Project Risk Analysis

On major transactions, typically greater than $20 million, lenders generally seek an independent opinion of a project or acquisition’s viability for the benefit of other participating lenders, governmental review agencies, and corporate compliance. For these projects, Synergen’s services include, but are not limited to:

Project Management – Project scope and time scheduling are reviewed for reasonableness and likelihood of success. A substantial number of projects exceed the planned work scope and project duration, often at considerable cost to the owner and lender. Factors influencing the success of a large scale project include the following:

Personnel

Systems and Procedures

Qualifications of Contractors and Vendors

Organizational Structure

Contract Terms and Conditions

Technology

Previous Successes and Failures

Economic Viability – Economic assumptions used to justify the project are reviewed, including the macroeconomic assumptions, the owner’s estimated productivity and profitability assumptions, and the economic assumptions utilized in the project costs. Many projects fail to realize their expected return due to improper economic assumptions of ongoing operating costs and other factors.

Business Operations – Ongoing operations of the project and enterprise are reviewed to identify “best practices” improvements to the existing operations and enhance operations after project completion. In many cases, our recommendations lead to enhanced profits far in excess of the project review costs. Improved operations and profitability reduce the lender’s risk in the project.

At SOCOTEC, we specialize in assisting clients with balancing the multifaceted contingencies of risk alongside specific contractual, financial, operational, organizational, and political requirements. By proactively identifying potential risks during the pre-execution phase, we empower our clients to prevent increased costs, delays, and disruptions that could impact their projects.

Our robust risk analysis and management process involves a meticulous assessment of construction risks and exposures. We then formulate comprehensive and effective risk management strategies designed to mitigate the potential for loss, ensuring our clients can navigate complex challenges with confidence and achieve their project objectives seamlessly.

SOCOTEC’s acquisition review is most beneficial when the acquirer of the business is a financial entity or in an industry not directly associated with the acquisition.

Many financial buyers focus on acquiring businesses with experienced and professional industry management. The management team of the acquired company, while competent within their industry, does not usually have extensive exposure to “best practices” that can be utilized to improve company operations.

In order to implement best practices, several of SOCOTEC’s services that differentiate us from other firms include:

-Reviewing efficiency of the operation and recommending best practices to improve efficiency and reduce costs
-Reviewing capital expenditure and future operating cost assumptions for reasonableness and efficiency
-Reviewing organizational structure and quality systems to optimize customer satisfaction and profitability goals

A troubled project or business can occur when either the owner or contractor is unable or refuses to continue the performance of its requirements due to insolvency, bankruptcy, force majeure or any other reason.

To minimize lender liability exposure, lending institutions utilize SOCOTEC’s experience in resolving troubled business situations by reviewing and implementing pro-active risk control measures. While lending institutions seek to be extremely cautious not to impose “lender liability exposure” to troubled projects, typical reactions in the industry include the following:

-Lending institutions insert clauses into financing agreements that require the owner to seek project management assistance from a pre-approved list of project management consultants when a project is more than a certain percentage over budget or exceeds the original timeline by more than a certain percentage.
-Lending institutions attempt to mitigate catastrophic cost overruns to seek preventative assistance.
-By avoiding catastrophic cost overrun projects, lenders avoid being drawn into contractual settlements and associated litigation.

When a project or business is troubled, SOCOTEC’s management experts quickly take action to implement procedures to get projects or businesses back on track. Additionally, our highly skilled team works with clients to mitigate and resolve problems while supporting progress. We are able to evaluate the situation and develop plans focused on moving forward, as well as execute these plans to ensure completion.

Market trends, customer needs, and effective market strategies are essential to success in any industry. It is important for a company to possess knowledge of market and industry trends, legal and regulatory changes, as well as political and economic changes in order to prevent loss of opportunities for their business.

SOCOTEC’s professionals have worked within many different industries and can provide thorough market analyses within a variety of sectors and industries. Our market research and analysis service provides clients with a better understanding of the environment their business operates in. We benefit companies by helping them identify new opportunities and execute competitive strategies, as well as assist in making smart business decisions.

SOCOTEC’s Professionals are educated and experienced in the following industry sectors:

-Airports
-Automotive
-Banking/Financial
-Commercial
-Education
-Environmental
-Government/Institutional
-Healthcare
-Hospitality
-Insurance
-LNG
-Manufacturing/Industrial
-Offshore/Maritime
-Petrochemical/Process
-Pipelines/Power/Energy
-Public Works
-Residential
-Sports/ Entertainment
-Technology
-Transportation