Key Success Factors for a Turnkey Construction Project
A turnkey contract is a business arrangement in which a project is delivered in a completed state. Rather than contracting with an owner to develop a project in stages, the development manager or the turnkey solution provider is hired to finish the entire project including design, construction, PMC.
The development manager or the turnkey solution provider is separate from the final owner or operator, and the project is turned over only once it is fully operational. In effect, the development manager or the turnkey solution provider undertakes the project from start to end and “turns the key” over to the owner.
This type of arrangement is commonly used for construction projects ranging from single buildings to large-scale developments. Under a traditional lump-sum contract, the owner agrees to pay the development manager or the turnkey solution provider to complete a project that is built to the owner's requirements and specifications. While the owner is, at all times, given several opportunities to make decisions throughout the project, as well as to make changes as needed, however, in such arrangements, the Owner is in much lesser burden of the project as the development manager or the turnkey solution provider handles all problems related to construction of the project.
Key factors involved:
Project Management
The complexity and magnitude of a turnkey construction requires, even more so than in other construction project types, the effective coordination and management of providers, subcontractors and government agencies. The most important criteria that determine the success of a construction project include budget and schedule compliance and whether it conforms to owner's expectations. Effective project management is required to control the progress and cost of a construction project.
Risk Allocation and Cost Estimation
Turnkey construction projects require the development manager or the turnkey solution provider to assume higher risks than other construction contract methods. A turnkey project may require the development manager or the turnkey solution provider to allow for multiple eventualities that cannot be easily foreseen. For instance, the development manager or the turnkey solution provider may have to, beforehand, take into account the ground conditions of a building site.
Cash Flow
Turnkey projects require the development manager or the turnkey solution provider to take on the operational costs until the project is completed. Successful projects require the development manager or the turnkey solution provider to have the necessary cash flow to meet construction costs until payment is received. At most times, the development manager or the turnkey solution provider and the owner/ clients agree on milestone based payments.
Masters Management Consultants India Private Limited provides turnkey solutions for your projects. For Clients with multiple businesses or for Clients who are based at a different location than project’s location or for any other time/ technical constraints, can make use of our Development Solutions.
Turnkey Construction services by Masters are offered to streamline construction processes, making it easy for you to achieve your objectives while benefitting from tremendous savings in both time and cost, and ensuring quality at the same time.
We take pride in developing strong working relationships with developers and architects while delivering top-quality workmanship through every phase of a project.
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