Research On Risk Management Of Large Hydropower EPC Project In The Tender Stage Based On The Owner’s Perspective

Hydropower project owner is the investor and beneficiary of the project.Enhancement of the owner’s understanding and management ability plays an important role in project implementation.Management and contract design in project procurement determines the direction of project management,That is an important factor for the success of the project,and is very important for the owners.The owner is the leading person in the choosing of construction management mode,Research on the risk management of EPC project procurement can promote the application of EPC in large hydropower projects in China.In this disseratation,through the analysis of the Yang Fang Gou Hydropower project,the main risks of EPC hydropower project have been got as follows:(1)Natural risks and accidents,including unfavorable geological conditions,force majeure and unexpected risks such as floods,mudslides,landslides and other forces majeure,etc.(2)Political and social risks,including permanent land acquisition,immigration risk,local government support risk,and the surrounding social risk of the project.(3)Economic and legal risks,including price risk,financing environment and interest rate changes,the increase of risks in the construction sector and the changes in laws and regulations after the signing of contracts.(4)Behavior risk,including the owners’ management behavior risk,tender documents and contracts cannot accurately and completely describe the scope and standards of the contract object,potential bidders receive asymmetric information in the tender stage,the owner lacks the ability to control the design optimization of the general contractor,conditions provided by the owner can not been provided,ability to fulfill all the contract of the general contractor,ability to fulfill all the contract of the engineer.Based on the research above,the EPC risk management of Hydropower project owners should be carried out at the tender stage as soon as possible,and the owners need to specify the organizational structure,staffing and work schedule.This risk management can be carried out in conjunction with other bidding preparations,but there should be enough time for risk management,for the risk management can be finished before the owner’s approval of the contract terms.Also the owners should evaluate the risk by diversified methods,and the risk management should be continued during the period of EPC contract performance.With the continuous effect monitoring of risk management,the risk management system of the whole construction period should be built.The practice of Yang Fang Gou Hydropower EPC project risk management proved that the method above is applicable to the risk management of large Hydropower EPC Project for the owners in the tender stage.It could be useful to the risk management practice for the similar projects.