Complexity in Ownership Structure

In a complex engineering and construction company, as well as in any capital project, either public or private, the structure of ownership is becoming more and more complex, due to a general shift from line to matrix. As a matter of fact, while until the end of the last millennium was still possible to identify, in majority of capital projects, the “owner” that was generally also the “employer” on one side and one or more “contractors” on the other side, now we find a more complex structure where, instead of the owner, we have different actors like “promoters”, “developer” and “investment funds” or other investment organizations, that supply the majority of the finance. This causes a lack of entrepreneurship, than vcan only in part be supplied by high level consultancy.  

The investors have a completely different approach to risk management as well as to the very concept of value creation if compared to entrepreneurs, that causes a different strategic management of the project, with a different vision that sometimes can kill a project that would otherwise be viable.

A further problem is given by the increased importance of other stake-holders that were not taken into consideration in the past.

The life cycle of a capital project is being reshaped, there is a general tendency to group projects someway related each other into programs, sometimes including in the same program a lot of project whose relationship is too weak to be managed together, the focus of the attention that was divided into construction and operation as two different activities without any relationship is now oriented towards the whole life cycle, starting from ideation and feasibility through execution and operation until the dismissal of the project.

The role of the developers has to be analyzed: some of them are really entrepreneurs, that make all design and authorization activities with own resources and funds and then put the fully authorized project on the market, other are consultants working with owner’s funds, in majority of cases we see mixed contractual structures (co-development).

New forms of contract are emerging, where the tendency is to replace conflicting parties with partnership agreements. The world of capital project has been subject to substantial changes from 2000 to 2020, and it is supposed to goi through further changes from now to 2050.