Converting 2003 construction costs to 2013 3

[CivilTyro]

Hello,
I am working on an prelim. engg. estimate to find construction costs associated with relief drain tunnels. This drain is going to be 6 miles long, 36' in diameter and probably 50-100 feet deep.
In my research I found similar utility tunnel projects and the costs associated with them. My questions is " What is the best way to estimate construction costs to present day dollars.
Is inflation adjustment the way to go? I have found out about ENR Index, but do not know much about in terms of how to convert the construction costs to present day dollars?
I know there will be lot of other factors that determine the cost and no one project is going to cost the same, but I would just like to get a very rough idea. Can anyone help?

One example:
For a similar tunnel job built in 2003, the construction costs are 506 million. How much would it cost in 2012 or 2013?
I have come across this website....

http://www.usinflationcalculator.com.

Is this the right way to account for inflation for construction jobs of this magnitude?

Thanks in advance.

 

[MiketheEngineer]

You are in some unchartered waters here. Find somebody that does this all the time - hopefully not a competitor and see what you can find out. Don't forget- soil composition will/will not cost you a lot of time!!

 

[Ron]

CT...you can use an inflation approach, but construction costs do not clearly follow inflation trends...they are up and down relative to a general inflation index.

If you can find an RS Means book, it will give you a factor that you can apply to current costs that will take you back to 2003...so you can figure how to reverse that to get your current number....as an example, if the 2012 cost is "X" and the 2003 factor is 0.67X, then multiply your 2003 value by 1.5 and you will have your answer. Please note this is just an example...the actual factors are probably quite a bit different than this but this was an easy example.

 

[cvg]

All things being the same, ENR adjustment would be 1.38, so your $506M job would be $700M

However, with tunneling - poor ground conditions could easily double or triple that cost. If you don't believe it, look at the cost overruns for the Big Dig. Do you really want to lowball your cost estimate by $1.4 Billion dollars?

you need to get a tunneling contractor on board to give you a real estimate.

 

[CivilTyro]

Thank you guys. All helpful tips.

CVG, Can I ask how you calculated the ENR adujustment (1.38 in this case)? I could not find it on ENR website.

 

[cvg]

ENR doesn't officially recommend any particular method, they just publish the data. The way I was taught was to take the construction cost index for the two years and divide them to get a ratio. So for August 2003, the construction cost index is 6733 and for August 2012 it is 9350. the ratio is 1.38. ENR has an index for construction costs, building costs, materials cost and for various cities and regions. I usually have the most use for the general construction index. But as you can see if you dig in a bit further, the index really has very little to do with tunneling and much more with general heavy construction including general labor, structural steel, cement and lumber.

http://enr.construction.com/economics/current_costs/

 

[miningman]

Be very carefull here. For drill and blast mining tunnel costs, these have escalated dramatically in the last decade. I wouldnt use anything less than double 2003 costs for an initial estimate for 2013. In fairness your proposed tunnel sounds like cut and cover, but at the dimensions you have quoted, there will be a lot of shotcrete / general ground support, regardless of the actual tunnelling method. And this is where it gets scary. Unless you KNOW that the general geology / ground conditions / water flows are VERY similiar to your 2003 project you could easliy be low by an additional 300%.