BUILDING UNDERGROUND: SPECIAL
TECHNIQUES FOR A STORAGE FACILITY
Ioannis E. Zevgolis1
ABSTRACT
Underground construction in metropolitan cities around the world has been steadily
gaining ground during the last decades. This is due to a series of reasons, among them
the lack of sufficient surface space and the increased cost of surface land. Athens, the
capital of Greece, with a population density of 8,000 inhabitants/km2 and with the
vast majority of the country’s commercial, industrial, and business activities gathered
within its boundaries, is not an exception to these cities. One of the business sectors
that suffer from the scarcity of surface space is that of warehousing and logistics. The
demand for new storage facilities increases, whereas the capacity of surface areas to
host them is already exceeded. Urban planners tend towards innovative solutions that
will alleviate the problem. Subsurface space utilization is regarded as one of them.
Within this frame, a research project was recently carried out in order to examine the
feasibility of an underground warehouse in the area of Athens. In this paper the
engineering construction and management issues of the project are discussed. The
construction of the warehouse is divided in two phases. First, the underground space
is created using mining techniques. Second, the already excavated space is converted
into a state-of-the-art facility, following the standards of typical surface warehouses.
Although the two phases have different characteristics, they are planned to advance in
parallel, with the second one occupying the areas already mined out. The room and
pillar method is adapted from mining for the space development. Excavation takes
place in two stages, using the drill and blast technique. Construction is anticipated to
last about two years. At the end of this period, the space will be ready for commercial
use.
KEYWORDS
Underground construction, design and planning, time management, warehousing,
storage, Athens.
INTRODUCTION
The utilization of underground space has provided viable solutions regarding many
serious problems of metropolitan cities around the world during the last years
(Sterling 1997; Cano-Hurtado and Canto-Perello 1999; ITA 2000; Kaliampakos and
Mavrikos 2004). The construction of major infrastructure projects, such as
transportation tunnels, composes a big part of the underground development. This
1
PhD Student, School of Civil Engineering, 550 Stadium Mall Drive, Purdue University, West
Lafayette, IN 47907-2051, USA, Phone +1 765/4940892, FAX +1 765/4961364,
zevgolis@purdue.edu
1
development also encompasses the construction of underground activities and
facilities, or even their relocation from the surface, to the subsurface. Usually, these
activities and facilities, if installed on the surface, are impractical, not friendly to the
environment, and even non-profitable (Damigos et al. 2004). In Athens, Greece, an
example of an activity that traditionally takes place on the surface, but lately faces
serious problems regarding its further development, is that of warehousing and
logistics business sector. Specifically, this sector suffers from the scarcity of surface
space available in the area, as well as the high cost for purchasing the necessary land
for building new storage facilities. Demand for these facilities increases, whereas the
capacity of surface areas to host them is already exceeded. Urban planners and
logisticians started thinking about innovative solutions that will alleviate the problem.
Subsurface space utilization is regarded as one of them (Kaliampakos et al. 2002).
Within this frame, a research project was recently carried out in the Laboratory of
Mining and Environmental Technology at the National Technical University of
Athens, Greece, in order to examine the feasibility of an underground warehouse in
the area of Athens. The construction of such a warehouse is a difficult task that has
never been undertaken before, in Greece. It involves a series of issues that have to be
encountered, starting from the technical feasibility of the project and ending to its
economics. In this paper, the construction management aspect is outlined. So, the
suggested construction technique, i.e. the creation of the underground space by using
mining engineering techniques and the conversion of this space into a storage facility
is outlined, as well as the analysis of the time planning involved. Finally, an overview
of the results for the cost and investment analysis is given.
CONSTRUCTION ISSUES
The proposed area for the implementation of the project is located at the foot of Mt.
Ymittos, a few miles south-east of Athens. The site is 350m (1150ft) above sea level
and the rock mass, composed mainly of good quality limestone (in terms of selling
perspectives in the local aggregates’ market), is classified as “fair quality rock” (in
terms of excavation support requirements). The RMR values vary between 58 and 62,
and the Q values between 4 and 10.6 (Benardos et al. 2001). The water table is
located approximately 150m (490ft) below the proposed site. The geotechnical
investigation showed that the location fulfills the necessary requirements for the
facility’s construction. Construction is divided in two phases. First, the underground
space is created and second, the already excavated space is converted into a state-ofthe-art storage facility; the greatest challenges appear in the first phase.
CREATION OF THE UNDERGROUND SPACE
After studying the characteristics of surface storage facilities, the creation of the
underground space was decided to be done using the “classical room-and-pillar”
mining method. The reasons for choosing this method were primarily that the method
can produce a space of similar shape and layout like that of typical surface
warehouses, and that it has been extensively applied around the world in underground
limestone mining. Additionally, the method allows for a high degree of
mechanization, which results in higher productivity and earlier completion of the
2
project. Last, the Greek mining sector has been exposed to the method for many
decades.
The room-and-pillar method, applicable mainly in flat-bedded deposits, recovers
resources in open stopes. The term stope is used to describe the excavation that is
made by removing ore from the surrounding rock (Hamrin 2001). The excavation
progresses in a horizontal or almost horizontal direction, leaving solid material
(pillars) behind, in order to provide support for the overburden load (Bullock 1982).
A typical layout of the room-and-pillar method is shown in Figure 1. In mining
operations the design in room-and-pillar is performed with a view to extracting as
much limestone as possible, and achieving the highest recovery ratio. However, in the
case of an underground warehouse this view had to be re-oriented and a different
approach had to be adapted. The design aims of the project are to provide adequate
and ergonomic space in order to satisfy the storage needs, and of course to secure
safety regarding the permanent and civil use of the space; the “mine and abandon”
approach, which was applied in past mining activities, does not apply here.
Figure 1: The classical room-and-pillar mining method (Atlas Copco 2000).
Implementation of the design was performed using the software package Surpac 2000
v3.2D (Surpac Minex Group Pty Ltd). This is a mine design software, well
documented in the literature (see for example, Asmadi et al. 1992; Firth and Taylor
2001). The software provided the ability to analyze in three dimensions several
aspects of the development process (Figure 2).
The whole project covers an area of 80,707m2 (20 acres). The main exploitation
stage includes the excavation of parallel and transverse galleries, leading to the
formation of patterned square pillars. These galleries, besides being the production
stopes, also serve as roadways for transportation of the aggregates to the surface and
for communication. The rooms will be 11m (36ft) wide, and the pillars will have a
square cross section of 11x11m. The excavation takes place using the drill and blast
method and is performed in two stages: the top heading, 5m (16.5ft) high, and the
bench blasting, 6m (19.5ft) high, leading to room and pillar height of 11m. This twostage process was preferred rather than a full-face excavation, because it achieves a
3
higher productivity rate. Typical underground mining equipment will be utilized,
involving three jumbo rock drills, six Load Haul Dump (LHD) machines, one
explosives’ handling and charging vehicle, one mechanical scaler, and two rock
bolting machines. The roof support will follow the RMR and Q systems
recommendations, using primarily resin grouted bolts and local installation of wire
mesh and rock bolts (Benardos et al. 2001). The pillar design is based on traditional
strength-based methods (Brady and Brown 1992; Farmer 1992; Zipf 2001). These
methods (practically the same as the Working Stress Design, WSD, methods in
geotechnical engineering) require an estimate of the stresses applied on the pillar and
of the strength of the pillar itself. The ratio of strength over stress (capacity – demand
model) gives the corresponding factor of safety (FS). For typical cases in mining
applications, a FS value between 2 and 4 is usually satisfactory. In the current study,
the design was performed for a conservative value of FS equal to 5.
Figure 2: Three dimensional view of the area after the completion of the excavation.
CONVERSION INTO A WAREHOUSE
The second phase of construction of the underground storage facility is the
conversion of the space to a warehouse according to the specifications and standards
of similar surface centers (Ackerman 1997; Frazelle 2001). The first step in this
process is the installation of the utilities networks, i.e. electricity, communications,
water supply, drainage, ventilation and lighting. For fire protection, sprinklers will be
installed. At this stage, the space will be ready for the industrial floor to be installed
or for the thin concrete layer to be poured. Finally, the security systems will be
installed and the cross-docks (ramps) will be placed.
TIME PLANNING
There are many inherent difficulties hidden in underground construction, regarding
the coordination of different types of activities. Taking into consideration the big
investment that the project requires in order to be completed, it becomes clear that the
time planning and scheduling of the construction activities is an integral part of the
study. Detailed analysis of every activity involved in the operation was performed,
4
and the time that is required for the completion of the project was determined. For
example, this analysis included, but was not
Table 1: Typical daily cycle of operations.
DRILLING
Top heading
D1
D2
D1
D2
D1
D2
Bench
D3
D3
D3
CHARGING
Top Heading
E1
E1
E1
E1
E1
E1
Bench
E2
E2
E2
1st SHIFT
Stope
Start
End
1st
2nd
3rd
4th
5th
6th
0:00
0:00
2:00
2:00
4:00
4:00
2:00
2:00
4:00
4:00
6:00
6:00
1st
2nd
3rd
Stope
0:00
2:00
4:00
Start
2:00
4:00
6:00
End
1st
2nd
3rd
4th
5th
6th
2:00
3:00
4:00
5:00
6:00
7:00
2:50
3:50
4:50
5:50
6:50
7:50
1st
2nd
3rd
2:00
4:00
6:00
3:00
5:00
7:00
2nd SHIFT
MUCKING
Stope
LHD1
1st
LHD2
2nd
LHD3
3rd
LHD4
4th
LHD5
5th
LHD6
6th
LHD1, LHD4
4th (V')
LHD2, LHD5
5th (V')
LHD3, LHD6
6th (V')
ROCK BOLTING
Stope
R1
1st
R2
2nd
R1
3rd
R2
4th
R1
5th
R2
6th
SCALING
Stope
S1
1st
S1
2nd
S1
3rd
S1
4th
S1
5th
S1
6th
Start
0:00
0:00
0:00
0:00
0:00
0:00
4:00
4:00
4:00
Start
2:20
2:20
4:10
4:10
6:00
6:00
Start
2:00
2:25
2:50
3:15
3:40
4:05
End
4:00
4:00
4:00
4:00
4:00
4:00
7:45
7:45
7:45
End
4:00
4:00
5:50
5:50
7:40
7:40
End
2:15
2:40
3:05
3:30
3:55
4:20
Notation: D1 - D2: Two type A jumbo drills, D3: One type B jumbo drill, E1: One
explosives’ handling/charging vehicle & three workers, E2: Two workers, LHD1 - LHD6: Six
Load Haul Dump machines, R1 - R2: Two rock bolting machines, S1: One scaler.
limited to, the required time for top heading drilling (2hours), top heading charging
(50min), mucking for top heading using one truck (4h), mucking for remaining
volume using two trucks (3h 45min), rock bolting (1h 40min), and so on. After
calculation of the time needed for each activity, the daily construction cycles were
determined. These were based on schedules of 8 hours per shift, two shifts per day.
Such a typical daily cycle of operations is shown in Table 1.
The time planning of the total exploitation sequence is given in Table 2 (Zevgolis
2002). As shown in the Table, the exploitation phase will be completed after 455
working days, which are equivalent to 664 calendar days. In other words, the
exploitation phase will be completed roughly two months before the end of the
second year. The excavation and conversion phases are planned to advance in
parallel, with the second one occupying areas already mined out. This is done in order
to save time for the whole project. The conversion of the space into a warehouse is
assumed to advance in parallel with the exploitation starting on the day that the daily
5
aggregate production reaches 50% of its maximum value, that is after 105 working
days (taking into account appropriate maintenance time and unexpected delays). At
this point it is considered that they will not affect the beginning of conversion.
Conversion phase will advance in a higher rate than exploitation; however it always
stays behind it for obvious reasons. By the end of the exploitation, most of the area
will be already converted into a warehouse. The remaining 45 working days from the
second year are considered enough for the completion of the facility.
Table 2: Time planning of exploitation.
Time distribution per year
Working days
T0
T25
T50
Tmax
Maintenance time (7%)
Unexpected delays (5%)
Remaining time
Production (t)
Production (%)
Equivalent area mined out (m 2)
1st year
250
10
84
84
42
17
13
0
679,487
38%
23,310
2nd year
250
0
0
0
175
17
13
45
1,129,941
62%
38,763
Total
500
10
84
84
217
34
26
45
1,809,428
100%
62,073
T0: Starting time
T25: Time required for production to reach 25% of its maximum value
T50: Time required for production to reach 50% of its maximum value
Tmax: Time required for production to reach its maximum value
COST AND INVESTMENT ANALYSIS
Underground construction usually costs more than equivalent surface construction.
However, as explained by Carmody and Sterling (1993), there are combinations of
features like the geological environment, the size and type of the facility and others
that may provide direct savings in the construction cost of underground structures.
For example, Linger et al. (2002) refer to case studies of in-service storage facilities
in Norway, in which the life cycle cost for underground facilities larger than 5,000m2
(1.2 acres) is approximately 40% lower than that of above ground facilities.
Total construction cost for the facility was estimated to be roughly 212€/m2. This
cost includes both exploitation cost (mining activity) and the cost of converting the
space into a warehouse. Figure 3 provides an overview of the expenses in terms of
contribution of each phase to the total cost. Details on the cost are given by
Kaliampakos et al. (2002) and Zevgolis et al. (2004).
The project was evaluated on the basis of the Net Present Value (NPV) and
Internal Rate of Return (IRR) criteria. Four different scenarios were analyzed with
respect to the period of operation of the warehouse and the funding process.
Specifically, the project was evaluated for a 15 and 25 years plan, each one
considering either a complete self-funded process, or a bank loan that would cover
60% of the construction cost. The cash flow table for the investment plan was
prepared based on the following assumptions:
 The exploitation cost was 4.41€/t and the aggregates revenue was 3.93€/t.
6
Total Construction Cost
2.7% Purchase of surface land
60.7% Exploitation Cost
36.6% Conversion Cost
06.1%
32.1%
11.6%
13.1%
04.6%
21.4%
11.1%
Drilling
Support
Charge and Blasting
Mucking
Ventilation
Personnel
Various
43.4%
11.9%
22.7%
17.0%
Water Proofing
Industrial Floor
Networks
Fire Protection &
Security Systems
05.0% Other
Figure 3: Overview of expenses.

The conversion cost was 77.64€/m2 and the net total conversion cost was
94.78€/m2.
 Based on market prices, the leasing price of underground storage space was set at
4.93€/m2 and month.
 The space lease would be 0% for the first two years, 50% for the third year, 75%
for the fourth year, and 100% for the rest of the years.
Table 3 shows the results of the analysis. These results indicate that the construction
and operation of an underground warehouse can be a profitable project. It is noted
that for all four scenarios analyzed, the net profit starts between the 7th and 8th year of
operation.
Table 3: Results of investment plan analysis.
Investment plan
NPV (€)
IRR (%)
15 years without a loan
4,003,942
20.88
15 years with a loan
4,357,456
25.17
25 years without a loan
6,165,936
22.29
25 years with a loan
6,664,121
26.46
7
CONCLUSIONS
A research project was carried out in the Laboratory of Mining and Environmental
Technology, at the National Technical University of Athens, Greece, in order to
examine the feasibility of an underground storage facility in the area of Athens,
Greece. The project was initiated due to the problems that are encountered by the
warehousing and logistics business sector the last few years. These problems are
related to the construction of new surface storage facilities in order to satisfy the
increased needs of the market. In this paper, the main aspects of the engineering
construction and management of the facility are presented. For the design, a typical
mining technique, i.e. the classical room-and-pillar method, was applied. The space
frame that this technique leaves behind presents many similarities to the space frame
of typical surface storage facilities. The main aspects of the technique with respect to
the specific project were outlined. Due to the use of the space as a state-of-the-art
storage facility, and not as a typical limestone mine, the design is performed with a
view not to extract as much limestone as possible, but to create a space that resembles
surface storage facilities. Taking into account that the project requires a big
investment for implementation, an accurate time planning is necessary so that it is
completed in time. According to the exhaustive analysis of all involved activities, the
required time for completion of the project is estimated to be slightly less than two
years. Finally, an overview of the main cost features was presented and the results of
an investment analysis were presented. Based on this analysis, it is anticipated that
the construction and operation of the facility can be a profitable business.
ACKNOWLEDGMENTS
The author would like to express his gratitude to Dr. D.C. Kaliampakos, Associate
Professor at the School of Mining and Metallurgical Engineering of the National
Technical University of Athens, Greece for his support in writing this paper.
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