Water Pumping Systems – “Cost of Ownership” Rod Ennor, 19/2/2015

When designing and selecting the most suitable pumping equipment for any water supply system, it is imperative that we consider all of the “cost of ownership” details.  Cost of ownership is not just the initial capital cost but it also includes the real dollar costs of necessary maintenance, system monitoring, energy & fuel costs, manpower costs, reliability, safety issues, ease of repair and real dollar savings accrued through actual benefits.

“Cost of Ownership = initial capital cost + ongoing operating costs + energy costs + replacement equipment costs + time”

The initial capital cost of a pumping system must always be considered but, the ongoing costs that will have to be paid for the expected 25-year life of the system must always be taken into account as they will always be far more than the capital equipment costs.   For example, if we installed a standard 240v AC submersible bore with mains power operating for 12 hours per day for the 25-year life of the system.   The initial capital equipment cost would be around $4,000 but, the energy costs to operate the pump using 240v electricity mains supply would be around $16,425-00.   The capital equipment cost is only 20% of the cost while the operating and energy costs make up around 80% of the total cost of ownership.

Reliability:

The fewer the number of moving parts in a system, the less opportunity for component failure and, the more reliable the system is likely to be.   A well designed and installed simple pumping system requires less maintenance and will operate for longer periods without problems.   Pumping systems that only include superior quality components will always provide a superior performance.    A reliable system that you can trust is absolutely critical in any water pumping system that is supplying water for your livestock or livelihood.

Maintenance:

This really goes hand in hand with reliability as, the fewer number of components there are in a system, the fewer maintenance hours required to keep the system at peak performance level.   When maintenance is required it must be carried our regularly and it must be carried out by staff who understand the system and understand exactly what the maintenance tasks are and why they need to be performed.   Again, a water pumping system that is intricate will require far more maintenance than a simple system.

System Monitoring:

Regular monitoring of all of the equipment that makes up the water pumping system is both smart and the best way to prevent failures. System monitoring certainly includes things like recording operating pressures on pressure gauges but it also includes comparing current and past readings to see if there are changes.   Listening to the water flowing into a tank will only tell you that it is filling, simple water quality testing and inspecting fittings inside the tank will tell you far more about potential problems such as scale build-up, iron oxide and perhaps even the presence of chemicals like sulphur.   Regular laboratory testing of water samples taken directly from the water source as well as tanks and troughs will provide information on actual quality and problems.   A water flow meter and data logger installed on the discharge pipe of the storage tank will not just tell you how much water has been used but, it will also tell you when there is a reduction in demand or an excessive demand.   A reduction in demand may be due to blocked pipes or valves or even water that is so contaminated that stock won’t drink it.    An excessive flow will most likely be due to a faulty valve that is stuck in the open position or a broken pipe causing a leak.

Manpower Costs:

This is one very real cost that many farmers continue to think of as a “no-cost to me” situation because they are not paying staff. You may not be paying staff but somebody still needs to do the actual work and that means time away from other tasks that can actually make you money. If you put a dollar value on your own labour of only $25-00 per hour, your annual salary is $49,400 pa if you only work 38 hours per week. The other way to look at it is, if you actually had to pay somebody to do the work, what would it really cost you?

The manpower operating costs for water pumping systems vary tremendously with each system.     For example, the manpower operating cost of a small diesel generator powered system must include the actual time required to drive to the bore, check the oil, fuel the generator, check the system, start the generator and, drive to the next job.   We must also allow for the time required to deliver fuel to the bore site.   As small diesel generators will only operate safely for around 12 hours at a stretch, this may require a visit to the bore site on a daily basis.  The same bore equipped with a solar powered pumping system would only require a site visit on a weekly or even monthly basis and so the savings in real dollar terms for manpower are significant for solar over diesel.

Safety Issues:

What possible safety issues could there be with a bore pump? If your pump is being supplied with power from a diesel generator then the major safety issue is staff having to transfer diesel fuel to site and from one container to another on site. Accidents with heavy diesel fuel containers are not uncommon and can be extremely dangerous particularly at a remote bore site where help is not immediately available. Other safety issues include the risk of fire at unattended generators and if a petrol generator or pump is used, these risks are multiplied.

Ease of Repair:

If you have selected superior components in your pumping system and carry out regular monitoring and maintenance programs, the need for repairs will be minimal but they will occur.   Having a good working relationship with your pump company should mean that repairs are carried out quickly and efficiently.  Your pump company should carry the full range of equipment in stock for repairs and replacement of critical components in your system.  In addition, a reputable pump company will have trained your staff in both the safe operation of the system and the repair and replacement procedures.

Energy Costs:

This is by far the largest single component that makes up the “cost of ownership” of any water pumping system and may be as high as 85% of the total cost of ownership. The cost of mains electricity, diesel fuel and, petrol will only increase over the life of the pumping system and this must be considered.   Before selecting a water pumping system, a thorough, accurate and detailed “Cost of Ownership” analysis should always be carried out as the figures will probably surprise you.

Finance:

Sadly, many farmers allow this issue to decide which pumping system is going to be installed.  The decision should always be based on the “cost of ownership” analysis results.   Many banks and other financial institutions will provide finance for pumping systems and it may be in the form of a lease, hire purchase or rental agreement.  Before making any decision regarding the suitability of any finance you should consult your accountant.

Actual Benefits:

This includes real dollar savings, a saving in time, a more reliable system, a system that is automatic, a system that is safe and, a system that is capable of performing to your requirements for at least a period of 25-years.   It may just be something as simple as a system that means that you don’t need to drive the length of the property every day to see if the tank is full or, it may be a system that you can trust enough to allow you to go away for a weekend.    Whatever your own benefits are, your stock will definitely benefit from an improved supply of clean fresh water.    The value of a property that has a safe, reliable and efficient stock watering system installed is going to be far greater than one without.

Summary:

Having a reliable and cost effective water pumping system is critical for excellent stock health and growth rates, which in turn are critical to farm profitability.    The actual benefits that your new system provides must improve the way the property is managed and must reduce the time required to operate the water system.  The system must be supplied by a reputable company with a strong track record of supply, support and backup service – a company that is still going to be in business in the long term.   Careful research and evaluation of the available systems to determine the one with the best “cost of ownership” makes excellent business sense and will pay dividends in many ways in both the short and long term.

A “Cost of Ownership” analysis for a water pumping and stock watering system can be arranged for your property by contacting our office.

Rodney Ennor
Managing Director
Irrigation Warehouse Group Pty Ltd
404 Grey St Glen Innes, NSW, 2370
Ph 1300 661 417 Fax 02 6732 6333
Email: rod@iwgroup.com.au