Avoiding specialists to manage mega projects a likely ‘false economy’

Complexity demands expertise

According to PwC, the increased demand for EPCM services is driven by various factors, including a global rise in the number of projects, the pressure to fast-track delivery, limitations on project owners’ resources, and the rising prices of materials and labour.

“As the complexity of so-called ‘mega projects’ increases and labour, materials and professional resources become more difficult or expensive to source, owners will need to choose between paying an increasing EPC profit/risk premium or placing greater reliance on the expertise and skill of reputable and experienced contractors to manage the delivery of their projects,” writes PwC’s Damian McNair.

This shift has led a broader range of industries to recognise the strengths of the EPCM model. Attempting to save project costs by foregoing an EPCM partner often proves to be false economy, says Aaron Fennell, director of project management specialists F9 Project Services.

“The strength of the EPCM model lies in its management component, particularly within project controls, which ensures effective best-practice schedule and cost management, risk identification and mitigation,” Fennell says.

“Often, contractors are not well equipped to interface directly with project owners. Without an EPCM to manage communications, any potential savings are frequently outweighed by lost productivity and efficiency.”

Recognised in this year’s AFR Fast 100 list of fast-growing and successful Australian businesses, F9 Project Services provides professional, integrated, project planning and controls services for complex major projects throughout Australia.

EPCM model back in vogue

The resurgence of the EPCM model is partly due to project owners acknowledging that an internal planner alone cannot effectively manage major projects, says F9 Project Services director Vamsi Gollapinni.

Effective project management requires engaging subject-matter experts alongside planning a project schedule.

“You cannot expect a planner to handle everything; you also need the right specialists at hand,” Gollapinni says.

“Additionally, it is important to understand that a competent EPCM is not merely providing personnel but offering a solution to ensure your major project remains on track.”

Amid the skills shortage, full-service EPCMs allow project owners to access the necessary expertise without the need to hire talent on an urgent basis or rely heavily on subcontractors.

In response, F9 Project Services has expanded its team to ensure the availability of the right mix of in-house expertise rather than operating lean and scrambling for talent as projects arise. This approach positions the company to consistently deliver optimal outcomes for project owners, says F9 Project Services director David Salmeri.

Project owners often mistakenly hire whoever is available, risking technical competence without effective stakeholder collaboration and engagement. Similar risks apply to small EPCMs, which only onboard talent as needed.

F9 Project Services demonstrated confidence in both the market and its business model by employing top talent in advance, building a team of approximately 50 permanent employees, Salmeri says.

“Operating too lean as an EPCM can lead to subcontracting out to whoever is available at the time, hoping for the best,” he says.

“We recognised that this approach is unsustainable if we aim to provide the best outcomes for project owners. Therefore, we ensure that we always have the right people onboard, with a commitment to development that keeps our team at the forefront of industry advancements.”

To learn more, visit f9projectservices.com.au/