Investing in construction projects carries considerable risk and it can prove difficult to secure funding. To reduce risk, many large projects employ the services of a Project Manager.
Project monitoring is carried out on behalf of investors such as banks or fund managers, to inform them of risks associated with a project. The Project Manager’s role is to provide advice on risk and return on a financial investment.
Without an understanding of the risk and the overall risk/reward relationship attached to transactions, poor decisions may arise that can ultimately undermine your business performance. The Project Manager may advise upon land and property acquisition matters; statutory consents; competency of the developer, its team and any proposed project management systems; financial appraisals; development, finance, consultancy and construction agreements; construction costs and programmes; and design and construction quality.
In practice the bank or fund will often want to select a range of services to be undertaken by the project manager. Most instructions fall into 3 key stages. The initial audit report provides the opportunity for the project monitor to fully acquaint themselves with the proposed scheme. Once completed, the report should provide a complete picture of the project including:
the desired specification, design brief and constraints
the development appraisal and associated cost build-ups
the design and construction programmes
the design and construction team
Using their experience, the project manager will then be able to advise the bank or fund on the risks associated with the project and fully appreciate the consequences of variations or changes, as they arise.
It is essential that the project manager develops an understanding of the bank or fund’s interest in the development and the risk profile that results from this analysis. At the end of these discussions, the project monitor should be in a position to agree an appropriate scope of service, fee structure and form of appointment.
Due to our broad breadth of in-house expertise and experience we believe Hamblin Sullivan are ideally suited to providing this type of service. Should you wish to discuss your requirements further please feel free to contact us.