Finaam Corporation on request of the Customer can realize Investment Objects “Turnkey” from concept development to the creation of the object and its exploitation. In order to maximize the convenience for Customer Company uses a contract of providing investment, the general contract and the contract on the basis of EPC (Engineering, Procurement, Construction) and ЕРСМ contracts (engineering, procurement, construction management).
EPC-contracts used in construction “Turnkey” and involve the performance by the contractor of all stages of the process: engineering, procurement and construction. EPC-contracts bind the Customer and the General Contractor, who is performing for a fixed price the all amount of work of the Investment Project and to take all risks for its implementation over, starting from the basic design to commissioning the Object and transfer it to the Client.
At the conclusion of EPC-contract Contractor is financially responsible to the Client on all issues arising in the process of construction risks and ensures that all warranties will be fulfilled.
EPCM-contract – is an agreement between Customer and the Contractor to full Project management.
EPCM-contractor – the company, which takes over all the functions of project management, speaking on behalf of the Customer. In the field of project management Contractor is taking over the functions in projection; procurement of equipment, construction materials and equipment; on the organization and control of the construction and installation of equipment.
The EPCM-contract spells out details such as the total cost of the project, the deadline for the phases and commissioning, warranty work. The cost of the Project is formed considering remuneration of the Contractor, and depends on the level of risk allocation for the implementation of the Project between the parties.
General contract includes the steps from the idea to the object: Customer, tender, contract, projection and construction of the object.
Contracts for EPC and EPCM models have the following key differences:
In terms of objectives:
EPC contracts are often used for standard projects, by which with accurate certainty can calculate the total cost;
EPCM model used in projects of high complexity, where the customer wants maximum details to control the process of building by himself.
In terms of risk allocation:
In EPC contracts the maximum number of risks lies on the Contractor; in EPCM they are distributed between the Contractor and the Customer.
In terms of price:
To EPC applies fixed-price (Lump Sum); in EPCM model price based on the principle contractor’s fee and direct costs (Cost Plus).
In terms of control over the process:
In the EPC – the choice of sub-contractors and management of them focused by the Contractor;
In EPCM contracts – distributed between the Contractor and the Customer.