Advantages and Disadvantages of a Consortium: (A Case Study)

Nowadays mega projects have got complex in all aspects from initialization to implementation, commissioning, and operation. They need investment of a large amount of money, time, technology, and managerial effort in addition to pay significant attention to social, economic, and political effects on the host country and even other countries which provide feed and material for mega project or consume its products. In the developed world of industry and business, different sections of a mega project such as financing, design, construction, operation, and management of all these staff are quite professional. Each company may become professional at only a limited number of these fields. Thereupon collaboration of companies to cover all required professions in a mega project is inevitable. So they need to manage for cooperation of several companies to execute a mega project via collaborative work. In order to perform a successful collaboration, all partners should establish an efficient and effective procedure with all required legal terms and conditions to regulate parties relations. There are several methods to bring companies together for collaborative work and alliance. Each method has its own legal base and executive process which make it different with others. Some different names for collaborative work in project execution are: Alliance Contract, Partnership Contract, Joint Venture Contract, and Consortium Contract. The consortium type of contract is used to implement various types of projects. Some of applications of consortium agreement are listed in Table1.

Keywords:

consortium management , collaborative work , coordination procedure , consortium partner , megan project , contract strategy