Establishment of cost functions for construction of
various types of public water services assets in Portugal
Abstract
This paper describes research on the establishment, validation and testing of construction cost functions of various types of
public water services assets in Portugal: ground-level and elevated water storage tanks, water pumping or booster stations,
water transmission mains and wastewater pumping stations. It also involves the validation of the parameters used to describe
these assets, such as physical characteristics (e.g., total volume; tank height; pipe material, nominal pressure, nominal diameter
and length) or hydraulic variables (e.g., flow capacity; installed electrical power; pumping head).
To this end, a methodology including four steps and 15 tasks was established and were analysed 415 price lists. The sample
derived from 221 construction contracts from 16 Portuguese water utilities managed by the Águas de Portugal Group. Data
concerning 754 assets were collected and organized in databases according to type of asset. Construction cost functions (civil
engineering construction, equipment, electrical facilities and total) were derived by statistical regression analysis. The analysis
and discussion of the functions included the comparison with cost functions previously published by three Portuguese authors
and between the estimated construction costs and the real ones, as well as the estimation of construction costs by the
developed functions for ground-level water storage tanks associated with pumping stations, some design examples and some
assets already constructed by other Portuguese water utilities.
This research is relevant to the speciality of Urban Hydraulics, insofar as it consolidates the knowledge of design engineers and
water utilities on the assessment of construction costs of the analysed types of water services assets.
Keywords: cost function, ground-level water storage tank, elevated water storage tank, water pumping or booster station, water
transmission main, wastewater pumping station.
INTRODUCTION
Since 1993, 7,5 billion Euros have been invested in water supply systems, wastewater systems and solid waste
management in Portugal, of which more than two thirds were European Union funds. As a result the extent ad
quality of these services has significantly improved, in compliance European Union regulations and national
demand for environmental and public health (Alegre and Covas, 2010).
There is now a general awareness among the international community that decision-making relative to
infrastructure of public water services should be transversal. According to Alegre and Covas (2010), it should be
based on three dimensions of analysis (including cost, performance and risk), be interdisciplinary (involving
engineering, financial management and information management) and be developed at three decision levels
(strategic, tactical and operational).
The current paper focuses on costs, which play an important role in an effective decision-making during the
design stage, tender evaluation and construction phases (Life Cycle Costing (LCC), unknown author, 2009; Grigg,
2003).
According to Alegre and Covas (2010) and the ISO 15686-5: 2008 standard, life-cycle cost analysis is a
methodology for the economic evaluation of the cost of a particular asset over its life cycle. In the case of water
services assets, it can be subdivided into investment costs (including consultancy and construction costs),
maintenance costs (including charges relating to the conservation of infrastructures, manual labor, materials,
equipment, accessories and transport), operating costs (including staff costs, energy and reagents, as well as
occupancy costs) and decommissioning costs (including charges related to the deactivation of the asset at the
end of the useful life).
The assessment of these costs should be easy to accomplish. However, engineers often have to take decisions
based on vague, incomplete, scattered and/or outdated data, so it becomes a challenging task.
1
In this context, it is of the upmost importance to have reliable cost functions that predict the costs of various types
of assets. This paper reports on construction cost functions for brand new water services assets in continental
Portugal, using key parameters of each asset. The estimated costs include neither VAT nor extra works.
A review of the state-of-the-art in Portugal concluded that the national bibliography on the assessment of
construction costs are the publication of Lencastre et al. (1995), the study of Águas de Portugal Serviços, S.A.
(2005) and the study of AdP – Águas de Portugal, SGPS, S.A. (2008). These references are more temporally
distant from each other than desirable, their methodologies are based on different principles and the scopes of
the functions are not identical. Table 1 presents a summary of previous construction cost functions obtained by
these authors and the dates of publication.
Table 1 – Previous cost functions for construction of water services assets in Portugal
Author
(1)
(2)
(3)
(1)
(3)
Asset
Ground-level
water
storage
tanks
Elevated
water
storage
tanks
Cost function
242,91 ,
2
5941,7 , (R2 = 97,8%)
158,62 18321 (R2 = 99,5%)
0,466 263,3 104000
(R2 = not known)
2578,79 , ,
(R2 = 95,0%)
!
1740,80 ," ,#
(R2 = 97,0%)
30408 $ ,##" (r = 0,96)
(2)
Water
pumping
stations
25176 $
(r = 0,95)
!
12000 1650 ,# ," 9250 150 % &,
(R2 = not known)
39904 374 0,15 (R2 = not known)
€
1994
2003
V = [10; 10 000]
€/m3
2008
V = [50; 500],
for a 20,0 m tank
height
€
1994
V = not known, for
a 20,0 m tank
height
€
2008
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
Q = [5,00; 300,00]
H = [25,00; 75,00]
€
1994
P: installed
electrical
power (kW)
P= [0,00; 595,00]
€/kW
2003
€
2008
€/m
1994
€/m
2003
€/m
2008
V: total
volume (m3)
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
(3)
Q > 20,00 (upper
limit not known)
H not known
D = [60; 150]
+', -, 0,0013 ) 0,0736 ) 13,009 (R2 = 100,0%)
D = [140; 500]
D = [60; 700]
+', -, 0,1855 ) 2,9114
(r = 0,83)
Water
transmission
mains
Q ≤ 20,00
H not known
'( 0,0008 ) * 0,1244 ) 64,22
(R2 = 98,0%)
'( 1,1956 ),#" (r = 0,91)
(2)
+', -, 0,171 ) 2,3592
(r = 0,85)
'( 0,0006 ) 0,1523 ) 75,867
(R2 = 99,7%)
+', -, 0,0009 ) * 0,0564 ) 43,897 (R2 = 99,8%)
+', -, 0,0015 ) * 0,1071 ) 46,218 (R2 = 99,9%)
. 0,0008 ) 0,1498 ) 73,697
(R2 = 99,9%)
Year
€/m3
! 1317 ,# ," 2092 % &," (R2 = not known)
(1)
Monetary
unit
V = [50; 20 000]
V: total
volume (m3)
32100 279 0,15 (R2 = not known)
(3)
,"
Applicable scope
of key parameter
V = [100; 7 000]
(R = 99,6%)
16541 , (r = 0,92)
(1)
Key
parameter
D = [63; 400]
D: nominal
diameter
(mm)
D = [63; 450]
D = [60; 600]
D = [63; 250]
D = [63; 250]
D = [60; 600]
2
Author
Asset
Cost function
5317,19 (R = 99,1%)
! 2987,80 ,"# ,#
(R2 = 97,0%)
,""
(1)
2
Key
parameter
Applicable scope
of key parameter
Monetary
unit
Year
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
Q = [5,00; 200,00]
H = [5,00; 50,00]
€
1994
€/kW
2003
€
2008
13446 $ , (r = 0,98)
(2)
Wastewater
pumping
stations
16750 $ , (r = 0,71)
2143094,17 $,# (r = 0,91)
20240 $,# (r = 0,90)
%42313,6 396,9 0,226 & / 1,23 (R2 = not known)
(3)
!
%1564,4 ,# ," 2485,2 % &
& / 1,23
(R2 = not known)
,"
P = [0,00; 1,00[
P: installed
electrical
power (kW)
P = [1,00; 30,00[
P = [30,00; 155,00]
P = [0,00; 155,00]
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
Q = [6,00; 10,00]
H not known
Notes:
Authors: (1) Lencastre et al. (1995); (2) Águas de Portugal Serviços, S.A. (2005); (3) AdP – Águas de Portugal, SGPS, S.A. (2008).
Cost functions: CT: total cost; CCE: civil engineering construction cost; CEQ+EF: equipment and electrical facilities cost; CEQ: equipment cost;
Ci: total cost per pipe material (i = DI: ductile iron; HDPE PN10: high-density polyethylene with a nominal pressure of 10; HDPE PN16:
high-density polyethylene with a nominal pressure of 16; ST: steel).
Given this situation, Águas de Portugal Serviços, S.A. is promoting the upgrade and improvement of such
construction cost functions. To this end, data from real water and wastewater systems, from various Portuguese
water utilities, were gathered by AdP – Águas de Portugal Group. These data were collected and treated,
applying a methodology which includes four distinct steps and a total of 15 tasks.
So, the current paper describes research on the establishment, validation and testing of construction cost
functions of various types of public water services assets in Portugal: ground-level and elevated water storage
tanks, water pumping or booster stations, water transmission mains and wastewater pumping stations. It also
involves the validation of the parameters used to describe these assets, such as physical characteristics (e.g.,
total volume; tank height; pipe material, nominal pressure, nominal diameter and length) or hydraulic variables
(e.g., flow capacity; installed electrical power; pumping head).
To this end, a methodology including four steps and 15 tasks was established and were analysed 415 price lists.
The sample derived from 221 construction contracts from 16 Portuguese water utilities managed by the Águas de
Portugal Group. Data concerning 754 assets were collected and organized in databases according to type of
asset. Construction cost functions (civil engineering construction, equipment, electrical facilities and total) were
derived by statistical regression analysis. The analysis and discussion of the functions included the comparison
with cost functions previously published by three Portuguese authors and between the estimated construction
costs and the real ones, as well as the estimation of construction costs by the developed functions for groundlevel water storage tanks associated with pumping stations, some design examples and some assets already
constructed by other Portuguese water utilities.
CASE STUDY
In Portugal, AdP – Águas de Portugal Group is responsible for the provision of essential public services in the
fields of water supply, wastewater collection and treatment and solid waste management.
AdP - Águas de Portugal, SGPS, S.A. is a state-owned holding company that has invested more than 7,5 billion
Euros in works since 1993. It is a leading business group operating in the environmental sector in Portugal,
whose mission is to contribute to the pursuit of public policy and national objectives in the above areas within a
framework of economic, financial, technical, social and environmental sustainability.
3
The 20 regional water utilities of the AdP – Águas de Portugal Group, in partnership with municipalities, serve
about 80% of the Portuguese population (more than 230 municipalities from a total of 308) and operate 247 water
treatment plants and 899 wastewater treatment plants and all associated infrastructures.
The sample of the case study derived from 221 construction contracts from 16 Portuguese water utilities, resulting
in a total of 754 assets analysed (635 excluding the found outliers of water transmission mains). Figure 1 shows
the location of the AdP – Águas de Portugal Group’s water utilities in continental Portugal whose real data have
been used. Table 2 presents a summary of the sample, which permits the conclusion that the case study is
representative of the Portuguese situation.
Water supply systems
Wastewater systems
Water supply and wastewater systems
Figure 1 – Location of the AdP – Águas de Portugal Group’s water utilities in continental Portugal
whose real data have been used (in pink, North region; in green, Central region; in blue, South region)
Table 2 – Sample characterization of the case study
Asset
Number of
water utilities
per region
Ground-level water
storage tanks
North: 5
Central: 3
South: 3
(Total = 11)
Ground-level water
storage tanks
associated with
pumping stations
North: 3
Central: 3
South: 1
(Total = 7)
Elevated water
storage tanks
Central: 1
South: 2
(Total = 3)
Number of
construction
contracts
Construction
contracts date
Number of
assets
per region
52
2005 to 2011,
2013
North: 64
Central: 13
South: 6
(Total = 83)
Total volume:
15 000 m3
15
2005, 2006,
2008, 2009
North: 11
Central: 6
South: 4
(Total = 21)
Total volume: 50 to 6 000
m3
Flow capacity: 1,30 to
224,00 L/s
Pumping head: 15,00 to
229,00 w.c. m
Installed electrical power:
0,94 to 175,18 kW
5
2005, 2008,
2011, 2013
Central: 2
South: 4
(Total = 6)
Total volume: 100 to 500
m3
Tank height: 14,1 to 27,0
m
General characteristics
of the asset
40
to
4
Asset
Number of
water utilities
per region
Water pumping or
booster stations
North: 3
Central: 1
South: 1
(Total = 5)
Water
transmission
mains
(outliers not
included)
Number of
construction
contracts
Construction
contracts date
Number of
assets
per region
General characteristics
of the asset
2005 to 2009
North: 18
Central: 1
South: 1
(Total = 20)
Flow capacity: 0,59 to
496,00 L/s
Pumping head: 3,00 to
174,00 w.c. m
Installed electrical power:
0,28 to 941,18 kW
53
2005 to 2011
North: 144
Central: 21
South: 2
(Total = 167)
Nominal diameter: 60 to
700 mm
Length:
85,00
to
17 032,33 m
North: 22
Central: 3
South: 2
(Total = 27)
Nominal diameter: 63 to
200 mm
Length: 86,10 to 6 198,00
m
12
Ductile
iron
North: 4
Central: 4
South: 1
(Total = 9)
HDPE
NP10
North: 2
Central: 2
South:1
(Total = 5)
17
2005 to 2006,
2008 to 2010
HDPE
NP16
North: 3
(Total = 3)
8
2005 to 2007,
2009
North: 18
(Total = 18)
Nominal diameter: 63 to
200 mm
Length: 61,30 to 4 995,60
m
Steel
North: 1
Central: 1
(Total = 2)
4
2005 and
2007
North: 2
Central: 4
(Total = 6)
Nominal diameter: 600 to
900 mm
Length:
53,30
to
17 260,98 m
2005 to 2011
North: 164
Central: 105
South: 18
(Total = 287)
Flow capacity: 3,00 to
1 329,00 L/s
Pumping head: 4,10 to
83,00 w.c. m
Installed electrical power:
0,61 to 700,41 kW
Wastewater
pumping stations
North: 4
Central: 6
South: 2
(Total = 12)
102
METHODOLOGY
All the data of the case study were collected and treated, applying a methodology which includes four distinct
steps and a total of 15 tasks, as follows.
Step 1: Collection and data processing
The first task of step 1 was the selection of construction contracts. AdP – Águas de Portugal Group stores all its
construction contracts in a SAP application (an Enterprise Resource Planning system), as price lists. With the
help of Águas de Portugal Serviços, S.A., the main requirements for construction contracts to be analysed were
established: (i) the construction contracts should belong only to the AdP – Águas de Portugal Group; (ii) the
construction contracts should be located across continental Portugal (divided into North, Central and South
regions); (iii) the works should have been awarded as public sector contracts; (iv) the construction contracts
should comprise a single asset or several types of assets with separate and detailed construction costs to each
asset; (v) the construction contracts should refer to the construction of brand new assets, not refurbishment or
improvement of existing assets; (vi) the construction contracts date should have been between 2005 and 2012
(after this decision, one construction contract from 2013 was also included); (vii) the chosen price list is that from
the construction firm to whom the contract was awarded; (viii) the construction costs taken from the price lists are
the contract award costs and do not include VAT. This method led to 415 preliminary price lists available in
Microsoft Excel format. In order to develop databases for each asset, and through a carefully analysis, the
number of price lists was reduced to 221.
The second task referred to development of a database for each type of asset, recorded in files in Microsoft Excel
format containing the components summarized in Table 3. When the necessary components weren’t described in
the price lists, clarifications were requested from the water utilities, equipment suppliers or catalogs were
consulted, or hydraulics or regulatory formulas were applied.
5
Table 3 – Components of the database
General items
Information source
Water utility name and file name
Construction contract
characterization
Contracting water utility name, order number, name of construction contract, construction contract
date, country region, construction contract value, cost of construction site
Specific items
Asset
Ground-level water
storage tanks
Ground-level water
storage tanks
associated with
pumping stations
Elevated water
storage tanks
Water pumping or
booster stations
Water transmission
mains
Wastewater
pumping stations
Asset characterization
Storage tank: total volume, number of cells, tank height
(only for elevated water storage tanks), foundation soil
and water treatment type
Pumping station: flow capacity, pumping head, pumps’
hydraulic power, pumps’ efficiency, pumps motor’s
efficiency, installed electrical power, number of pumps
(includes the reserve pump), pumps’ installation (series
or parallel), existence of variable speed motors and
foundation soil
Construction cost item
Earthworks
Foundation works and structural
works
Architectural and building works and
finishes
Landscaping
Equipment
Water treatment facilities (only for
storage tanks)
Electrical facilities
Total
Flow regime (gravity or pressure), pipe material, nominal
pressure, nominal diameter and outside diameter,
length, pavement type, pavement area, pavement width,
foundation soil, volume of excavation, trench width,
mean excavation depth, mean earth cover and
groundwater level
Pavement removal and replacement
Earthworks
Pipe works
Pipe fittings, control and safety
devices and thrust blocks
Special works
Electrical facilities and remote control
systems
Total
As for water pumping or booster stations
As for water pumping or booster
stations
The compiled databases comprised a total of 28 447 items, divided into 6 786 general items and 21 661 specific
items. It is believed that databases are very complete, reliable, flexible, innovative and adequately represent the
variables that influence the construction cost of each asset. As such, in the future, through the introduction of new
records, these databases can be expanded and promote various types of analysis in order to refine the
construction cost functions now developed.
The last task of step 1 was sample characterization as presented in Table 2.
Step 2: Analysis of construction cost for each asset type
The first task of step 2 was the calculation of factors to update costs for inflation, namely the cumulative inflation
factors.
The inflation rate for the costs of construction of assets in the public sector varies every year. PORDATA, a
contemporary Portuguese database, provides statistical data on various sectors (e.g., social, economics,
environmental, etc.) for the Portuguese regions and municipalities, Portugal and the 27 countries of the European
Union expressed as indicators. Figure 2 presents the evolution of the inflation rate and cumulative inflation factor
between 1990 and 2014, considering the “public consumption” deflator values indicated on the PORDATA
1
website .
1
See website http://www.pordata.pt/Portugal/Deflatores+(base+2011)-2413.
6
300%
250%
0%
-10%
200%
-20%
150%
100%
-30%
-40%
50%
0%
-50%
-60%
Inflation rate
20%
10%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Cumulative inflation factor
400%
350%
Year
Figure 2 – Evolution of the inflation rate and cumulative inflation factor between 1990 and 2014,
considering the “public consumption” deflator values indicated on the PORDATA website
The second task was the calculation of the present cost (year 2014) for each construction cost item presented in
Table 3 (construction contracts referred to the years 2005 to 2013) using the cumulative inflation factors. Before
this, the costs of construction site (usually considered to be 5% of the total works cost) were distributed
proportionally between the cost items.
The present cost (year 2014) was calculated using the following equation (ISO 15686-5: 2008):
5
$ 0 1%1 23 & 0 / 045
36
in which PC – present cost (year 2014); IC - cost in the year of opening the works to tender; ti – inflation rate in
the year of opening the works to tender; n – number of years between the year of opening the works to tender
and 2014 and IF0-n – cumulative inflation factor in the year of opening the works to tender.
The third task was the evaluation of generic cost indicators (for each speciality or category: construction cost,
percentage of total cost and unit construction cost).
Step 3: Derivation of construction cost functions for each asset type
The first task of step 3 was the analysis and adjustment of the key parameters for each type of asset, which was
an iterative process, based on the key parameters of the previous cost functions for construction of water services
assets in Portugal (Table 1) and on the sample construction costs analysis.
The second task was statistical analysis with regression models (using Microsoft Excel regression tools), whose
selection depended on the type of variables to be analysed. The dependent variable is the construction cost for
each category, while the independent variables are the key parameters of each asset. In order to measure the
quality of fit of the mathematical equation to the sample, a few correlation factors were calculated: Pearson
correlation coefficient, coefficient of determination, adjusted coefficient of determination and p-value. For water
transmission mains, a simplified outlier analysis was carried out.
The third task was the construction cost function formulation.
The fourth task was sensitivity analysis, including: (i) the effect of varying the construction cost in a given category
on the total cost (for all assets); (ii) the number of cells as a key parameter in the cost of ground-level water
storage tanks; (iii) the derivation of construction cost functions considering the country divided into three regions
(for ground-level storage water tanks and wastewater pumping stations).
Step 4: Analysis and discussion of the developed construction cost functions
The developed construction cost functions were analysed and discussed using five distinct analyses.
The first task was to compare the developed construction cost functions for each type of asset with the previous
cost functions for construction of water services assets in Portugal. Note that these cost functions were updated
to the year 2014 using the cumulative inflation factors previously calculated in step 2.
7
The second task was the comparison of the construction costs estimated by the developed functions with the real
costs in terms of the percentage difference between them.
In the third task, it was checked how to estimate construction costs for ground-level water storage tanks
associated with pumping stations by combining the developed functions for ground-level water storage tanks with
the functions of water pumping or booster stations.
The fourth task was the estimation of construction costs by the developed cost functions for some design
examples.
The last task comprised the estimation of construction costs by the developed cost functions for some assets
already constructed by other Portuguese water utilities.
DEVELOPED CONSTRUCTION COST FUNCTIONS
Ground-level water storage tanks
The construction cost items for ground-level water storage tanks listed in Table 3 were grouped in three main
categories: civil engineering construction cost (including earthworks, foundation works and structural works,
architectural and building works and finishes, and landscaping), equipment and electrical facilities cost (including
equipment, water treatment facilities and electrical facilities) and total construction cost (civil engineering
construction plus equipment and electrical facilities costs).
The problem was approached using the total volume as a key parameter and a power regression model for all
cost categories. The developed construction cost functions for ground-level water storage tanks are depicted in
Figure 3.
1050
Civil engineering construction - CE
Equipment and electrical facilities - EQ+EF
Total - T
Cost, C (€/m3) (2014)
900
750
600
CCE = 4037,6 V-0,409
R² = 0,6568
450
CT = 11448 V-0,51
R² = 0,7447
300
150
CEQ+EF = 13698 V-0,728
R² = 0,7416
0
0
1000
2000
3000
4000
5000
6000
7000
8000
9000 10000 11000 12000 13000 14000 15000 16000
Total volume, V (m3)
Figure 3 – Developed construction cost functions for ground-level water storage tanks
(civil engineering construction cost, equipment and electrical facilities cost and total construction cost)
The first sensitivity analysis showed that, on average, civil engineering construction and equipment and electrical
facilities represent about 68% and 32% of the total construction cost for a total volume in the interval [40; 3 000[
3
3
m . For a total volume in the interval [3 000; 15 000] m , civil engineering construction is about 81% of the total
construction cost and equipment and electrical facilities constitute the remaining 19%.
3
By the second sensitivity analysis it was concluded that for the same total volume (150 to 2 000 m ), a groundlevel water storage tank with two cells is more expensive than one with only one cell.
A third sensitivity analysis allowed concluding that a ground-level water storage is more expensive if located in the
3
North region and is cheaper if in the South for a total volume in the interval [150; 1 000[ m . For a total volume in
3
the interval [1 000; 2 000] m , a ground-level water storage is more expensive if located in the South and is
cheaper if in the Central region.
8
Elevated water storage tanks
The construction cost items for elevated water storage tanks listed in Table 3 were grouped in the same three
main cost categories as ground-level water storage tanks.
The problem was first approached considering the total volume as a key parameter. However, an elevated water
3
3
storage tank with 150 m and a tank height of 22,0 m is more expensive than one with 200 m and 15,5 m, so the
tank height is also a key parameter and the first approach was abandoned.
For the second approach, it was considered that the total volume and the tank height have influence on the civil
engineering construction cost (because it requires special construction techniques), but the equipment and
electrical facilities cost are only influenced by the total volume (because the equipment design does not depend
on the tank height). Multiple linear and a simple linear regression models were applied for civil engineering
construction and equipment and electrical facilities costs. The developed construction cost functions for elevated
water storage tanks are depicted in Figure 4.
(a)
(b)
450000
140000
Sample
h = 25,0 m
Civil engineering construction - CE CCE = 360,08 V + 210904
400000
Equipment and electrical facilities - EQ+EF
120000
h = 27,0 m
300000
250000
h = 20,0 m
CCE = 360,08 V + 141632
h = 22,0 m
200000
150000
h = 15,5 m
100000
h = 14,1 m
50000
h = 14,1 m
h = 15,0 m
CCE = 360,08 V + 13854,44 h - 135457,27
R 2 = 0,9695
Cost, C (€) (2014)
Cost, C (€) (2014)
350000
100000
CEQ+EF = 195,84 V + 12914
R² = 0,8827
80000
60000
40000
20000
h = 15,0 m
CCE = 360,08 V + 72359
0
0
0
50
100
150
200
250
300
Total volume, V
350
400
450
500
550
600
0
50
100
150
200
250
300
350
400
450
500
550
600
Total volume, V (m3)
(m3)
Figure 4 – Developed construction cost functions for elevated water storage tanks:
(a) civil engineering construction cost; (b) equipment and electrical facilities cost
Sensitivity analysis showed that, on average, the civil engineering construction represents about 78% of the total
3
construction cost for a total volume x tank height equal or lower than 13 500 m x m. The equipment and electrical
3
facilities represent about 22% of the total construction cost for a total volume in the interval [100; 500] m .
Water pumping or booster stations
Water pumping and booster stations were analysed together because the nature of the construction costs is the
same. Both are installed in independent buildings, all the pumps have the same characteristics (flow capacity,
pumping head, hydraulic power, efficiency in a parallel installation) and the installed electrical power does not
include the reserve pump.
The construction cost items for water pumping or booster stations listed in Table 3 were grouped in three main
cost categories: civil engineering construction cost (including earthworks, foundation works and structural works,
architectural and building works and finishes, and landscaping), equipment and electrical facilities and total
construction cost (civil engineering construction plus equipment and electrical facilities costs).
The key parameters of water pumping and booster stations are the flow capacity, the pumping head and the
installed electrical power, so it is important to determine the best combination of these parameters in order to
derive the appropriate construction cost functions.
The problem was first approached considering the installed electrical power as a key parameter and using a
power regression model for all categories. Notice that the flow capacity and the pumping head affect the installed
electrical power value.
However, it is well known that the size of the pumps, the nominal diameter of the pipes, accessories, valves,
measure equipments and the size of the building depend more on flow capacity than on pumping head, and do
not depend on efficiency (Marchionni et al., 2014b). As such, Marchionni et al. (2014b) studied the following
9
hypothesis: the key parameters for costs of civil engineering construction and equipment are the flow capacity
and the pumping head while the installed electrical power is the only key parameter for the cost of electrical
facilities. Results of the statistical analysis have shown that the pumping head is not statistically significant.
Therefore, the second approach considered that the flow capacity is the only key parameter for costs of civil
engineering construction and equipment, while the installed electrical power alone determines the cost of
electrical facilities. Once again, note that the flow capacity and the pumping head affect the installed electrical
power value.
In this approach the construction cost items were regrouped in three categories: civil engineering construction
cost (including earthworks, foundation works and structural works, architectural and building works and finishes,
and landscaping), equipment and electrical facilities. A power regression model was selected for each category.
The construction cost functions for water pumping or booster stations are depicted in Figure 5.
(a)
(b)
14000
22000
Civil engineering construction - CE
Equipment - EQ
Electrical facilities - EF
20000
18000
10000
8000
6000
-0,528
CCE = 14507 Q
R² = 0,7631
4000
CEQ = 9886,5 Q-0,394
R² = 0,6339
Cost, C (€/kW) (2014)
Cost, C (€/L/s) (2014)
12000
16000
14000
12000
10000
8000
6000
4000
2000
C EF = 22777 P-0,7
R² = 0,7927
2000
0
0
0
25
50
75 100 125 150 175 200 225 250 275 300 325 350 375 400 425 450 475 500 525
Flow capacity, Q (L/s)
0
50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950
Installed electrical power, P (kW)
Figure 5 – Construction cost functions for water pumping or booster stations:
(a) civil engineering construction cost and equipment cost; (b) electrical facilities cost
Sensitivity analysis showed that, on average, civil engineering construction and equipment represent,
respectively, about 34% and 30% of the total construction cost for a flow capacity in the interval [0,59; 496,00] L/s.
Electrical facilities represent about 36% of the total construction cost for an installed electrical power in the
interval [0,28; 941,48] kW.
Water transmission mains
The construction cost items for water transmission mains listed in Table 3 were grouped together in a single
category named total construction cost (including pavement removal and replacement; earthworks; pipe works;
pipe fittings, control and safety devices and thrust blocks; special works; electrical facilities and remote control
systems).
Note that the pipe material of the water transmission mains is an intrinsic key parameter, as is the length, since it
is needed to calculate the total construction cost from the unit construction cost per meter.
The problem was first approached using the nominal diameter as a key parameter and a polynomial regression
model for ductile iron, a simple linear regression model for HDPE (NP10 and NP16) and a power regression
model for steel. The total construction cost varied greatly for the same nominal diameter, leading to weak
correlations.
Three further approaches were then attempted, using a multiple linear regression model for all pipe materials and
considering the following key parameters: nominal diameter and length in the second approach, nominal diameter
and mean earth cover in the third approach and nominal diameter, length and mean earth cover in the fourth. It
was concluded that there were no standard key parameters for all pipe materials, and the correlation factors were
not good.
10
The fifth approach to the problem used a simplified outlier analysis, per nominal diameter of each pipe material,
assuming an outlier if one or more of the following criteria were met: (i) construction contract under 50 000 €;
(ii) the unit cost per meter of a construction cost item or category greater than five times the mean cost per meter
of the same; (iii) pipe fittings, control and safety devices and thrust blocks and/or special works cost greater than
40% of the total construction cost; (iv) total construction cost per meter negatively influenced the overall statistical
behavior of the phenomenon under analysis. The outliers were excluded from the original sample (45 from ductile
iron, 46 from HDPE NP10, 25 from HDPE NP16 and three from steel).
In this approach, a polynomial regression model was used for ductile iron, HDPE NP10 and HDPE NP16, while a
power regression model was used for steel pipes. Although the correlations are good for ductile iron and steel,
and quite acceptable for HDPE NP10 and HDPE NP16, careful use of the developed cost functions is
recommended. The developed construction cost functions for water transmission mains are depicted in Figure 6.
(a)
(b)
80
700
Total - T
Total - T
DI
Cost, C (€/m) (2014)
Cost, C (€/m) (2014)
HDPE NP10
70
600
500
400
CT = 0,0011 ND2 - 0,1687 ND + 72,343
R² = 0,8324
300
200
CT = 0,0015
60
ND2
- 0,172 ND + 33,382
R² = 0,5141
50
40
30
20
100
10
0
0
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
0
25
50
75
100
125
ND (mm)
(c)
200
225
250
275
300
(d)
700
70
Total - T
60
Total - T
HDPE NP16
ST
600
CT = -0,0001 ND2 + 0,2613 ND + 12,086
R² = 0,6304
Cost, C (€/m) (2014)
Cost, C (€/m) (2014)
150
175
ND (mm)
50
40
30
20
500
CT = 2 x 10 -5 ND2,4897
R² = 0,7935
400
300
200
100
10
0
0
25
50
75
100
125
150
175
200
225
250
0
550
575
ND (mm)
600
625
650
675
700
725 750 775
ND (mm)
800
825
850
875
900
925
950
Figure 6 – Developed construction cost functions for water transmission mains (total construction cost):
(a) DI - ductile iron; (b) HDPE NP10; (c) HDPE NP16; (d) ST - steel
An additional trial was then carried out using the nominal diameter and length as key parameters and a multiple
linear regression model for all the pipe materials, but its results did not show significant improvements in
correlation factors.
Sensitivity analysis showed that, generally: (i) the fraction of total construction cost due to pavement removal and
replacement, earthworks or pipe works is very variable; (ii) pipe fittings, control and safety devices and thrust
blocks make up about 20% of the total construction cost; (iii) although special works sometimes contribute
significantly to the total construction cost, on average it corresponds to about 3%; (iv) electrical facilities and
remote control systems contribute little to the total construction cost.
Wastewater pumping stations
The construction cost items for wastewater pumping stations listed in Table 3 were grouped in the same three
main cost categories as water pumping or booster stations.
Note that all the pumps have the same characteristics (flow capacity, pumping head, hydraulic power, efficiency in
a parallel installation) and the installed electrical power does not include the reserve pump.
11
The key parameters of wastewater pumping stations are also are the flow capacity, the pumping head and the
installed electrical power, so it is important to determine the best combination of these parameters in order to
derive the appropriate construction cost functions.
At first, the problem was approached considering the installed electrical power as a key parameter and using a
power regression model for all categories. Notice that the flow capacity and the pumping head affect the installed
electrical power value.
Similarly to water pumping or booster stations, it is well known that the size of the pumps, the nominal diameter of
the pipes, accessories, valves, floodgates, measure equipments, pre-treatment equipments and the size of the
building depend more on flow capacity than on pumping head, and do not depend on efficiency. As such, it was
extrapolated the conclusion of Marchionni et al. (2014b) that the pumping head is not statistically significant also
for wastewater pumping stations.
Therefore, the second approach considered that the flow capacity is the only key parameter for costs of civil
engineering construction and equipment, while the installed electrical power alone determines the cost of
electrical facilities. Once again, note that the flow capacity and the pumping head affect the installed electrical
power value.
In this approach the construction cost items were regrouped in three categories: civil engineering construction
cost (including earthworks, foundation works and structural works, architectural and building works and finishes,
and landscaping), equipment and electrical facilities. A power regression model was selected for each category.
The developed construction cost functions for wastewater pumping stations are depicted in Figure 7.
(a)
(b)
6000
Civil engineering construction - CE
Equipment - EQ
10000
8000
7000
C CE = 9664,4 Q -0,39
R² = 0,4864
4000
Cost, C (€/kW)
Cost, C (€/L/s)
Electrical facilities - EF
9000
5000
3000
C EQ = 8169,7 Q-0,359
R² = 0,5135
2000
6000
5000
4000
3000
CEF = 11574 P -0,505
R² = 0,548
2000
1000
1000
0
0
0
100
200
300
400
500
600
700
800
Flow capacity, Q(L/s)
900
1000 1100 1200 1300 1400
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
Installed electrical power, P (kW)
Figure 7 – Developed construction cost functions for wastewater pumping stations:
(a) civil engineering construction cost and equipment cost; (b) electrical facilities cost
The first sensitivity analysis showed that, on average, civil engineering construction and equipment represent,
respectively, about 39% and 37% of the total construction cost for a flow capacity in the interval [3,00; 1 329,00]
L/s. Electrical facilities represent about 24% of the total construction cost for an installed electrical power in the
interval [0,61; 700,41] kW.
A second sensitivity analysis concluded that the civil engineering construction is more expensive than the
equipment in the North region, while the opposite case holds in the other regions. The civil engineering
construction is most expensive in the Central region and the cheapest in the North for a flow capacity in the
interval [3,48; 810,00] L/s. The equipment cost is highest in the Central region and cheapest in the North for a
flow capacity in the interval [3,48; 300,00] L/s. In the flow capacity interval [300,00; 810,00] L/s, the equipment is
most expensive in the Central region and the cheapest in the South. Finally, the electrical facilities are most
expensive in the South region and the cheapest in the North for the installed electrical power interval [0,74;
329,23] kW.
12
Summary of the developed construction cost functions
Table 4 presents a summary of the developed construction cost functions for each asset.
Table 4 – Developed construction cost functions for each asset
Asset
Ground-level
water storage
tanks
Elevated
water storage
tanks
Cost function (in 2014)
!
13698 ,# (R2 = 0,7416)
360,08 13854,44 7 * 135457,27
(R2 = 0,9695)
!
195,84 12914 (R = 0,8827)
2
9886,5 ," (R2 = 0,6339)
'( 0,0011 8) * 0,1687 8) 72,343
(R2 = 0,8324)
+', -, 0,0015 8) * 0,172 8) 33,382
(R2 = 0,5141)
+', -, *0,0001 8) 0,2613 8) 12,086
(R2 = 0,6304)
. 2 / 10 8),"# (R2 = 0,7935)
9664,4 , (R2 = 0,4864)
Wastewater
pumping
stations
Monetary
unit
V: total
volume (m3)
V = [40; 15 000]
€/m3
V: total
volume (m3)
h: tank
height (m)
V = [100; 500]
h = [14,1; 27,0]
€
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
P: installed
electrical
power (kW)
Q = [0,59; 496,00]
H = [3,00; 174,00]
P= [0,28; 941,18]
11448 , (R2 = 0,7447)
! 22777 $,# (R2 = 0,7927)
Water
transmission
mains
Applicable scope
of key parameter
4037,6 ," (R2 = 0,6568)
14507 , (R2 = 0,7631)
Water
pumping
or booster
stations
Key
parameter
8169,7 ,
2
(R = 0,5135)
! 11574 $, (R2 = 0,548)
ND:
nominal
diameter
(mm)
L: length
(m)
Q: flow
capacity
(L/s)
H: pumping
head
(w.c. m)
P: installed
electrical
power (kW)
€/L/s
€/kW
D = [600; 900]
L = [53,30; 17 260,98]
D = [60; 700]
L = [85,00; 17 032,33]
D = [63; 200]
L = [86,10; 6 198,00]
€/m
D = [63; 200]
L = [61,30; 4 995,60]
Q = [3,00; 1 329,00]
H = [4,10; 83,00]
P= [0,61; 700,41]
€/L/s
€/kW
Note:
Cost functions: CCE: civil engineering construction cost; CEQ+EF: equipment and electrical facilities cost; CT: total cost; CEQ: equipment cost;
CEF: electrical facilities cost; Ci: total cost per pipe material (i = DI: ductile iron; HDPE PN10: high-density polyethylene with a nominal pressure of
10; HDPE PN16: high-density polyethylene with a nominal pressure of 16; ST: steel).
ANALYSIS AND DISCUSSION OF THE DEVELOPED CONSTRUCTION COST FUNCTIONS
Comparison of developed construction cost functions with previous cost functions for construction of
water services assets in Portugal
Figure 8a presents a graphical comparison of the function derived for total construction cost of ground-level water
storage tanks with previously published cost functions for construction of water services assets in Portugal. Figure
8b presents the graphical comparison of total construction costs of a few examples of elevated water storage
3
tanks (total volume from 100 to 500 m for a tank height of 20,0 m) estimated using three different cost functions,
since the cost functions themselves were not graphically comparable.
13
(a)
(b)
1050
500000
Sample
Developed function (2014)
Lencastre et al. (1995)
AdP - Águas de Portugal, SGPS, S.A. (2008)
450000
900
600
Águas de Portugal
Serviços, S.A. (2005)
450
CT = 18890 V-0,6
r = 0,92
300
AdP - Águas de
Portugal, SGPS,
S.A. (2008)
CT = 5939,3 V-0,389
R² = 0,978
Developed
function (2014)
CT = 11448 V-0,51
R² = 0,7447
Lencastre et
al. (1995)
CT = 428,56 V-0,197
R² = 0,996
150
Cost (€) (2014)
Cost, C (€/m3) (2014)
400000
750
350000
300000
250000
200000
150000
100000
50000
0
0
1500
3000
4500
6000
7500
9000
10500
12000 13500 15000 16500 18000
19500 21000
0
0
Total volume, V (m3)
50
100
150
200
250
300
350
400
450
500
550
600
Total volume (m3)
Figure 8 – (a) Comparison of the function derived for total construction cost of ground-level water storage tanks
with previously published cost functions for construction of water services assets in Portugal; (b) Comparison of total
construction costs of a few examples of elevated water storage tanks estimated using three different cost functions
In the case of ground-level water storage tanks, it can be observed that the developed construction cost function:
(i) is far superior to that of Lencastre et al. (1995), because those authors did not include the landscaping and
electrical facilities and nowadays water utilities tend to install much more equipment than in the past; (ii) is quite
similar to those from both AdP studies (2005 and 2008), although the temporal universe of data and the range of
the samples are different, and Águas de Portugal Serviços, S.A. (2005) study did not considerer any updated
process costs.
For elevated water storage tanks it can be observed that the total construction costs estimated by the developed
function (2014): (i) are far superior to those obtained by Lencastre et al. (1995), for same reasons as above;
(ii) are also far superior to those obtained by AdP – Águas de Portugal, SGPS, S.A. (2008), although this study
did not explain the costs methodology.
Table 5 compares total construction costs for water pumping or booster stations and wastewater pumping stations
estimated for design examples using four different cost functions (since the cost functions themselves were not
graphically comparable), and the total construction cost estimated at the design phase.
Table 5 – Comparison between total construction costs for water pumping or booster stations and wastewater pumping
stations estimated for design examples using four different cost functions and those estimated at the design phase
Total construction cost estimated by formulae
Asset
Characteristics
of the asset
Total construction
cost estimated at
the design phase
Water pumping
or booster
stations
Flow capacity:
10,44 L/s
Pumping head:
64,10 w.c. m
Installed electrical
power: 33,12 kW
Wastewater
pumping
stations
Flow capacity:
78,00 L/s
Pumping head:
11,90 w.c. m
Installed electrical
power: 47,65 kW
Developed
function
(2014)
Lencastre
et al.
(1995)
Águas de
Portugal
Serviços,
S.A.
(2005)
AdP – Águas
de Portugal,
SGPS, S.A.
(2008)
124 009,36
140 769,19
51 733,80
177 094,57
78 966,09
513 332,85
349 562,30
144 071,40
290 260,88
Not applicable
In the case of water pumping and booster stations, it can be observed that the total construction cost estimated by
the developed function (2014): (i) is far superior to that estimated according to Lencastre et al. (1995), because
the latter authors did not include the landscaping and electrical facilities and nowadays water utilities tend to
install much more equipment than in the past; (ii) is inferior to that estimated by Águas de Portugal Serviços, S.A.
(2005) for unknown reasons; (iii) is far superior to that estimated by AdP – Águas de Portugal, SGPS, S.A.
14
(2008), probably due to the very specific costs methodology used in this study, or because the pumping head of
the design example is outside the applicable scope of the key parameter (note that pumping head is unknown).
For wastewater pumping stations it can be observed that the total construction cost estimated by the developed
function (2014): (i) the total construction cost estimated by the developed function (2014) is far superior to that by
Lencastre et al. (1995), for same reasons as above; (ii) is superior to that estimated by Águas de Portugal
Serviços, S.A. (2005) for unknown reasons; (iii) is not comparable with that from AdP – Águas de Portugal,
SGPS, S.A. (2008), because the latter cost function is not applicable to the characteristics of this design example.
Figure 9 compares the function derived for total construction cost of water transmission mains with previously
published cost functions for construction of water services assets in Portugal (Figure 9a for ductile iron, Figure 9b
for HDPE NP10, Figure 9c for HDPE NP16 and Figure 9d for steel).
(a)
(b)
1000
Cost, C (€/m) (2014)
800
Developed function (2014)
CT = 0,0011 ND2 - 0,1687 ND + 72,343
R² = 0,8324
Lencastre et al. (1995)
700
500
AdP - Águas de Portugal, SGPS, S.A. (2008)
400
CT = 0,0006 ND2 + 0,1522 ND + 75,837
R² = 0,997
300
Águas de Portugal
Serviços, S.A. (2005)
200
Lencastre et al. (1995)
CT = 0,0024 ND2 + 0,1299 ND + 22,95
R² = 1
200
CT = 0,0009 ND2 - 0,0564 ND + 43,88
R² = 0,9983
100
Developed function (2014)
CT = 0,0015 ND 2 - 0,172 ND + 33,382
R² = 0,5141
0
0
0
50
100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900
0
50
100
ND (mm)
(c)
150
200
250
ND (mm)
300
350
400
450
700
AdP - Águas de Portugal,
SGPS, S.A. (2008)
CT = 0,0015 ND2 - 0,107 ND + 46,2
R² = 0,9993
100
90
80
70
Águas de Portugal
Serviços, S.A. (2005)
CT = 0,1953 ND + 2,6942
r = 0,85
60
50
40
30
Developed function (2014)
CT = -0,0001 ND2 + 0,2613 ND + 12,086
R² = 0,6304
20
10
0
ST
Sample
HDPE NP16
600
Developed function (2014)
-5
Cost, C (€/m) (2014)
Sample
120
110
500
(d)
130
Cost, C (€/m) (2014)
Águas de Portugal
Serviços, S.A.
(2005)
CT = 0,2118 ND + 3,3248
r = 0,83
AdP - Águas de
Portugal, SGPS,
S.A. (2008)
150
50
CT = 1,3654 ND0,7495
r = 0,91
100
HDPE NP10
250
CT = 0,0014 ND2 - 0,2195 ND + 113,3
R² = 0,98
600
Sample
Cost, C (€/m) (2014)
Sample
900
300
DI
CT = 2 x 10 ND
R² = 0,7935
500
2,4897
AdP - Águas de Portugal, SGPS, S.A. (2008)
CT = 0,0008 ND2 + 0,1497 ND + 73,668
R² = 0,9992
400
300
200
100
0
0
25
50
75 100 125 150 175 200 225 250 275 300 325 350 375 400 425 450 475 500
ND (mm)
0
50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950
ND (mm)
Figure 9 – Comparison of the function derived for total construction cost of water
transmission mains with previously published cost functions for construction of water
services assets in Portugal: (a) DI - ductile iron; (b) HDPE NP10; (c) HDPE NP16; (d) ST - steel
In the case of water transmission mains, it can be observed that: (i) the developed construction cost functions for
ductile iron and HDPE NP10 are inferior to those of Lencastre et al. (1995), due to the very specific costs
methodology used by those authors; (ii) the developed construction cost functions for ductile iron, HDPE NP10
and HDPE NP16 give higher results than those of Águas de Portugal Serviços, S.A. (2005), probably because the
latter study did not consider any updated process costs; (iii) the developed construction cost functions for ductile
iron, HDPE NP10, HDPE NP16 and steel are inferior to those of AdP – Águas de Portugal, SGPS, S.A. (2008),
probably due to the very specific costs methodology used by the latter study.
Comparison of the construction costs estimated by the developed functions with real construction costs
For each asset of the sample, the total construction costs were estimated through the developed cost functions
presented in Table 4. These costs were then compared with real total construction costs through the percentage
difference between them (Table 6).
15
Table 6 – Comparison of the total construction costs estimated by the developed functions with real total construction costs
Percentage difference
Asset
Maximum
Minimum
Ground-level water storage tanks
103%
-62%
4%
Elevated water storage tanks
22%
-21%
5%
Water pumping or booster stations
200%
-68%
7%
Ductile iron
159%
-59%
11%
HDPE NP10
111%
-37%
10%
HDPE NP16
61%
-37%
6%
Steel
38%
-25%
-5%
266%
120%
156%
Water transmission
mains
Wastewater pumping stations
Average
On average, the total construction costs estimated by the developed functions are similar to real total construction
costs, except for wastewater pumping stations, which had a weak coefficient of determination. However, in certain
cases the maximum or minimum deviations are very significant.
Estimation of construction costs by the developed functions for ground-level water storage tanks
associated with pumping stations
The problem of how to estimate the total construction cost of ground-level water storage tanks associated with
pumping stations was approached in two ways: (i) approach A – as a sum of the developed construction cost
functions of the ground-level water storage tanks (civil engineering construction cost, equipment and electrical
facilities cost) and of water pumping or booster stations (civil engineering construction cost, equipment cost,
electrical facilities cost); (ii) approach B – as the civil engineering construction cost function developed for groundlevel water storage tanks plus the equipment and electrical facilities construction cost functions developed for
water pumping or booster stations. Results are shown in Figure 10 and Table 7.
1200000
Real total construction cost
1100000
Total construction cost estimated by approach A
Ground-level
water storage tank
Total construction cost estimated by approach B
1000000
ID
900000
Cost (€) (2014)
600000
500000
400000
300000
200000
100000
Flow
capacity
Installed
Pumping
electrical
head
power
ID
Ground-level
water storage tank
Water pumping station
Total
volume
Installed
Flow
Pumping
electrical
capacity
head
power
(m )
3
(L/s)
1
50
1,30
88,00
1,97
12
500
2,20
31,30
2
50
5,70
130,00
12,03
13
500
4,80
40,00
4,53
3
100
2,50
27,00
1,14
14
600
9,90
22,00
3,64
4
100
7,78
93,00
11,27
15
800
16,20
109,00
27,14
5
100
7,78
212,80
25,45
16
1 000
3,30
88,00
5,00
6
100
38,33
229,00
133,16
17
1 000
50,00
50,40
37,73
7
100
70,56
190,00
206,09
18
1 100
8
250
4,20
77,77
5,23
19
1 600
12,50
21,00
6,47
9
250
8,60
48,85
6,64
20
3 800
224,00
15,00
45,58
10
300
3,65
51,00
6,47
21
6 000
63,88
115,60
110,57
11
350
30,00
55,00
25,03
800000
700000
Total
volume
Water pumping station
(w.c. m)
3
(kW)
(m )
(L/s)
1,48
(w.c. m)
74,00
(kW)
1,10
1,86
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21
ID
Figure 10 – Comparison of two approaches for estimating the total construction costs by
the developed functions for ground-level water storage tanks associated with pumping stations
Table 7 – Comparison of the total construction costs estimated by the developed functions with
real total construction costs for ground-level water storage tanks associated with pumping stations
Approach
Percentage difference
Maximum
Minimum
Average
A
109%
-21%
51%
B
37%
-43%
1%
On average, results from approach A exceed the real total construction costs, which is logical because the
separate construction cost functions consider duplicate works. This does not correspond to the reality in which the
equipment of a water pumping station is installed in the pump house of the tank. The total construction costs
estimated by approach B are similar to real total construction costs, so this method should be adopted in future for
new assets.
16
Estimation of construction costs by the developed functions for some design examples
The total construction costs for some design examples were estimated by the developed cost functions presented
in Table 4. These were then compared with the total construction costs estimated at the design phase in terms of
the percentage difference between them (Table 8).
Table 8 – Comparison of the total construction costs estimated by the developed functions
with total construction costs estimated at the design phase for some design examples
Asset
Characteristics of the asset
Percentage
difference
Ground-level water storage tanks
Total volume: 200 m3
-34%
Elevated water storage tanks
Total volume: 300 m3
Tank height: 26,4 m
-3%
Water pumping or booster stations
Flow capacity: 10,44 L/s
Pumping head: 64,10 w.c. m
Installed electrical power: 33,12 kW
21%
Water transmission mains
Nominal diameter: 160 mm
Length: 1 726,48 m
-41%
Flow capacity: 78,00 L/s
Pumping head: 11,90 w.c. m
Installed electrical power: 47,65 kW
-32%
HDPE NP10
Wastewater pumping stations
Generally, the total construction costs estimated by the developed functions differed slightly from those estimated
at the design phase. This does not necessarily mean that the developed construction cost functions are predicting
overestimated or underestimated values, but that costs estimated at the design phase are somewhat removed
from reality.
This discrepancy may occur because the civil engineering construction costs are more difficult to quantify by
design engineers, while costs of equipment and electrical facilities are more easily obtained from suppliers.
However, in a construction contract, the latter items may be subject to significant discounts by suppliers.
Estimation of construction costs by the developed functions for some assets already constructed by
other Portuguese water utilities
The total construction costs for some assets already constructed by other Portuguese water utilities were
estimated by the developed cost functions presented in Table 4. These were then compared with real total
construction costs in terms of the percentage difference between them (Table 9).
Table 9 – Comparison of the total construction costs estimated by the developed functions with
real total construction costs for some assets already constructed by other Portuguese water utilities
Asset
Characteristics of the asset
Percentage
difference
Ground-level water storage tanks
Total volume: 500 m3
3%
Water pumping or booster stations
Flow capacity: 5,20 L/s
Pumping head: 30,30 w.c. m
Installed electrical power: 2,71 kW
3%
Water transmission mains
Wastewater pumping stations
DI
Nominal diameter: 250 mm
Length: 1 979,50 m
-17%
HDPE NP10
Nominal diameter: 125 mm
Length: 452,72 m
16%
HDPE NP16
Nominal diameter: 160 mm
Length: 4 140,00 m
28%
Flow capacity: 100,00 L/s
Pumping head: 23,32 w.c. m
Installed electrical power: 33,10 kW
-5%
17
Generally, the total construction costs estimated by the developed functions are similar to real constructions
costs.
Synopsis
For the Portuguese case (and excluding the archipelagos of Madeira and the Azores), and for the five asset types
analysed, the results obtained from the five analyses for analysis and discussion of the developed construction
cost functions were as follows: (i) functions for the construction cost of ground-level water storage tanks are valid
and recommended to estimate the total construction cost through the sum of civil engineering construction and
equipment and electrical facilities; (ii) construction cost functions for elevated water storage tanks are valid,
though the sample lacks data; (iii) construction cost functions for water pumping or booster stations are valid;
(iv) construction cost functions for water transmission mains are valid, although the causes of the outliers need to
be determined; (v) construction cost functions for wastewater pumping stations are valid.
Total construction costs of ground-level water storage tanks associated with pumping stations should be
estimated as the sum of the function for civil engineering construction cost of the ground-level water storage tanks
plus the functions for equipment and electrical facilities costs of the water pumping or booster stations.
All the developed construction cost functions should be used with care. In future these should be refined through
the introduction of new records to the databases.
In any case, there will always be errors associated with the estimated costs, regardless of the method used to
measure costs at any stage prior to the award of the contract.
Note also that, in general, the previous cost functions for construction of water services assets in Portugal (Table
1), although updated to the year 2014, do not adequately represent the current situation in Portugal.
CONCLUSIONS AND RECOMMENDATIONS
The assessment of construction costs at the planning stage, prior to the award of the construction contract, is a
challenging task.
Generally, the cost functions obtained previously by Portuguese authors, updated to the year 2014, don’t
adequately represent the current Portuguese reality.
The construction cost functions developed in this work for each asset are intended to be another step towards the
establishment of robust methodologies for cost estimation early in the planning stage, by presenting another
perspective of analysis.
The development of construction cost functions was focused on the logical relationships between variables based
on empirical knowledge, rather than on the values of the statistical parameters, even though attempts were made
to find the best compromise between the two approaches. Ockham's razor was also applied in order to define the
key parameters of the cost functions. This is a problem-solving principle which states that, among competing
hypotheses and in the absence of certainty, the hypothesis with the fewest assumptions should be selected.
Since the construction cost functions now developed are supported by data from real Águas de Portugal Group
systems, it’s reasonable to state that they are reliable. Their main disadvantage is that their robustness depends
on the amount of sample data for the type of asset that was available from the construction contracts analysed.
In order to use these construction cost functions, the user only needs to know the basic physical characteristics of
the assets (e.g., total volume; tank height; pipe material, nominal pressure, nominal diameter and length) or
simple hydraulic variables (e.g., flow capacity; installed electrical power; pumping head).
These functions only give the cost of construction of a particular asset in continental Portugal, for brand new
assets and within the applicable scope of key parameters of each asset. The estimated costs include neither VAT
nor extra works.
18
It is suggested that the next developments should be: (i) to periodically update the databases of the assets
analysed in this paper, to update and improve the construction cost functions; (ii) to periodically update the
databases of assets analysed by other authors such as water distribution pipes (Lopes et al., 2013), wastewater
pumping stations, gravity sewers and distribution mains (Marchionni et al., 2014a), to allow the improvement of
their construction cost functions; (iii) to develop databases and derive construction cost functions for other assets
such as water intakes, water treatment plants, wastewater treatment plants, gravity sewers and pumped mains
(iv) to analyse the sample of ground-level storage tanks considering a division in two total volume intervals (below
and above 1 500 m), to refine the construction cost functions and to confirm whether the number of cells is a key
parameter; (v) to carefully statistically analyse the sample of water transmission mains in order to confirm the
existence of outliers, and whether the flow regime is a key parameter; (vi) to derive construction cost functions for
each region of the country, to confirm whether there are any geographical cost differences; (vii) to statistically
analyse all the assets studied in this paper with a statistical computing software in order to determine confidence
and prediction intervals.
This paper’s theme is challenging, apparently simple, yet with many complexities arising from the multiple
possible approaches to the problem, whereby the search for a solution continues.
The correct and/or single solution does not exist, so the solution has to be derived from the sample data, a
dynamic process. The progression of the subject in terms of consolidation and sophistication is gradually evolving
and enduring.
REFERENCES
ADP – ÁGUAS DE PORTUGAL, SGPS, S.A. (2008). Planos Directores para a Criação dos Sistemas Multimunicipais de Baixa
de Abastecimento de Água e de Saneamento de Águas Residuais do Norte, Centro e Sul. Critérios de Concepção de Soluções
e Estimativa de Investimentos e Custos Operacionais.
ÁGUAS DE PORTUGAL SERVIÇOS, S.A. – Direcção de Engenharia (2005). Análise de Preços Unitários em Sistemas
Multimunicipais de Abastecimento de Água e de Saneamento.
ALEGRE, H.; COVAS, D. (2010). Gestão Patrimonial de Infra-estruturas de Abastecimento de Água. Uma Abordagem
Centrada na Reabilitação. Série Guias Técnicos N.º 16. Entidade Reguladora dos Serviços de Águas e Resíduos. Laboratório
Nacional de Engenharia Civil. Instituto Superior Técnico. Lisboa.
GRIGG, N. S. (2003). Water, Wastewater, and Stormwater Infrastructure Management. Lewis Publishers.
ISO 15686-5:2008. Buildings and Constructed Assets – Service Life Planning – Part 5: Life Cycle Costing.
LENCASTRE, A.; CARVALHO, J.; GONÇALVES, J.; PIEDADE, M. (1995). Gestão de Sistemas de Saneamento Básico.
Volume 9. Custos de Construção e Exploração. Direcção Geral do Ambiente do Ministério do Ambiente e Recursos Naturais.
Laboratório Nacional de Engenharia Civil. Lisboa.
Life Cycle Costing (LCC). Methodologies for GPP. (unknown author) Em: EC GPP TOT Seminar, 7-9 Julho 2009, ITCILO
Campus, Turim, Itália.
LOPES, N.; PENA, J.; MAMOUROS, L.; MENDES, D. (2013). Funções de Custo para Sistemas de Abastecimento/Distribuição
de Água em Ambiente Urbano. Águas de Portugal Serviços, S.A.
MARCHIONNI, V.; LOPES, S.; LOPES, N.; MAMOUROS, L.; BRÔCO, N.; COVAS, D. (2014a) Cost Functions for Different
Water Supply and Wastewater Systems Asset. Em: IWA World Water Congress & Exhibition, 21-26 Setembro, Lisboa, Portugal.
MARCHIONNI, V.; LOPES, S.; LOPES, N.; MAMOUROS, L.; BRÔCO, N.; COVAS, D. (2014b) Urban Water Infrastructure Cost
Development Using Regression Models. In: Journal of Water Resources Planning and Management (submitted in June 2014).
19