In the engineering and construction sector, selecting the right project delivery model is crucial for ensuring a smooth and successful execution. With multiple approaches available, two of the most widely adopted are the EPC (Engineering, Procurement, and Construction) contract and the Turnkey project model. Both offer distinct advantages, depending on the project’s scale, complexity, and client expectations. For businesses in Singapore looking to collaborate with reliable engineering companies, understanding these models can make a significant difference in achieving cost-effective, timely, and compliant results.
What is an EPC Contract?
An EPC contract refers to a comprehensive project delivery method where the contractor is responsible for the Engineering, Procurement, and Construction of the entire project. Under this model, the contractor designs the project, procures all necessary materials and services, and carries out the construction works. Industries such as oil & gas, infrastructure development, and industrial facilities often rely on EPC contracts due to their complexity and scale.
In Singapore, engineering companies executing EPC contracts play a vital role in managing local compliance, ensuring safety standards, and coordinating various stakeholders to deliver integrated and high-quality outcomes.
What is a Turnkey Project?
A Turnkey project is one where the contractor delivers a fully functional, ready-to-use facility to the client. Once the project is completed, the client simply “turns the key” and starts using it. This model is especially popular in sectors like real estate, utilities, and manufacturing, where fast deployment and minimal client involvement are priorities.
Turnkey solutions are ideal for clients who prefer not to be involved in day-to-day execution and want a clear, predictable outcome with minimal hassle. In Singapore’s fast-paced and regulated environment, turnkey projects are often chosen for their simplicity and speed.
Key Differences Between EPC and Turnkey Models
The following points highlight the key difference between EPC and Turnkey models.
Ownership of Design
In an EPC contract, the contractor typically leads the design process but may collaborate closely with the client to refine specifications. In contrast, a Turnkey project grants the contractor full control of the design, with minimal to no client input once the contract is signed.
Client Involvement
EPC contracts often involve higher levels of client engagement throughout the execution phase, allowing for greater customisation and flexibility. On the other hand, Turnkey models require minimal client involvement after the initial agreement, making them ideal for clients seeking a hands-off approach.
Final Handover
The handover process also differs: EPC projects may involve client-led testing and commissioning before final acceptance, while Turnkey projects are handed over as fully operational systems, ready for immediate use upon completion.
Customisation
EPC contracts allow more design and scope flexibility, making them suitable for complex or evolving projects. Turnkey projects, by contrast, have a fixed scope defined early on, limiting changes during the execution phase.
Risk Allocation
Risk distribution is another key distinction. EPC contracts tend to share project risks between the client and contractor. In Turnkey projects, the contractor assumes most of the risk, offering the client greater cost and schedule certainty.
Choosing the Right Model for Your Project
Choosing between EPC and Turnkey depends on your project’s complexity, delivery timeline, and desired level of involvement.
- Opt for EPC if your project requires customisation, involves multiple phases, or demands close coordination, such as infrastructure or energy projects.
- Choose Turnkey if you want rapid delivery with minimal client input, especially for standardised or repeatable builds like residential blocks or utility stations.
In Singapore, considerations such as urban planning restrictions, regulatory compliance, labour availability, and environmental standards also influence this decision. This is where experienced engineering companies in Singapore provide crucial guidance in choosing and implementing the most suitable delivery model.
The Role of Engineering Companies in Singapore
Engineering companies in Singapore are highly skilled at executing both EPC and Turnkey models, integrating local compliance requirements and best practices. From liaising with regulatory agencies to implementing advanced technologies, these firms ensure projects meet stringent quality and safety standards.
Numerous successful Singapore-based projects, from MRT extensions using EPC frameworks to factory constructions using Turnkey methods, demonstrate the versatility and reliability of local firms in managing diverse project needs.
EPC or Turnkey? Make the Right Call with Expert Guidance
EPC and Turnkey models each serve unique project demands. While EPC contracts offer more flexibility and shared responsibility, Turnkey solutions provide simplicity and a hands-off approach for clients. Ultimately, aligning your choice with the project’s goals, complexity, and resource capacity is key. For businesses in Singapore, partnering with a reputable engineering company can provide the expert insight needed to select and execute the right delivery model for long-term project success.
