Risk Sharing Study Of EPC Consortium Led By Design Institute

The EPC model,which has emerged in recent years,has the characteristics of reducing construction time,costs,and contract disputes.China has enacted a number of policies to expedite the implementation of EPC general contracting mode,and has identified EPC general contracting mode promotion as an important measure of China’s engineering construction reform.The joint mode of EPC general contracting led by design institutes emerged with the development of EPC general contracting.At the present,China’s design institutes are in transition and lack general contracting management experience.While the EPC general contractor bears the majority of the project risks,there is an urgent need within the consortium for a reasonable risk sharing mechanism to allocate the project risks to the consortium parties in order to mitigate the consortium parties’ risks.Therefore,this paper conducts a study on the risk sharing of the EPC general contracting consortium led by design institutes.The main work is as follows.Firstly,the paper clarifies the concept of EPC general contracting and consortium,analyzes the characteristics of EPC consortium led by design institutes,introduces the concept,principles,and common methods of EPC project risk sharing,and gives a detailed introduction to the system dynamics,TOPSIS method,and Shapley value used in this paper.Secondly,the main risks of the EPC consortium led by the design institute were identified by using the literature related to EPC project risk management and the actual cases of EPC projects as the analysis samples.Experts were invited to supplement the screening of the main risks,and a final risk list was formed.A system dynamics risk dynamic evaluation model was established by fitting the identified risk factors into a whole.In this paper,a risk evaluation scale is also established,which can be combined with the system simulation results to determine the key risk factors at each stage.Thirdly,a preliminary risk sharing model based on the improved TOPSIS method is established.Through the model,the main body of the key risk factors at each stage can be determined,and the risks can be divided into individual risks and shared risks.This paper also establishes a risk re-sharing model based on the revised Shapley value,which can determine the proportion of shared risks.Finally,this paper verifies the feasibility of the model by taking the general contracting(EPC)project of the central hospital construction project in the Q district of W city as an example.The case analysis shows that the main risks in the project implementation stage are organizational management risk,cost risk,quality risk,construction risk and schedule risk;The preliminary risk sharing results of the project implementation stage are as follows: the construction risk is solely borne by the construction party;the engineering change risk is shared by the designer and the construction party;Organizational management risk,cost risk,quality risk,schedule risk,environmental risk and contract risk are jointly borne by the three parties of the consortium.Taking organizational management risk as an example,after revising the initial Shapley value,the Shapley values of the three parties(design,construction,and procurement)of the consortium are 10,101,200 yuan,6,742,300 yuan,and5,147,700 yuan respectively.The proportions of commitment are 45.91%,30.65%and 23.40% respectively.The dynamic risk assessment model based on system dynamics,the initial risk sharing model based on TOPSIS method and the risk re-sharing model based on Shapley value method constructed in this paper can bring some inspiration and reference to some design institutes in transition.It can also provide some new ideas and new inspirations for the theory and practice of risk sharing in the EPC consortium model led by the Design Institute.