Research On Early Stage Risk Management Of Overseas EPC Contracting Projects Of Chinese Enterprises

The current EPC model has evolved into a relatively universal general contracting model in the world,which is mostly suitable for engineering projects with large investment amounts,high technical requirements,large quantities of equipment purchases,and difficult management.The EPC model requires that the contractor must complete the project that meets the owner’s expected use target,performance and apply conditions of the project the specified time,regarding to the agreed contract price and specified technical standards.Under the EPC project model,the owner is less involved in or intervened in the daily management,and the contractor has greater autonomy in the overall project management,which means that the contractor will therefore also bear greater risks than other engineering contracting modes.In the context of Chinese engineering contracting enterprises’ acceleration of "going out",what are the characteristics of the risks that contractors adopt the EPC model,how to identify and manage them?In-depth research on these issues is not only of urgency for theoretical conclusions,but also of practical importance for Chinese companies to better go out.Based on the previous research results,the theory of risk management,contract management and project management,this article focuses on the early risk management of international engineering projects under the EPC model.In order to identify and evaluate risks,this article uses the more popular analytic expert scoring method and hierarchy process in risk management to analyze and evaluate the early-stage risks of EPC international engineering projects,including macro risks(economic,political,social risks,etc),meso-level risks(the country’s industrial policies,and industry technology levels,etc),as well as micro-risks(the technical standards and management models adopted by the project,etc).Then,this article integrates the macro,meso and micro risks and the risks of the pre-contract signing stage,summarizes the EPC project risk factor framework in early stage,and constructs a risk evaluation system.According to the results of theoretical analysis,this article also takes an EPC project in Australia as an example,uses the analytic hierarchy process to decompose the risks of all levels of the EPC project into several sub-items,establishes a hierarchical structure for the set of decomposed risk factors,and calculates the risk the weight.Then determine the main risks in the primary and secondary indicators in the risk evaluation system.Through the summary,the general contractor can clearly understand the level of various risks.From the macro,meso,and micro perspectives,high risks are mainly micro risks(project duration and acceptance risk,data integrity risk,engineering technical difficulty,etc.).Medium risk factors are mainly project macro risks(cultural and religious differences,political instability,tensions between countries,etc.),low risk factors are mainly medium risk(policy support,international contracted project market environment,EPC model social technical level,etc.).From the perspective of the first-level indicators of the risk evaluation system,the levels of legal and regulatory risks,risks before contract signing,and organizational risks are relatively high.Finally,this article puts forward practical and effective countermeasures for the main risks faced by the EPC project in the early stage to achieve the role of risk management.Starting from the perspective of general contracting,through theoretical and empirical analysis,this thesis deeply researches the pre-contract risks faced by Chinese general contracting companies adopting the EPC model in the field of overseas general contracting,which has important theoretical value and practical significance for the selection of overseas projects and the construction of risk management systems for overseas general contracting projects.