Principles of Project Finance

financially whole, at least for some time (cf. §7.1.8). LDs provide an incen-

tive for the EPC Contractor to take any necessary action to deal with pro-

spective problems. But if the delay extends beyond 6 –12 months, it is likely

that delay LDs will run out, and the pressure on the EPC Contractor then re-

duces considerably.

Unless caused by last-minute performance problems, a delay in reaching

COD by the EPC Contractor is often quite predictable if detailed program-

ming for the project is in place, as it will become evident that critical-path

items (i.e., aspects of the project which, if delayed, will delay the final com-

pletion) are falling behind schedule. The Project Company and the Owner’s

Engineer should be supervising progress sufficiently closely ...