How difficult is it for construction enterprises to transform into epc business model?

Core Tip: For traditional domestic construction general contracting enterprises, the main driving force to realize EPC transformation depends on either technology or comprehensive management ability. Obviously, the transition to EPC mode is not easy.

On March 13, 2007, the former Ministry of Construction issued a new "Special Qualification Standard for Construction General Contracting Enterprises", which put forward higher requirements for special construction general contracting enterprises in terms of credit, personnel and scientific and technological progress. It can be clearly seen from this requirement that the former Ministry of Construction is actively promoting the transformation of construction enterprises from construction general contracting to engineering general contracting. General contracting is a popular construction project management model in the international construction market, among which EPC business model is the main model. blog.mypm.net

What are the advantages of EPC model?

EPC (project-procurement-construction) mode is one of the typical modes of general contracting, and it is also the general contracting of project procurement and construction. Under EPC mode, the project includes not only the specific design work, but also the overall planning of the whole construction project content and the planning and specific work of the implementation organization and management of the whole construction project. Procurement refers to the procurement of the whole construction project, including large-scale equipment, ancillary equipment and materials in the construction process, and construction refers to the construction process of general contracting. Under EPC mode, the owner can complete the rest of the work by the general contractor as long as he roughly explains the investment intention and requirements and the operating standards to be achieved by the project; The owner does not need to hire a supervision engineer to manage the project, but manages the project by himself or by appointing the owner's representative; The general contractor of the project bears most risks, such as design risks, natural force risks and unforeseeable risks. EPC model is widely used in some large-scale, long-term projects with considerable technical complexity, such as factories, power plants, oil development and other infrastructure. Compared with the current situation of separation of design, procurement and construction in China, EPC has the advantages of saving time, reducing costs and clarifying the responsible subject.

How difficult is it for construction general contracting enterprises to transform into EPC mode?

The integration of design, procurement and construction industries in China is the general trend. At present, internationally, enterprises with EPC capability are mainly driven by three forces, namely, comprehensive management capability, technical capability and core equipment manufacturing capability. At present, in China, many enterprises are transforming into EPC driven by their technical capabilities. These enterprises are mainly concentrated in chemical, nonferrous, black, electric power and other industries, mainly transformed from design institutes. It should be said that many enterprises have achieved initial results. Relying on their own advantages in technology and technology, they improved their overall project management ability by improving their comprehensive management ability, purchasing ability and post-service ability, and achieved initial success in actual operation.

For the traditional construction general contracting enterprises in China, the main driving force to realize EPC transformation depends on either technology or comprehensive management ability. Obviously, the transition to EPC mode is not easy. Then, how difficult is it for traditional construction general contracting enterprises to transform into EPC mode? From the point of view of project value chain, under EPC mode, the general contractor should complete the planning, organization, construction and operation of the project (as shown below), including early planning, process selection, scheme design, construction process management and later equipment debugging.