The Risk Evaluation And Control Study Of An Overseas Project Contractor Under The EPC Mode

The overseas EPC (Engineering, Procurement and Construction contractingmode) projects are usually huge. They are not only influenced by economy, politics,labour, funds, procurement, transportation and other reasons, but also closely relatedto technical standards, laws and regulations, climate and environment, social culturefactors. Therefore, they are determine its high risk. Due to the contractor in ourcountry accustomed EPC mode without a thorough understanding of the EPC contractand a proper handling of risk, resulting in some overseas EPC projects at a loss. Sohow to effective, comprehensive and correct to identify, evaluate and control risks isthe focus of EPC contractors in our country.Combined the M road of EPC project in Z country and identify all kinds of risksin accordance with the risk evaluation theory. The study made a systematic researchabout the risks of EPC contractor through qualitative and quantitative approaches.The main contents include:(1) The risks of the contractor can be divided into two categories from the sourceof risk: Risks caused by objective factors and contractor’s own limitations. Identifyand analyse risks roundly. Risks caused by objective factors are divided into sevencategories, a total of20risk events. Risks caused by contractor’s own limitations aredivided into six categories, a total of39risk events.(2) Risks caused by objective factors are independent of each other, so improvequalitative analysis using expert scoring method, and combine with risk severity andpossibility to determine the risk level. Quantitative analysis by using centralizationstatistical method for loss analysis and using Monte Carlo computer simulation forprobability analysis. Calculate the risk value and risk index to determine the risksequencing.(3) Risks caused by contractor’s own limitations influence each other, so usingexpert scoring method and AHP to determine the weights of risk. Grey theory isintroduced to calculate the risk value in quantitative analysis, to determine the risksize and make the evaluation results more real.(4) Build M road project contractor’s risk early warning system to monitor the risks of higher risk value and grasp the risk state at any time, in order to reduce theincidence of risk. Based on M road project contractor’s risk situation to put forwardsome suggestions to avoid the risk and provide the reference for contractors.The study results can be used as a reference, when EPC contractors evaluatingthe overseas EPC projects’ risks. So the contractor’s risks could be identified,evaluated and controlled. Minimize risk loss, so as to successfully control theengineering cost.