Construction

Project Management
LU 7: Construction Equipment Management
 Table of contents

Classification Factors behind Earthworks

of Construction the selection of Equipment
Eqipment construction

Concreting Hoisting Plant and

Equipment Equipment Equipment
Aquisition
 Table of contents

Depreciation Methods of What to do

calculating after the
depreciation session?
 Construction Equipment
❖ Construction equipments are one of the very
important resources of modern-day
construction, especially in infrastructure
projects. Such projects utilize equipments for
most of the works including earthmoving
operations, aggregate production, concrete
production and its placement, and so on.
❖ In order to select the right equipment to
perform a specific task at the least cost, it is
essential to know the features of a
construction equipment including its rate of
production and the associated cost to
operate the equipment. In this chapter, major
types of equipments have briefly been
introduced.
Classification of Construction Equipment
❖ The classification could be on the basis of the function an equipment performs. In the functional
classification, equipments are grouped into (a) power units, (b) prime movers, which make it possible
for the equipment to operate, (c) tractors, (d) material-handling equipment and (e) material-
processing equipment.
❖ It could be on the basis of the operation in which the equipment is used. Such as (a) equipment used
for lossening and moving materials, (b) equipment used for processing the materials, (c) equipment
used for transporting materials, and (d) equipment used for placing finished materials
❖ Another basis is the purpose, whether general-purpose or special-purpose equipments. Such as in
general-purpose equipment we can have earthwork equipment, material-hoisting equipment,
concreting equipment, etc., while in special-purpose equipment we can have bridge-construction
equipment, marine equipment, coffer dams and caissons equipment, large-diameter pipe-laying
equipment
 Factors behind the selection of
construction
❖ Economic Considerations -The economic considerations such as owning costs, operating labour
costs and operating fuel costs of equipment are most important in selection of equipment. Besides,
the resale value, the replacement costs of existing equipment, and the salvage value associated with
the equipment are also important.
❖ Company-specific -The selection of equipment by a company may be governed by its policy on
‘owning’ or ‘renting’. While emphasis on ‘owning’ may result in purchase of equipment keeping in
mind the future requirement of projects, the emphasis on ‘renting’ may lead to putting too much
focus on short-term benefits.
❖ Site-specific -Site conditions, both ground conditions as well as climatic conditions, may affect the
equipment-selection decision.
 Factors behind the selection of
construction
❖ Equipment-specific -While it may be tempting to go for the equipment with low initial price, it is
preferable to opt for standard equipments. Such equipments are manufactured in large numbers by
the manufacturers, and their spare parts are easily available, which would ensure minimum
downtime.
❖ Client- and Project-specific -The owner/client in a certain project may have certain preferences
that are not in line with the construction company’s preferred policies as far as equipment
procurement is concerned.
❖ Manufacturer-specific -A construction company may prefer to buy equipment from the same
manufacturer again and again, and that too from a specific dealer.
❖ Labour Consideration -Shortage of manpower in some situations may lead to a decision in favour of
procuring equipment that is highly automated. Further, the selection of equipment may be governed
by the availability or non-availability of trained manpower.
 Earthworks Equipment
The selection of earthmoving equipment is mainly dependent on the quantities of material to be
moved, the available time to complete the work, the job conditions, the prevailing soil types, the swell
and compaction factors, etc. The job conditions include factors such as soil conditions, availability of
loading and dumping area, accessibility of site, traffic flows and weather conditions at site (Alkass and
Harris 1988).

❖ In order to plan the number of earthwork equipment needed, the planner first determines the
following:
1. The suitable class of equipment for earthwork
2. The appropriate model of equipment within that class
3. The number of equipment needed for the project to carry out the given quantity
4. The number of associated equipment required to support the main equipment
Earthworks Equipment
 Concreting Equipment
❖ Selection of concreting equipment can be complicated and difficult. The decision will involve many
issues that have to be analysed. The following factors mentioned by Alkass et al. (1993) are
noteworthy:
1. Site characteristics such as boundary conditions, equipment manoeuvre, provision of
temporary roads, noise limitations and other restrictions
2. Equipment availability—local availability of equipments, whether the contractor owns that
equipment
3. Continuity of operation
4. Effect of permanent work
5. Weather conditions
6. Temporary works
7. Time restrictions
8. Concrete specifications
Concreting Equipment
 Hoisting Equipment -Hoists
❖ Hoists are a means of transporting materials or passengers vertically by means of a moving level
platform. Materials hoists come in basically two forms—static and mobile models.
❖ The static version consists of a mast or tower with the lift platform either cantilevered from the small
section mast or centrally suspended with guides on either side within an enclosing tower.
❖ Mobile hoists usually do not need tying to the structure unless extension pieces are fitted, in which
case they are treated as cantilever hoists.
 Hoisting Equipment -Cranes
❖ A crane is a device used for hoisting and placing materials and machinery. It is used to facilitate
handling of materials such as formwork, reinforcement, pipes and structural steel items
❖ Cranes are available in different ranges and the choice of a crane is dependent on factors such as the
weight of the materials and machineries to be lifted, the overall dimension, the distance to which
they are to be placed, and the prevailing site condition.
❖ Construction cranes can be broadly classified under two major categories—tower cranes and
mobile cranes.
 Tower Crane
❖ Various types of tower cranes are available in the market and it is
important to choose the right tower crane for a project. The
tower cranes offer several advantages over conventional cranes
and it is required to be familiar with the different features of the
tower crane.
❖ Top-slewing tower cranes Top-slewing cranes require a longer
duration to erect and dismantle, but they can be erected
virtually up to any height. These cranes are suitable for medium-
to high-rise construction projects where they are needed for
longer durations.
❖ Bottom-slewing tower cranes Bottom-slewing cranes have
height limitations although they can be erected and dismantled
very quickly—the reason they are known to be self-erecting and
fast-erecting. These are suitable for low-rise construction and
for short-term assignments.
 Mobile Crane
❖ The mobile cranes have their own prime
movers and, thus, are capable of moving
freely on the project sites. Mobile cranes
come in a wide variety of designs and
capacities. The cranes typically consist of
an undercarriage, an engine to propel the
movement, a boom at an inclination, and
an operator’s cabin.
❖ Mobile cranes can be classified into four
major categories—(1) truck crane; (2)
crawler crane; (3) rough-terrain crane;
and (4) all-terrain crane.
❖ Truck cranes The term ‘truck crane’
comes from the fact that the entire
superstructure of the crane consisting of
boom, engine, counterweight and
operator’s cabin is mounted on a special
truck. Truck cranes are suitable for short-
term lifting assignments only and should
not be considered if the lifting assignment
extends for longer duration.
❖ Crawler cranes Crawler cranes have
better manoeuvrability and can be quickly
relocated at different locations on a
project site. However, for shifting to
another project site, these cranes require a
truck or a trailer.
❖ Rough-terrain cranes Rough-terrain
cranes have high mobility and can work
best if combined with the operation of a
tower crane. These cranes are very good
in rough terrain conditions and where
frequent relocation of cranes is needed.
❖ All-terrain cranes As the name suggests,
all-terrain cranes can manoeuvre through
rough terrain as well as public roads with
ease. These cranes are technologically the
most advanced of all the mobile cranes.
Plant and Equipment Aquisition
❖ A construction company can acquire a construction plant and equipment through (1) cash or outright
purchase, (2) hire purchase and (3) leasing.
❖ In cases where the company has surplus funds available, it can invest in cash purchase of plant and
equipment provided such investment guarantees a return more than the minimum attractive rate of
return of the company
❖ In the hire purchase option, the company enters into an agreement with the financer of the plant and
equipment. The financer receives the specified rental from the company using the equipment during
the entire agreement period.
❖ In the leasing option, the company pays the lease rentals to the lessor (one who owns the
equipment) for the use of equipment for a specified period. The title of the equipment never gets
transferred to the company using the equipment.
 Depreciation
❖ In a general sense, ‘depreciation’ discusses the different issues related to this gradual change
(reduction) in the value of an asset. Formally, there are a number of definitions for depreciation,
although each one conveys similar meanings
❖ From the point of view of bookkeeping, depreciation is considered as an expense and is listed as
such (as an expense) in the firm’s financial statement. It may be noted that this ‘expense’ is only
technical in nature and the funds are not really transferred out of the system.
❖ As far as the idea of the final value is concerned, it is referred to as the salvage value. Now,
depending upon various factors, an asset may take different periods of time to depreciate to its
salvage value, and therefore, the concept of ‘service life’ also needs to be borne in mind.
 Straight –line Method
❖Straight-line depreciation is considered to be the most common method of
calculating depreciating assets, and is based on the assumption that the asset loses
an equal amount of value each year. This annual depreciation is calculated by
subtracting the salvage value of the asset from the purchase price, and then dividing
this number by the estimated useful life of the asset.
 Sum of Years Digit Method
❖One of the commonly used methods of calculating depreciation, it leads to a higher
rate of depreciation initially which reduce progressively. Such a strategy could be
useful to obtain greater tax benefits in the early years of the economic life of the
asset.
 Declining Balance Method
❖In this method, the depreciation for a given year is calculated on the basis of the
undepreciated balance (instantaneous book value), rather than the original cost.
Further, the method does not take into account any salvage value of the asset.
 Sinking Fund Method
❖The idea of this method is basically to have enough funds to be able to replace the
asset at the end of its service life. To achieve this, a fixed sum is set aside from
revenue each year and taken to be invested with compound interest throughout the
life of the asset, such that after successive instalments the sum accumulates to
produce the original purchase price of the asset less its salvage value.
 Accelerated Depreciation
❖Accelerated depreciation is a method that allows faster write-offs than the straight-
line method. It provides a greater ‘tax shield’ effect than straight-line depreciation, and
for this reason, companies with large tax burdens might prefer to use the accelerated
depreciation method, even if it reduces the income shown on financial statement.
Whoa!
What to do after the session?
 Major requirements

Group Activity 7
Revision LU7