Root Cause Analysis of Project Delay in BGC-TEG Project

PT WEI is a company that the main business as fabricator contractor for oil and gas and renewable energy industry located at Batam, Indonesia, they have operate for more than 15 years. The company produce types of facilities such as Process Packages module, FPSO (Floating Production Storage and Offloading) Topside Modules, E-house module and Sub-Station packages for client from all over world. The problem on this research is the delivery delay issue during execution of the BGC-TEG project. the project that have scope of EPC (Engineering Procurement and Construction) contract for delivery process module include mechanical equipment, piping and accessories for client at middle east, the delivery project delay is 21 months from original contract 11 months. The research to determine main factor that contribute to the delay by quantitative method, to gain information and identify alternative for improvement action. The primary data gathered from interview with some person in charge team member of the project. The secondary data gain from internal company document, project record and report, and project repository data base. Study literature of some similar case of project delay from various papers and articles reviewed. Fishbone diagram as analysis method with framework based on PMBOK by Project Management Institute to gain the root cause factors and propose solution alternative action to prevent same issue happen on future.

Cost overrun in construction projects in Oman: Case study

There are many challenges in construction industry sector, and one of the most important and critical is completion of the project within the original contract value. As the issue of cost overrun in construction projects is spread worldwide generally and commonly encountered in the Sultanate of Oman.The main objectives of this study are to identify and determine vital factors leading to cost overrun in Building Projects in Oman, evaluate the impact of cost overrun in building construction projects and develop the best protocol strategy for project management teams that can be adopted in order to control the cost overrun in future projects. These objectives have been obtained through several methods, questionnaire survey,interviews with experts in construction industry. Twenty nine major factors lead to cost overrun were identified through literature review and studied in Sultanate of Oman.The study concluded that there are three major impacts of cost overrun in construction projects and industry which are time of completion, delivery of poor quality projects and delay of payment approval. Additional to that, Hire good Supervision Team, a good Cost Controller, Project Manager, a good project design team, well planning for pre-contract stage and proper procurement strategy. Consider the Risk assessment and Risk Control are crucial to minimize the cost overrun in building construction project in Oman. The study have recommended procedure to cost control in future project such as the Employer should have a proper tender analysis of the Contractor’s bid, Detailed design should be finalized before award of work and others.

Cost Escalation in Road Construction Contracts

This paper presents a study of cost escalation in unit price road construction contracts. The aim is to investigate why the final cost of contracts differs from the agreed contract cost following tendering, both to identify causes of observed discrepancies and to suggest measures that could improve the planning and delivery of future projects. Road projects often consist of several contracts and as they account for the biggest costs of the projects, cost escalation in the contracts may increase the risk of project cost overrun. Even if contract cost performance is an important indicator of project success, it may be too simplistic to equate this with project success. It is quite possible to deliver a project within budget even if contract costs escalate, as long as the project cost contingency is adequate to cover such escalations. However, escalations in contracts increase the risk of project overrun and may lead to other problems such as conflicts and delays. The results show that most of the studied contracts experienced cost escalation. The main cause of the escalation was change orders to the scope that were not covered by the original contract. In addition, the results indicate that complexity represented by contract size, duration, and urban location increases the risk and size of cost overrun. Based on these findings, the paper presents some recommendations on how contract delivery can be improved as well as some implications for future research.

SPECIFIC PROBLEMS ARISING OUT OF EXERCISE OF THE RIGHT OF PRE-EMPTION IN RESPECT OF PARTICIPATORY INTEREST (SHARES)

The paper provides analysis of the rights available to the parties of the legal relationships resulting from exercise of the right of pre-emption in respect of the participatory interest (shares), including, in particular, transformation powers available to the right holder, claims against the transferor (grantor) and its counterparty, as well as the right to take away the participatory interest (shares) from such counterparty. The author demonstrates that for the purposes of resolving theoretical and practical problems arising in this connection the constitutive theory – according to which the exercise of the right of pre-emption leads to the emergence of a new contract between the right holder and the transferor (grantor) generally on the same conditions as the original contract between the transferor (grantor) and its counterparty (the principle of identity) – has indisputable advantages. The paper, among other things, provides indepth analysis of individual cases of deviation from the principle of identity as well as the problems relating to modification, termination and invalidity of the original contract. In addition, the author examines in detail the rights available to the counterparty and the transferor (grantor), including the particularities of settlement in case where the right holder takes away the participatory interest (shares) from the counterparty as a result of exercise of the right of pre-emption.

Contract Design and Related Agreements

As we delve into value deconstruction, the number of contractors will increase a great deal, and every specialty will have its own parameters. The contract by its own will not be able to accommodate all clauses and conditions that may be due for changes. Now imagine, what would happen if important information like trade secrets of any corporation or business were to be leaked to competitors? And wouldn't it be so much better to legally oblige to privacy and urge those who consent to keep the information in question completely under wraps? For this reason, it is important to have an ecosystem of agreements such as NDAs, SLAs, and others to complete the chain and allow for efficient governance and risk management considerations. NDAs and confidentiality provisions have groundbreaking propensity. The design of such agreements is fundamental and various parameters must be considered. This chapter directs attention to these subjects and concerns by discussing the various types of complementary agreements and how they can be attached to the original contract to add value and reduce risk.

Power of Arbitration Agreement

Arbitration certainly plays a pivotal role in characterizing commercial relations that are of various kinds among individuals, and this, in turn, leads to make arbitration clause contained within contracts so as to settle disputes created by such contracts. It, in a way or another, aims at preventing litigants from recourse to a court of law. Instead, litigants should be fully committed to refer their disputes to a well-trusted arbitrator whose responsibility is to adjust their de facto or potential dispute, and should also be committed to put the arbitrator's judgment into effect. This paper sheds some light on determining the principle of power of arbitration agreement when an original contract is prepared. It provides the definition, the concept and the legal foundation of power of arbitration agreement.