What Is Turnkey Projects
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Walid KarmouzWhat Is Turnkey Projects
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Soap & Detergent Machines Division
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Presenting
Turnkey Projects
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A turnkey project is what exactly?
A turnkey project is a mode of project delivery in which a single organization—
a contractor—coopers with a project owner under a solitary contract to
complete all phases of a project. From precise engineering through
construction. Turnkey projects relieve the project owner of inconveniences
because this method transfers to the contractor duties that would otherwise be
the owner’s in a standard design-bid-build (DBB) delivery. Turnkey delivery
techniques combine elements of project design, financing, procurement,
subcontracts, & construction into a single, integrated solution with a single
point of accountability, in contrast to the DBB approach. For a variety of capital
projects, including those in the energy, terminal & logistics, & chemical
industries, turnkey delivery methods can be used. Before entering into a
contract, it is crucial to assess the benefits and drawbacks of any project
delivery method. Let’s examine the benefits and drawbacks of turnkey projects.
Features of turnkey projects
In this method of managing global projects,. A business in need of a service or
manufacturing facility employs a third-party operator to construct and design
rather than managing everything itself. Everything from production to supply
chain services must be provided by the third-party contractor.
Examples of turnkey projects
Large-scale infrastructure projects that are support by the government are
often develop on a turnkey basis. For instance, the forthcoming Jewar Airport
project is a turnkey project. Zurich Airport International, a Swiss corporation, is
creating it. The airport will be turn over to the local government for operation
after it has been fully construct. A turnkey property in the real estate industry is
a fully furnish apartment or home that is available for purchase and rental right
away.
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Advantages and disadvantages of turnkey projects
You must take into account a number of considerations while determining
whether a turnkey project delivery technique is appropriate for you. Cost,
timeframe, risk, and quality are a few of these. Here is a closer look at the things
to think about.
Cost and Schedule Benefits
Price certainty:
Compared to the conventional DBB methodology, turnkey approaches lessen
financial unknowns and enable project owners to precisely calculate return on
investment (ROI), and there is less uncertainty over the overall project cost.
With conventional techniques, the price of construction isn’t known until after
it has been develop and put out to bid. If a separate company is engage to
design and plan the project without having significant building experience.
They might not be able to do it within the allocated budget. This may cause
building bids to come in significantly more expensive than anticipated.
Reduced difficulties with change management:
With the DBB method, there is no collaboration between the companies that
design and engineer a project and those that build it. Due to discrepancies
between the project owner’s actual requirements and the engineering
drawings, there may be frequent change orders. Which may result in ongoing
price increases throughout the duration of the project. Errors and omissions are
also treat as a modification order and are therefore more expensive. If not
discovered before construction begins, projects with poor design might incur
huge cost overruns. Due to the fact that everything in the “Issue for Design”
package is include in the cost. Turnkey techniques considerably lessen this
challenge.
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Reduced cost overruns:
When a turnkey project is tender at a fix cost, the project owner is only
accountable for the lump sum decide upon during contract negotiations. As a
result, the contractor is responsible for covering any cost increases, such as
spikes in material prices. Cost overruns are decrease, if reimbursable, in
comparison to DBB procedures because the team stays together from
engineering to construction. Members of the construction team should be
involve in the design process as well because it helps to avoid project delays
that could lead to cost overruns.
Condensed project timelines:
Because a turnkey project uses a single construction and design contractor,
several stages may overlap. This results in a shorter timetable and less delays
throughout the process. Because materials and subcontractors may be acquire
as final drawings are being create.
Disadvantages
Strong scope definition is necessary: Before beginning the design and
engineering phase of a turnkey project, the scope must be completely defined.
In other words, after the project’s scope has been establish, revisions and extra
components shouldn’t be made. Due to possible already-started construction,
procurement, & planning activities, changes during engineering must be kept
to a minimum.
Cost: Project budgets are frequently anticipated to accommodate for
unforeseen changes in budget requirements, such as cost increases brought on
by inflation and final design material takeoffs and labour. Project budgets are
typically supply prior to design finalization. However, it can be argue that
pricing certainty is more crucial because it enables project owners to precisely
calculate the project’s ROI and satisfy investment requirements.
Dependent on trust: Totally dependent on the project owner’s confidence in
the contractor, the turnkey approach. Finding the correct contractor who
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comprehends the project owner’s vision, budget, and engineering and
construction objectives is absolutely essential. Even though having a single
point of responsibility is an advantage.
About Labh Group
Labh Group is a global engineering and technology-driven industrial
conglomerate with headquarter in India. We provide complete end-to-end next-
generation smart, innovative turn-key solutions to diverse industries across the
globe. With 30+ years of rich experience and presence in 100+ countries, we
have helped 10000+ customers to excel and outperform in their industry.
Leveraging over an experience of around three decades, we continuously
reinvent to help our customers achieve better results and create a more
sustainable world for our current and future generations.
Living by our core values of excellence, respect, care and joy, we at Labh Group
are committed to provide best advice, best quality products, at the best price
with the best service, always!
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We help our customers write their future!
We are LabhGroup!
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Our Global Presence
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Get In Touch
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Address: Labh Group of Companies
4th Floor, Sarthik Square, Pakwan Cross Road,
S. G. Highway, Ahmedabad – 380054, India.
Phone: +91-79-66611888, 66611999
E-mail: [email protected]
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Disclaimer: Information provided here are for illustration purpose only and may not be actual representations. We
reserve the right to change or discontinue specifications and designs shown in this brochure without notice or
recourse.
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