Opportunities Related to EPC

gurglejapaneseManagement

Nov 18, 2013 (3 years and 8 months ago)

68 views

1

Opportunities
Related
to EPC
Initiatives

Support Services Management
-

NWC

2

1.
Rationale for
choosing
EPC methodology

2.
Objectives and criteria for the selection of EPC contractors

3.
Key success factors for EPC

4.
Ongoing
improvement initiatives at NWC

5.
Investment Forecast in RIYADH and JEDDAH (CAPEX)



Outline

3


EPC methodology is about
Lead
-
Time, Quality and Ability to
Execute


EPC methodology is
Generic, Objective, Transparent and Time
Based


EPC proven benefits include:


Streamlined tendering and selection process


Better integration of design, procurement and construction


Higher accountability for the success and failure of the project


More flexibility to contractors


Lower project costs


The process is
multi
-
stage

to allow for a variety of levels of complexity

Features of EPC Methodology

4


The two most important value
determining factors in any competition
are the
quality of the specification

and
the
bidders who are invited
to
participate

Engineer

Construct

Procure


Increasing
scrutiny of
procurement

means
organizations are putting a lot
more emphasis on who is a
vendor


New issues

have risen up the
agenda: health and safety,
environmental care, corporate
responsibility, climate change


Increased fear amongst buyers of
the impact of using inappropriate
vendors:
financial risks, publicity,
reputation damage


Allowing
inappropriate
vendors
to bid will have a
negative effect on the
competition, is wasteful
to the buyer and the
sellers and causes
increased time delays

Selection of EPC Vendors


Our Views

5


To find a range of
EPC vendors who wish to provide a
particular service


To reduce that number to a list of vendors who wish and
are
capable of providing the service


To select people who wish to provide the service and are
capable of doing so and can do so
whist being ethical,
credible and stable


Finally to then choose (if the numbers justify) not only
those who wish to provide, are capable and ethically
suitable but who are the
best EPC vendors available

Selection of EPC Vendors


Our Objectives

6


Experience


Quality and timeliness of past performance


Reliability and responsibility


Compliance with equal employment requirements


Compliance with wage and other fair labor
standards


Subcontractors used by the Firm


Integrity of the Firm and its key personnel


Financial status and operations

Selection of EPC Vendors


Our Selection Criteria

7

Key Success Factors for EPC Projects


Higher degree of owner involvement:
a move away from comprehensive lump
-
sum turnkey projects toward alternate structures


Better partnering and relationship
-
building with EPC Contractors:
build
longer term, mutually beneficial relationships with their key EPC suppliers


Front
-
loading,
especially for the engineering and design phase


Thorough risk identification and clear allocation:
such as the use of specified
cost indices to manage volatility and price increases for commodities and labor


Effective project management,
including detailed scheduling, constructability
reviews, progress reporting, and overall performance measurement

8

Our Ongoing Improvement Initiatives


Human Capabilities
: recruitment of specialists in asset management/
design/procurement and transfer of knowledge from management
contract operators


Procurement and Tendering
: clear scope of work in RFPs, optimized
prequalification and selection criteria, limited number of bidders,
implementation of FIDIC standards


Project Management
: hiring the best consultants to supervise projects,
developing a competent internal team, and reengineering of project
management processes and systems


Financial Support
: advance payments to cash strapped contractors and
claim resolutions facilitation prior to end of contracts


Technical Support
: supporting contractors in coordination with Ministries
and ensuring that contractor counterparts have a strong engineering
background (design and construction)

9


We
have
32
qualified international
companies and 28
international companies with local JV


We have awarded over 265 projects worth of SR 3.6
billion



15% of projects were
awarded
directly to international
contractors



45% of projects were awarded to international JV






As of Today

10

I
NVESTMENT FORECAST IN RIYADH AND JEDDAH (CAPEX) in Billion SAR

Remark

TOTAL

2014

2013

2012

2011

2010

Projects

(
6.5
) plants

(
8.4
) network

14.9

2.0

2.0

2.1

3.0

5.8

Water

(
3.3
) Plants

(
11.5
) network

14.8

2.0

2.3

2.5

3.5

4.5

Waste Water

TOTAL

29.7

4.0

4.3
?
4.6
?
6.5
?
10.3
?
TOTAL

11