A large Indian EPC company serving the energy and infrastructure sectors urgently needed help in completing ongoing projects.
The key challenges faced for laying of new crude offshore transmission lines for a project in Saudi Arabia were as follows:
From the inception of the Project in May 2013 until the contractual completion date (Nov 2014) only 5% project progress was achieved.
- Original contract value was $30 million less than the cost to complete (CTC).
- No working capital was made available from the Client to complete the project.
- No proper project organization was in place, and there was a lack of procedures, competent resources and operational assets.
- The project completion date and project insurances had lapsed.
There was mistrust between X-PM’s Client and their Saudi customer
X-PM deployed an interim president to complete the project without damaging the Client’s reputation further. The plan was to:
- Rebuild the trust and confidence between X-PM’s Client and the Saudi customer.
- Establish a competent project team.
- Amend the contract, including getting extension of time to complete the project.
- Revise the project schedule with Client approval.
- Set up project office.
- Find subcontractors with the right capabilities.
- Develop a specific execution plan for offshore/installation including the subcontractors’ involvement for pipe laying and offshore surveys.
- Convince the Client’s Saudi customer to provide additional working capital and help in covering the gap between contract value and CTC.
X-PM’s interim manger quickly rebuilt trust with the Client’s Saudi customer and achieved the following results:
- The contract was amended and X-PM’s Client was given a 21-month extension from the original completion date.
- A project office was set-up and a new project organization was approved by the Client’s Saudi customer.
- A detailed revised project schedule and execution plan was presented and approved by the Saudi customer, including commercial proposals of subcontractors.
- X-PM’s Client reached an agreement with their Saudi customer to support the project with working capital within the original contract value and to look for ways of covering the CTC gap.