estimating salvage values

[Builder604]

I am trying to calcluate salvage values for pump stations, force mains gravity sewers, etc. Are there any formulas for estimating salvage values. Thank You.

 

[dicksewerrat]

Are you looking at the end of design life? Salvage values change somewhat depending on the level of maintenance. No maintenance would give them a zero value. Good , consistent maint. will give them anactual life of 1.5 times the typical design life of 50 years. The problem you will face is the actaul cost to replace buried infrastructure is difficult to estimate. partially because no one knows what someone else will place on top of them.

Richard A. Cornelius, P.E.

http://WWW.amlinereast.com

 

[rconner]

If any plant/station or piping material etc. is metal, and if it is undesirable for whatever reason to re-use the pipe, I suspect local salvage yards (and while I am not an expert in this field) are likely to buy e.g. scrap iron or steel pipe etc. delivered to them. The ferrous scrap metal price now in the USA goes up and down, but I believe it has generally/historically escalated, and I suspect scrap dealers generally may now be paying somewhere in the neighborhood of $80-85 US/ ton (or $4-$4-1/4/100 lb) for such metal (perhaps you could check with your local salvage folks for better/more specific guidance). Based on the trends over say the last hundred years it appears the value of such scrap metal may well increase (with characteristic perhaps not much unlike some other (precious) metals) – perhaps this could be why some folks are having to lock down their used/unused loose metal items, or even installed manhole covers etc., now (see e.g. current article at

http://www.boston.com/news/local/ma...s_markets_churn_scrap_metal_profits_pile_up/)

!

This “scrap value” example assumes that the old pipe must be removed and replaced (e.g. in a perhaps in a not to uncommon case that an undersized or other line in a limited right-of-way (R-O-W) must be removed and hauled somewhere, with a new and/or larger line installed in the approximate place of the old one as the old one is pulled up). Also, I believe it might on the other hand actually cost (to landfill etc. some pipes of other materials in the same situation, if there is not comparable scrap value?) perhaps constituting in reality a negative salvage value? In this regard I noticed a current article at

http://www.zwire.com/site/news.cfm?newsid=16508309&BRD=2256&PAG=461&dept_id=455823&rfi=6

apparently involving some sort of flap in working around/disposal of another type of piping.

If there is/will be, on the other hand, plenty of future room in specific R-O-W’s, I suspect it could conceivably cost more to remove (particularly for buried pipelines with infrastructure on top of same) and ship even metal pipe to a salvage yard than the scrap value – therefore it would obviously cost less (at least from just the present economic standpoint) in that case to just leave the old line in place if this doesn’t present any other insurmountable problems.

I also once noticed an engineering economics course example problem (see “10…” at

http://www.ucs.mun.ca/~coadym/engr4102/contents/password/assignment.html

, where they have assumed a “20% of initial cost” salvage value for some various types of iron piping, although apparently for a very specialized industrial application (but I don’t know what if anything this figure is based on).

I have noticed that “salvage value” is apparently a part of GASB 34 asset “depreciation expense” calculations, as I suspect mentioned there and in the article “GASB 34 and Ductile Iron Pipe” (on page 12 on at the site

http://www.dipra.org/pdf/DIPnews_ss2003.pdf.)