Sun. Sep 25th, 2022

Large-scale infrastructure projects are usually developed through various methods. One of these methods is known as turnkey project development. In this article we explain everything about turnkey projects.

What is a turnkey project?

According to the Oxford Dictionary, the word ‘turnkey’, an adjective, means anything that is ‘complete and ready for immediate use’. When applied to project development, the meaning of a turnkey project remains the same. A turnkey project is one that is designed, developed and equipped with all facilities by a company under contract. It is delivered to a buyer when he is ready to operate the business. Obviously, the company in charge of building a turnkey project does so for the cost agreed in the contract. The company’s work includes design, manufacturing, installation, after-sales support and technical service for the turnkey project.

See also: All about lighthouse projects

Characteristics of the turnkey project

In this way of doing international projects, a company that needs a manufacturing or service facility hires an outside operator to design and build, rather than doing it all on its own. The outside contractor is responsible for providing everything from manufacturing to supply chain services.

See also: What is a Greenfield Project?

Examples of turnkey projects

Most large-scale infrastructure projects financed by the government are developed on a turnkey basis. The next Jewar Airport project, for example, is a turnkey project. It is being developed by the Swiss company Zurich Airport International. Once fully developed, the airport will be handed over to local authorities to operate. In the housing market, a turnkey property is a fully furnished flat or apartment that you can buy and rent immediately.

Also read all about the Setu Bharatam Project

Benefits of turnkey projects

Such projects, also called turnkey projects, are mutually beneficial for the company that develops them and the player that eventually takes control of said projects. Some of the main benefits of turnkey projects are listed below:

  • Cost savings: A company hires companies that are willing to carry out projects at a cost mentioned in the contract.
  • Save time: Since there is no need for companies to waste their time and energy on developing a facility, they have time to grow their own businesses.
  • Without complications: As someone spends time and energy building the facility, the main operator is free from all sorts of legal and technical challenges, an inherent feature of project development, especially in a country like India.
  • Access to expertise and know-how: A company running a textile business may not be adept at building and operating a textile manufacturing unit. Therefore, turnkey projects offer them the opportunity to hire experts in the field in question.

Was this article useful?

  • 😃 (26)

  • 😐 (1)

  • 😔 (1)

Read More: Meaning, What is Turnkey Contract & Examples