EPC Contracts: How good are they?

 

EPC stands for Engineering, Procurement, and Construction. An EPC contract, also called a turnkey contract, is an agreement between a project principal/owner and a contractor where the contractor is responsible for the completion of the project and handover to the principal.

An EPC contract covers the entire lifecycle of a project. Therefore, as the name suggests, the EPC contractor or the contracting company is responsible for handling the engineering design, procuring the necessary materials, building the facility, and delivering it to the principal/owner.

Why are EPC contracts preferred?

EPC contracts are an excellent risk mitigation tool as the contractor is responsible for everything in the project. An additional benefit of EPC contracts is that lenders are more likely to finance a project if there are fixed timelines and prices.

What are the advantages of an EPC contract?

• A single point of responsibility: An EPC contractor is responsible for taking up all the work in a project, including designing, procurement of materials, commissioning, and handing over the finished project. Hence, the principal would only need to convey any issues to the contractor. Furthermore, the contractor will be responsible for any defects and rectifications to the agreed-upon project expectations.
• Fixed prices and dates: EPC contractors submit and adhere to a fixed price and completion date for all the phases. Any cost overruns or delays will have to be compensated by the contractor.
• Performance guarantee: EPC contractors provide performance guarantees to the principal backed by performance liquidated damages which are payable by the contractor for any losses or damages suffered due to the contractor’s actions.
• Limited involvement in the project: With EPC contractors assuming full responsibility, principals do not need to get involved in all the aspects of decision-making for the project, and the contractor is responsible for the appointment of subcontractors and completion of the project with quality and efficiency.
• Security: EPC contracts protect principals from potential financial losses due to the transfer of project responsibilities, financial undertakings, and project completion to the contractors.

What are the disadvantages of EPC contracts?

• Less involvement: The principal only oversees and approves certain aspects of the project. Therefore, it allows the principals limited participation and intervention in the project.
• Reduced flexibility: EPC contracts are not very flexible once the scope of work is decided. Change in the scope of work may result in extra charges for the principal.
• Higher costs: As the nature of payments in EPC contracts are usually lump-sum or fixed price, the principals may have to shell out a high initial cost to contractors. The contractors charge a premium on the services to account for uncertainties.
• Complex documentation: Principals enter into complex agreements that require proper and thorough understanding and negotiation.

In conclusion, EPC contracts are popular as they provide a single point of responsibility, certainty, and efficiency. The drawbacks are present but could be minimal if the right EPC contractor is selected. Shapoorji Pallonji’s EPC division has consistently been one of the best EPC contractors in the world and has completed large-scale turnkey projects over the years.

You can read more about SP EPC at www.shapoorjipallonji.com/company/SPEngineeringProcurementAndConstruction.

Originally published at http://realestateandepc.wordpress.com on November 22, 2023.

Understanding large-scale infrastructure projects

 

Start checking all of the things you have done from the list mentioned here: Switched on a tube light, powered on your laptop, visited your local library, went on a road trip. If you answered yes to more than one of these activities, then your life has been impacted by more than one infrastructure project.

As the scale suggests, a large-scale infrastructure project is a massive undertaking involving everything from installing power grids, establishing dams, and expanding a hospital wing to constructing a new school and even a senior citizens’ park. All of these facilities ensure that people have access to clean water, quality education and healthcare, transport, and electricity.

Unlike a seemingly straightforward construction project, an infrastructure venture serves higher goals of nation-building, facilitating economic growth and improving the quality of lives of citizens with facilities and services that stimulate connectivity, meet basic needs of livelihood, provide opportunities for individual growth with the development of schools and universities, and encourage recreation with the creation of parks and community playgrounds.

Infrastructure projects directly impact the communities they are built in, and since these projects will remain permanent for the foreseeable future, every step in the planning process is a carefully considered decision that in some cases, like renewable energy projects, happens years in the making. During this time, complexities like policy changes, shifting governmental priorities, economic downturn, and supply chain constraints such as the one we witnessed with COVID-19 can significantly impact project timelines, available labour, and its associated costs.

Taking into consideration its evolving nature, infrastructure projects require leadership that remains strident in the face of uncertainty and changes to ensure a society has the required facilities to grow, develop its potential, take advantage of opportunities – and ultimately lead a full, comfortable life.

So, the next time you switch on a light, charge your phone, step onto a train or drive along highways, you know that these actions are a culmination of thousands of hours, countless labour, and numerous decisions aimed at making your life easier, simpler, and smoother.

Originally published at http://realestateandepc.wordpress.com on October 31, 2023.

Shapoorji Pallonji Commercial Buildings Construction Projects

 

Shapoorji Pallonji, a name synonymous with excellence in the construction industry, has a rich history of delivering high-quality projects across India and beyond. They have designed and built diverse civil and structural engineering landmarks that serve millions globally.

Here are some remarkable projects undertaken by Shapoorji Pallonji Engineering & Construction.

1. BIAS Plant for MRF Tyre

Shapoorji Pallonji’s Engineering and Construction segment played a crucial role in completing the construction of the BIAS plant for MRF in Dahej, Gujarat. This facility includes a mixing plant, storage, and various other units, highlighting their expertise in industrial construction.

2. Oman Across Ages Museum

The ‘Oman Across Ages’ museum in Nizwa, Oman, is a testament to Shapoorji Pallonji’s international reach. This project showcases their capability to construct world-class cultural and educational institutions.

3. Kalyan Singh Super Speciality Cancer Sansthan:

Shapoorji Pallonji’s commitment to healthcare is evident in constructing the Kalyan Singh Super Speciality Cancer Sansthan in Lucknow. This complex includes various blocks, such as OPD, OT, and radiology, reaffirming their role in contributing to healthcare infrastructure.

4. Dr. B.R. Ambedkar Telangana State Secretariat:

Shapoorji Pallonji’s expertise extends to the construction of state-of-the-art government buildings. The Dr. B.R. Ambedkar Telangana State Secretariat is a massive project, showcasing its capability to handle large-scale civil, structural, and architectural projects.

5. Jay Prabha Medanta Super Speciality Hospital:

The Jay Prabha Medanta Super Speciality Hospital is a state-of-the-art healthcare facility in Bihar. Shapoorji Pallonji’s commitment to affordable healthcare and modern technology is evident in this project, paying homage to the legacy of Jayaprakash Narayan and Prabhavati Devi.

6. Pune Metro Elevated Stations:

Shapoorji Pallonji’s contribution to urban infrastructure development includes the construction of elevated metro stations in Pune. These stations are integral to the city’s public transportation network.

7. Kartavya Path:

Kartavya Path in New Delhi exemplifies Shapoorji Pallonji’s commitment to urban redevelopment. This project revamped the iconic Rajpath, showcasing its skills in creating public spaces that combine functionality with aesthetics.

8. Medical College at Palamu, Jharkhand:

The construction of the Medical College at Palamu is a testament to Shapoorji Pallonji’s role in strengthening the educational and healthcare infrastructure in India.

9. ITC Narmada Hotel:

Shapoorji Pallonji’s expertise in constructing five-star hotels is evident in the ITC Narmada Hotel in Ahmedabad. The LEED Platinum certification highlights their focus on sustainability and innovation.

10. IKEA Retail Store:

The construction of the IKEA Retail Store showcases Shapoorji Pallonji’s capabilities in delivering complex, large-scale commercial projects, meeting international standards.

Shapoorji Pallonji’s diverse portfolio of commercial building construction projects reflects its commitment to innovation, quality, and sustainable development. These projects not only contribute to the growth of infrastructure but also leave a lasting impact on the communities they serve.

Visit www.shapoorjipallonji.com/business/EngineeringAndConstruction to learn about the other commercial construction projects by Shapoorji Pallonji.

Originally published at http://realestateandepc.wordpress.com on October 31, 2023.

Undivided Share (UDS) in Real Estate: What is it and why is it important?

It is no secret that trying to purchase an apartment means jumping through a whole lot of hoops. There are various hidden charges, a lot of legal jargon, and many specific terms which need to be understood. One of these is Undivided Share of Land or UDS. 

What is UDS?

Undivided Share of Land (or UDS) is the land that is allotted within the residential development when one purchases an apartment. This share of land has no defined boundaries and is associated with every flat that makes up the apartment complex. 

Often, while purchasing a home, especially an apartment, buyers tend to refer to the built-up area to analyse the cost of the home. However, the UDS is the most crucial factor in determining the true worth of the home. 

Over time, the value of the building itself depreciates but the value of the land the building is built on (i.e. the UDS) appreciates. Therefore, if the building is demolished or acquired by the government, the compensation to be given to the flat owner is calculated based on the UDS of the flat and not just its built-up area. Additional features such as owning a parking spot can add to the UDS of your apartment, thus increasing its value. 

How is UDS calculated?

UDS is a ratio between the amount of space occupied by one flat to the total number of flats in the development. To calculate UDS, one must divide the area of one flat (in sq. ft.) by the total area occupied by all the flats in the building (in sq. ft.) and multiply that by the total land area of the development. 

Why is UDS important?

Ideally, the UDS should match or be 1.5 times that of the built-up area of your flat. However, there is no authority in place to enforce such regulations. Thus, it is important that you ensure that this is followed since remuneration in case of redevelopment depends on the UDS of the flat. The UDS of every flat is usually mentioned in the Agreement for Sale. In case it is missing, the buyer can question the builder about the same. 

Knowing the UDS of the flat is essential while purchasing an apartment. To this end, one must ensure that the builder and developer of the flat is trustworthy and transparent. Shapoorji Pallonji Group’s brand – Joyville Homes – is committed to ensuring complete transparency and quality construction to residents. Joyville Homes provides well-designed, affordable housing all over the country. 

Visit https://www.joyvillehomes.com/ to learn more about these projects and their specifications.

Originally published at http://realestateandepc.wordpress.com on October 11, 2023.

Top 10 Civil Engineering Companies in India

 

Civil Engineering is an engineering discipline that deals with constructing and maintaining the infrastructure of a region such as roads, bridges, canals, airports, rail and metro lines, dams, sewage systems, etc. It is essential to provide a population with the tools and infrastructure they need for efficient day-to-day functioning.

Civil engineering has played an important role in turning India into the economic powerhouse it is today.

Here is a list of the top civil engineering companies which have contributed to the development of the country with their projects.

1.SP Infrastructure (Shapoorji Pallonji Group)

Shapoorji Pallonji Infrastructure (SP Infra) is part of the Shapoorji Pallonji Group and has delivered high-impact infrastructure projects worldwide for 157 years.

The company was founded in 1865, with the Malabar Hill Reservoir being one of its first projects. Since then, SP Infra has maintained a legacy of high-quality, sustainable construction projects with timely delivery, while also adding value to local communities.

2. Afcons Infrastructure Ltd. (Shapoorji Pallonji Group)

Afcons Infrastructure Ltd. is another infrastructure powerhouse under the Shapoorji Pallonji Group with a history of completing extremely challenging and complex infrastructure projects. It is currently valued at around $1.25 billion.

With a $350 million equipment fleet, Afcons Infrastructure is one of the fastest-growing civil engineering companies in India (in the large category).

3. Punj Lloyd

Punj Lloyd was started in 1982 by Atul Punj as a pipeline company. Today, it has more than 50 subsidiaries and contracts in over 60 countries.

Some of the company’s notable projects include the Vijayawada Road in Hyderabad, Sikkim’s Greenfield Airport, the Bengaluru Metro, and the Changi Airport Terminal 2 Extension.

4. Consolidated Construction Consortium Ltd.

The Consolidated Construction Consortium was founded in 1997 in Chennai. Today, the company has a total revenue of $1.99 billion. With more than 900 projects under its belt, the company is one of the leading civil engineering companies in the country.

The first LEED Platinum-certified Green Building in India at Hyderabad, the Morning Star Church in Velankanni, Tamil Nadu, and Asia’s second largest dome — Gachibowli in Hyderabad are some of its most notable projects.

5. BGR Energy Systems Ltd.

BGR Energy Systems was established in 1985 as a joint venture between GEA Energietechnik GmbH, Germany, and Mr. B. G. Raghupathy. It is one of the rapidly growing names in the electricity industry in India.

BGR provides turnkey thermal and gas plant solutions, supplies supercritical steam generators, works on hydroelectric power projects, and manufactures and supplies pipeline equipment.

6. Bridge & Roof Co. (India) Ltd.

Bridge & Roof Co. has been part of the construction industry for more than 100 years. During this period, they have worked with almost all of the major project implementation authorities in both the private and public sectors.

Bride & Roof is a total solutions conglomerate with services in design and engineering, project management consultancy, infrastructure development, EPC solutions, and IT instrumentation and automation, among others.

7. L&T Engineering and Construction Division (L&T ECC)

Larsen & Toubro (widely known as L&T) was founded in 1938 by Henning Holck-Larsen and Soren Kristian Toubro, two Danish engineers, in Bombay (now Mumbai). Since then, it has grown into a multinational corporation, with services in technology, engineering, construction, manufacturing and banking.

The Riyadh Metro, Mumbai Airport’s Terminal 2, and the Statue of Unity in Gujarat are just a few of the most notable projects undertaken by the company.

8. Tata Projects Ltd.

Part of the Tata Group, Tata Projects Ltd. is one of India’s most recognisable infrastructure corporations. The company provides end-to-end services in sectors such as industrial infrastructure, urban infrastructure, and utility services.

Some of the company’s notable projects include the Prayagraj Airport Terminal Building, an Integrated Cryogenic Engine Testing Facility for the Indian Space Research Organisation (ISRO), and nine metro projects, including ones in Mumbai and Delhi.

9. Hindustan Construction Company (HCC)

Established by the industrialist Seth Walchand Hirachand, the Hindustan Construction Company (HCC) has been building innovative and complex infrastructure projects since 1926.

HCC is responsible for constructing more than 4036 lane-km of roads across the entire country. Some of these include the NH-3 in Maharashtra, the Mughal Road in Jammu and Kashmir, and the Chennai Bypass in Tamil Nadu.

10. Jaypee Group (Jaiprakash Associates Ltd.)

Founded in Noida in 1979, the Jaypee Group is a major player in the construction of hydroelectric power plants. The Sardar Sarovar Dam, Tehri Dam, and Indira Sagar Dam are some of the main projects undertaken by the company.

The companies under the Shapoorji Pallonji Group are heavily involved in the construction, civil engineering, power generation, water treatment, and real estate industries. To learn more about the group and its companies, visit https://www.shapoorjipallonji.com/

Originally published at http://realestateandepc.wordpress.com on September 22, 2023.