Study of Risk Management in EPC Contracts in Highway Constructions: A Case Study of Kollam and Alappuzha Bypass

An efficient project delivery method is the key factor for any venture. For rapidly growing constructions, an effective mode of contracting is needed. When compared with other modes of contracts, EPC (Engineering, Procurement, Construction) contracts have better risk allocation, fixed cost and fixed time. Governments also prefer contracting modes with less risks to them, and EPC is one among them. From review of literature, it has been found that EPC contracts are being extensively used in highway constructions. In Kerala, two prestigious projects, Kollam and Alappuzha bypass, have been done in the EPC mode. For the two bypass projects, risk identification, analysis, assessment and treatment strategies adopted are studied. Direct interviews and questionnaire surveys were conducted on the project personnel. The impact of the risks on the project objectives of cost, schedule, quality and scope of work are found. For Kollam bypass, the highest impact was due to the Material Availability and for Alappuzha bypass, delay in permits, approvals and change of scope order were crucial. The projects had mitigated the risks to a certain extent, but better response strategies can also be explored.