EPC & EPCM
There are some golden rules when installing
incentives and penalties, according to these
EPCM contractors:
n Include clear objectives with reasonable and
attainable goals;
n Ensure those carrying the risks are in the best
position to control it;
n Make sure an open dialogue with a project
owners’ team is established and continues
throughout.
EPCM providers are open to signing contracts
that dictate such clauses, but they normally
only do so where, again, they have been
involved at an early project stage and can
dictate the project direction.
This is probably why, the big EPC and EPCM
contractors are trying to ensure the bulk of
project work is carried out in-house.
Bechtel’s Wilson said: “We establish the best
combination of both external and internal skills
in engineering to project needs, as well as the
right balance of construction executed by
contractors and direct hire construction by
Bechtel.
“Our data shows that when we control the
critical path with our direct hire workforce,
applying world-class productivity tools and
procedures to reduce costs, we add the most
value to our clients by constructing the facilities
that represent their revenue stream.”
This is all a matter of reducing risk in project
execution, according to Christo Visser, Senior
Vice President – Origination, for DRA Global.
“In delivering comprehensive solutions, the
organisation is able to mitigate overall project
risk and interface risk between various
contractors – this ultimately leads to overall
project risk reduction.
“Financiers also tend to prefer funding
projects backed by larger, more established
engineering firms and often shy away from
contracts that are divided among smaller, higher
risk, less profitable, less financially strong
organisations,” Visser said.
This ties in neatly with the idea EPC and
EPCM providers should be employed in the early
stages of a project, a time when having a
complete suite of capabilities under one roof is
most telling, according to Ausenco’s Douglas.
“Being a mine to port provider is most useful
in the study phase where clients have a ‘one
stop shop’ and a single integrator of the study
document – otherwise the client needs to take
on this role and the challenge is ensuring there
are no gaps at the interface points,” he said.
The integration of services also has an impact
on the overall cost, DRA Global’s Visser says.
“This reduces risk for clients through less
interfaces which, in turn, places downward
pressure on costs by eliminating margins on
various companies and reduces management
teams required to assist with the project.”
Technology aids
Mining companies and contractors have been
aided in cost and schedule forecasting with the
evolution of technology. The big data,
automation and electrification buzz is not just
confined to the operational phase of mining, it
also has relevance in design and build.
Turner & Townsend sees opportunities to
influence and design project data with recent
technology improvements.
“This will focus on the needs of the various
stakeholders with a primary focus on:
n “Mapping and understanding what data is
really needed for all stakeholders at each
gateway approval;
n “Data sharing single-source data and the
ability to append the data sets;
n “Timelines of production of the data;
n “Defining the data deliverables in all project
consultant contracts with associated timing
and sequencing to drive project-aligned
behaviours.”
Bechtel’s Wilson said automation and
digitalisation were allowing the company’s
innovation initiatives to deliver “tangible”
benefits.
“On the process innovation side, we are
leveraging automation and other process
technologies to reduce power and water
consumption, and labour requirements in the
plants we are designing.”