A project promoter or developer has an option to give single contract on turnkey basis on single contractor or to source project packages/components from several suppliers. Advantages of an EPC single contract are highlighted in this presentation.

1. WELCOME TO THIS
PRESENTATION
ON
“THE EPC ADVANTAGE”
BY
THERMAX LIMITED

2. THE “ EPC ” WAY
FOR
ECONOMICAL & TIMELY
EXECUTION OF
A COGEN PLANT

3. Factors for Success of Power
Plant
• Project Financials
– Project cost
• Capital Cost
• Interest Cost
• Development Expenses
– Operating cost of the plant
• Heat rate

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

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

6. 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

7. Conventional Power Project
Execution
Appointing an Engineering Consultant
Buying out multiple packages
Awarding Construction Contract
Project Management
Liaison with various agencies
Checking on performance

8. The EPC Way
Single point responsibility for:
System Configuration
Basic Design
Procurement
Erection & Commissioning
Performance Trial
Training & Handing over

9. Conventional Execution-Limitations
A
Overall Project
• Overall performance
guarantee
• Overall schedule
• Overall price
guarantee
Conventional Route
• None
• Individual package supplies
• Does not constitute overall
performance guarantee
• Difficult to fix responsibility
•None
•None

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

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

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

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

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

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

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

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

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

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

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

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

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

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

24. The EPC Advantage - A Case
Study
Tangible Benefits
1
2
3
4
5
Boiler & Accessories
Steam Turbine Generator
Electricals
Civil Work
Miscellaneous Items
Engg. & Project
6 Management Cost etc.
7 Erection & Commissioning
8 Total Project Cost
IDC
Development costs
Difference in LD's
66
78
45
21
15
66
78
45
21
15
6.6
7.8
2.25
1.05
1.5
5
30
30
30
0.5
1.5
260
?
?
285
Fixed
Fixed
21.2
7.3
LD on Total
28.5 Value for EPC

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

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

27. THANK YOU