Marine Newbuild Project Due Diligence and Monitoring Solution for Financial Institutions
What are the technical and financial risks associated with marine newbuild projects? See how we helped a financial institution understand and monitor project risk, compliance, scheduling and costs for an EPC project.
Engineering, procurement and construction (EPC) projects are major financial investments, with banks and financial institutions involved in transactions related to large, complex and capital-intensive marine and offshore projects. These financial clients require a better understanding of the project as well as the risks inherent to each phase of a newbuild project, from design and construction through delivery.
ABS Group carried out project survey and monitoring services for a newbuild marine vessel. The work scope included reviewing the vessel's technical specifications and associated risks, as well as providing project due diligence guidance. The goal was to provide the client with a better understanding of the technical and project risks inherent to an EPC project throughout the vessel's design, construction and delivery.
- Evaluate and understand potential technical risks and project work scope
- Requirement of regular updates regarding project status and progress throughout vessel's design, construction and delivery
Risk: Carry out risk assessment of the project schedule, scope, procurement process, costs and other factors that can have significant impact on capital-intensive projects
Quality: Verify compliance and specifications, standards, procedures, applicable governmental regulations and Classification Society rules
Cost Control: Review strategies adopted by shipyard and owner to maintain project expense within budget
On behalf of the financial institution, ABS Group assessed the project schedules, plans, specifications, budgeting and expense information necessary to conduct independent inspection, verification and project due diligence services. Explore our solutions for the marine industry.
Phase 1: Technical Review and Verification
Our team of surveyors carried out a technical review of the vessel's specification and shipyard contract and a survey of the vessel, which was under construction at the time of our appointment. As a result of our review and survey work, a Project Risk Register was developed, which was monitored throughout the construction period.
As part of quality control and compliance verification, our team also reviewed equipment test results and materials certification associated with the equipment and components scheduled for installation on board the newbuild vessel.
Phase 2: Construction Monitoring Program
In addition, we implemented a Construction Monitoring Program for which our engineers reviewed and monitored progress during the vessel's construction period. As part of the program, ABS Group verified compliance with the applicable technical specifications, standards, procedures, governmental regulations and Classification Society rules. The intensity as well as frequency of the Construction Monitoring Program was dependent on the Project Life Stage as well as Project Risk Profile – leading to detailed monitoring and frequent visits during critical stages of the project.
Considering the complexity and capital intensive nature of this newbuild vessel project, investors were regularly updated with an understanding of the potential technical and regulatory risks to which they were exposed, as well as the status of those risks. The Condition Monitoring Review also provided them with regular updates about the measures being implemented so the project would achieve its contractual milestones and so that the asset being built would conform to regulatory and industry standards.