Comparison of EPC Contract and Item Rate Contract with Case Study

Abstract

The present research aims at comparing the EPC contracts with Item rate contract and their effectiveness on risk in infrastructure projects. This research is a practical and descriptive type. The library and field methods were used for data collection. The statistical population of this research includes all managers and experts of construction firm who are involved in engineering of infrastructure projects. Engineering, procurement and construction (EPC) contracts are most widely used in private sector for construction works of big infrastructure projects like  roads, telecommunication, petroleum, real estate etc. In each project it is very important to have good management among the contractors; or else it may have negative consequences for all parties involved – the contractor, government, project management consultancy, client, etc.  In EPC contract, the contractor carry’s out project designs, procures equipment and materials according to the drawings and specifications and completes the project in given time duration. It is found that EPC contractor works very well, mainly in the cases where the EPC contractor is in good position to handle and understand all legal aspects of contract, including the risks involved. A comparative study between EPC and Item Rate contract will enable to know the feasible mode of contract in India. It lists certain advantages, disadvantages and their need in contract.