Mitigating the Risk of Delays in Power Plant Projects

This article explores how the EPC contractor's risk of project delays related to the default of a key component supplier can be mitigated contractually. Only a limited number of the remedies that are regulated in standard construction contract forms are designed to support the EPC contractor's chances of quickly and successfully replacing a key component supplier, which is often the only relevant remedy worth pursuing for an EPC contractor in case the supplier lacks the ability or will to perform the sub-contract on time. Replacing for example a boiler builder in a power plant project is fundamentally problematic because the boiler is a highly complex and often tailored component. The EPC contractor can, however, seek to contractually alleviate the inherent challenges of replacing a defaulting boiler builder by facilitating quick and unhindered access to the three main elements, which the construction or manufacturing of most key components entails, namely: The hardware, the design, and the manpower