wow- tough question.
There are a lot of factors:
As BigAl points out, a lot of it is equipment availability. Companies cannot sell you stuff that is not in stock. (Actually they can sell it, but they cannot deliver it to you.) A lot of them do not even have the material on hand to make the stuff you want. They have to procure that. Think about 450 truck loads of pipe. No body has that in stock. They must manufacture it. Their production line can turn out so many feet an hour and so many feet a day. Suppose you say "I'll pay whatever it costs- double your production capacity." It will take him a year to get the necessary manufacturing equipment and he just will not do that for one order (even a big order.)
There are a lot of considerations with regards to the installation of this stuff. You put in concrete foundations but you cannot put heavy loads on them for 3-4 weeks. It takes a lot longer to put in the foundations if the weather is cold. It takes a lot longer to trench for pipe if the ground is frozen. It will be extremely difficult to build the outfall structure if the river level is real high. The joints (4000 of them) on the HDPE pipe are heat fused together. This is pretty straight forward in the summer. In the winter you will need to build a temporary shelter around each joint. They are sinking ONE main shaft 7 1/2 meters (25 ft) in diameter. As I recall, somewhere in the report, it lists a shaft advancement rate of 1 1/2 meters/day (about 5 feet/day). There is ONE shaft with room for so many people and so much equipment. You cannot put twice as many people and twice as much equipment in this ONE shaft. The upper portions (probably 600 feet) of the shaft will be concrete lined. There is some curing time on this concrete. That will limit the advancement rate. Just throwing money at it will not solve these sort of problems. There is efficient and inefficient use of construction labor. Many such projects are run on 2-10 hour shifts 6 days a week. Very few locations have sufficient skilled labor. Craftsmen travel from several states away. At Elk Creek it will be at a minimum: Colorado, Iowa, Missouri, and Kansas. They will not travel and pay living expense for a 40hr/week job (or at least the competent ones won't.)If you work 6-10s they get paid for 11 hours (8 hours + 2 at time and a half) on weekdays and for 15 hours (10 at time and a half) on Saturday which adds up to 70 hours of pay per week. You could work 7 days a week but Sunday is double time ALL DAY. You get 70 hours a week of work instead of 60 but you pay for 90 instead of 70. If you have two shifts a day each working 10 hours, they actually work 10 hours and get a half hour unpaid lunch. If you work three 8 hour shifts a day, each shift works 7 1/2 hours and gets a paid lunch. The actual difference is 20 hours a day of work vs 22 1/2 hours. Scott Honam is nobody's dummy. I suspect he knows all of this. I have discussed some facets of construction with him and he is well aware. I imagine a lot of these schedules are based on 6-10's of two shifts/day construction labor. As soon as you go past that you spend a LOT more money for a minimal increase in production and your Capex numbers skyrocket. It is NOT 10% more money for a 10% improvement in schedule. As noted elsewhere, I am not a financial guy. But I suspect a real good way to make your stock tank is have a private placement or issue a bunch more shares half way through construction because "we are running way over budget on Capex."
All of this is important and all will have an impact. But, I really cannot answer your question because I do not know what schedule Nicorp planned on using for construction. In fact, until they hire a contractor, no one knows. I have personally purchased large quantities of pipe, but these were one truck quantities, not 400-500 trucks.
AI
