Turnkey EPC Contracts

Session 1 – The Big Picture

• Risk identification

• Cost overruns
• Delays
• Performance re specification

• Liquidated damages

• Why important
• Consequences if absent
• Caps in infrastructure and utility projects
• Caps in industrial and extractive industry projects
• Consequences if containing punitive element
• ‘Policing’ the damages

• Performance bonds

• On-demand
• Caps

• Retentions

• Duration of retentions
• Illustration of their effectiveness

• The EPC project management of scope, cost, time
• The importance of functional specifications

• The FIDIC EPC concepts
• Comparison with circumstances where absent

• Design responsibility
• Variation and change orders

• Compliance with laws and regulations
• Cost-benefit-analysis
• Who can authorize it?
• Lender protections

• Completion guarantees

• Theoretical method of calculation
• Standardisation of approach

• Standard form documentation

Session 2 – The Documentation

• The FIDIC turnkey EPC contract agreement – 2017

• General conditions
• Particular conditions

• Circumstances where turnkey EPC (Engineering, Procurement and Construction) is not feasible

• g. offshore wind

• Division and allocation of risks
• Commencement
• Fossils and artefacts
• Inspection

• Testing
• Rejection

• Delays

• Suspension
• Resumption

• Taking over

• Completion tests

• Defects liability
• FIDIC EPC Contract price and payment

• Price variations and adjustments

• Termination by employer
• Suspension and termination by contractor

Session 3 – Other Issues

• The construction tendering process

• Pre-qualification
• Invitation to tender
• The bids and bid bonds

• Contractor’s claims
• Structure of insurances

• CAR, ALOP, DSU
• Marine cargo
• Public liability

• Force majeure

• Natural FM
• Political FM

• Dispute adjudication

• The ADRP process
• Enforcement

• Environmental impact analysis and environmental liability
• The six ‘killers’ of project finance

Session 4 – Case Study

• Review of a series of cases where problems evolved during the construction implementation phase, with varying degrees of success in dealing with the resultant issues

Our trainer has a unique blend of experience in Law, Corporate Banking, Investment Banking, Corporate Financial Management, General Management and Workout. He has gained a worldwide reputation for the quality and depth of his training courses which have been developed and presented over 20+ years.

• He trained as a lawyer at Cambridge and the Middle Temple and was called to the English bar.
• 5 years with an American bank (Chase), the world’s largest financier of oil & gas projects, as a corporate relationship manager in New York and London. Whilst in this role, he was exposed to the development of the North Sea projects and petrochemicals.
• 6 years: investment banking in Hong Kong and London (Wardley – the investment bank subsidiary of HSBC), primarily involved in mergers and acquisitions and corporate restructurings.
• 6 years: CFO of a public group with a joint head office in the United States and Australia. In this role he was engaged in some 35 acquisitions, over 20 equity raisings and a large number of complex financings, many of them structured on a limited recourse basis.
• 18 months: responsible for the ‘workout’ of a company in severe financial difficulties, being appointed as General Manager by KPMG.

For the past 20 years, our trainer has acted as an independent consultant and financial trainer. On the consulting side, he has been primarily involved in the financial modelling and structuring of power generation, LNG, mining, and petrochemical projects, as well as undertaking project vetting for a number of clients. On the training side, he conducts training courses in Financial Modelling, Loan Documentation, Project Finance and Corporate Finance, Corporate Valuation and M&A.

• To identify the significant EPC contract risks that are present in the construction phase of any project.
• To observe how those risks can be allocated, together with the variant arrangements that can be adopted.
• How those structures are captured within the FIDIC Silver Book.

• The intent is to link the commercial aspects of the pre-completion phase to the documentation that controls it.
• This Turnkey EPC contracts training course has a strong practical bias.
• Participants will take away a substantial body of written materials for further investigation and research.
• EPC contract training will be accompanied by videos prepared by the trainer.

In the great majority of project financings, the greatest challenge is to get the infrastructure built and get it to work to specification. Once it works, the chances of it subsequently failing are remote, save for political interference risk or macroeconomic risk. Accordingly, this pre-completion phase is ordinarily the period of greatest risk to both the financiers and the Sponsors of the project. This Turnkey EPC contracts training course will enable participants to identify the various and significant risks that are present in the construction phase of any project and to observe how those risks can be allocated, together with the variant arrangements that can be adopted. The treatment then follows how those structures are captured, and the contractual protections that are put in place in the FIDIC Silver Book.