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China into AfricaThe era of Chinese EPC contractors in Africa

Adam BoughtonNovember 2016

Click icon to add pictureVital to developmentChinese EPC contractors are becoming vital to the development of Africa, developing an increasing work portfolio in the region.

Chinese Engineering, Procurement and Construction (EPC) contractors have definitively arrived on the global contracting market. They will have an extensive impact on the delivery of projects worldwide, and their influence will be particularly strong in Africa.

It is well known that Chinese companies are highly capable and can excel at almost anything. The One Belt One Road project intersects with East Africa, increasing Chinese financial influence, and Chinese EPC delivery companies are playing a significant part in the building of a new Africa. In this environment, there is much to be gained by reflecting on project-delivery strategies that can help government and the private sector achieve the best outcome when delivering projects with Chinese EPC contractors. Advisian / 3

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Working together for future development

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As they become increasingly vital to African development, Chinese EPC contractors are building a growing portfolio of work in the region. When working with Chinese EPC contractors, taking an insightful, strategic approach improves the odds of success for all stakeholders. The methods that owner companies use to select and manage these contractors are incredibly important.

The following are 12 guidelines for successfully engaging a Chinese EPC.

1Develop a management framework at the initial outset of the project to ensure key strategic issues are addressed through all phases of the project.

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2Chinese EPC contractors, and a

project’s surrounding community, can significantly benefit from

strong health and safety policies and procedures. Advisory support

and PMC coordination and monitoring can help an EPC contractor embed a greater

health and safety focus in their organisational culture, at least in

the context of the project.

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3Conducting design reviews and production-line quality inspections in China before delivery can significantly improve an asset’s whole-of-life effectiveness.

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4The establishment of front-end

engineering and contract modelling is critical to ensure

that key project details are negotiated before the contract is

awarded.

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5Chinese EPC contractors benefit from support in developing a project execution plan and working in accordance with its requirements.

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6Establishing a sound approach to

project logistics is critical to the project’s success.

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7The capabilities of Chinese EPC contractors need to be supplemented with environmental-management capabilities and an appreciation of requirements within specific African countries.

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8The management style of the client or advisor/PMC must be adapted to match the diverse

cultures involved in the project.

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9Chinese EPC contractors often prefer to introduce Chinese design and construction standards, they may need support in adopting and following standards proven, used, and even required in regions such as South Africa, the United States, Australia and Europe. Use of these internationally recognised standards can improve project outcomes.

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10Adequate management and

supervision of construction is required to ensure smooth,

timely completion, as well as quality and compliance to

design.

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11Establishing a project steering committee can significantly improve communication between the client and decision-makers in the Chinese EPC contractor’s organisation.

…..Strong Relationships are critical

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12To ensure the continued

operational success of the asset, a construction closure,

commissioning and operational handover review

should be established, in which outcomes should be compared with the project-

execution plan.

DISCLAIMERThis presentation has been prepared by a representative of Advisian.The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive.Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to, Advisian. Advisian and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information or correcting any error or omission that may become apparent after this document has been issued.To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Advisian and/or any of its agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.

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