Gelecek Agro

What is EPC?

When carrying out investment projects in the agricultural sector in the Russian Federation, the client usually acts as a technical client himself. In other words, it concludes direct design, contracting and supply contracts.

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+90 534 832 48 63

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info@gelecekagro.com.tr

What is the implementation of major investment projects in the agricultural industrial complex?What are EPC and EPCM contracts for the implementation of investment projects in agriculture?When carrying out investment projects in the agricultural sector in the Russian Federation, usually the client acts as a technical client on his own. In other words, it concludes direct project design, contracting and supply contracts.The historically formed pattern of Soviet industrial construction continues to have a significant impact on Russia's industrial-construction complex.However, general contracting forms the basis for the realization of the investment project. The traditional tasks of general contracting are the supply of construction materials and structures, construction and installation works.However, the ongoing globalization and developing digital technologies in an increasingly competitive environment require the application of efficient, economically functional production solutions.

At the same time, new requirements are being implemented for the implementation of large-scale investment projects in the field of technical solutions, engineering activities, management standards.
It should be noted that Decently organized business processes between all participants (investors, customers, technology companies, project institutions, contractors, suppliers) form the basis for the success of a large-scale project.
Both the efficiency of the project work and its financial viability depend on the simultaneous joint work of the specified participants.
In our opinion, the experience of western engineering companies in the field of construction is remarkable. They combine project design, the supply of raw materials, materials and equipment, construction ”in one hand". Such a structure is most in demand among customers and investors. Dec. The form of interaction between the customer and the contractor is the EPC-contract.Dec.

What is the essence of EPC contracts in agriculture?
EPC allows the temporary and financial costs of the investment project to be estimated by investors and customers for the realization of the investment project.
Note:
EPC (Engineering, procurement and construction) – this abbreviation means project design, procurement and construction contract.
EPC-contracts have become widespread in large-scale projects of the petrochemical and mining industry, the electricity industry.
The EPC-agreement creates a single center of responsibility for the following:
Project Planning;
Purchase of technical equipment; Procurement of construction materials and structures; Construction and installation.

It should be noted that according to common practice, the customer tries to impose the responsibility of the technical process on him by entering into a contract with both an EPC contractor and a technology supplier at the same time, even if the EPC contractor does not accept it.
The EPCM-contract provides the customer (investor) with the opportunity to get a turnkey agricultural business.
The most preferred option for an investor in the realization of an investment project is the EPCM contract.
1. EPCM-contract - is not a project design, procurement and construction contract, but a business establishment contract with guaranteed parameters.
2. The ERSM-contract takes the technical, production, economic, financial and legal risks over the customer.
3. ERSM-contract - is a management contract for the implementation of an investment project based on a single responsibility.

EPCM - it is the conclusion of a contract with a single contractor at a fixed price for the realization of the project on a turnkey basis.
The ERSM-agreement attaches great importance to the creation process of the initiator of the investment project. The main features are the legal aspects of the successful operation of the investment project at each stage.
Special attention is paid to issues related to the legal security of both the project and its initiators.
Only the ERSM deals with the economic dimensions of an investment project:
Production planning;
Calculation of direct production costs;
Financial modeling;
Feasibility assessment of investments;
Analysis of the financial validity of the project.

Apart from that, unlike the EPC-contract, the ERSM-contract includes technological engineering:
Development of a technical project, Transfer and implementation of technologies, Selection of technical equipment, even training of personnel on duty.
EPCM is used during the realization of projects that are technologically difficult by using living systems - agriculture, agro-industrial complex:
It is a typical feature of the agricultural industrial complex that there are a large number of interconnected technical processes that take time to obtain the final product.
In order to get results during the production of agricultural industrial complex products, the activities of many participants must be integrated.
One of the most important participants of the investment project are the financial institutions October that finance the project and impose additional restrictions on it for the division of risks (banks or financial leasing companies).

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EPCM Agreement with Gelecek Agro

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What is EPC?

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EPCM Agreement with Gelecek Agro

The use of the EPCM-contract for the realization of the investment project in agriculture is justified in terms of creating a high-tech project with multiple multifaceted business processes centered on a single responsibility for the final result.

What is EPC?