (Primer, ..) 10) Insulation Works (Hot, ..) 11) NDT Works (Radiography ..)
12) Testing & Commissioning

Inch-Mtr (IM) & Inch-Dia (ID) Inch-Mtr When a Pipe of 1 Inch Dia having a length of 1
Mtr is installed, it is termed as 1 Inch-Mtr. (Ex. 6 Inch Pipe, Length 5 Mtr = 6 x 5 = 30 IM)
Inch-Dia When a Pipe of 1 Inch Dia Size is welded having 1 joint, it is termed as 1 Inch-
Dia. (Ex. 10 Inch Pipe, 4 Joints = 10 x 4 = 40 ID)

ManHour, ManDay & ManMonth
ManHour When 1 Worker works for 1 Hour, it is said 1 MH of work. (Ex. 2 Workers
worked 8 Hrs = 2 x 8 = 16 MH) ManDay When 1 Worker works for 1 Day, it is said 1 MD
of work (Ex. 3 Workers worked 7 Days = 3 x 7 = 21 MD) ManMonth When 1 Worker
works for 1 Mth, it is said 1 MM of work (Ex. 8 Workers worked for 5 Mths = 8 x 5 = 40
MM)

Piping Rates Quotation Basis
1) Per Mtr 2) Per Inch-Mtr 3) Per Inch-Dia 4) Per MT 5) Lumpsum

Piping Welding Productivity Normal Figures as per the Average working of any Company,
certain Norms are as below a) Shop Floor 50 - 60 ID / Day / Welder (Marking, Cutting,
Grinding, Tacking etc..) b) Erection at Site 25 - 30 ID / Day / Welder (Laying, Fit-up,
Welding, Testing etc..)

Piping Fabrication from Plates
Normally, above 30 Inch Size Pipes are Prefabricated out of Plates by Rolling & Welding.
Plate Bending Machine is very much important aspect in this Fabrication. It is Specified as
Thk (mm) x Width (Mtr)

Related Piping Works

Pipe Supports Fabrication & Erection Mitres Fabrication (Tee, Reducer, Elbow ..) Insulation
(Hot & Cold) Sand Blasting (SA 2 ) Painting (Primer, Intermediate, Final) Hydro Testing
Chemical Cleaning etc..

Various NDT Requirements

Visual Inspection Radiography (X Ray, Gamma Ray) DP / MP Testing Vacuum Box Testing
Ultrasonic testing (UT) etc..

Various Piping Materials CS API 5L, A 106 Gr B (IBR, Non IBR) LTCS
A333 Gr 6 AS A335 Gr P1, P11, P22 SS 304, 304 L, 316, 316 L, 347 H GI IS 1239
HDPE / Plastic C.I. / Cement Pipes Cement Lined

PIPING ERECTION TYPES
a) Unit Piping Involved within the plant mostly coming on Equipments & has more number
of welding joints is referred as Unit Piping. b) Offsite / Rack / Yard Piping Involved within
the plant mostly on Racks & across the plant, but has less number of welding joints is
referred as Offsite Piping. c) Cross country Piping Out of plant mostly coming across the
cities & has naturally less number of welding joints is referred as Cross-country Piping. (Oil,
Gas, Water) d) Under Ground Piping Involved under the ground / buried may be within or
outside the plant & has less number of welding joints is referred as Underground Piping

Ratio of Inch-Mtr to Inch-Dia (Appr.) Unit Piping 1.5 to 2.0 Offsite / Rack / Yard Piping
3.5 to 4.0 Cross-Country Piping 10.0 to 12.0 Under-Ground Piping 4.0 to 6.0

IM & ID Calculations from Isometrics Piping Material wise Grouping Sizewize Grouping
Number of Fittings Valves (Welded / Bolted)

Piping Gangs a) Piping Prefabrication Pipe Fabricator, Gas Cutter, Tack Welder, Grinder,
Helper b) Piping Erection Pipe Fitter, Tack Welder, Rigger, Helper c) Piping Welding
Qualified Welder, Rigger, Helper

Weighted Inch-Dia
Piping involves various types of Schedules. To estimate Man-hours, Consumables etc.. for
each Schedule, it is really a tough task. Hence, all welding Inch-Dia are converted to a 40
Schedule as a base. On this basis costing is done, which becomes easier. This is called
Weighed Inch-Dia.
Example
Size 6 Dia 6 Dia Sch 40 120 Thk Actual ID 6 mm 100D 18 mm 100D Wighted ID
100D 300D

Material wise Piping Consumables (Sch 40 as a base) (Rs / Inch-Dia) C.S. 30
CSLT 35 AS 80 SS 125 G.I. 10 PVC / HDPE 5

Material wise Piping Rates (Only Factors) (Considering CS as a base) C.S. 1.00
CSLT 1.25 AS 2.50 SS 3.50 G.I. 0.60 PVC / HDPE 0.40

Direct Cost Direct Labor Direct Supervision Consumables R & M of Tools / Tackles &
Vehicles Rental Charges of Equipments Power & Water consumption

Indirect Cost Administrative Staff Indirect Labor Accommodation Tools / Tackles &
Vehicles Depreciation Insurance Preparatory Expenses Travel Bank Guarantees General
Expenses Guarantee Obligation

Total Price Direct Expenses + Indirect Expenses + Material Supplies + Subcontracting
Charges + Taxes & Duties + Agents Commission + Overheads + Profits

Section A ( Fill in the Blanks) ( 5 Marks ) 1) 6 Inch Size pipe having 15 Mtr length laid on a
rack will have how many total InchMtr of work -2) 12 Inch size pipe 5 Joints to welded will
be having total -------- Inch dia of work. 3) For Unit piping installed to be in Plant will have
Inh-mtr to Inch-dia ratio approximately -----4) Pipe Fabrication from Plates is done at site
normally above ------- Inch Size Pipe. 5) Fabrication of Larger diameter Piping Fittings like
Tees, Elbow, Mitre, Reducer etc.. is done on basis of Per -- rate. (Please mention unit)

Section B ( State True or False ) ( 5 Marks ) 1) 6 Inch Sch 40 CS piping of 2000 Mtr is to be
erected as Offsite Piping & the same quantity is to be erected as Unit Piping in one Refinery
Plant. Then Offsite piping will have Less number of joints than Unit piping. 2) SS rate will be
More than CS of the same schedule. 3) Various Schedules of Piping Inch-dia work is
converted to single unit of inch-dia of work for easy calculation purpose. This concept is
called Weighted Inch-dia. 4) One welder gang in Erection Site will give an average of 25-
30 ID Productivity in a working shift of 8 hours. 5) The Piping, which is involved across
cities & has less number of welding joints, is referred Cross-country Piping

Section C ( Write Answers in Short ) ( 5 Marks ) 1) 5 Welders work for one daily shift of 8
hours per day for 10 days. Calculate total man-hours worked by them. 2) Total work done on
one piping job was of 5,200 Manhours. Assuming one ManMonth (MM) of 208 Manhours,
find total ManMonths spent on piping job. 3) One piping project has got total workers
strength of 100 during its peak period. Find out the total Direct Supervision strength
(Engineers & Supervisors) as per the normal experience of few standard norms. 4) Write the
Elements of Direct Cost. 5) Write the Elements of Indirect Cost.

Section D ( Full Descriptive Question ) ( 10 Marks ) Shriniwas Constructions Limited,
Lucknow (UP) In one of the Fertilizer Plant near Shahajanpur (UP) some Piping Work is to
be done. Quantity is finalized by the Petroleum Company Design department & handed over
to Contracts Section for Estimation to find out the Total Cost involved. They floated the
Tender & ultimately Shriniwas Construction Limited, Lucknow (UP) was Selected as a
Final Contractor to Award the Contract being the Lowest Tender.

Question 1) Estimate the Total Cost in Rupees, which will be required to carry out the
work, as the Contracts Department has to get Top Management Approval. 2) Shriniwas
Construction Ltd., Lucknow has offered 10 % discount on Total Pricing. Hence, also
calculate the Discount & Final Tender Price in Rupees Separately to inform to the Top
Management.

Tender for Ammonia Fertilizer, Shahajanpur (UP)
Sr 1 2 3 4 5 6 7 8 9 Item Piping Laying Piping Welding Pipe Support Insulation Painting
Extra Labor Work Radiography (10%) Commissioning Labor 25 T Crane Supply Unit IM ID
MT M2 M2 Mhrs --Mhrs Days Ltrs Qty 3,000 2,000 10 50 100 200 ? 100 5 10 Rate 50 100
2,500 100 50 75 50 50 2000 200 Amount
10 Enamel Paint Supply