SPH gives a general presentation on our preferred approach to project delivery, the EPC model.

1. WELCOME TO THIS
PRESENTATION
ON
BY
SAPITWA PROJECT HOUSE (PTY) LTD
“THE EPC ADVANTAGE”
Sapitwa Project House (Pty) Ltd:
www.sapitwaprojecthouse.com

2. THE SPH WAY
Sapitwa Project House brings together expert
practitioners in a variety of spheres to:
• visualize
• prepare
• fund
• Implement (with all required technology partners
much needed infrastructure and development projects
throughout Southern Africa.

3. THE SPH WAY
Our core operating model is what we term the Vision-
Resources-Reality Nexus.
Simply explained, a project owner/sponsor’s vision
must be brought into harmony with available
technological and investment capital resources, in
order to become a functioning reality.

4. HOW CAN WE ASSIST
OUR CLIENT
• Identification of Bankable Projects among the client’s
portfolio of industrial and municipal wastewater
treatment and reuse projects ranging from waste-to-
energy plants to potable/non-potable quality water
recycling
• Project Capital Raising from a variety of sources
• EPC (turnkey implementation)
• Own-Operate-Transfer Concessions where feasible

5. THE “EPC” WAY
FOR
ECONOMICAL & TIMELY
EXECUTION OF
PLANT BASED PROJECTS

6. Factors for Success of a Plant -
Based Project
• Project Financials
– Project cost
• Capital Cost
• Interest Cost
• Development Expenses
– Operating cost of the plant
• Heat rate, Energy input and output, Chemicals

7. Developer's Risks
• Technical Risks
– Proven Technology
– Developer / Contractor’s Competence &
Experience
• Commercial Risks
– Feasibility
– Project schedule
– Contractor’s Financial Strength

8. Developer's Concerns
• To Ensure Return on Investments
– Technical & commercial viability
– Guarantees
• Project Cost - No Escalation.
• Performance- Adequate Guarantees
• Schedule -Adequate Guarantees
– Possible Approaches for execution
• Single point responsibility ( EPC )
• Conventional procurement from equipment
manufacturers ( NON-EPC)

9. Developer's Concerns
• Equipment Performance
– To remain within the planned revenues
• Project Schedule
– To Ensure No Delays
– To maintain predicted cash flows
• Project Overruns
– To keep the overall cost within the project
outlay

10. Conventional Approach to Project
Execution
↳ Appointing an Engineering Consultant
↳ Buying out multiple packages
↳ Awarding Construction Contract
↳ Project Management
↳ Liaison with various agencies
↳ Checking on performance

11. The EPC Approach to Project
Execution
➢Single point responsibility for:
= System Configuration
= Basic Design
= Procurement
= Erection & Commissioning
= Performance Trial
= Training & Handing over
= Own-Operate-Transfer (optional)

12. Conventional Execution-Limitations
• Overall performance
guarantee
• No Gaurantee
• Individual package supplies
• Does not constitute overall
performance guarantee
• Difficult to fix responsibility
A
• Overall schedule • No Gaurantee
• Overall price
guarantee
• No Gaurantee
Overall Project Conventional Route

13. The EPC Advantage
A
Overall Project EPC Route
•Overall Performance
Guarantee
•Higher Damages on Total Project
•Larger risks for EPC Contractor-
hence obliged to perform
•Overall performance assured
•Overall Schedule
Guarantee
•Overall Price
guarantee
•Overall commissioning schedule
monitored and maintained
•Firm price contract

14. Conventional Execution-Limitations
B
Engineering Conventional Route
•Responsibility
& Coordination
•All documents need to be checked
•Needs dedicated manpower
•Miss-outs in scope
•Interactions with multiple firms:

15. The EPC Advantage
B
Engineering EPC Route
•Responsibility
& Coordination
•Single point responsibility
•Fewer documents to be checked
•Faster communication
•Lower resources required
•Total scope responsibility
•No miss-outs & surprises allowed

16. Conventional Execution-Limitations
Procurement Conventional Route
•Buying Power
•Sourcing
Lower negotiation power
•Single project execution
•No vendor
partnership/synergy
•Limited vendor data
Lower global sourcing
C

17. The EPC Advantage
C
Procurement EPC Route
•Buying Power
•Sourcing
Better negotiation power
•Multiple project execution
•Vast vendor data bank
•Vendor partnership
•Rate contracts
Lower purchase cost
•Global sourcing at lower cost
•Higher flexibility in vendor selection

18. Conventional Execution-Limitations
D
Construction Conventional Route
•Faculties required Resources required for :
•Project Management
•Scheduling
•Quality
•Inspection
•Erection & Commissioning
•Needs to be installed

19. The EPC Advantage
D
Construction EPC Route
•Faculties required •These faculties already exist
with EPC contractor

20. Conventional Execution-Limitations
E
Project Management Conventional Route
•Skills required •May require to acquire
project management skills
•Scheduling: L1,L2,L3
•Planning
•Monitoring
•Integration

21. Conventional Execution-Limitations
E
Project Management Conventional Route
•Monitoring Requires to generate :
•Daily reports
•Weekly reports
•Monthly reports
•Critical issue reports

22. The EPC Advantage
E
Project Management EPC Route
•Skills required
•Monitoring
•Skills and Resources
•already with EPC
contractor
Progress review through :
•Daily reports
•Weekly reports
•Monthly reports
•Critical issue reports

23. Conventional Execution-Limitations
F
Quality Conventional Route
•Skills
•Resources
Resources/ Skills
need to be in place for :
•Design Reviews
•Quality plans
•Site/Vendor
•Quality Inspectors

24. The EPC Advantage
F
Quality
•Skills
•Resources
EPC Route
Following are part of
EPC setup :
• Reviews
•Quality plans
•Site/Vendor
Quality checks
•Quality Inspectors

25. Conventional Execution-Limitations
G
Results Conventional Route
•Project cost
•Project Schedule
•Project Quality
?
?
?

26. The EPC Advantage
G
Results EPC Route
•Project cost
•Project Schedule
•Project Quality
•Fixed
•Guaranteed
•Guaranteed

27. The EPC Advantage
A Case Study
→Project Management Personnel Cost
→Inspection & Expediting Cost
→Contingency, Escalations & Miss-outs
→Cost Overruns due to delayed
commissioning
Intangible Benefits

28. The EPC Way
Benefits to :
•The Developer
•The Lender

29. THANK YOU