ABSTRACT

A sponsor’s approach to the construction of an infrastructure project will depend upon its experience in construction, its tolerance for financial risk and schedule delay and its source of project funds. A well-capitalized sponsor with extensive construction experience in the location of its project may be best served by pursuing the design and construction management approach of letting contracts for discrete portions of the work separately to different contractors in order to squeeze the last dollar of savings and efficiency out of the overall capital cost of its project. On the other hand, a sponsor without recent and successful experience in project construction in the vicinity of its proposed project that is planning to solicit third-party funding to help finance its project is probably better served by pursuing the turnkey, lump sum, EPC approach.