EPC: Engineering, Procurement and Construction

Picture hiring a contractor purely to design and build something to your exact specification, paying an agreed fee for that work, with no further stake or responsibility for the contractor once the building is handed over and payment is made. EPC is precisely that straightforward arrangement, one of the oldest and simplest infrastructure contracting models still in wide use.

Under an EPC contract, the government funds the entire project cost upfront, and the contractor is responsible purely for engineering the design, procuring materials and equipment, and constructing the asset to specification, for a fixed fee. Once construction is complete and handed over, the contractor typically has no further involvement in operating or maintaining the asset, and carries no exposure to how the asset performs afterward.

EPC remains an important part of India's infrastructure toolkit precisely because of its simplicity, and construction companies routinely carry a mixed order book of both EPC and HAM projects, EPC for quicker, fee based revenue and HAM for the longer, annuity backed income stream that builds a more durable base business over time.