BrazilEnsuring the successful delivery of renewable energy projects
With more and more renewable energy initiatives being launched in the Middle East, it is becoming increasingly important to ensure the successful implementation of such projects. Connor Curran and David Murphy from FTI Consulting share key success factors for clean energy project delivery.
An integral element of the national strategies of most countries in the region, green energy has made striking gains in the Middle East over the past five years. However, many alternative energy projects are the first of their kind, which can present governments, contractors, developers and other parties involved with significant challenges.
As projects are exposed to (significant) risks of project delay and additional costs, it is crucial to identify risks at an early stage and implement measures to avoid or mitigate the risks as appropriate. The earlier that risks are identified and planned for, the greater the chance of overall success.
An overview of measures that could be considered across the project lifecycle:
Pre Contract
The pre-contract stage of any project provides the foundations for effective and post-award contract management. Key areas to address are:
- Contract drafting, execution, and advice: Clear drafting, avoiding repetition and reducing ambiguity leads to more certainty in the pricing and project schedule.
- Critical success factors: Assessing project targets, interim milestones, and project KPIs to keep the project on track.
- Procurement advice: The right procurement methodology with the correct suppliers is crucial. Management of provisional sums and long lead items is particularly important.
- Risk allocation: Review and understand risk allocation and the party in control of that risk to prevent misunderstandings.
- Bonuses: Consideration of milestone bonuses and not just employer damages.
Project Execution
To ensure effective project execution, leading to successful project completion, many aspects need to be considered during construction and commissioning. Key areas to address are:
- Project controls: Evaluation of budget, schedule, procurement, and risk assessments.
- Project records: Accurate records are essential but are of little use if they get lost. Use industry-leading software to store and collate necessary project documents.
- Contract administration and management: Project correspondence must be drafted appropriately, including daily protection of interests by robust administration of the contract.
- Change management: Changes on construction projects are inevitable and may result in additional costs and/or additional time. Effective management of such changes will assist the parties and reduce the risk of disputes arising.
- Dispute avoidance and resolution: Effective and swift resolution of disputes is essential to give construction the best chance to stay on track, boost confidence, and protect all the parties involved. Hold regular meetings and aim to close out matters on a quarterly basis or sooner.
Beyond the technicalities of risk governance, a successful construction project delivered on time and within budget relies on strong leadership, ongoing team collaboration, as well as the setup of an effective project management approach. A collaborative approach between all concerned parties and project stakeholders should be considered as project success will benefit both the employer and the contractor.
