Transition from Contractual to Turnkey Projects

Turnkey

Contract

One agency is responsible for total design, execution and completion of the project.

Participation of all consultants starts at an early stage of the project.

Client has to appoint various designers and subsequently various contractors for different disciplines.

The client & Principal Contractor are forced to do proper planning before the project starts.

It helps to determine the total scope of the project. 

The Cost of the project is finalized before work  starts.

Though the budgets for each discipline are done before the start of the project, the final cost is seen only after project completion.

The Principal Contractor does the coordination between various agencies including the liasioning of permissions from authorities like MPCB, factory inspector, CCOE, MIDC etc.

Coordination between the various designers & contractors is difficult and time consuming.

Client has to arrange for a project management team to monitor the progress as well as coordination between consultants.

Since Principal Contractor is responsible for the total delivery; client’s interaction is limited only with one agency thus reducing the cost of monitoring and follow-ups.

The Specifications are worked out by the Principal Contractor based on their experience of the risks involved.

Guarantees thus given are more effective.

The Principal Contractor creates all infrastructure at the site.

Individual contractors are not able to establish proper infrastructure which ultimately leads to confusion at site.

Optimum utilization of resources can be done to improve quality of work and performance of the system and timely completion of the project.

Since all contractors are separately appointed, if one contractor fails to deliver, the whole project gets delayed due to the interdependencies of the contracts.

Interdependencies can be worked out properly with all agencies, to avoid reworks / breakages etc.

Normally civil works are done first; rework and breakages are very common as requirements from various agencies comes much later.

Client has to pay only one agency  - this eliminates many financial / tax hassles, enables single point of billing, paperwork etc.

Client saves consultancy charges to certain extent, but has to pay different agencies which increases accounting costs.

The Principal Contractor is 100% responsible for the total project.

They are also “first in” and “last out” for the project – and can tie up all the loose ends that usually occur at the end of a project.

The Consultant/Architect is only liable for a small (usually 5%) percentage of the project, and therefore has little to lose. Consultants often become bottlenecks that cause delays that ultimately get blamed on the Contractor.