EPC contractors can lower project costs with smart risk management techniques. Seek out EPC contractors with solid “bankability.” Learn more at
http://bv.com/
TRANSCRIPT
Ted Pintcke | Vice President, Energy, Black & Veatch:
Typically a private developer needs a firm lump sum price early in the project and EPC contract in hand, lump sum price, they go to the banks and seek financing for that project.
A regulated utility is a little different; often they'll finance projects on their own balance sheet. They're not going out to banks.
We do a lot of open book EPC-type contracting where we work with the owner on selecting equipment. Sometimes the owners want to carry the cost of the equipment on their books instead of built into an EPC price. Owners will share risk. Things like that can result in a lower price for the project.
Blake Childress | Senior Vice President, Design-Build, Black & Veatch:
Every project has a risk element to it and owners can participate in sharing that risk or they can choose not to participate in sharing that risk.
Ted Pintcke | Vice President, Energy, Black & Veatch:
We have to carry risk premiums, contingencies for those unknowns. So when an owner steps in and shares that risk, works with the OEMs they want, contracts separately with the OEMs, it's kind of a nice marriage because it again, it enables us to look at our risks and our contingencies differently.
Blake Childress | Senior Vice President, Design-Build, Black & Veatch
In my experience i have done several projects with private clients who waive the need for a bond because they know the company that they're hiring, like a Black & Veatch, they know they're going to be there at the end of the day to provide the services that they've signed up for even if there's an issue.
Ted Pintcke | Vice President, Energy, Black & Veatch
I would call bankability to mean somebody that has a strong balance sheet; they have a history of delivering on projects of a certain technology or in a certain location. The banks who are financing these projects would look at a contractor and say, “Can this entity perform this job?
Blake Childress | Senior Vice President, Design-Build, Black & Veatch
How many projects have you done that are like this, both in capacity and/or size?
Ted Pintcke | Vice President, Energy, Black & Veatch
Is this contractor going to complete this project on time? Do they have a history of doing that, and if there are issues, do they have the financial depth, strength to place the kinds of sureties necessary to provide that assurance? That’s what I would call bankability. I think that’s another one of our differentiators.
Risk Management and Bankability in EPC projects human resources jobs | |
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| Science & Technology | Upload TimePublished on 3 Sep 2015 |
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