Turnkey Epc Agreement

One of the particular forms of international activity is a turnkey project. Turnkey projects mean a contract under which a company undertakes to fully design, build and equip a manufacturing/business/service facility and to hand over the project to the buyer if it is operational for a fee. Engineering, procurement and construction (EPC) contracts, sometimes referred to as turnkey contracts, are similar to design and construction contracts, since there is only one market for the design and construction of the project, but as a general rule, with an EPC contract, the client has less control over the design of the project and the contractor takes more risks. They cannot subdivide this project into separate activities such as civil, MEP, etc., and assign it to different contractors on a turnkey basis. While, on a CBE, you can only outsource MEP work on CPEs or a sewage treatment plant (CCA), work is allocated to CPEs. However, the total cost of preparing CPR and turnkey projects ordered by India should be the same, regardless of the type of control to which it is subject. This is a very interesting point that makes it a little easier for everyone to perform contractual functions for all kinds of business in India. The fundamental difference lies in the role of the holder of the CPE or the EPCM. As part of an EPC contract, the EPC contractor develops the project from start to final. The owner or general manager of the EPC project provides the EPC supplier with a detailed project, including technical and functional specifications, so that the CEP contractor can, within a specified time frame, complete and deliver the project at the “key rotation.” This is why CPE contracts are often referred to as “turnkey.” The volume of work should be clearly defined in the contract documents; Therefore, changes to the scope of work in the CBE treaties should not be a common feature. For this reason, a CBE contract is often a fixed-price contract or a lump sum contract. Any cost shortfall is a risk to the CPR holder, so cost control is his top priority.

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