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Changing ways of building plants are reflected as this widely used index is brought into the 21 st century
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The Chemical Engineering Plant Cost Index (CEPCI) is an established institution. Since its introduction in 1963 [1], it has been published in each and every issue of CE. For more than 37 years, chemicalprocess-industry (CPI) professionals - engineers, managers, and technicians - have used the CEPCI to adjust process plant construction costs from one period to another. This index - rather, indexes, as it consists of a composite index and eleven sub-indexes - has received such wide acceptance that it has even been written into construction-contract cost-escalation clauses.
The CEPCI has a history of revisions. Most of these have been cosmetic, such as renaming the "Fabricated equipment" sub-index to the more descriptive "Heat exchangers and tanks" sub-index. The most recent, and most significant, revision - more like an overhaul - occurred in 1982 [2]. The major changes included reducing the number of components from 110 to 66, replacing many components with more suitable ones, and revising the productivity factor downward from 2.50% to 1.75%. (See next page for an explanation of the productivity factor.) The 1982 changes deliberately retained the structure of the CEPCI.
The set of sub-indexes has remained unchanged for nearly four decades - decades that have seen major changes in the CPI, especially in plant design and operation. We have not changed the data series and the relative weights since 1982. That is a long time to freeze an index, and does not necessarily reflect recent changes. For that reason, we have decided it was time for the CEPCI to be revised again, this time to bring it into the twenty-first century. The structure is not being changed, but many underlying details are being updated.
The established structure
Before describing the latest CEPCI revision, we need to review its structure and some history. Table 1 shows that the composite index is built from seven component-indexes and four sub-indexes, For all of these, values have been reported running back to 1947. Table 2 lists annual values of the four sub-indexes and the composite index for the years 1963 to 2000. Component-index data and an extension back to 1947...