Introduction
Estimating and costing play a crucial role in electrical engineering projects. They help in determining the approximate cost, material requirements, and time needed to complete an electrical installation or project. These processes ensure efficient budget planning, resource allocation, and project execution without unnecessary delays.
In this guide, we will cover the fundamentals of estimating and costing, including material selection, types of wiring, labor and overhead charges, market survey, and purchasing systems.
1. Estimating in Electrical Engineering
Definition
Estimating is the art of approximating the materials, investment, and time required for the completion of an electrical project. It is essential for budgeting and ensuring smooth project execution.
Purpose of Estimating & Costing
- Determines material and cost requirements before starting a project.
- Ensures all necessary materials are available.
- Prevents misuse of funds and resources.
- Saves time by streamlining procurement and labor management.
- Allows for uninterrupted project completion.
Elements of Estimating & Costing
- Proforma for Making Estimates – Provides a structured format for financial calculations.
- Material Schedule Preparation – Plans the purchase of materials at different project stages.
- Price Lists – Lists material prices obtained from suppliers.
- Net Price List – Includes all taxes like sales tax, central sales tax, and excise duty.
- Market Survey – Gathers pricing data from various suppliers to ensure competitive costs.
2. Overhead and Labor Charges
Overhead Charges
Overhead costs refer to the daily expenses incurred during the execution of an electrical project. These include:- Maintenance Overhead Charges – Cover machine repairs, depreciation, taxes, and spare parts.
- Administrative Overhead Charges – Include office expenses, salaries, rent, electricity, and insurance.
Labor Charges Calculation Methods
- Electrical Point Method – Labor cost is determined based on the number of electrical points (e.g., switches, sockets, and lighting points) installed in the building.
- Fixed Percentage Method – A percentage of the total material cost is considered for labor. This percentage varies (15-25%) depending on the type of wiring.
3. Contingencies in Estimating
Definition
Contingency costs are additional costs added to the estimate to account for unexpected expenses such as:- Fluctuation in material prices.
- Labor cost variations.
- Unforeseen difficulties in installation.
- Delays due to natural calamities (floods, earthquakes, storms).
Standard Contingency Allowance: 3-5% of the total estimated cost.
4. Purchase System in Electrical Projects
Steps in the Purchase Process
- Requisition – Departments submit material requirements.
- Call for Quotations – Suppliers are invited to provide price quotes.
- Comparative Statement – Different supplier rates and terms are compared.
- Purchase Order – Orders are placed with selected suppliers.
- Inspection & Payment – Materials are checked for quality before payment is released.
5. Tendering in Electrical Engineering
Definition
A tender is a formal offer submitted by suppliers for supplying materials and services at specified rates. It ensures fair competition and cost-effective purchasing.
Key Terms
- Earnest Money – A refundable security deposit submitted along with the tender.
- Tender Notice – An invitation for suppliers to submit bids for supplying materials.
- Comparative Statement – A document used to compare offers from different suppliers.
Process of Tendering
- Tender notice is issued.
- Suppliers submit sealed bids.
- Bids are opened and compared.
- The best offer (based on price, quality, and terms) is selected.
- A purchase order is issued to the winning bidder.
6. Types of Electrical Wiring
Different Wiring Systems
- Cleat Wiring – Cheapest but not durable; suitable for temporary installations.
- Batten Wiring – Uses wooden battens; moderately durable and cost-effective.
- Casing-Capping Wiring – Offers good insulation; commonly used in residential wiring.
- Conduit Wiring – Best mechanical protection; used in commercial and industrial buildings.
Comparison of Wiring Types
| Wiring Type | Cost | Lifespan | Protection | Appearance |
|---|---|---|---|---|
| Cleat Wiring | Low | Short | Poor | Basic |
| Batten Wiring | Medium | Long | Fair | Good |
| Casing-Capping | Medium | Long | Good | Good |
| Conduit Wiring | High | Very Long | Excellent | Very Good |
7. Selection of Wires and Cables
Factors to Consider
- Current Carrying Capacity – A wire should be able to handle the required current without overheating.
- Voltage Drop – The voltage drop should be minimal to maintain efficiency.
- Conductor Material – Copper vs. Aluminum.
- Mechanical Strength – The wire must be strong enough to withstand environmental conditions.
Copper vs. Aluminum Wires
| Feature | Copper | Aluminum |
| Conductivity | High | Moderate |
| Cost | Expensive | Cheaper |
| Strength | High | Lower |
| Weight | Heavier | Lighter |
8. Market Survey & Price Lists
Purpose of Market Survey
- Determines the competitive price of materials.
- Ensures the best quality-to-price ratio.
- Helps in cost estimation and budgeting.
Net Price Calculation
Net price includes:
- Retail Price – The basic price of an item.
- Discounts – Reductions offered by suppliers.
- Taxes – Sales tax, excise duty, and GST.
Conclusion
Estimating and costing are fundamental aspects of electrical engineering that ensure projects are completed within budget and on time. By understanding material selection, wiring types, labor charges, market surveys, and tendering processes, professionals can efficiently manage resources and execute electrical installations successfully.