The Situation

The key challenges faced for laying of new crude offshore transmission lines for a project in Saudi Arabia were as follows:

1. From the inception of the project in May 2013 until the contractual completion date (Nov 2014) only 5% project progress was achieved. 

2. Original contract value was $30 million less than the cost to complete (CTC).

3. No working capital was made available from the Client to complete the project. 

4. No proper project organisation was in place, and there was a lack of procedures, competent resources and operational assets. 

5. The project completion date and project insurances had lapsed. 

6. There was mistrust between the WIL Group's client and their Saudi costumer. 

The Solution

The WIL Group deployed an interim president to complete the project without damaging the Client's reputation further. The plan was to: 

1. Rebuild the trust and confidence between the WIL Group's Client and the Saudi customer. 

2. Establish a competent project team. 

3. Amend the contract, including getting extension of time to complete the project. 

4. Revise the project schedule with Client approval. 

5. Set up project office. 

6. Find subcontractors with the right capabilities. 

7. Develop a specific execution plan for offshore/installation including the subcontractors' involvement fr pipe laying and offshore surveys. 

8. Convince the Client's Saudi customers to provide additional working capital and help in covering the gap between contract value and CTC.

The Result

The WIL Group’s interim manger quickly rebuilt trust with the Client’s Saudi customer and achieved the following results:

1. The contract was amended and the WIL Group’s Client was given a 21-month extension from the original completion date.

2. A project office was set-up and a new project organization was approved by the Client’s Saudi customer.

3. A detailed revised project schedule and execution plan was presented and approved by the Saudi customer, including commercial proposals of subcontractors.

4. The WIL Group’s Client reached an agreement with their Saudi customer to support the project with working capital within the original contract value and to look for ways of covering the CTC gap.

5. Long lead procurement items sourced.

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