Understanding EPC and Turnkey Contracts

In the construction industry, EPC (Engineering, Procurement, and Construction) and turnkey contracts are often used interchangeably, but they have distinct characteristics that affect project execution, risk allocation, and cost structures. Understanding these differences is critical for project owners making contracting decisions.

What is an EPC Contract?

An EPC contract places the responsibility for engineering design, procurement of materials and equipment, and construction execution on a single contractor. The EPC contractor assumes comprehensive responsibility for delivering a functional facility as per agreed specifications. This model is particularly prevalent in energy, industrial, and infrastructure projects where technical complexity demands integrated execution.

What is a Turnkey Contract?

A turnkey contract is broader in scope than EPC. Beyond engineering, procurement, and construction, turnkey includes commissioning, testing, and delivering a fully operational facility. The term 'turnkey' literally means the owner just needs to 'turn the key' and start operations. Turnkey contracts often include training, initial operations support, and performance guarantees.

Which Model Should You Choose?

The choice between EPC and turnkey depends on your organization's capabilities, risk appetite, and project complexity. If you have an internal project management team and want to maintain control over commissioning and operations, EPC is appropriate. If you prefer a single point of accountability and minimal involvement, turnkey delivers that convenience at a premium.

Good Value Solutions Approach

At Good Value Solutions, we offer both EPC and turnkey models depending on client needs. Our 50 MW solar plant in Jaisalmer was delivered as a full EPC project with performance monitoring handover. For industrial clients without in-house technical teams, we offer extended turnkey packages that include operations support and maintenance contracts.