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Summary
IDEA member Serdar Tufekci, Principal Consultant & Founder of SELEST Solutions, is writing a 6-part series on the Hidden Costs in an EPC contract. A snippet and link to chapters 1 and 2 are included below.
Chapter I: Aligning Development and Construction Goals
The energy infrastructure lifecycle is long, complex, and unforgiving of misalignment. A project that clears every development hurdle (permits secured, financing closed, offtake contracted) can still fail to deliver on its promise if the people who built the business case never sat in the same room as the people who have to build the plant.
The Asymmetry Problem
Development teams are optimized for a specific kind of success: getting to financial close. That is not a criticism, it is simply what the incentive structure demands. Construction and operations teams, however, inherit the consequences of every assumption baked into that development process. Schedule commitments made to satisfy a lender's model become contractual milestones. Equipment specifications locked in to hit a capital cost target become field realities a project manager has to live with. A site access provision negotiated quickly to satisfy a permitting deadline becomes a serious logistics constraint once mobilization begins.
The asymmetry is structural: developers are rewarded at financial close, while constructors and operators bear the downstream cost of development-era decisions. Left unaddressed, this turns the handoff from development to execution into less a baton pass and more a collision.
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