EPC Project Delays: Understanding the Causes and Costs

EPC (Engineering, Procurement, and Construction) projects, which encompass a wide range of infrastructure and capital projects, are critical for supporting the growth and development of communities. However, despite careful planning and coordination, many EPC projects experience delays, which can impact budgets, timelines, and overall completion. In this blog, we'll explore the causes of EPC project delays and present some statistics to help illustrate the extent of the problem.

Causes of EPC Project Delays

• Weather conditions: Weather can play a significant role in EPC project delays, as rain, snow, and high winds can impact work schedules and slow down progress.
• Lack of skilled labor: A shortage of skilled workers can cause delays, as it takes longer to find and hire the right personnel.
• Material shortages: Delays can also result from a shortage of materials, such as steel, concrete, or building supplies, which can impact the construction process.
• Material availabilty at time of construction: Poor material management can lead to project delays, which can have a domino effect on the entire schedule and budget
• Permit issues: Delays can result from permit issues, such as delays in obtaining the necessary permits and approvals from local and federal agencies to begin work.
• Change orders: Change orders, or requests for changes to the original plans, can also result in delays, as they require additional time and resources to accommodate.

Statistics on EPC Project Delays

• According to a 2017 McKinsey analysis, 98% of EPC construction projects suffer cost overruns of more that 30% and up to 80%.
• 77% Out of the 98% of these projects are at least 40% behind schedule. Frequently resulting in litigation that leaves customers dissatisfied and resulting in complex and time-consuming claims process
• Average profit on a construction project around 5%. A well managed EPC project could profit 20% ~ 30%
• According to the Construction Industry Institute (CII) 50% of the project's cost is material. However, materials control 80% of the project schedule.

Conclusion

EPC project delays can have a significant impact on budgets, timelines, and overall completion. But the number one reason for cost over-runs and schedule delays is miss managing material. The question is, do you have the right tools and systems to manage your next project and avoid becoming a statistic? Check how Masterlinxx can help you with your 80% of your problem.

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