Report n° 103 - 2008
Life Cycle Management of Port Structures
Recommended Practice for Implementation
PIANC
‘Setting the course’
LIFE CYCLE MANAGEMENT
OF PORT STRUCTURES
RECOMMENDED PRACTICE
FOR IMPLEMENTATION
PIANC REPORT N° 103
MARITIME NAVIGATION COMMISSION
PIANC
‘Setting the course’
PIANC has Technical Commissions concerned with inland waterways and ports (InCom), coastal and ocean waterways (including ports and harbours) (MarCom), environmental aspects (EnviCom) and sport and pleasure navigation (RecCom).
This Report has been produced by an international Working Group convened by the Maritime Navigation Commission (MarCom). Members of the Working Group represent several countries and are acknowledged experts in their profession.
The objective of this report is to provide information and recommendations on good practice. Conformity is not obligatory and engineering judgement should be used in its application, especially in special circumstances. This report should be seen as an expert guidance and state of the art on this particular subject. PIANC disclaims all responsibility in case this report should be presented as an official standard.
PIANC Secrétariat Général
Boulevard du Roi Albert II 20, B 3
B-1000 Bruxelles
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http:
//www.pianc.org
VAT
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ISBN
2-87223-168-4
PIANC Secrétariat Général
Boulevard du Roi Albert II 20, B 3
B-1000 Bruxelles
Belgique
http:
//www.pianc.org
VAT
BE 408-287-945
ISBN
2-87223-168-4
©
All rights reserved
TABLE OF CONTENTS ACKNOWLEDGEMENTS ... 4 1. INTRODUCTION ... 5 1.1 Background ... 5 1.2 Terms of Reference ... 5 1.3 Target Readers ... 5
1.4 Objectives of the Report ... 6
1.5 Structure of the Report ... 6
1.6 Abbreviations ... 6
2. LIFE CYCLE MANAGEMENT AS A CONCEPT – A BROAD OVERVIEW ... 7
2.1 General ... 7
2.2 Life Cycle Phases ... 7
2.3 Performance Criteria – Functionality and Technical Quality ... 8
2.4 Direct and Indirect Costs ... 9
2.5 Direct and Indirect Benefits ... 9
2.6 Relationship between Technical Lifetime and Time of Use ... 9
2.7 The actual LCM process ... 10
2.7.1 Identify Alternatives ... 11
2.7.2 Estimate costs and benefits of alternatives ... 12
2.7.3 Evaluation of alternatives and WLC ... 12
2.8 WLC in relation to LCM ... 12
2.8.1 Stakeholders and institutional set up ... 13
2.8.2 Factors affecting WLC and required input ... 13
2.8.3 Availability of justifiable input data ... 16
2.9 MCA in relation to LCM ... 16
3. PRACTICAL APPLICATION OF LCM EXAMPLE FOR A CONTAINER TERMINAL ... 17
3.1 General ... 17
3.2 LCM related processes and actions in consecutive life cycle phases ... 17
3.3 Typical example based on the construction of a major container terminal ... 19
3.3.1 Planning and design phase ... 19
3.3.2 Construction phase ... 25 3.3.2.1 Quality ... 26 3.3.2.2 Cost Control ... 26 3.3.2.3 Programme Management ... 27 3.3.2.4 Design Review ... 27 3.3.2.5 As-Built Documentation ... 28
3.3.3 Operation & maintenance phase ... 28
3.3.4 Re-use and/or disposal phase ... 30
4. MAINTENANCE MANAGEMENT ... 31
4.1 General ... 31
4.1.1 Review of Maintenance Strategy ... 31
4.1.2 Operational Records ... 31
4.1.3 Maintenance Monitoring ... 31
4.1.4 Maintenance Costing ... 31
4.1.5 Operation & Maintenance Cost Planning ... 31
4.1.6 Operational Performance Review ... 32
4.2 Organisation ... 32
4.2.1 Personnel ... 32
4.2.2 Structures and Facilities ... 32
4.3 Inspection Program ... 33
4.3.1 Types and Frequencies of Inspections ... 33
4.3.2 Rating and Prioritisation ... 34
4.3.3 Recommendations and Follow-up Actions ... 36
4.4 Repair Prioritization ... 37
4.5 Data Management ... 38
5. REFERENCES ... 38
APPENDIX A – PERFORMANCE CRITERIA ... 39
APPENDIX B - NEW QUAYWALL ... 46
APPENDIX C - NEW QUAYWALL ... 49
APPENDIX D – EXISTING QUAYWALL ... 50
ACKNOWLEDGEMENTS
The work and contributions of the following WG 103 (formerly MarCom WG 42) members, review-ing, corresponding and temporary members is ac-knowledged:
Wim Colenbrander - Chairman
Retired from Bouwdienst Rijkswaterstaat The Netherlands
George Steele - Vice Chairman
George Steele Consulting Ltd United Kingdom
Wilfred Molenaar – Secretary
Ballast Nedam Infra Consult + Engineering Delft University of Technology
The Netherlands Åke Bjurholm Grontmij-CarlBro Sweden Gunnar Björk Niras Denmark Hans Hartelius
Retired from Ramboll Denmark
Ron Heffron
Moffatt & Nichol USA
Mitsuyasu Iwanami
Port and Airport Research Institute Japan
Hans Klingenberg
KFS Anläggnings Konstruktörer AB Sweden
Professor Giuseppi Matteotti
University of Padova Italy Piero Ruol University of Padova Italy Peter Spragg
High Point Rendel United Kingdom
Ad van der Toorn
Port of Rotterdam
Delft University of Technology The Netherlands
Andreas Westendarp
Bundes Ambt Wasserbau Germany
Ronald West †
Ronald West Consultancy Ltd. United Kingdom
† The working group regrets the death in August 2004 of Ronald West, who was a very active and enthusiastic member of the group.
Reviewing, corresponding and temporary members:
Valery Buslov
former Han-Padron Associates USA
Ole Christoffersen
Denmark
Ennio de Curtis
Canada
Koen van der Eecken
Hydro Soils Services Belgium
Hidenori Hamada
Port and Airport Research Institute Kyushu University
Japan
Jean Jacques Trichet
Cetmef France
Enrique Urribarri
Alatec Spain
1. INTRODUCTION
1.1 Background
Since 1987 three MarCom Working Groups WG17, WG31, and WG 103 (formerly known as WG42) have been working on the Inspection, Repair, Main-tenance and Life Cycle Management (LCM) of Port Structures.
Working Groups 17 and 31 prepared three reports. The first report “Inspection, Maintenance and Re-pair of Maritime Structures Exposed to Damage and Material Degradation Caused by the Salt Wa-ter Environment”, published in 1991, was the step-ping stone for the second report “Life Cycle Man-agement of Port Structures – General Principles” which was published in 1998.
The Working Group 17 report was revised and up-dated and re-published in 2004.
The revised WG17 report contains:
• principles and causes of degradation and da-mage of materials
• state-of-the-art methods of inspection, mainte-nance and repair of port structures
• a guide and an extensive, annotated bibliography • materials dealt with are timber, stone and
ma-sonry, concrete (unreinforced, reinforced and pre-stressed), and steel.
WG31’s report “Life Cycle Management of Port Structures — General Principles” contains:
• introduction to the concept of LCM by first de-fining the terms used and what is meant by the term LCM
• a chapter on the reasons for undertaking LCM, introduction of the concept of Whole Life Cost-ing. Whilst this is not an essential precursor to LCM, its use at the pre-construction planning phase is an excellent starting point for planning maintenance from the very beginning
• onset to the implementation of LCM – the latter of which is considerably expanded in the pres-ent report.
1.2 Terms of Reference
As a sequel to the WG 31 1998 report MarCom ap-pointed WG42 (currently named PIANC WG 103) with the following Terms of Reference:
1. PIANC PTCII report: “Life-cycle-management of port structures – General principles” (report of Working Group 31, Supplement to Bulletin no.99) has been published giving the general principles of LCM
2. The new working group will build on these gen-eral principles and develop the practical recom-mendations for implementation in port struc-tures
3. The goal of the new working group is to produce an “Implementation Manual” for LCM in port Structures based on the four phases of LCM. The scope of the Implementation Manual will con-sider:
4. The four fundamental phases of LCM: planning and design, construction, operation & mainte-nance, disposal.
5. Each phase will be considered independently, but the study will also highlight interactions be-tween decisions taken in former phases. 6. The Manual will be based on the
comprehen-sive analysis of the practices employed by the ports worldwide as well as on the latest devel-opments in the port technology.
For a full understanding and appreciation of the life cycle process it is considered advisable to read all of the above Working Group reports in combination with each other.
1.3 Target Readers
Port structures are subject to a life cycle process, and this report is based on the four phases listed in the Terms of Reference. Conventionally, these phases are managed and developed by separate teams of qualified personnel. With this arrange-ment the overall outcome technically, economically, and environmentally may not be optimal because a particular aspect is not pursued beyond the phase dealt with by the team due to perhaps a flaw in log-ic, knowledge, or custom.
An important objective of LCM is to link the four phases by providing each team with adequate knowledge and vision to master this objective and to collaborate closely with any other team perform-ing concurrently.
In this context, the report principally aims at read-ers with qualifications to participate in the above-mentioned teams but who may not be conversant with LCM. Further, the report endeavours to cover subjects of potential interest to port owners and port users. Besides these target readers the report may, of course, be used for other purposes, e.g. teaching and training, but for brevity this has not been taken into account.
Note: readers with an economic-financial back-ground will recognize in LCM a lot of what is known to them as Asset Life Management (ALM).
1.4 Objectives of the Report
The intention of this report is to supplement the “general principles” into recommendations and gui-dance for implementation to port structures.
Port authorities are interested in the behaviour of the civil engineering elements of port infrastructure, particularly with respect to the financial, technical, safety and environmental decisions to be taken during the life-time of the structures.
It therefore follows that to avoid unexpected large-scale rehabilitation measures and costly down-times as a consequence of neglected periodic maintenance, a systematic planning and budgeting of maintenance activities is necessary.
LCM, and its precursor Whole Life Costing, will contribute to a realistic approach of maintenance policy, including decision-making, planning, bud-geting and funding of inspection and repair activi-ties during the life-time of port structures.
The report focuses on LCM of port infrastructure such as wharves, quays, jetties and breakwaters. Roads and buildings, as well as dredging associ-ated with the structures, and port equipment such as cranes are excluded from the report, however similar principles will and frequently are used with respect to them.
It cannot be over-emphasised that whilst the ideal is to set up LCM at the planning stage for a new project, it can be implemented at any time during a facility’s lifetime for the remainder of its working life. It can also be used for a specific part of a facility, although in this case it is to be hoped that once the
benefits are seen, LCM would be rapidly extended to cover all infrastructure in the port.
1.5 Structure of the Report
This report begins with an overview of LCM, which includes the necessary definitions of life cycles and performance criteria, description of the LCM pro-cess, Whole Life Cost and Multi Criteria analysis. Chapter 3 includes a practical example for a con-tainer terminal. Chapter 4 covers the area of main-tenance management following completion or re-furbishment of a facility.
Some references are listed in Chapter 5 to enable interested readers, to further their knowledge in the various aspects of the subject.
The Appendices present:
• Performance criteria and measures to enhance performance
• The LCM approach to decide on the berth depth to be provided along a new quay
• The LCM approach to decide on immediate or postponed investment for a new quay
• A case where LCM was implemented for decisions on renewal of an existing quay in Rotterdam. • The Questionnaire and results. This
Question-naire has been sent to ports all over the world in order to assess the degree to which port struc-tures are managed from an LCM point of view, if at all. The outcome of the Questionnaire has been useful in preparing the report.
1.6 Abbreviations
PIANC International Navigation Association, www.pianc-aipcn.org
MarCom Maritime Navigation Commission (formerly PTC II)
PTC II Permanent Technical Committee II
WG Working Group
LCM Life Cycle Management ALM Asset Life Management WLC Whole Life Costing MCA Multi criteria analysis QA Quality assurance QC Quality control NPV Net present value
CD Chart Datum; reference level on nauti-cal maps
2. LIFE CYCLE MANAGEMENT AS
A CONCEPT – A BROAD OVERVIEW
2.1 General
In general terms Life Cycle Management (LCM) is a management approach to infrastructure construc-tion to achieve cost effective funcconstruc-tionality and qual-ity and to enable a port to generate maximum direct and indirect income for minimal Whole Life Cost (WLC).
Whole life costs relate not only to the direct cost of construction, maintenance, etc. of the structure itself but also to indirect costs and probable benefits related to its use and the environment in which it is located.
Although in principle LCM is aimed at providing min-imum Whole Life Costs it has to be acknowledged that in practice there are many situations where time or budget constraints lead to far from optimum solutions. For example port owners may not wish to expend additional money on an adaptable or re-useable structure, or may not have the funding to choose more durable or easier maintainable alter-natives. Part of the problem is due to the fact that although additional direct costs are identifiable, fu-ture savings or tangible benefits may not be readily apparent. It only becomes easier to accept when for example it is known that ship sizes are likely to increase in the future which has been the case with container vessels for many years. This has also had the effect of developers having to consider the cost of larger shore side cranage together with deeper dredged berths and approach channels when con-sidering medium to long(er) term planning.
In this report the LCM approach is applied to both new and existing port infrastructure and is limited to quays, jetties and breakwaters and takes into ac-count performance criteria such as functionality and technical quality. It also examines appropriate life cycle stages such as design, construction, opera-tion, maintenance (including inspecopera-tion, evaluation and repair), re-use and /or disposal.
Although examples in this report are generally lim-ited to quays, jetties and breakwaters the LCM tech-nique can be applied to other structures, plant and equipment.
2.2 Life Cycle Phases
The relevant life cycle changes for new or existing structures covers planning and design, construc-tion, operaconstruc-tion, maintenance, renovaconstruc-tion, and /or reconstruction, re-use and /or disposal.
A brief description of each of these phases follows below:
The planning and design phase encompasses
the whole period and all the activities from the ini-tial idea to elaboration into concepts, outline design and pre-design thru to the detailed design stage of a structure.
The construction phase commences with the
preparation phase followed by on-site construction and finishes with a handover to the owner or opera-tor and ongoing maintenance.
The operational and maintenance phase relates
on the one hand to operational activities and com-mercial use of the facility and on the other hand to inspection, evaluation and if deemed necessary ap-propriate repairs.
The re-use and/or disposal phase relates to the
end of the service life and /or the technical lifetime. A reassessment of existing structures can take
place at any time during their lifetime to review the functional requirements. If these are not being ful-filled an upgrade, downgrade or refurbishment of the structure may be necessary. Substantial
chang-es in the functional requirements may demand
re-use of the main parts or the total structure itself or
even re-location to another site. Disposal means
demolition of a structure in whole or/and in part and its removal from site.
All structures will eventually reach the end of their serviceable life, e.g. due to changes in economic, operational, or environmental conditions or for so-cial reasons. It is at this phase an LCM database may contain sufficient information in respect of the design, construction, maintenance, repairs or up-grading of the structure to allow an informed judge-ment to be made on the future use of the asset. Some options at the re-use stage are shown in Fig-ure 2.1 (next page).
2.3 Performance Criteria –
Functionality and Technical Quality
The performance criteria, functionality (or func-tional quality) and (technical) quality, mentioned in the definition of LCM need to be defined or clarified further. For this purpose general reference is made to Appendix A.
Functionality is the degree to which a structure
can fulfill its intended main functions as specified in the functional and operational requirements, which are primarily of user interest.
In this report the overall criterion functionality has been split up in three sub criteria: prime require-ments, serviceability and availability.
A common prime requirement regarding berthing facilities and breakwaters is the number of berths or number of breakwaters to be provided; only one or a multiple number.
Other prime requirements for berthing facilities would be the depth of water, the length of the quay
or jetty, the quay or jetty deck loads and, last but not least for LCM, the lifetime of the structure. Prime re-quirements for a breakwater would also include the horizontal layout, thus the length of the breakwater, and the height of the breakwater, more specific the required crest level.
Given the prime requirements, serviceability and availability demands are equally important for the overall functionality of berthing facilities, whilst for breakwaters, availability of the sheltered area gen-erally overrides all other factors.
Technical Quality is the degree to which a
struc-ture suffices to wishes and demands being more of interest to other stakeholders such as the designer, builder or contractor, maintenance manager, the surrounding, society as a whole, etc.
The technical qualities that come into play due to stakeholder interests are listed in the table below, together with the functionalities, the latter to pro-vide oversight over all the performance criteria dis-tinguished in this report.
Table 2.1: Performance criteria
2.4 Direct and Indirect Costs
When considering construction of a quay wall, jetty or breakwater the following present and future cost components directly related to the structure may be applicable:
Design costs + Construction Costs + Inspection and Maintenance Costs + Renewal and /or Demolition Costs
Some times Operational Costs have to be consid-ered as a Direct Cost Component. For instance, when standard bollards have to be compared with quick release hooks, or the use of capstans instead of reeling lines by hand.
Indirect costs will occur if during the lifetime of a structure it is partly or totally out of use due to lack of quality, poor inspection or maintenance, exces-sive damage due to impact forces caused by use or mother nature. Such periods of non-usage could re-sult in loss of benefits / income or damage to equip-ment and could even lead to claims from third par-ties. Other indirect costs associated with short- or long-term downtime can include associated down-time of industrial facilities depending on the port, or permanent loss of customers to other ports.
The above direct and indirect costs or financial risks can and will be faced at any time during the lifetime of the structure. For comparative purposes such
costs have to be translated to a common base level. To achieve this, the Net Present Value (NPV) of all costs has to be calculated.
2.5 Direct and Indirect Benefits
The direct benefits or income derived from quays and jetties is generally related to the use of the structure itself. This can be through individual ship’s dues, but in many cases through a longterm lease arrangement between a private company and a Port Authority.
Indirect income is also derived from port dues for use of the navigational approaches (including breakwa-ters) to the quays or jetties and from charges placed on goods which are loaded or discharged over the quayside or jetty.
If during the lifetime of the structure it is put out of use due to problems related to the quality of construc-tion, inspection or maintenance activities, physical damage and/or obsolence, there will be partial or total loss of income from the asset.
Similarly, if the structure has to be upgraded to im-prove the functionality, hence the income stream, there will be a period of little or no income during the period of upgrade activities.
As for costs, the NPV of all benefits has to be calcu-lated for fair comparison of alternatives.
2.6 Relationship between Technical
Lifetime and Time of Use
A quay or jetty structure will generally be designed for a minimum life of 25 - 50 years. In certain cir-cumstances a longer design life may be required by the owner on the basis there is an expectation that a structure can be adapted for different user require-ments over the lifetime of the structure.
Apart from the design life, extended future use is greatly dependent on the flexible nature of the structure. As an alternative it may be considered more cost effective to use a shorter design life with a view to future demolition of the structure and its replacement with another structure as business needs change. In many cases given the fast chang-ing needs of the business in ports and harbours the latter view is taken in preference to pure technical considerations for such structures.
The relationship between time, functionality, quality, benefits and costs is shown in Figure 2.2. Gradu-ally increasing functional demands may require a quantum increase in functionality of the structure at a certain moment in time.
Figure 2.2: Functionality versus time
Figure 2.3 shows the typical deterioration of a struc-ture, the decrease of quality in time. This generally coincides with the increases in maintenance costs. Assuming a minimum level of quality is required, the decrease can be redressed through a periodic injection of investments, which may also be neces-sary to improve the functionality and benefit of a structure.
Figure 2.3: Quality versus time
Usually some time will pass before the benefits reach a maximum level. In a following, longer pe-riod of time, the benefits remain stable, then they may diminish, but can increase again when major investments to improve functionality are made, see Figure 2.4.
Figure 2.4: Benefits versus time
The constant and increasing need for maintenance of a structure over a period of time is demonstrated in Figure 2.5. The potential effect on functionality, quality and benefit, when a major investment is made is illustrated in Figures 2.2 thru 2.4. Some-times structures need extra maintenance in the first years of operation because of so called children’s diseases (not shown in Figure).
Figure 2.5: Costs versus time
2.7 The actual LCM process
The implementation of LCM involves a three-step process. Assuming that a project has been identi-fied and the basic functional requirements and de-sign criteria are known, either explicitly or intuitively, the LCM process may begin.
1. The first step is to identify alternatives
2. The second step is to estimate the costs and benefits associated with each alternative 3. The third step is to apply whole life costing to
Figure 2.6 illustrates this concept. Each of these steps is further explained below. Before moving on, note that it could be worthwhile to draw up a first design that meets most of the draft design criteria, if this has not already been produced. This first de-sign can be used as a Reference Dede-sign or Zero-Al-ternative, acting as a beacon for setting alternative development in the right direction.
Figure 2.6: The LCM procedure
2.7.1 Identify Alternatives
Each of the LCM considerations may involve many alternatives to be considered. The alternatives will be project and facility specific. While it would be im-practical to list all of the possible alternatives which could apply to all facility types, examples may be useful. The next Chapter and Appendix A provide examples of measures that may be implemented for each performance criterion. Not all of these aspects may be applicable for a given project and an alter-native measure proposed for one criterion may be beneficial for more than just that aspect. This would limit the number of alternatives to be evaluated.
Adopting the spirit of LCM a port authority could prepare different scenarios for the use of the facility during its lifetime, not only varying the type of use but the considered period of use as well. Assuming that the facility and/or area is planned in a versatile but odd corner of the port, three life scenarios for a new quay, to be developed in that area, are present-ed. Obviously a lot could be argued pro and contra these scenarios, however, the main purpose to be served here is illustration of LCM implementation. Scenario1: the facility is used for dry bulk the first
30 years, then 20 years for containers, and the remaining lifetime for heavy lift purposes. Note that the total required lifetime would be about 70 years, which in itself results in additional strength design requirements. In fact an upgrade of a larger piece of port area is effectuated by this development.
Scenario 2: the facility is used for about 20 years as multi purpose berth. Being at a slightly obsolete corner of the port most probably there will be no further use of the facility after this period. Note that the lifetime is relatively short for a quay, possibly resulting in reduced strength require-ments.
Scenario 3: the facility starts as a container termi-nal; will be used for general cargo in the next period, resulting in a total of about 30-35 years for port use. Since the port is moving seaward the city takes over ownership from the port and will develop the facility according to its needs. Traditionally the designer would select the most governing situation to base the design upon using ‘engineering judgement’, but considering 3 different life time scenarios and multiple types of possibly required quays/jetties, vision might get too clouded to make the right decision intuitively. Now, applying LCM, questions of a strategic nature have to be an-swered:
• Is it cost effective to construct the governing quay immediately? Or should a quay of lesser functionality be constructed first and upgraded later?
• What is the financial value of a quay being trans-ferred to the city after a 30 year service life? • Will rock-bottom construction price combined
with minimum maintenance throughout the life-time result in unacceptable downlife-time?
• Is it possible to abandon the degraded structure safely after the service life without (extra) costs or disposal required?
• etc.
LCM implementation calls for a more systematic ap-proach; although this may result in a larger amount of alternatives to be worked upon. Analysis will demonstrate whether the choice of an optimal so-lution is at all sensitive to possible uses 20 or 30 years ahead.
2.7.2 Estimate costs and benefits of alternatives
To use whole life costing for decision making, costs and benefits have to be measured or expressed in currency, see next subsection. Engineers, design-ers or consultants generally are able to produce reli-able cost estimates for the technical components of a port project. To determine the future income flow it will be necessary to involve commercial and finan-cial experts to arrive at realistic income predictions. The costs and benefits of all the alternatives have to be established with the same level of accuracy or reliability, which depends on the stage of the de-sign, and, obviously, basic unit rates or calculation methods should be the same for every alternative, to avoid wrong comparison.
Note that probabilities may be introduced while computing costs and benefits, by means of simple percentages, see Figure 2.7, or by using more so-phisticated probability density functions.
Figure 2.7: Adding probability to scenarios and/or alternatives
2.7.3 Evaluation of alternatives and WLC
After developing all the alternatives, they have to be evaluated and finally one or a few best alternatives have to be selected. For selection the Whole Life Costing method will be used. The steps to be taken comply with the overall LCM procedure:
1. Calculate costs and/or benefits of the alterna-tives; the reference design or zero-alternative and of all proposed alternatives
2. Apply WLC by calculating the Net present Value (NPV) for each alternative
3. Select one or a few alternative(s) with the lowest NPV.
Design is a cyclic process, where the following phase builds upon the previous phase. Based on all the work done to develop and evaluate the alterna-tives sufficing to the draft design criteria, now the fi-nal design criteria should be drawn up. The selected alternative, one or a few, will be further elaborated and worked into a tender or detail design.
2.8 WLC in relation to LCM
Whole Life Costing (WLC) in financial terms is a technique enabling expenditures and revenues to be discounted over time and normalised to a com-mon base year. As such it can be used to enable owners to appraise projects and assist them in mak-ing decisions about:
• different strategies for projects and uses
• evaluate different projects competing for limited expenditure.
Provided the relevant cost figures and a few other parameters are known the technique is very flexible and can, if desired, incorporate many items such as:
• Initial capital cost
• Financial repayment options • Revenue streams
• Maintenance costs • Loss of revenue • Upgrade costs • Demolition costs
By including revenues, all flows of money, both in and out, are taken into consideration. In that case WLC shifts into the category of evaluation tech-niques known as Cost Benefit Analysis (CBA). Although WLC can be extended to consider the en-vironmental impacts of the whole construction pro-cess from raw material extraction to different end of life management scenarios for the structure, the application of non quantifiable costs may add an el-ement of confusion and divert attention from a true financial comparison of the alternatives. For evalu-ation of qualitative issues the use of a Multi Criteria Analysis is more appropriate.
2.8.1 Stakeholders and institutional set up
The WLC analysis is greatly influenced by the insti-tutional set up of the port project. This depends on the stakeholders involved and vice versa. In existing ports, public ports (be it a service, landlord or tool port) or private ports (general or captive), the insti-tutional set up may be more readily available, when the existing model is copied or modified, but on the other hand, more complicated because more stake-holders may be involved. For new developments it may take some extra time or effort to define the set up, but fewer stakeholders may be involved.
Stakeholders, public or private organisations or per-sons with a legitimate interest in the project, can be divided considering their active or passive contri-butions, or their positive or negative attitude to the project. Contributions and attitudes may change throughout the life cycles.
An example to illustrate the effects on the WLC: • Given a large public port, organised according to
the landlord model, where a new container ter-minal will be developed. For the owner the costs and revenues as mentioned in Section 2.4 and 2.5 respectively should be reflected in the WLC. The user of the terminal, being the lessee, bares the cost of the lease of the terminal, revenue for the owner, and has revenues through the cargo handling dues.
• Now consider a private port and a similar con-tainer terminal development.Although owner and user in a private port may be different enti-ties it will be assumed they are the same entity here. In the WLC analysis similar costs and rev-enues as for the public port owner are reflected,
however, by cross balancing e.g. the lease of the terminal disappears as cost and/or revenue item.
The example is rudimentary at best, but more detail would be beyond the scope of this report.
2.8.2 Factors affecting WLC and required input
Besides stakeholders and institutional set up, dealt with in the previous section, there are other factors affecting the WLC. Whilst any parameter or value used in calculating a Whole Life Cost will affect the final value, some are more fundamental to the result than others. Also some are much easier to calculate with confidence than others.
The formula used to discount costs and benefits is the following:
NPVC =
Where:
NPVCn = the Net Present Value of costs
C in the nth year
n = a future year
r = discount rate
This section is not a treatise on WLC or NPV but is intended to highlight some of the important pa-rameters, their significance and the accuracy with which they may or should be calculated. The key to making informed comparisons is both the accuracy of estimating the initial variables and knowing their sensitivity on the final result.
Discount rate: Normally referred to as r.
The discount rate is used to discount future costs or benefits back to the base year. Small changes to the discount rate sway the NPV dramatically, hence have a considerable influence on the final decision taken by comparing WLC values. Having this effect on the result, it is sound, and recommended proce-dure to carry out sensitivity analyses using different interest rates.
The discount rate chosen should be in keeping with market interest rates, public or private, and with inflation, the growth of the overall economy. The interest rate often includes a risk premium. In the
Cn (1 + r)n n
following these three contributions to the discount rate, influencing each other, are discussed.
Public or private loan interest rates:
Given the fundamental difference between pub-lic and private institutions, pubpub-lic loan rates are smaller than private loan rates. The effect on eco-nomic evaluations will be smaller than the effect on financial evaluations, because the actual cash flow, which includes the cost of borrowing money, is be-ing considered in financial evaluations. It is impor-tant to keep in mind that that economic evaluations tend to focus on relative differences in costs and benefits, whilst financial evaluations concentrate on absolute cost figures.
Inflation:
It is highly recommended to do the evaluation in real terms, i.e. at constant base prices. However, when relative changes in real prices over the lifespan are expected for particular cost items, significantly dif-fering from inflation, such changes should be incor-porated into the appraisal. This shall be done by correcting those specific future prices, not by ad-justing the rate because that would affect all the other prices as well.
In the financial world the nominal or real interest rate are used for discounting procedures. The rela-tion between the nominal, the real and the inflarela-tion rate is as follows:
1 + rnominal = (1 + rreal)(1 + i) i = inflation rate
With negligible error the expression below can be used:
rnominal = rreal + i
Using constant base or real prices implies the use of the real interest rate, which is preferred as stated before. If the nominal rate were to be used the costs and benefits in future years should be corrected for inflation. When done properly this should result in the same NPV for alternatives. By no means shall the use of real prices be mingled with the use of the nominal rate for the discount rate or, vice versa, the use of nominal prices, including inflation, shall be mingled with using the real interest rate.
Risk premium:
It is common practice to include a risk premium in the discount rate, for instance for particular fore-casting uncertainties, political and/or regulatory risk. Generally public entities will use no or smaller risk rates than private parties.
In practice the interest rates adopted are gener-ally from 2.5% up to about 10% for transport in-frastructure projects in Europe. The expectation of lower real growth rates in national and worldwide economies in the long term has led to a reduction in discounting rates in some countries, while other countries maintain higher interest rates because of a shortage of resources.
High discount rates have the effect of favouring smaller projects with a short construction phase. The choice of high discount rates for infrastructure projects with long lifespans (which may neverthe-less be above-average importance in a wider con-text) is problematical and can even be inadequate. Big projects with a long construction phase and delayed benefits may therefore be particularly dis-advantaged.
Life span of the structure:
For ports the figures of 25 to 50 years are normally assumed for the technical (physical) life span of structures.
When carrying out whole life costing it makes little sense to forecast beyond 50 years at the most. A normal span to take is 30 years. This is particularly true if a higher figure is taken for the discount rate as costs and benefits further away in time become negligible when discounted back to the net present value.
The economic life span of infrastructure may be considerably shorter than the technical lifespan. If a shorter life span of 10 to 15 years would be used, a considerable number of projects would not be financially sound. The calculated WLC would be negative because of the generally high initial invest-ments and the pay back period being too short. It could be decided to invest a little extra and increase the functionality of the infrastructure, thus extend-ing the economic life span. Conversely it could be decided to construct a quay for rock bottom price
with a life span of only 15 to 20 years. Complete reconstruction or a thorough upgrade after the first period would allow for increasing functionality and extending the economic life span as well as the technical lifespan. Depending on the scenarios se-lected the life span to be taken into account has to be determined.
In case of an existing structure that has to be up-graded a careful study of the remaining physical life of the structure may be necessary to obtain a mean-ingful estimate for the life span to be taken into ac-count for the WLC.
Initial capital costs: Relatively easy to calculate.
Design engineers are already experienced at cal-culating the initial costs with a high degree of accu-racy (plus or minus 10 per cent). Following current practice, calculations will be done once only to one given specification, however introducing the con-cept of WLC will demand that a range of options is considered. These will include options on durability, the inclusion of ‘cradle to grave’ costs and incorpo-rating features for the ease of future inspection and maintenance.
Maintenance costs: Preventative and Corrective.
Considering maintenance generally distinction is made between preventative and corrective mainte-nance. Preventative maintenance will normally be carried out on a regular programmed cycle, with each year’s program being similar to the previous. Examples would include drain cleaning, repainting of metal structures, fender maintenance. In spite of the routine maintenance program, defects may oc-cur and be of such nature that e.g. loss of loading capacity, collapse, or loss of safety has to be pre-vented. The maintenance work required will not fit in with the regular program and generally will be clas-sified as corrective maintenance. Often corrective maintenance is of a greater magnitude and more urgent than preventative or routine maintenance. For these reasons alone corrective maintenance is more costly. Resulting (planned) disruption to oper-ation on the structure or associated parts of the port will add to the costs, or loss of revenue. Corrective maintenance is associated with unforeseen events, hence more difficult to plan in advance over the life
span of the structure. Both types of maintenance in-terrelate with each other, i.e. if routine maintenance is skimped then corrective intervention will become more frequent and costly, and vice versa.
Traditionally it has been difficult to quantify mainte-nance costs for future years, possibly for as long as 25 years in advance. The desire to estimate Whole Life Costs has over the last decade encouraged many major infrastructure owners to gather detailed information on maintenance costs. As time goes by the accuracy of forecasting the future maintenance costs for any specific type of port asset is improving. For example for preventative routine maintenance, materials ageing models can be used after calibra-tion on historic data available by now. Hindcasting results in maintenance costs as a percentage of construction costs, see the Questionnaire in Appen-dix E. Using WLC results in a better understanding of the increased maintenance costs that can be as-sociated with low initial cost.
Loss of revenue and/or ship waiting time:
These costs will be port specific but can be easily defined and can be calculated for any project or part of a project using current rates including demur-rage. These costs will on most occasions be high, and even more often a number of times greater than the costs of actual maintenance works being carried out. In certain circumstances the loss of throughput on a quay or jetty may be of national importance, e.g. for a single berth serving an LNG Plant or an oil refinery, in which case costs can be far greater than any direct loss of revenue.
Environmental/ Sustainability costs:
These are difficult to quantify at present, and are outside the scope of this report.
This heading of necessity could cover a very wide range of costs. The list could include the effects of mining for aggregates as opposed to using recycled aggregates, the saving in deleterious emissions by changing from one material or method of construc-tion to another, minimisaconstruc-tion of marine polluconstruc-tion, loss of wildlife habitat, and many others. At present few steps are taken to quantify or even to list these areas and environmental costs.
On the other hand, in a considerable number of countries port infrastructure projects will only be al-lowed when sufficient mitigation and compensation measures are taken. The costs associated with these measures are direct input into the WLC, they simply increase the initial required investment.
Disposal or re-use:
Whilst disposal will not normally be a significant fac-tor in determining the whole life cost of a structure it should be recognised. Many parts of a port are left in position at the end of their useful life and are fre-quently re-used for other purposes. Typical of this are commercial ports being re-used as marinas or qual-ity housing developments. A rough figure for demoli-tion costs would be 20% of the initial construcdemoli-tion costs. Demolition tends to be far into the future and when discounted back over a period of more than 50 years, the cost generally is minimal. However, when it is accompanied by removal of contaminated land and dredging of contaminated deposits it may turn into a significant cost item. As discussed previously, the (economic) life span of the structure may be much shorter, say 15 years, which significantly changes the contribution of demolition or re-use costs.
2.8.3 Availability of justifiable input data
Whole Life Costing, as with any such process, relies upon the accuracy of the input data for the produc-tion of accurate predicproduc-tion. At the time of writing there are many uncertainties surrounding the performance profiles required for life cycle costing. However, that strengthens the need for the process, rather than invalidates its use. The performance profiles them-selves are of critical importance whatever the means by which they influence intervention selection. A life cycle costing process can thus set a framework for recording essential data in a standard format. As the basic data is gathered and refined over a period of time, the predictions themselves can be improved.
2.9 MCA in relation to LCM
The common denominator of LCM, WLC and the Multi Criteria Analysis (MCA) is the objective of rationalising the selection of investment alterna-tives for (port) infrastructure. The three techniques
overlap and supplement each other. They encour-age the longer term performance of solutions to be examined more closely, and compared with con-sidered objectives, and thus may generate infor-mation upon which management decisions can be based. Cost is never the only relevant factor, and in some instances, other reasons may have a strong influence on the final choice. The facility could be of national importance and its loss of use may be critical even for a short period. Unless the costs associated with downtime or closure are included in the WLC analysis; then attitudes to cost may be quite different. Nevertheless, for most organisa-tions, cost is probably the most important factor, with an inclination to delay expenditure as long as possible (unless investments are clearly expected to generate profits). MCA explicitly enables the in-clusion of all other selection criteria other than the financial, the environment not being the least con-sideration.
The MCA is a methodology by which the relative merits of alternatives can be compared using a range of quantitative and qualitative criteria. MCA is also referred to as multi-objective decision mak-ing, a multi-objective decision support system, and a multi-criteria decision aid.
For most projects there are many considerations which must be factored in by decision makers. Of-ten, these considerations are reflected in different ways. Criteria like costs and benefits are measured in currency, whilst environmental impacts are at present often measured only in a qualitative way, which complicates comparison of the alternatives. Nonetheless the whole process should result in se-lection of only one, best alternative.
Briefly, the steps to be taken within a MCA are as fol-lows:
1. Identify the alternatives to be compared; 2. Identify a set of criteria for comparing the
alter-natives;
3. Identify the relative importance of each criterion (weighting);
4. Score the alternatives against each criterion; 5. Multiply the score by the weighting for the criterion; 6. Add all the scores for a given alternative and
MCA is a systematic methodology, which can be replicated and opened up to public scrutiny. Al-though MCA does not necessarily require quantita-tive or monetary data, the information requirements to compile the effects table and derive the weight-ings can, nevertheless, be considerable.
3. PRACTICAL APPLICATION OF LCM
Example for a container terminal
3.1 General
The main subject of this PIANC publication con-cerns the practical application of LCM in port struc-tures. Therefore this chapter is aimed at providing an example to illustrate the approach that may be taken in the development of a new or the modifica-tion of an existing port structure in managing its life cycle from cradle to grave.
Any development requires a promoter or Client from the public or private sector, who has an idea or concept in mind of what facility is required. Ide-ally, an outline or fully developed Business Plan for the port activity foreseen is available. The project concept can be expressed, verbally or in simple written form, requesting a consultant or contractor to develop the basic ideas or it can be a detailed list of instructions or procedures to be adopted by the consultant or contractor to deliver the Client’s specific requirements. A pre-feasibility study can also be helpful as perhaps alternative options can be explored, compared and a preferred solution de-veloped. Whichever route is adopted the first phase of Planning and Design is initiated through the Cli-ent’s Brief.
The Contractor or Consultant developing the project will develop this brief into a Designers Brief or Basis of Design to clarify, in engineering terms, the Clients requirements. It is most important, particularly in the case of LCM, for the Client to fully understand and approve the Basis of Design presented to him at this initial phase to ensure that the completed work meets his expectations. For the purposes of this ex-ample it is assumed the Client wishes to proceed on the basis of implementing LCM for his project. In Section 3.2, processes important for LCM are listed and in Section 3.3 the example for a contain-er tcontain-erminal will be presented.
3.2 LCM related processes and actions in
consecutive life cycle phases
Planning & design phase:
As stated previously, two important documents to be delivered are the Client’s Brief and the Design-ers Brief or Basis of Design.
The Client’s Brief should include as minimum: • The type of port facility required, e.g. a container
terminal
• Where the facility is to be located
• When the facility should be commissioned – programme/phasing of facilities
• Planned performance of the facility – through-put and phasing
• Planned economic life and implementation of LCM
• Potential future use for the facility at the end of its economic life or possible alternatives
• Likely external influences e.g. Planning con-sents
• The available budget / required phasing of costs
Normally a port structure will require some form of Government approval for its development and may well have been subject to a planning inquiry that will have led to certain caveats, or legal requirements, which must be adhered to during the construction and operational phase; for example additional noise restrictions on piling, visual impact – crane heights, transport of construction materials etc. These re-strictions and their impact will be summarised in the Basis of Design. Environmental regulations and demands can be crucial to the project development and implementation. They must be carefully con-sidered from the beginning of the project.
The Basis of Design should include as minimum: • A recital of the Client’s Brief
• Local and site specific physical and environ-mental conditions
• Site geotechnical investigations
• The design criteria and design loadings to be adopted
• Impacts from external sources e.g. planning conditions or operational conditions
• The results of any investigations undertaken and their impacts
• A maintenance strategy
• Anticipated re-use/removal of the structure at the end of its economic life
The Contractor or Consultant will also need to con-sider and develop:
• Budget costs including comparisons with the LCM strategy and Whole Life Costs
• Types of construction contract(s), including control of design, specification, quality, cost/ risk
At the completion of and agreement on this first and most important phase the Client will be in a position to invite tenders for the next phase of the project viz. construction.
Construction phase:
The construction phase enables the Client to see his requirements and concepts brought into life. The most important aspect during this phase will be to ensure that the quality requirements, crucial to LCM, are achieved, and seen to be achieved, through a programme of quality control & docu-mentation. Of equal importance is the control of costs and the construction programme. Reviews of the design intent should be carried out to ensure that any effects on the LCM strategy, negative or positive, are taken into account and at the comple-tion of work As-Built documents, drawings, other records and Operation & Maintenance manuals must be completed. The requirements may be summarised as follows: • Quality control • Cost Control • Programme Management • Design Review • As-Built Documentation.
At the completion of this phase the facility is ready for commissioning and to become operational, and moves into the Operation & Maintenance phase.
Operation & Maintenance phase:
The Operation & Maintenance phase assumes its
own importance in that it continually examines and challenges the decisions and direction that LCM has taken in the Planning & Design Phase.
The main relevant topics to be measured and re-corded encompass the following:
• The Maintenance organisation • Review of Maintenance Strategy • Operational Records
• Maintenance monitoring • Maintenance costing
• Operational Performance Review.
As the use of the structure continues during its normal life span the economics that gave rise to its initial choice may begin to change such that af-ter a certain period it is no longer required for its original purpose. It may be that the size of vessels have outgrown the originally predicted expecta-tion in vessel growth, or the trade for which it was originally designed, may have ceased or moved elsewhere or some other factors have meant that the facility is no longer required. This may well oc-cur before the structure itself has become obso-lete and it may be possible to upgrade the facility or bring it back into useful alternative use. At this point the structure enters its final phase in the LCM cycle during which it may be upgraded, disposed of or reused.
Re-use and/or disposal phase:
The first important activity when the structure reaches this phase in its life is to undertake a feasi-bility study into future use. The feasifeasi-bility study will enable the various options for the future use of the facility to be studied, developed to a sufficient level to allow cost estimates to be made, (re)establish potential benefits and its future life. It may be that the most economical solution will be to dispose of the structure.
In summary the activity at this stage in the life cycle is to:
• Undertake a feasibility study
• If the result is positive the facility returns to the Planning & Design Phase and its new life be-gins or
• If the result is negative methods for its removal and disposal may be developed and put into ac-tion.
3.3 Typical example based
on the construction of
a major container terminal
To help illustrate some of the concepts and ideas involved in the adoption of the LCM process a typi-cal example is tracked through the various phases of its life cycle. The example chosen is that of a major container terminal but developments large or small and of all types may follow the same logical path.
3.3.1 Planning and design phase Client’s Brief:
A container terminal to be constructed within an existing port, (although this could equally be on a “greenfield” site), capable of an annual throughput of 2 million TEU serving main line and feeder ves-sels. The terminal is to be capable of maximising the use of automation. Planning consent has been gained and thus the next stage of the facility’s de-velopment is to continue the Planning & Design phase to enable the terminal development to be completed.
This phase of the development, including construc-tion, is expected to be completed within the next 3 years at a budget cost of € 300 million. The planned economic life for the facility is 20 years for the pur-pose of financial assessment although the actual design life is expected to be 50 years in this ex-ample.
Summary of Client’s Brief:
Development: Container Terminal. Location: Within the existing port. Programme: 3 years.
Performance:
− 2 million TEU/annum;
− 20’ containers: 856 000; 40’ containers: 572 000;
− Hence about 1.4 million boxes to be moved. Main line & feeder vessels; maximise the use of au-tomation.
Economic Life: 20 years. Design Life: 50 years.
Potential Future use of the facility: ‘Unknown’- to be discussed.
External Influences: Planning consent gained but various conditions to be incorporated.
Maintenance Strategy: to be determined, see Chap-ter 4.
Budget Cost: € 300 million.
Basis of Design:
It is assumed a consulting engineering firm has been engaged by the Client to take the develop-ment through the Panning & Design phase and the Client has in mind an Engineering Procure-ment Construction (EPC) approach to the project. The consulting engineering firm in this case is ef-fectively a Project Management Consultant (PMC) and their first major task is to develop the Basis of Design. This document will be used to clarify the cli-ent’s requirements and will be used by the PMC to develop the tender documents and appointment of the EPC contractor in order that the client’s concept is developed into a fully functioning and completed facility incorporating the various aspects of LCM. This requires adoption of a systematic approach, as set out below.
Commencement and development of the Design:
As with all design processes after initial concepts have been established various quay structures and alternatives will be examined in detail. The choice of quay type structure will have a great influence on its life and LCM aspects and vice versa.
However, paradoxically the most important selec-tion criteria relates to geological and geotechnical conditions. Other important criteria include environ-mental conditions, i.e. meteorological (wind wave, tide and currents), hydrographic, hydraulic condi-tions and seismic events. LCM comes into play when using the performance criteria mentioned in Chapter 2, elaborated in Appendix A. As well as design, LCM is an iterative process and should be used to refine the ongoing WLC analysis which will ultimately lead to the final decision on the quay wall design to be adopted.
Performance criterion: Functionality – Prime requirement
Item / Subject: Question & LCM considerations Reasons & Decision
What berth depth is to be adopted? What are the costs compared to the economic benefits for alternative depths?
Berth initially dredged to -16.5 m CD water depth to save dredging costs.
Water depth Basis of design:
Design Vessel 2007 or Future vessels as shown below: Design Vessel 2007:
LOA: 397.71m, Beam: 56.4m, Draught:15.5m
Displacement:230 000t, 11 000TEU
See Appendix B for further elaboration.
Future vessels 2027:
1. Stretched vessel: LOA: 420m, Beam: 56.4m, Draught: 15.5m, Displacement: 245 000 t, 15 000 TEU 2. Malaccamax vessel: LOA: 410m, Beam: 60m, Draught: 18m, Displacement: 295 000 t, 18 000 TEU Quay length
Basis of design:
2007: Not all vessels will be of design vessel length. The quay will also need to cater for feeders and transshipment vessels
Initial productivity is assumed to be 900 container moves/m of quay/annum
What length of quay should be selected?
What is the anticipated increase in berth occupancy?
Not all calls will be largest vessel. Initial and future berth productivity, vessel size and frequency of calls need to be considered.
After studies frequency of calls is not considered to be an issue. 1600 m should be adequate for the first phase and will provide
berthing for both types of vessels simultaneously. Regarding following phases 1600 m will suffice, assuming increased productivity, hence a larger throughput on the same length of quay.
Crane
Basis of design:
2007: 22 boxes wide Front rail loading
Front Rail Loading: 815 kN/m 2027: 24 boxes wide.
Front Rail Loading: 850kN/m
What size of ship to shore crane should be adopted as larger cranes will increase crane beam / rail loadings?
Design loading for larger outreach cranes, based on 2027 projection as cost increase is small.
Table 3.1: LCM example for a container terminal
The example, presented in table format in the fol-lowing illustrates the LCM approach and identifies critical issues to consider for a number of key el-ements of the quay structure and container yard. The main headings in the table have been chosen to conform to the performance criteria. Where pos-sible and applicable the issues and reasons for the ultimate choices in relation to the life cycle of the project are described within the table.
The example as a whole is not intended to be ex-haustive but should serve to assist the reader in tackling in a systematic manner the likely issues to be encountered in the use of LCM. Other items or subjects can and should be added, if appropri-ate for the design under consideration. Reasons or decisions given in this example do not necessarily have to be adopted in other projects or conditions.
From a the study of the foregoing matters, decisions can be made on the extent of the analysis to be un-dertaken on alternatives that will affect the life cycle costs and what is to be included in the design. This will enable Whole Life Costing to be undertaken for important alternatives that will affect the overall cost of the project. To ensure this task does not become onerous, alternatives may be eliminated based on judgement or experience.
The conclusions drawn from the completion of this exercise will lead to the finalisation of the Design Criteria as input into the Tender Specification.
Tender phase:
There are normally 2 alternatives in carrying out construction works for a project:
• a General Contract (a contract based on Design Drawings and Specifications produced by the Client`s Consultants
or
• a Turn Key Contract (a contract based on De-sign Drawings and Specifications produced by the Contractor and his Consultants).
It can also be a combination of both alternatives. Implementation of LCM can normally be exercised more easily with a General Contract because the Client is more in control of both the Design Process and Specification.
Inviting national or international contractors can be carried out in different ways. One method is to pre-qualify suitable and interested marine civil contrac-tors to tender for the work.
As soon as the tenders are received, reviewed and a short list is prepared, the Client may undertake negotiations with the tenderer they consider best on all accounts, not merely price but to ensure the specified LCM requirements have been included.
3.3.2 Construction phase
Important aspects of this phase of a project, are: • Quality control
• Cost control
• Programme management • Design review
• As-Built documentation
From the LCM viewpoint the most important will be the control of the quality of the construction. To achieve this, a formal inspection and reporting pro-cedure needs to be in place.
The example being followed is the construction of a container terminal and in particular the quay wall. For the purposes of this example it is assumed that steel sheet and tubular piles in the form of a combi wall is to be installed and capped with a reinforced concrete beam that is capable of taking forces from the front crane rail, fenders and bollards.
3.3.2.1 Quality
The quality control programme will need to review the contractor’s method of installation.
For a combi wall piling this will need to include the method of installation and plant to be used, how the accuracy of position and verticality of the piles is to be maintained and how the correct depth and pile resistance is to be measured and tested. It will also need to include a methodology for the collection and recording of information during con-struction, including the electronic format and hard copy system to be adopted. The means and fre-quency of witnessing the installation work must be identified and include any hold points that the Client’s representative may require to witness the installation.
Methods of correcting any defects such as out of verticality and damage to the pile coatings need to be described and listed. The method will also need to include the phasing of the construction of the anchor wall, backfilling and installation of the anchor ties. The final backfilling to the full height behind the quay wall must be described, put in po-sition, inspected and approved before any paving is constructed. Any dredging in front of the quay wall must be considered.
Normally such an important structure will require the contractor to describe his method in drawings illustrating the sequence of construction and sup-ported by relevant calculations that test the sen-sitivity of the structure to load changes or settle-ments.
Similarly the contractor will describe his method of construction for the capping beam including how quality is to be achieved, how the correct amount of steel reinforcement need to be installed and how the position of the inserts is to be controlled. Drawings illustrating the arrangement of the steel reinforcement will be produced together with bend-ing schedules for the steelfixers to use durbend-ing con-struction.
The development of the concrete with the required characteristics must be described together with a procedure for its installation to ensure a dense ho-mogeneous mass is achieved with the correct min-imum amount of concrete cover to the reinforce-ment. Control of the quality of the concrete must be described to ensure consistency of the quality. The frequency of taking cubes or cylinders and how these are to be tested should be described. These descriptions and the results of the tests need to be reported. Any hold points required by the Client’s representative must be included.
All aspects of the physical construction must be wit-nessed and recorded to assure the quality of the materials and workmanship, and to provide the re-quired information for the As-Built Documentation on completion of the structure.
3.3.2.2 Cost Control
Monitoring and keeping control of the costs of the construction work are most important in order to keep the Client informed of his financial commit-ment which will include cash flow and out-turn cost compared with the budget. The main potential im-pact on the LCM aspects, established during the design and planning phase of cost increases, could lead to the downgrading of the specification of ele-ments of the facility to keep the financial commit-ment within the Client’s preset budget. It is impor-tant therefore that the Client does have a realistic contingency within his overall project budget to maintain his original financial planning and commit-ment to LCM.
The latest Contracts currently in use include the means by which the effects of potential impacts on the costs of construction are monitored, as the con-tract progresses, on a daily basis. It is important that the contractor notifies the client’s site repre-sentative, on a regular basis, of any circumstances giving rise to a potential increase in cost and all relevant evidence of the circumstances is gathered at the time. The cost and programme impact, if any, must be given in a timely manner by the contractor to enable the client’s representative to make any necessary changes as quickly as possible.
