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EPC contract

Clients intending to implement an EPC contract in Russia should always remember that the FIDIC Conditions of Contracts for EPC turnkey are universally applied recommendations, although they are poorly adapted to the Russian legal system (the FIDIC documents contain a lot of legal terms and mechanisms unknown in the Russian law or their content differs from what is provided for by the Russian law). Therefore, if the Conditions of Contracts are applied, corresponding contracts should be adapted to the Russian legal framework.

It should also be noted that, on a practical level, construction contracts are often delivered in phases, which is not typical for turnkey projects. Contractual provisions governing delivery and acceptance (and essentially other provisions of an EPC contract) directly depend on corresponding clauses of a concession agreement or a private-public partnership agreement. Accordingly, if construction activities are implemented on a phase-by-phase basis, the wording of the EPC contract should allow for such approach and, if possibly, specify activity types and phases.

We can help clients by:

  • Conducting a risk assessment before an EPC contract is signed;
  • Assisting in drafting an EPC contract in a way that accommodates results of the risk assessment and takes into account best practices and our experience in similar projects;
  • Monitoring performance of parties to an EPC contract as an independent technical expert;
  • Providing technical, financial and legal reviews of contracts already in force.

New Construction

Making an accurate estimate of construction costs is probably the most delicate aspect in a preliminary valuation of a project. A review of cost estimates may reveal where the contractor unreasonably inflates rates or offers excessively understated prices. This service offers savings before implementation of a project begins.

For this area, we offer the following services:

  • Comparison of contractor-proposed prices for construction materials and costs of work with prevailing market prices and rates;
  • Review of cost estimates for correctness and feasibility of pricing, limited expenses, multipliers etc.;
  • Comparison of declared and actual work scopes;
  • Evaluation of the true cost of proposed construction activities.

Financial control

In almost any greenfield or brownfield project, technical and financial discipline plays a crucial role. A large-scale construction project involves numerous contractors and generates huge quantities of documents. Establishing an intelligent supervision process at all stages, from cost estimation to assessment of scope and quality of works becomes an especially useful tool for the client.

We offer:

  • Monitoring of project budget spending vs plan and cost estimates;
  • Comparison of actual works and works accepted and paid on paper;
  • Assessment of technical and economic feasibility of additional works (which often make up 100% or more of the initial budget).

Construction consulting

Another important aspect is to ensure that the client is sufficiently and adequately aware of applicable laws and regulations. A construction audit offered by SHANECO is a packaged service that includes an impartial assessment of reporting documents and cost estimates for potential tax and civil risks, as well as necessary adjustments to the documentation.

We can help the client to assess reliability of a contractor and fairness of declared prices and rates for construction materials and works. As a result, the client is provided with not only reliable and objective information about the construction project but also with consistent and legally compliant documentation.

For investors, the construction consulting service ensures transparency of all phases of a project, introduces impartial monitoring and assessment of the project status, and creates significant cost savings.