The Myth of the All-Inclusive Turnkey Contract Turnkey Contract - - PowerPoint PPT Presentation

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The Myth of the All-Inclusive Turnkey Contract Turnkey Contract - - PowerPoint PPT Presentation

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conference & convention enabling the next generation of networks & services The Myth of the All-Inclusive Turnkey Contract Turnkey Contract Edward West (Cable & Wireless Worldwide) conference & convention enabling the next

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conference & convention

The Myth of the All-Inclusive Turnkey Contract Turnkey Contract

Edward West

(Cable & Wireless Worldwide)

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SLIDE 2 enabling the next generation of networks & services

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Presenter Profile

Edward West joined Cable & Wireless in 2000, since when he has worked on systems including Japan-US, Maya-1, PanAm, EIG and WACS. He is a Chartered Engineer and Chartered Physicist. He is a

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Engineer and Chartered Physicist. He is a Member of the Institute of Physics and a Member of the Institution of Engineering and Technology. Edward West Principal Engineer Email: edward.west@cw.com Tel: +44 20 7528 2815 Mobile Tel: +44 7957 808680

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Presentation Overview

Turnkey contracts and their application to the submarine cable system market Alternative modular approaches Alternative modular approaches Purchasers as system integrators Summary and conclusions

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Section 1: Turnkey Contracts and the Submarine Cable System Market

Is submarine system project implementation as simple Is submarine system project implementation as simple as just “turning the key”?

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Turnkey is an Unquestioned Principle

  • Submarine projects

are almost always based on turnkey supply

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supply

  • Non-turnkey solutions

are usually rejected

  • ut of hand
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Ideal Model of Turnkey Supply

(Purchaser) (Supplier)

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Simple Model of Turnkey Supply

  • Product/service

provided ready to use

  • Appropriate to simple

products which can be

Supplier

products which can be provided “off the shelf”

Purchaser

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Benefits of Turnkey Supply

Simple, integrated organisational structure Purchaser’s input minimised One stop shop One stop shop

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Fit to Submarine Cable Industry

Complexity

  • Complex, technically

challenging product

  • Bespoke solution

Integration Purchaser effort

  • Devolution of work
  • Different products from

different business units

  • Purchaser involvement

needed in implementation

  • Overall project includes

Purchaser-only activities

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More Realistic Model of Submarine System Procurement

Submarine System SDH Backhaul Equipment Marine Sub Plant SLTE Purchaser PG System Supplier Station M&E Land Route Station Building s Back- haul NA NOC Synchro

  • nisation

Supplier Equipment Supplier

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Section 2: Modular Approaches to Submarine Cable Procurement

Modular applications of turnkey procurement to Modular applications of turnkey procurement to submarine cable projects

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Geographical Division of Work

  • Different segments provided by different

suppliers

  • Risk and capability shared by the

various suppliers various suppliers

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Division of Work by Product

  • Different suppliers

provide different products

  • Example: SDH

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  • Example: SDH

procured separately from sub plant

  • Best supplier for

individual job

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Section 3: Purchasers as System Integrators

Purchasers take on responsibility of ensuring that the Purchasers take on responsibility of ensuring that the completed system performs correctly as an integrated whole

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Purchasers as System Integrators

  • Different suppliers for marine activities,

submerged plant and terminal equipment

  • Responsibility of ensuring that the completed

system performs correctly as an integrated system performs correctly as an integrated whole rests with the purchaser

  • C&W Worldwide has acted as

systems integrator

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Purchasers as System Integrators

  • Pros:

– Flexibility – Multi-vendor environment environment – Cheaper

  • Cons:

– Multiple contracts – Increased Purchaser responsibility

Purchaser effort Purchaser risk/ responsibility Best solution Price

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Other Factors

  • Purchasers are risk-averse
  • Long haul / regional system
  • Consortium / private system
  • Ability of Purchasers to contribute significant
  • Ability of Purchasers to contribute significant

asset is key factor

– Redeployed submerged plant – Shore end re-use – Terminal equipment

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Section 4: Summary and Conclusions

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Summary

Theoretical turnkey Submarine turnkey

Purchaser Supplier

Submarine turnkey Purchaser integration

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Conclusions

Benefits of turnkey supply have not always been realised in the submarine cable system market Purchasers who have the capability can perform the system integration themselves Revival of previous incarnation of industry?

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SLIDE 21

2010

enabling the next generation of networks & services

conference & convention

Pacifico Convention Plaza Yokohama & InterContinental The Grand Yokohama 11 ~ 14 May 2010 www.suboptic.org The 7th International Conference & Convention

  • n Undersea Telecommunications