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Increase in construction costs

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Reference no: EM131160050

A 50-mgpd (million gallons per day) water treatment plant was proposed in 2012 for Ureka, Wa.A 60-mgpd plant using the same treatment process was built in 2006 in Vancouver, Wa. for$50,000,000. Given the following additional information and assumptions:

  • Poor site condition in Vancouver required an additional $3,000,000 for foundations, which is notanticipated for Ureka.
  • Assume the size exponent m = 0.67.
  • Assume inflation will persist at an average 4% per annum.
  • Assume the location index for Vancouver is 1.17 and 1.24 for Ureka.
  • A new high-pressure filter process will be added at Ureka at an additional cost of $4,000,000.
  • The construction period for the new plant will include winter construction. The Vancouver plantwas not constructed through a winter season. Assume an increase in construction costs for Urekaof 12%

Reference no: EM131160050

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