INTERNATIONAL TENDER OF EPC PROJECT

1
INTERNATIONAL TENDER OF EPC PROJECT??????

• Presentation to ICDF, Taipei
• March 31st 2005
• John H. Lin (???)
•  President, CTCI Corporation

2
Agenda

• Definition of International EPC Projects
• Definition of EPC Projects
• Typical International EPC Projects
• Current Trend of International EPC Projects
• EPC Projects Development
• EPC Projects Bidding Procedure
• Business Model of International EPC Contractors
• SWOT of Taiwanese Contractors in the
  International EPC Projects
• Winning strategy of a Taiwanese Contractor
  sharing experiences
• Open discussion

3
DEFINITION OF INTERNATIONAL EPC PROJECTS

• Investors
• Foreign Government / State-Owned Enterprises
• Foreign Private Sectors
• Project Location
• A foreign location
• Project Fund / Budget Source
• Foreign Government
• Shareholders
• Project Finance by the Owner (International
  Financial Institutes and Commercial Banks)
• Project Finance by the Contractors (EXIM Bank
  and Commercial Banks)
• Players
• International EC Firms from the Developed
  Countries

4
DEFINITION OF EPC PROJECTS

• E Engineering Design
• Process Design (PFD)
• Basic Design (FEED)
• Detailed Design
• P Supply of Equipment Materials
• Ps Procurement Service
• C Construction
• Cm Construction Management Service
• Ca Construction Advisory Service
• K Commissioning Start-UP

5
TYPICAL INTERNATIONAL EPC PROJECTS

• Gas Processing
• Chemical Process Industries (Refinery,
  Petrochemical, Chemical, etc.)
• Power Plants (Coal-Fired, Gas-Fired, Hydro,
  Nuclear, Wind, etc.)
• Steel Mills
• Infrastructure (MRT, High Speed Rail, Highway,
  Harbor, Airport, Dam, Desalination, etc. )
• Environmental (Wastewater, Municipal Waste
  Incineration, De-Nox, De-Sox, etc. )

6
CURRENT TREND OF INTERNATIONAL EPC PROJECTS

• Booming in the Countries either with Low Cost Raw
  Material or Huge Market
• Mid East
• PR China
• Mega-Sized and Complicated Project
• Integrated Complex
• World-Scale Capacity
• Global Keen Competition
• Project Finance
• Partnering Arrangement

7
EPC PROJECTS DEVELOPMENT (1/2)

• Project Planning Preparation Phase
• Project feasibility study and Define Scopes
• Government / Regulatory Approval
• Funding / Budgeting
• Project Definition Phase
• Technology / License Selection
• PMC / Engineer Selection
• Process Design / Basic Design

8
EPC PROJECTS DEVELOPMENT ( 2/2 )

• Project Implementation Phase
• Pre-Qualification of the Potential Bidders
• EPC Bid (ITB, Site Visit, Clarifications, Bid
  Submittal)
• Contract Award (Clarification Negotiation)
• Project Execution
• Pre-Commissioning Commissioning
• OM Phase
• Start-Up Operation
• Maintenance

9
EPC PROJECTS BIDDING PROCEDURE
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BUSINESS MODEL OF INTERNATIONAL EPC CONTRACTORS (
1/2 )

• Partner Structuring (contract scheme)
• Consortium, Vertical Split, Joint and Several
• Joint Venture, Share Profit Loss
• Prime and Sub, Horizontal Split
• Global Resources Integration
• Low Cost Engineering Offices
• 1st Layer Management by Expat
• 2nd Layer Management by 3rd Countries
• 3rd Layer by Local Sub

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BUSINESS MODEL OF INTERNATIONAL EPC CONTRACTORS (
2/2 )

• Risk Management
• Technical, Commercial, Financial
• Risk Analysis, Risk Transfer, Risk Mitigation,
  and Risk Control
• Support by Financial Institutes
• Project Finance by EXIM Bank and Commercial Banks
• Bonding via Global Network

12
SWOT OF TAIWANESE CONTRACTORS IN THE
INTERNATIONAL PROJECTS

• Strength Well-Educated Engineers with
  Diversified Construction Experiences and Devoted
  Mentality
• Weakness Lack of Projects Records, English
  Language Barrier, Poor Support by EXIM Bank and
  Related Industries
• Opportunity Numerous
• Threat Contractors from Korean, PR China and
  Indian

13
WINNING STRATEGY OF A TAIWANESE CONTRACTOR
SHARING EXPERIENCES

• How could you be invited to bid alone or with a
  partner?
• What benefits you can bring it to a partner?
• Establishment of projects records
• Project management capabilities
• Global EPC capabilities and experiences
• Finance capabilities
• Joint forces of Taiwanese contractors

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OPEN DISCUSSION
15

• Thank You

16
Project X, KSA Contract Scheme
February 2005
Project X
OOK Contract
IK Contract
Com.B
CTCI
Com. B Arabia
CTCI Arabia
Bridging Agreement
(Un-incorporated JV)
(Un-incorporated JV)
JV Ratio TBD
JV Ratio TBD
Outsourcing
Outsourcing
Lump Sum
Lump Sum
Lump Sum
Suppliers
Com.B
CTCI
Contractors/Suppliers
Com.B Arabia
CTCI Arabia

• Detailed Engineering
• E/P Project Management

• Technology
• Basic Design
• E/P Project Management

• Construction
• Construction Management

• Construction Management