EPC sector in India continiously growing

In India, the construction industry has evolved from item rate packages to lump sum contracts and then to EPC contracts over the years. It has resulted in a visible shift from owner-managed projects to projects where the risk of time and cost overruns has been transferred to the contractor, along with the responsibility of designing, procurement of material and construction. This form of contract even protects the owner/developer from currency and interest rate fluctuations. Initially there were only few contractors in India who had the required technological and financial capabilities to take overall responsibilities of the complete project; therefore, large projects were divided into small EPC packages. Gradually, EPC contractors developed technical expertise and became financially competent. As a result the project owners began to award them complete projects as single lump sum turnkey contract.

The Indian EPC sector is still developing and is different from the global EPC sector where EPC contractors have adopted a modern variation called EPCM — engineering, procurement and construction management. The EPC contractors have expanded their roles and have adopted the roles of project consultants by managing the project from design to commissioning. This has limited the role of engineering consultants and large EPC companies have transformed into solution providers. Globally, large EPC players manage projects in different corners of the world with production hubs strategically located in several continents. They have highly sophisticated project management and risk management techniques, which help them to monitor and manage projects efficiently across different locations. It has been observed that some of the global players also acquire a strategic stake in the equity of the project, which express their commitment as well as provide confidence to owners and investors.