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A turnkey project or contract as described by Duncan Wallace (1984) is [2] …. a contract where the essential design emanates from, or is supplied by, the Contractor and not the owner, so that the legal responsibility for the design, suitability and performance of the work after completion will be made to rest … with the contractor ….
Various abbreviations used for this type of contract are LSTK for lump sum turn key, EPIC for engineering, procurement, installation & commissioning and EPCC for engineering, procurement, construction and commissioning. Use of EPIC is common, e.g., by FIDIC and most Persian Gulf countries. Use of LSTK is common in the Kingdom of Saudi Arabia.
Lump sum turnkey (LSTK) is a combination of the business-contract concepts of lump sum and turnkey.Lump sum is a noun which means a complete payment consisting of a single sum of money while turnkey is an adjective of a product or service which means product or service will be ready to use upon delivery.
Turn Key’s contract with the jail trust expired and a vote on a new deal has been delayed. The company is now working on a month-to-month basis.
A construction contract is a mutual or legally binding agreement between two parties based on policies and conditions recorded in document form. ... Turn key contract;
A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products (in which case it is a turnkey supplier). It is a form of outsourcing . A contract manufacturer performing packaging operations is called copacker or a contract packager .
The EPC contract is quite complicated in terms of legal issue, therefore the project company and the EPC contractor need sufficient experience and knowledge of the nature of project to avoid their faults and minimize the risks during contract execution. The terms EPC contract and turnkey contract are interchangeable.
A turnkey project is a way for a foreign company to export its process and technology to other countries by building a plant in that country. Industrial companies that specialize in complex production technologies normally use turnkey projects as an entry strategy.