Reform Of The Engineering Cost Evaluation Methods-Practice And Study Of The Analytical Cost Estimating Method

Unit Price Cost Estimating Method (UPCEM) is the most popular applied method used today for engineering cost estimation. However the UPCEM has disadvantages such as not able to reflect the real cost. The reform of the engineering cost evaluation methods must be done. Analytical Cost Estimating Method (ACEM) is a widely used cost estimation method in the developed marketing economy countries. It satisfies the requirements of the reform and is the future direction of the reform.Ertan Hydraulic Station is one of the first projects in our country that has largely utilized foreign investment and apply international invent bid for major civil engineering and main permanent equipments. The project has tried out both traditional UPCEM and ACEM. The experiences and lessons learned from the project is a big help for us to fully understand and apply ACEM. Based on the summarization of the ACEM practice in Ertan Hydraulic Station and author's years of work experience, the essay proposed the calculation method of the ACEM that fits to the characteristic of the hydraulic industry. It will first estimate the construction load. Then estimate the Budgetary Estimate for each part or sub bid based on the characteristic of the hydraulic engineering project. The subtotal of the Budgetary Estimate is used to calculate the construction cost. The technical and management cost and interest during the construction phase are then calculated based on the construction cost. Sum up all these three cost and the total Budgetary Estimate for the project is then calculated. The PuBuGou Hydraulic Station is used as an example to show the process and result of the ACEM.Although it has reached some level of agreement that ACEM is the future direction of the reform, however many issues still exist during the promotion. For example, there are still gaps among people on understanding ACEM and can't differentiate between ACEM and UPCEM well. Some people think UPCEM is no longer useful since the ACEM is available. All these issues need to be considered and resolved. We need the government to change the role of commanding to guidance and provide the information support. With the help from the external force, push cost estimation professional to correct their thoughts, but not prevent traditional cost estimation methods from playing appropriate roles in corresponding situations.It needs time to promote ACEM. We need invest research effort with persistence and detailed promotion plan. I believe this reform will succeed with the development of the marketing economy reform.