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Feb06

Stainless steel life cycle costing

When specifying the material grade of any installation, whole life-cycle costing reveals the cost-effective winner.

Life cycle costing (LCC) Stainless steel is sometimes considered to be an expensive material. However, experience has shown that using a corrosion resistant material in order to avoid future maintenance, downtime and replacement costs can produce economic benefits which far outweigh higher initial material costs. Life cycle costing (LCC) quantifies all the costs - initial and ongoing - associated with a project or installation. It uses the standard accountancy principle of discounted cash flow to reduce all those costs to present day values. This allows a realistic comparison to be made of the options available and the potential long term benefits of using stainless steel to be assessed against other material selections. The present day value represent the amount of money which would have to be invested today in order to meet all the future operating costs - including running costs, maintenance, replacement and production lost through downtime. These are added to the initial costs to give the total LCC:
where AC = initial materials acquisition costs IC = initial fabrication and installation costs N = desired service life of project in years i = discount rate (calculated from interest and inflation rates) OC = operating and maintenance costs in year n LP = lost production and downtime costs in year n RC = replacement costs in year n Once the cost data have been gathered, the calculation of the life cycle cost is straightforward. Software packages are available which prompt the user to collect the relevant data, carry out the calculation and allow different options to be compared easily. Example (see reference "Applications for stainless steel in the water industry") Galvanised carbon steel and Type 316 stainless steel were both candidate materials for ductwork to remove odorous fumes in a sewage inlet works. The galvanised steel required a multi-stage site-applied painted coating whereas the stainless steel could be installed in a single operation. The galvanised steel was expected to need maintenance every 5 years, and replacement after 15 years. The stainless steel equipment was designed for a 30 year service life, with maintenance every 10 years. A 10% interest rate and 5% inflation rate were assumed, giving a discount rate of 4.76%.
Not only was the stainless steel option only slightly more expensive initially (because of the lower installation cost) but it showed a distinct life cycle cost advantage following the anticipated replacement of the galvanised steel plant after 15 years (see graph). The stainless steel option was chosen (see picture).
Further information on Life Cycle Costing can be found on the ISSF Website.
Apr28

Change of Hazardous Waste Regulations

BFPA identifies a ‘land-mark’ ruling on the handling of key waste materials with the Environment Agency on behalf of the Mobile Hydraulics Sector

BFPA CEO Chris Buxton reports on having reached a much needed conclusion with the Environment Agency on the treatment of waste hoses and associated PPE in mobile applications.

The BFPA are very pleased to report that following extensive discussions with the English Environment Agency the much discussed and contentious issue of transporting waste hoses and the associated PPE from mobile sites and on mobile call-outs has been resolved satisfactorily. After many months of discussion and correspondence it has been agreed that such materials in these circumstances will not be treated as hazardous waste and going forwards, operators will no longer require consignment notes and the associated administration system for removing these wastes and transporting them back to a depot for disposal or recovery. It is estimated that this much applauded clarification will save the industry approximately £18 million pounds a year, not to mention the likely unauthorised disposal of waste materials through casual discard or ‘fly-tipping’.

The significance of this result should not be underestimated. Whenever any hazardous waste is moved from the site at which it is produced, regulations demand that it be accompanied by a hazardous waste consignment note. Completion of the consignment note requires the producer and/or carrier of the waste to provide full and accurate details relating to the nature of the waste, which is a labour-intensive exercise, and to produce multiple copies to be provided to, and retained by, multiple parties involved in the chain of possession of the waste. Consignees of the waste are then required to provide a quarterly report to the Environment Agency which provides details of all consignments they have accepted during the quarter. Fees are payable by consignees in respect of each quarterly report filed. The fees vary, but in broad terms, a fee of £10 is payable in respect of each individual consignment accepted during the quarter. Status as a consignee therefore creates significant financial exposure. Unfortunately, “consignee” is a fairly strict term. It is not just the business which ultimately disposes or recovers the waste which is a consignee. Any business which brings back its own hazardous waste produced at a customer’s premises is also a “consignee”.

We oversaw some considerable research into the classification and assessment of waste contaminated with hydraulic oils. This included a review of 100s of safety data sheets, along with an analysis of associated on-site procedures and close scrutiny of the European and domestic law. This work concluded that these particular oils did not display any hazardous properties. It has been confirmed that going forwards, waste hydraulic hoses and the associated PPE and oily rags generated in mobile applications, which contain residues of or are contaminated by these particular hydraulic oils, will not be classified as hazardous waste. They will not therefore be subject to the tighter controls of the Hazardous Waste Regulations. FP017020

 

This land-mark ruling comes at a time when the industry is seeing long awaited signs of growth in the mobile construction and transport/infrastructure sector thus it is particularly welcome.

The oils themselves are still legally classified as hazardous wastes, when discarded. So this confirmation only applies to other wastes contaminated by or containing residues of these oils. Quite rightly, all operators will still need to meet their duty of care under what pundits will know as ‘S34 of the Environmental Protection Act 1990’ which ensures that waste from any activity is disposed of or recovered correctly.

The all-important key issue here is that the waste is not categorised as ‘hazardous’.

All fruitful negotiation depends upon the goodwill and co-operative working of the parties involved and tribute should be paid to the BFPA members that contributed to this exercise. Pirtek UK deserve special mention as without their support both in terms of resources and expertise we would not have succeeded. We must also acknowledge our legal counsel, (Irwin Mitchel), and the constructive manner in which the EA staff handled these negotiations. All too often Government departments come under criticism for their apparent inflexibility and intransigence. Not this time. The pragmatism shown by the EA team on this occasion is a credit to them and has helped to secure a result with which all parties, most notably UK industry, are very happy.

The BFPA is currently writing a formal FAQ document (under the auspices of the EA), which it is anticipated will answer any more detailed questions that might arise amongst industry users.

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