as Alternative for EPC Petrochemical in Indonesia
FEATURED PAPER
By Rachmad Ramila SA, CCP
Jakarta, Indonesia
Abstract
There are many delays and cost overruns in a project. One of the reasons is that other consultants and contractors carry out the work, so there may be differences in understanding the scope details. Then came the idea to combine FEED and BED stages to be done by one party. For this reason, analyzing the risks and opportunities that arise in the bidding method is necessary.
This study will use the SWOT-UPP analysis method to determine risk and opportunity analysis for both internal and external risks. From these results, we obtain the opportunity-threat ratio for each analysis.
The result of this study is that the DCB Bidding Method is appropriate for a project using the DBC bidding method for Petrochemical Industries in Indonesia. However, it is necessary to monitor and manage internal risks. Therefore, for internal factors, the classification is Low Opportunity and High Threat. In contrast, the category is recommended to be processed for external factors because it gets an O/T score of more than one.
Keywords: Risk and Opportunities, Design Build Competition, Alternative Bidding Strategy, EPC Petrochemical Indonesia, Schedule Delay, Cost Overrun
Introduction
“Capital projects are long-term, capital-intensive investments to build, supplement, or enhance capital assets. Large scale and the relative costs determine the capital project to other investments involving less planning and resources. Infrastructure projects such as railways, roads, and dams are the most common investment projects. Additionally, these projects include assets such as subways, pipelines, refineries, power plants, land, and buildings.”[1] “Capital projects in some sectors are particularly complex. For example, withinside the worldwide oil and fuel line industry, sizable investments are being made in unconventional resources like shale oil, oil sands, and deep-water projects. Owner/operators in this industry deal with multiple joint venture partners; engineering, procurement, and construction (EPC) firms; contractors; and suppliers, making collaboration among the stakeholders crucial.”[2]
But in fact, there are many delays in project scheduling which, of course, result in over budget. The literature shows that only “19% of study participants from North American firms said their companies finish projects on budget.”[3]
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How to cite this paper: Ramila, R. (2023). Risk and Opportunities Analysis for DBC (Design Build Competition) Bidding Strategy as Alternative for EPC Petrochemical in Indonesia; PM World Journal, Vol. XII, Issue XI, November. Available online at https://pmworldlibrary.net/wp-content/uploads/2023/11/pmwj135-Nov2023-Ramila-risk-and-opportunities-analysis-for-DBC-bidding-strategy.pdf
Editor’s note: This paper was originally prepared during a 6-month long Graduate-Level Competency Development/Capacity Building Program developed by PT Mitrata Citragraha and led by Dr. Paul D. Giammalvo to prepare candidates for AACE CCP or other Certifications. https://build-project-management-competency.com/our-faqs/
About the Author
Rachmad Ramila SA, CCP
Jakarta, Indonesia
Rachmad Ramila SA, CCP is a Senior Specialist Cost Engineering with ten (10) years (since 2013 – Present) of experience in Oil & Gas Refinery and Petrochemical Development Project. He is currently working as a Senior Specialist Cost Engineer at the Indonesian National Oil Company. Having a strong interest in the energy industry (Oil and Gas). Holding a Bachelor’s degree in Civil Engineering from University of Brawijaya and currently completing his master’s degree in project management at the University of Indonesia. He attended a distance learning mentoring course under the supervisory of Dr. Paul D. Giammalvo, CDT, CCE, MScPM, MRICS, GPM-m Senior Technical Advisor, PT Mitratata Citragraha (PTMC/APMX), to attain Certified Cost Professional certification from AACE International.
Rachmad Ramila SA, CCP lives in Bekasi, West Java, Indonesia, and can be contacted at rachmadramilasa@rocketmail.com and rachmadramilasa@gmail.com.
[1] Barron, Adam. (2022). Capital Project. Retrieved from https://www.investopedia.com/terms/c/capital-project.asp
[2] Kennedy, Sheila. (2012). 8 factors that predict capital project success. Retrieved from https://www.plantservices.com/home/article/11333021/8-factors-that-predict-capital-project-success
[3] Inspectivity. (2015). Oil Price Downturn Creates Need for ‘Cost Culture’ in Industry. Retrieved from https://inspectivity.com/latest-news/19-finish-oil-gas-projects-within-budget/
