Investment in capital projects represents a commitment of finite resources, money and time. During the project lifecycle there are countless risks that need to be mitigated to ensure a return on the organization's investment. Projects can quickly be derailed by challenging regulations, evolving government expectations or technological advances that require significant changes to ongoing projects.
For investors or owners, this represents a minefield of uncertainty that can expose budgeting shortfalls or exacerbate existing problems within highly compressed project schedules. Although investing in Germany presents specific challenges, organizations can in return expect a very stable political climate as well as the opportunity to plan for the long term and look confidently into the future.
These are some of the challenges we have experienced with our clients' projects.
Dr. Markus Kreher
Partner, Head of Finance Advisory, Head of Media
KPMG AG Wirtschaftsprüfungsgesellschaft
Minimizing the impact caused by project construction and operations while still achieving a target return on investment is a key consideration for many owners. Additionally, strict EHS legislation for both renovations and new construction can significantly delay project permit approvals, leading to significant costs and delays.
Contractor & staff availability
The German construction market is currently very tight due to favorable lending conditions. Knowledge of the German market and contracting structures is indispensable in maximizing the number of tender returns and acquiring competent staff.
Re-activating and expanding transport and utilities infrastructure can be a lengthy process in Germany. Assessing the feasibility of mission-critical infrastructure (direct purchase and public) and helping negotiate terms that are aligned with the project's goals are pivotal for project success.
Regulation frequently differs from state to state in Germany, and red tape too often slows things down. Experience with local authorities is key to navigating approval processes.
These are just some of many factors that impose cost and schedule constraints on already complex projects and programs. Owners need a trusted advisor to help them navigate through these issues and to deliver successful projects.