SETP No. 14 The Economic Value of Incremental Employment in the ...

Table 7-8
Local and Import costs of operating Wheeled Loader
Based on a Bell 1204 with 48% import component.
Cost/ Total revenue/ Total annual Imported Local
Assumptions cost per hour margin cost component component
Total revenue Based on hire rate of R150 per hour 150 277,200
Capital cost Five year amortisation 619,300 123,860 59,329 64,531
Driver Works 7 hr day 22 day month 20 36,960 - 36,960
Diesel & oil 80% imported 40 73,920 59,136 14,784
Spares & service Labour local, 80% spares imported 10 18,480 7,392 11,088
Total margin Revenue less direct costs 23,980 23,980 23,980
Total annual cost 277,200 125,857 151,343
7.25 Table 7.8 tells the same tale as Table 7.7 but for a change in the imported
component of the wheeled loader. It illustrates how a reduction in the imported
component of a wheeled loader reduces total operating imports by a much
smaller extent than the fall in the imported component. In this case the imported
component of the wheeled loader falls by nearly 33%. The final fall in the
imported component of the running costs is only 18% (from R154,000 to
R125,000).
Table 7-9
Cost of Earth Moving based on local expenditure component
Labour Based Daily wage 25 33 50
Soil conditions Soft Soft Soft
Cost per M 3 5.5 7.3 11.2
Daily wage 25 33 50
Soil conditions Normal Normal Normal
Cost per M 3 9.2 12.2 18.7
Daily wage 25 33 50
Soil conditions Difficult Difficult Difficult
Cost per M 3 18.3 24.4 37.4
Equipment Based
Bell 1204 with 71% import component
Ground conditions Soft Normal Difficult
Total Cost per M 3 5.0 6.0 7.5
Implicit local content cost M 3 11.4 13.6 17.0
Bell 1204 with 48% import component
Ground conditions Soft Normal Difficult
Total Cost per M 3 5.0 6.0 7.5
Implicit local content cost M 3 9.2 11.0 13.8
7.26 Table 7.9 uses the results from table 7.8 and calculates the implicit import
‘losses’. It biases the equipment cost upwards because of this import loss. The
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