Capital Cost Estimation

There are five different types of cost estimate

  1. Order-Of-Magnitude Estimate
  2. Study Estimate
  3. Preliminary or Budget Estimate
  4. Definitive Estimate
  5. Detailed Estimate

Summary Table

Estimate TypeProbable ErrorPurposeLevel of Eng'g Req'dCost of Estimate (as % of Total Project Cost)
Order-of-Magnitude-40% to +40%Feasibility studyNone0 to 0.1%
Study-30% to +30%Project evaluationPreliminary flowsheets, Main equipment sized0.1 to 0.2%
Preliminary-20% to +20%Budget authorisationPIDs, mass and energy balances, equipment list, equipment specs and data sheets,site layouts incl buildings, project program, engineering manhour estimate0.4 to 0.8%
Definitive-10% to +10%Project cost controlSubstantial, but incomplete engineering1 to 3%
Detailed-5% to +5%Contractors' tenderComplete project engineering5 to 10%