Research On The Optimization Of Cost Of Sino-Foreign Cooperative EPC Project Of C Company

Sino-foreign cooperative EPC project is a “transition mode” for EPC development,and it is currently playing an active role.However,cost overrun has been a key factor determining successful implementation of such project.Against the background,Company C was troubled by cost overrun and declined profit margin.Therefore,it is an urgency to enhance cost management level and implement more successful projects.In this paper,considering research in recent ten years at home and abroad,the author narrated concepts and basic theories of cost management of engineering projects and that of EPC.Subsequently,an analysis was conducted on cost performance deviation of project,and it was found Company C faced problems during cost management of EPC project.In this regard,factors were explained via questionnaires that affected cost overrun of EPC project.In addition,the author also applied principal component analysis,correlation analysis and regression analysis,to discover that these influencing factors included incapability in project team management,project changes,underestimation of project budgets,incomplete prediction of project risks,and lack of whole life cycle management.Cost overrun usually occurred at construction phase and project cost was mainly subject to the Owner.In view of this,the author,from the perspective of contractors,proposed improvement principles and measures to optimize cost overrun of EPC project.In other words,they should control key factors resulting in cost overrun at different project stages;prepare appropriate project budgets;draw project reserves in advance;perfect change process of project;strengthen dialogues with the Owner.Through the optimization design of the company’s project cost management method,the project cost can be reduced,the project profit margin can be improved,the project can be handover smoothly,and the competitiveness of the company can be enhanced.In summary,this paper can also provide useful inspiration for the optimization and improvement of cost management of Sino-foreign cooperative EPC project.