The development process of EPC general contracting model in China

Mondo Finance Updated on 2024-02-23

1. Definition and connotation of EPC

The EPC general contracting model originated in the fifties and sixties of the twentieth century, and was originally used for private investment projects in European and American countries. Its full English name is "engineering pro-curement construction", that is, the integrated mode of design, procurement and construction, and there is no unified definition in the world. Specifically, it means that the enterprise is entrusted by the owner to carry out the design, procurement, and construction work in the project through the contract.

Contracting of a project or part of a project. where e refers to engineering, including:

engineering design and planning, management and specific work of the overall project content;

p refers to procurement, which includes the procurement of construction equipment and materials; c refers to.

construction, including engineering installation, construction, test testing, etc.

The EPC general contracting model is a common mode for the construction of large-scale and complex projects in the world, and it is also known as a "turnkey" project. The owner can send a representative to the site or entrust a professional project management team or engineer to carry out EPC project management work on behalf of the owner. Supervise and urge the general contractor to strictly abide by the contract and complete the project construction tasks in accordance with the scope of work and technical requirements agreed in the contract between the two parties. There are also a large number of well-known foreign enterprises that have completed a large number of EPC general contracting projects around the world.

Second, the development process of the EPC model in China.

On September 18, 1984, China promulgated the "Interim Provisions on Several Issues Concerning the Reform of the Construction Industry and the Management of Capital Construction" (repealed on October 6, 2001), the first of which stipulates that "comprehensively promote the responsibility system for construction projects." In the future, new projects will be subject to a lump sum investment system. The promulgation of this administrative regulation has opened the way for the exploration of China's EPC general contracting model.

Subsequently, China has successively promulgated regulations (opinions or specifications) on the EPC general contracting model, and the main documents are as follows

According to the statistics in the above table, it can be found that in the past five years, China has frequently issued documents on improving the EPC general contracting model, which shows the importance and determination of the national competent authorities to promote the EPC general contracting model. In addition, in order to implement the spirit of the documents of the Ministry of Housing and Urban-Rural Development and other ministries and commissions, various provinces and cities have also successively issued relevant policies for general contracting, focusing on the implementation of the general contracting model in the field of housing construction and municipal construction.

In China, the EPC general contracting model has strong practicability, and is mostly used in infrastructure projects with high technical difficulty, large project volume and long construction period.

3. Application prospect and thinking of EPC general contracting model.

In recent years, more and more large-scale projects have adopted the EPC general contracting model for construction, and in order to survive in the increasingly "involution" market, it is indispensable to learn and explore, think and summarize the EPC general contracting model. The EPC general contracting model is not a fixed model, and can be roughly divided into: a comprehensive engineering company independently completes the design, construction and procurement; The construction unit and the design unit form a consortium to give full play to the advantages of their respective enterprises to complete the project. Here, due to the different lead units, it can be further subdivided into the construction lead EPC model and the design lead EPC model.

As for the specific mode to use, it should be determined according to the characteristics of the project, the needs of the owner, and even the technical characteristics of many intending units.

It is foreseeable that in the future engineering construction, the EPC model will be the main organizational model of project construction, and both the design and construction units should actively embrace this change, accelerate the transformation, highlight their own advantages, and seize the track as soon as possible to achieve sustainable development.

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