Construction contracting for the 1990s

This paper reports that power plant constructing during the 1980s is over. Demand growth projections presently anticipate a need for 100,000 MW of new capacity by the year 2000, with only a small percentage of the demand growth currently under construction. Given a six-year lead time for baseload plants, a surge of activity must now begin. Another development over the past five years has been a conscious decision by regulators in increase rates only for the costs of efficiently built plants. The cost of construction inefficiencies will no longer be shouldered by investors. Large construction claims, excessive cost overruns, and expensive delays will no longer be passed on to the consumer automatically. Utility commissions will require the inefficient builders to either clean up their act or forego building their own plants. The most traditional contracting scheme, general contracting, will probably be the lease desirable in the construction of new power plants. General contracting is a single, general construction contract based on a detailed design. The design is not performed by the general contractor.