for the subject offered in GTU, ACE, MODULE 4 Construction Equipment

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S.S.A.S.I.T, SURAT GTU

2. Importance of Construction Equipments
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• In Case of major construction projects, the speed of work and the
timely completion of work is very important. Due to this reason,
construction equipment play the most important role. The proper
use of the appropriate equipment contribute to economy, quality,
safety, speedy and timely completion of the project.
• The cost of construction is a major factor in all the projects. The factors
that influence construction costs mainly are materials, labour,
construction equipments, overhead and profit.

3. Major Construction
Projects
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4. Importance of Construction Equipment's
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•The cost of construction equipment for civil engineering
construction projects ranges from 25 % to 40 % of the total
project.
•The amount which is invested in the purchase of a
construction equipment should be recovered during the
useful period of such equipment.

5. Importance of Construction Equipment's
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• Cost-effective implementation.
• Large output
• Equipments equipped with software control.

6. Classification of Equipments
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1) Intermittent Type: This type of equipment's have the irregular
cycle of work. They can be operated on series of work cycles
and each cycle completes in itself.
• Power shovels, draglines, scrappers, bulldozers, concrete mixers, etc.
2) Continuous flow type: This type of equipment's have a continuous
flow of work turned out.
• Belt conveyors, pipelines, air compressor, etc. are the example of
continuous flow type equipment's.
according to the type of work

7. Concrete Mixers(Intermittent Type)
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8. Belt Conveyors (Continuous flow type)
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9. 3) Mixed type
• This type of Equipments have characteristics of
both, intermittent as well as continuous flow type
Equipments.
• They are continuously operated over a defined
surface area. After completion of a particular
sweep, readjustment of its position to resume
production on another area.
• Motor graders, bulldozers, scrapers, etc. are the
examples of mixed type Equipments.
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10. Motor graders,Bulldozers,Scrapers
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11. Excavating
Hoisting
Conveying
Drilling
Pumping
Compacting
Pile- Driving
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construction
works

12. Earth Excavating and Transportation
Equipment's
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13. Hoisting Equipments
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14. Conveying Equipments
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15. Drilling Equipments
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16. Pumping Equipments
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17. Compacting Equipments
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18. Pile- Driving Equipments
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19. Classification of equipment's
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• Depending upon their availability, commercial
sizes and specifications, the equipment's can be
classified into following types:
• (i) Standard Equipment's
• (ii) Special Equipment's

20. Classification of equipment's
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• Standard Equipment's:
The standard Equipments are commonly manufactured
and are easily available to the prospective purchasers.
• They can be used for variety of construction operations
without any difficulty and they are available in standard
commercial sizes. The initial investment is less as
compared to a special equipment.
• The delivery of standard equipment's is very quick, as it is
readily available in the market.
• The repair parts for standard equipment can be obtained
more quickly in short period.

21. Standard Construction Equipments
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• Standard Equipment's:

22. Standard Construction Machineries
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• Standard Equipment's:

23. Classification of equipment's
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• Special Equipments:
• The special Equipments are those which are
manufactured for a specific project or which does not
have readily accessible spare parts.
•The selection of special equipment's should be made
carefully after proper financial analysis.
•The initial investment in case of special equipment
is very high and there is risk of change in design, it
cannot, be used economically on the other project.

24. Special Construction Equipments
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• Special Equipments:

25. Special Equipments
• A special order is to be given to the manufacturer of
special equipment's and a special price is to be given
and therefore the delivery of special equipments can
be obtained after long period.
• Examples of special equipment include tunnel-
boring machines, large hauling units and very large
shovels, such as a 70 to 80 cubic metre shovel used
to strip-mine coal.
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26. Special Construction Equipments
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• Special Equipments:

27. Selection of equipment's
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• The various factors to be considered, while selecting the
construction equipment are as follows:
 Standard Type of Equipment's:
• The contractor should confine their purchase to standard
equipment unless a project definitely justifies the purchase of special
equipment's.
 Replacement of Parts: Prior to purchasing equipment's, the
buyer should determine where spare parts are obtained.
• If the parts are not obtainable quickly, it may be wise to
purchase other equipment, for which the parts are quickly
available, even though the latter seems less desirable.

28. Selection of Equipments
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29. Selection of Equipments
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 Operating Costs:
• The most efficient and therefore the most economical
equipment is one whose operating cost is the minimum.
This is a full proof measure for selection of the equipment.
 Utilization of Equipment's:
• The maximum utilization of the existing machine should
be done to reduce the cost of production of various items of
the project.

30. Contid…
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 Availability of Equipment: Sometimes the
selection of equipment has to be made from
the available equipment held with the
manufacturers or dealers.
 Source of Equipment: Contractor and other
users of construction equipment frequently are
concerned with a decision as to whether to
purchase or rent (Lease) equipment's.

31. Contid…
 Country of Origin:
• As far as possible, indigenous equipment's should be used. This
encourages the industry of the country and saves foreign
exchange. When imports have to be resorted to, they should
be preferable restricted to soft currency area.
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 Operating Facility:
• The equipment's chosen for project should be such that the
trained operators for the machine are available.
 Suitability of Equipment for Future:
• While selecting an equipment, the useful life of the
equipment should be compared with the duration of the
project. If the life of the equipment is longer, it should be
possible to use the equipment for other projects.

32. Financial Aspects Related To Const. Equipment's
• 1. How to arrange finance…
• Most of the mfg. want immediate advance with orders
varying with 30% to 40% without any commitment for
delivery…!!!!
• 2. Whether to buy or hire…
• Lets see…!!!
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34. Aspect Related to Finance
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35. Buy (Purchase) or Hire
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• A Piece of Equipment may be employed on a
project, in one of the following two ways:
1. Direct Purchase
2. Hiring

36. Direct Purchasing
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• If the equipment's are to be used frequently for many
types of jobs for a long duration of time on a
project, it will be economical for the contractors
to purchase the equipment's.

37. DIRECT PURCHASE
ADVANTAGES
Equipment is always
economically operated
It receives better care &
maintenance
It can be available and
used at any time
DISADVANTAGES
If equipment becomes
outdated, it is useless
Tendency to perform work as
per available equipment
Disposal is difficult
Equipment may be used
beyond its economic life
Equipment may remain in idle
condition for some time
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38. Hiring
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• If the project is small and if the equipment is to be
used for a short duration of time on the project, it
will be economical for the contractor to get
it by hiring or by renting from other agencies.

39. Hiring (advantages)
Little care is required for maintenance and
storage
Desired equipment is available in working
order at short notice
Investment costs can be diverted to other
better purposes
No fear of obsolescence of equipment, full
advantage is taken by contractor of the
improved technical aspects of equipment
If found useful, equipment can be bought
later
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40. Examples- Purchase/ Hire
▪The original cost of power shovel is Rs. 5 lacs & its
salvage value is 10% of the original cost. The power
shovel is used for 1400 hours/year and its life is 5
years. The hiring charges for the power shovel including
maintenance & repairs is Rs. 25000/month. Suggest
whether the power shovel should be purchased or hired on
rent?

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Cost of Owning & operating
Equipment

42. ▪ DepreciationCost
▪ Investment Cost
(Average investment) =
Costs to be considered for owning equipment

43. Investment cost
Investment (or interest) cost represents the annual cost
(converted into an hourly cost) of capital invested in a machine. if
borrowed funds are utilized for purchasing a piece of equipment,
the investment cost is simply the interest charged on these funds.
if it is purchased with company assets, an interest rate that is equal
to the rate of return on company investment should be charged.

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If S = 0, (Average investment) =
If S ≠ 0, (Average investment) =
In most of the cases the avg. investment taken as 10 % to 15% but need
to follow this two case relevant to salvage value…
S = salvage value
N = no. of years
P = initial cost or primary cost
F = salvage value

45. Depreciation cost
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46. Depreciation
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• Depreciation can be defined as the loss or decrease in the
value of the property due to the use, life, wear and tear,
decay and obsolescence.
• As the equipment which is purchased today will not work
for ever. This may be due to wear and tear of the equipment
or obsolescence of technology.
• It is dependent on its original condition, quality of
maintenance & mode of use.
• Usually a % of depreciation per annum is allowed, which
gradually increases with time.
• Present value of property= Initial cost - Total amount of
depreciation

47. Depreciation Fund
• The recovery of money from the earnings of an
equipment for its replacement purpose is called
depreciation fund, since we make an assumption that
the value of the equipment's decrease with the
passage of time.
• Thus, the word, depreciation means decrease in
value of physical assets with the passage of time.
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48. Types of depreciation
a) Physical depreciation
1.Wear and tear from operation
2.Action of time and other elements
b) Functional depreciation
1.Inadequacy or suppression
2.Obsolescence

49. Methods of Calculating Depreciation:
1. Straight Line method
2. Constant Percentage method
3. Sinking Fund method
4. Sum of years Digits method
5. Service Output method

50. Straight Line method
Assumption: Property loses its value by the same amount every year.
Therefore, Annual Depreciation= Annual Decrease in property value
where, D= Annual Depreciation
C= Original Cost
Depreciation of property after m years:
S= Scrap Value
n , m= life in years
Therefore, Book value after m years:

51. Constant Percentage method
Assumption: Property will lose its value by a constant percentage of its value at
the beginning of every year.
Where, p= % rate of annual Depreciation
S= Scrap value C= Original cost
n= life in years
If any age of property is m years, the value of property after m years:

52. Sinking Fund method
▪ Assumption: Depreciation of the property = the annual sinking
fund + interest on the sinking fund for that year.
▪ If i is the rate of interest, the annual sinking fund installment(p) to
accumulate 1 Rs in m years:
If i is the rate of interest, and 1 Rs is deposited every year, total sinking
fund accumulated at the end of n years:
▪ Rate of depreciation in n years:

53. • Maintenance and repair Cost
• Depreciation on tires and tubes
• Labour Charges
• Fuel Charges
• Operators and maintenance crew charges
• Down time Cost
• Obsolescence Cost
• Replacement Costs
Costs to Be Considered For Operating Equipment

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Maintenance and repair costs
The cost for maintenance and repairs include the expenditures for
replacement parts and the labor required to keep the equipment in
good working condition.
The manufacturers of construction equipment provide information
showing recommended costs for maintenance and repairs for the
equipment they manufacture. The annual cost of maintenance and
repairs is often expressed as a percentage of purchase prices or as a
percentage of the straight-line depreciation costs.

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Operating cost
Operating cost is incurred only when the equipment is operated. The
operating cost of the equipment is influenced by various parameters
namely number of operating hours, location of job site, operating
conditions, category of equipment etc. The operating cost consists of
the following;
a) Repair and maintenance cost,
b) Fuel cost,
c) Cost of lubricating oil, filter and grease,
d) Tire cost
e) Equipment operator wages,
f) Cost of replacing high-wear items and
g) Cost of mobilization, demobilization and assembly.

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Down time cost
It is a time that a machine is not working ,because it is undergoing
repairs or adjustments.
Obsolescence cost
It may be defined as the loss in the value of an equipment due to
improvement in designs of equipments.
Replacement Cost
Every year the cost of equipment is increasing. In view of these
factors, they are to be included in ownership cost which will allow
the unit of equipment to generate sufficient capital during its
economical life to ensure its replacement at the end of the
depreciation period.

57. Economic life of Construction Equipment's
Equipment should be replaced under following circumstances:
1. Depreciation
2. Downtime
3. Inadequacy
4. Normal Deterioration

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59. Equipment Replacement Policy
 A firm has to face three type of decisions:
1. The replacement of equipment as it wears out
2. The equipment required for expansion
3. The replacement of old technology by new
 Equipment is replaced before its estimated life to:
▪ Reduce production cost
▪Reduce fatigue
▪Raise quality
▪Increase output
▪Secure greater convenience, safety and reliability

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Do consider Do not consider
For equipment in use For equipment in use
1. Operating cost
2. Repair and maintence cost
3. Down time cost
4. Salvage value
5. Rebuilding cost
1. Original Cost
2. Money already spent on repairs and
maintenance
3. Unrealistic book value For New
Equipment
For new equipment For new equipment
1. Initial cost
2. Interest on capital investment
3. Salvage value
4. Labour savings
1. Any savings not clearly assessable
2. Overhead charges

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