EPCM Agreement with Gelecek Agro

Agricultural construction carried out using the EPC-contract allows the investor to estimate the temporary and financial costs required for the realization of the investment project, since the contractor performs both the tasks of the builder, project specialist and supplier. It would also be appropriate to note that the liability belonging to the EPC-contractor is limited to functionality. EPC-contract does not exempt from the following types of risks: financial-economic, EPC-contractor does not aim to achieve economic and financial results within the scope of the investment project; Legal security, the EPC-contractor does not constitute the initiator of the investment project; the technology process, because the EPC-contractor is not a technology supplier, can get more detailed information about the implementation of the EPC-contract in the agricultural industrial complex here. The described shortcomings of the EPC-contract abolish the EPCM-contract and create the most preferred option for the implementation of the investment project in agriculture. EPCM-contractor manages the implementation of the investment project based on a single responsibility.

In order to make a decision about investing in the creation of a financial model of a technical project and a business plan of an agricultural project, it should be worked on in an appropriate way. The FEED should be developed by specialized companies that have competence in the following areas: technical design of agricultural facilities; production planning of agricultural industrial enterprises; financial modeling and economics of investment projects in the agricultural industrial complex; public regulation of the agricultural industrial market; government support measures for the implementation of investment projects in the field of agriculture. In addition, a professional team of experts has been established at Future Agro, which realizes vertically integrated investment projects that are comprehensive in the agricultural industrial complex. The arrangement of the Frontend for the preparation of the basic engineering in the future Agro usually requires 4 meetings with the investor: 1. Interview: In the first interview, the investor; his ideas for the realization of the investment project in the agricultural industrial complex; Their views on the principles of creating product value; the goals aimed at the investment project;

Taking into account the existence of the investment area and existing limitations. The project concept determines the following: naming composition and volumes of manufactured products; preliminary assessment of raw material, material and resource needs; determination of the investment project value; an extended network schedule for the implementation of the project. 4. Meeting. Discussion and approval of the preliminary investment plan of the project. The creation of the investment plan of the project provides the opportunity to evaluate the concept, investment content and volume of the investment project. The pre-investment plan consists of two main parts: pre–investment stage – preparation costs for the realization of the project (project management, project design); investment stage – costs related to the procurement, construction and installation of technical equipment (equipment procurement), construction materials and structures (construction procurement); operating stage - implementation studies (operation), production of test products, verification of specifications and the start of a stable production process.

After the completion of the FEED and the approval of the basic conceptual engineering with the customer, the future contract with the customer is converted into a contract for the implementation of the project in the form of turnkey (or a new contract is signed). The EPCM-contract concluded with the future Agro includes the following: creation of conditions for the initiator of the investment project to receive government support; creation of the initiator of the investment project (legal follow-up); design of the management architecture by the initiator of the investment project; creation of an occupational safety strategy; conducting marketing research and analysis of retail chains on the development of the field according to the market segment of the products planned to be produced; creation of a documentation team for a technical project (process design packages); production-preparation of a financial plan; financial modeling for investment project and business plan; collection of basic permission documents; preparation of a risk management plan; design of construction for the ”project" phase; audit of documents related to the estimated calculation of project costs;

Future Agro conducts a 3-stage analysis of the bidders and their bids. Develops its own proposals for the technical and economic advantages and disadvantages of each commercial proposal. In case the customer has preferences regarding the equipment and materials used in the implementation of the investment project, compliance with the technical parameters and the specified requirements is evaluated. Therefore, the contract with the Future Agro is arranged in such a way that the customer can use an option that he prefers from his point of view. The most important function of the Future Agro is to synchronize the work of all participants in the implementation of the investment project, to solve the problems of dependence of one contractor on the work of another contractor, to supervise the fulfillment of obligations. This is the main advantage of Future Agro, which is a single responsibility center not only for the development of project documentation, procurement and construction within the scope of the EPCM-contract, but also for both the technological process and an effective investment project in general.