EPC/Turnkey contracts and examination under the FIDIC

Technological changes on global scale necessitate continuous development in response to the needs of people and industries. These developments are also effective in the construction sector and industrial projects, necessitating the sector's renewal in line with technological advances and increasing demands. The dynamic structure of the construction sector paves the way for the realization of more effective, reliable, and practical projects and modern contract models. In this context, "Turnkey/EPC" new contract models applied in government and large-scale private sector construction projects responds to the needs of the sector. , The turnkey EPC contract which is one of the new models with standard contract models under FIDIC provides a different perspective on practices in the sector. A turnkey EPC contract is a type of contract where the contractor assumes extensive responsibilities from the beginning of the project. The contractor is responsible for all processes from project design, through the completion of installation, to delivery, and even after the delivery. The project owner agrees to pay a fixed lump sum price, usually higher than the market value of the project due to the majority of risks being assumed by the contractor, which is determined before the project starts. This model is preferred by investors and project owners for its predictable costs and protection against unexpected cost increases. The contractor assumes both the implementation risks and the cost risks, taking on all obligations during the contract's construction phase unless otherwise agreed. The characteristics of the turnkey construction contract necessitate a comprehensive examination of the contract, and its preparation, which must also be considered under the 2022 updated FIDIC Silver Book.