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Risks in Mega EPC Projects
EPC Contracting model tends to be more expensive for the owner due to the shift of risk to the EPC contractor. Paolo Bonucci, Commercial Vice President, Tecnimont presented the paper the paper Risk Mangement for EPC Projects during EPC International World Expo 2011 organized on the sidelines of CHEMTECH World Expo 2011.

EPC WORLD - THE PRESENT SCENARIO
• EPC Contracts becoming larger and larger With Huge Capacities planned for improving investment return (Mega Projects, though Fewer!)
• Clients driving towards reducing risks & Project Schedule but on most economical model (stiffer competition increasing risk for Contractors!)
• Moving the Project Execution Risks as much as possible on the EPC Contractor Shoulders (Preferred use of EPC LSTK Contracts)

EPC WORLD - THE PRESENT SCENARIO (EPC LSTK MODE)
• Reduced Organizational Resources
• Clear SOW & Easier Control on Changes
• Fixed/Committed Completion Time
• Single Point Responsibility
• Committed Cost Negligible escalation
• Better Coordination & Logistics
• Comprehensive Guarantees

TEMPORARY ALLIANCES FOR SHARING MEGA PROJECTS RISKS
• General approach is for EPC Companies to form allies / partnerships to derive synergic benefit and share the risks (JV or consortium schemes are the typical forms)
• Contractors aligning together across Countries -virtual 24/24 working environment -(increased productivity!).
• Stronger emphasis on Cross-Cultural Coordination and different working methods(Globalization at its best!)...