Dealing with EPC Project Management Problems and Challenges A Case Study on Petrochemical, Oil and Gas EPC Projects in Middle-East

Abstract

Abstract Project schedule delay and cost overrun have become a normal matter to witness and at a certain point, it textures almost likely that it would be an inevitable result. Such result could be avoided if we identify the causes of delay and try to mitigate the challenges early phase in the project. An effective Project Manager manages all aspects of EPC project and he must understand the causes of problems. This case study aims to explore problems faced in EPC projects that lead to cost overrun and schedule delay, and to explore good practices to minimize impact on overall project. The methodology adopted consists of survey, interviews and case study approach. A survey was used to collect the common causes of EPC Project delays and cost overrun. An interview approach used to find out significant delay and success factors together with effective management practices collected from survey. Later, case study approach is used to validate the information gathered previously and to understand the relation and consequences of each factor. The interviewee were project managers, project controls manager, construction manager, discipline engineers, subject matter experts and client representatives, etc. from several EPC contractors and clients. There are several causes of EPC projects delay and cost overrun and every project may have its own challenges but many found to be common among projects. Sometimes, it may be a single trigger event that leads to delays or a combination of events. The case study reveals that major factors contributing to schedule delay and cost overrun are mostly related to project complexity, aggressive unrealistic schedule, weak or poor planning and control, inherited bidding inaccuracies and estimation mistakes, ineffective leadership and poor decision-making, absence of project management practices, etc. Also, design changes, delay in placing POs, lack of team competency, late client approvals, late vendor information, delay in PTW issuance, inadequate construction resources, quality issues and reworks, and ignoring previous project's lesson learned. Further most, poor risk management, poor interface management between project stakeholders contributes to cost overrun and delays. This case study findings may be helpful to EPC contractors, clients, project sponsors, project managers, construction managers and other stakeholders to understand the major factors, causes and problems that they may face during EPC project lifecycle and how to overcome such challenges effectively. This case study can be viewed as a lesson learned approach. This study will guide them in developing and adopting necessary effective and efficient project management practice to complete the EPC projects within budget, on schedule with good quality, and safety. Stakeholders’ awareness about causes of delay give them more options and improve capability in problem-solving throughout the project life-cycle.