EPCM model popularity is growing in industrial investments

The EPCM model primarily means ease for the client. It is enough to choose one partner, and then we take care of the implementation of your project from the preliminary stages to execution.

EPCM model (Engineering, Procurement, and Construction Management) is a relatively new way to implement industrial investments in Finland and Europe, but for example, in America, it has been the prevailing practice since at least the 1960s. So, it is a tried and tested way to implement projects.

In recent years, the demand for the EPCM model has clearly increased here in Finland as well. With the green transition and the energy revolution, new industrial plants are being built in Finland and old ones are being modified for new uses. The EPCM model is equally suitable for Green Field new investments as well as Brown Field investments (in connection with existing ones), where, for example, old industrial sites are renewed or modified for new purposes.

EPCM implementation requires extensive expertise and resources

Many international investors require that the implementation of the investment is handled by a single turnkey partner. The purpose is to centralize responsibility for schedules, costs, and other risks to one operator. However, in the Finnish market, such EPC or turnkey suppliers are not found, unlike, for example, in Asia.

The difference with the EPCM model is that although the EPCM implementer takes care of the procurements, the procurement contracts are between the client and the suppliers. Therefore, the EPCM consultant’s margin is not added to the procurements, unlike in the EPC and turnkey models, where the supplier’s margin is practically added to all material, equipment, and contract procurements.

In addition, resources are needed. Sweco has about 3,000 experts in Finland, and if English is chosen as the project language, the expertise of more than 20,000 Sweco employees is available. We can offer everything the client and the project need for EPCM implementation.

Preliminary planning phases can save millions in industrial investment

The worst moment for many industrial projects is when the client realizes they have wasted millions on a project whose basic idea does not hold. Expectations can be as unrealistic as in a single-family house project: the goal is to build a house twice as big and fancy as the neighbor’s, but twice as fast and half as cheap.

With the phased approach of the EPCM model, such surprises can be avoided. Preliminary study, study, and basic design phases (FEL1, FEL2, and FEL3) help advance the project realistically. The schedule and cost estimate of each project are refined only by planning the scope more precisely. In the FEL1 phase, the costs are often a fraction of what is spent on the next phases, but it provides a sufficiently accurate schedule and cost estimate to decide whether to proceed to the next phase or terminate the project as unprofitable.

Preliminary planning phases are never unnecessary or duplicate work, but in fact, the same things have to be done even if you rush straight to implementation.

The client of the EPCM project can have a light organization

For many clients, the investment project is the first, or it has been decades since the last industrial project. The practices of running the project have changed, and during the project, it becomes clear that their own expertise or time is not enough for client-led implementation.

In the EPCM model, the client’s light organization does not matter. There are few interfaces because the client chooses only one partner instead of ten different operators. We are responsible for design, procurement, scheduling, cost monitoring, and site management. One of the best aspects of EPCM implementation from the client’s perspective is the flexibility in the use of their own time.

We have been offering EPCM services as a company for over 10 years, and many of our experts have decades of experience and impressive references in managing EPCM projects. With us, the EPCM model works as a flexible implementation method for small, large, and mega industrial projects.

Shall we start evaluating whether the EPCM model could be a suitable implementation method for your investment project?

Contact me!

Ville Mykrä, Unit Manager, Industry & Energy (project management), ville.mykra@sweco.fi