HVAC Project Cost Estimation & Implementation on Outstation Projects

In 2020, roughly a year after starting GAPOM, we received an outstation project for a VRV installation in Osogbo, Osun State. The project scope covered labour only and consumable materials such as oxygen, acetylene, nitrogen, silfos, threaded rods, nuts, washers, anchor bolts, and more. The consumables were not quantifiable, which led to a cost overshoot that was challenging to manage.

A significant challenge was the logistics cost of replenishing consumable gases like oxygen, acetylene, and nitrogen. When we quoted for the project, we used Lagos prices for the gases, underestimating the complexities and logistics costs involved in transporting the bottles for refills. The frequent need for refilling and the logistic hurdles compounded our expenses, leading to a considerable cost overrun.

The refrigerant line's total length was over 12,000 meters. The project involved approximately 16 bottles on-site at any given time. We took the bottles from Lagos filled with oxygen, acetylene and nitrogen at the start of the project with the mindset that we would refill them in Osogbo. Then came the shocker: we couldn't get a place to refill the gases. We will deplete the bottles and charter a vehicle for a to and from a journey to Lagos to refill. The logistics cost was enormous. After a year, we got a gas vendor in Ibadan, which is almost 50% more expensive than Lagos, but logistics are cheaper and faster for us. We started buying from Ibadan. By 2022, we had a gas vendor in Osogbo who would refill from Ibadan, offer better pricing, and solve the logistics nightmare. After getting the vendor in Osogbo, we returned 8 of the 16 gas cylinder bottles?to Lagos while we used his.

One thing about being an HVAC contractor in this clime is that you can't have the required gas bottles across several projects, and we rely on the gas vendors dropping theirs to be used and refilled from them.

In Q3 2021, we got a new VRV installation project in Enugu. For this project, our scope covered procuring all installation materials. We leveraged the lessons learned (OPM) from Osogbo to estimate the cost. However, there was still a challenge. We have never done a project in Enugu before then and do not know the gas vendors. I have a project engineer in Port Harcourt who was tasked to get prices in Port Harcourt, which was used for the quote while also factoring in logistics costs for the site.

We also learned from Osogbo that QS often underestimates the quantity of consumables needed on HVAC projects. The amount on the BOQ and the actual used were 300% higher. On some projects, the QS were smarter in making them a lumpsum and not an?estimated quantity.

Estimating how many pipes a bottle of oxygen, acetylene, and nitrogen can braze is crucial.

Two years ago, a friend who works in a facility management company managing a government building in Ado Ekiti couldn't get acetylene and nitrogen in Ado Ekiti. He reached out after remembering I had family members in Akure, Ondo state, and asked if I knew if he could get it. I spoke with my people in Akure, and they got a vendor who sells. The cost was 300% higher than Lagos prices.

I received a quote last year as a “sub-subcontractor” for a VRV installation project in Ondo state. The subcontractor will supply us with all the installation materials, excluding oxygen, acetylene, and nitrogen. I used the data accrued from helping the colleague from Ado Ekiti. After submission, the subcontractor felt the prices were too high relative to Lagos. I had to explain that they were higher in Ondo State than in Lagos.

These are a few examples from our lived experiences. We have done several projects across several Nigerian states, and the lessons we learn from each project help us plan better for the next project.

Another factor that also bit us was the astronomical increase in prices, house rents, and logistics over the course of these projects. When the Osogbo project started, $1 was at N450. When we commissioned it, $1 was over N1700. Even though the project had several cost variations, the impacts were still felt. In this climate, projects hardly keep to the scheduled project duration.

Oxygen, acetylene, and nitrogen procurement and logistics are why I believe in the press method for refrigerant pipe flame-free joining. It is not commonly used locally, and many contractors have reservations about its durability over time. I have been following it and looking forward to using it on a project soon. Currently, I know of 2 brands for the flame-free joining method. For a Daikin VRV project, one can use Daikin Tight Gas (DTG) since Daikin offers that option. For others, one can use a Rapid Locking System (RLS). The fittings may be more expensive than traditional fittings. Still, the press method will likely be cost-beneficial and durable compared to the logistical support required on big projects. The press method also eliminates the probability of carbon buildup in the refrigerant copper pipe since no brazing is done. RLS, for example, has been tested to >750 psi, which held up to show its capabilities. Three main types of flame-free joining methods exist: press, compression, and flare. We are all conversant with the flare as most units below a specific cooling capacity come with it by default for refrigerant pipe termination to the unit.

I read the ASHRAE research project in 2021, which evaluated the robustness and leak-tightness of field-made mechanical joints used in refrigeration systems through a series of assembly, harshness (durability), and leak rate tests. The summary was that press connect fittings have:

• Quickest Assembly Time
• Lowest Assembly Failure Rate
• Most Durable (No failures during harshness testing). They have an acceptable leak rate of ~1 g yr-1 per fitting.

In conclusion, factors surrounding the site should be considered when planning a project outstation. However, for a first-timer, some information may be lacking due to having no prior knowledge of said areas. Currently, I struggle with planning and costing for projects in other Western African countries, especially with logistical support. This is easy for some contractors, who have done it several times and have the core information needed to thrive. For others, we learn more as we work more.