Testing and commissioning

Testing and commissioning are areas of cost which are only cursorily addressed when estimates are assembled. Generally they are given a nominal percentage based upon the estimated value of the constructed plant and more often than not as combined value. This lack of attention presents problems to the project team and accountants as the project enters the later phases of construction.

Problems arise due to the engineers' lack of detail in the estimating stage for `testing and commissioning', and the accountants' requirements of defining where the moneys are to be attributed. For the latter we must look at the way in which capital investment (the total amount of finance required to put a project into operation) is divided into two parts. These are: (a) the fixed capital investment to provide the physical investment, and (b) the working capital investment needed to keep the plant operating.

Fixed capital investment is capital required to provide all the facilities needed for the project regardless of how remote they might be to the process operations. It can be divided into various categories, such as design and engineering, equipment, bulk materials, construction, building, services, utilities, storage, testing, commissioning (start-up), etc. In some cases land purchase is included depending upon the local tax requirements.

Working capital is the moneys, in addition to the fixed capital and commissioning costs, required by the operating company to get a project started and meet subsequent obligations - for example, inventories, cash for wages and materials, sales and services, warehouse and distribution costs, insurance and so on. It is normal for a product producer to take the sum of the working capital over a period of one working month. Working capital tends to have a range of 10 to 20 per cent of the fixed capital investment, but in the `high cost' service industries up to 50 per cent can be required.

Between the nominal end of construction of a new or revamped project and the production of the specific quality and quantity of the required product there is a grey area. The separation of costs between when construction ends and commissioning begins is almost impossible to determine.

Unfortunately, economic reasons do require the separation of the costs of testing and commissioning. Testing and construction changes during commissioning are items of capital costs, according to custom and practice. But beware - the value of first charge of chemicals, catalysts, fuels required for start up, etc, are sometimes attributed from the working capital to make the fixed capital cost look similar for political and comparative reasons.

Seldom do commissioning costs exceed 10 per cent of the fixed capital cost, with the construction portion being in the order of 4 per cent. Times vary from a few days for a complete package unit to over three years when the main plant items, though scaled up from a pilot plant, do not function as predicted.

Skilled engineers who are production oriented should be assigned to the project team in the engineering phase to consult in the design of the plant. In this way, features that will facilitate the commissioning process can be included - a small price to pay for insurance against costly delays. PE

{{Check list for common commissioning problems

* Defective equipment, vessels, pipework, instrumentation and electrics.* Debris left in equipment, vessels and pipework.* Changing valve positions for operator access.* Lubrication and bearing faults.* Vessel and pipework leaks.* Pipework expansion and support problems.* Bringing structures and supports up to safety standards.* Equipment bottleneck correction.* Operator errors.* Off-specification raw materials.* Damage to catalysts.* Supply failure of utilities.* Discharge of untreated effluents.* Construction errors.}}