Lessons from Common Engineering and Project Development Failures
Many industrial and energy projects
fail not because of a lack of technology, but because critical issues are
overlooked long before construction begins. In sectors such as oil &
gas, power generation, utilities, and bioenergy, project failures are often
rooted in weak feasibility assumptions, premature decisions, and
insufficient independent review.
An independent project review is not
about criticizing a project team. Instead, it is a structured process designed
to identify gaps, risks, and unrealistic assumptions early, when
corrective actions are still possible and cost-effective.
This article discusses why
independent project reviews are essential, what they typically uncover, and
how they can significantly improve project outcomes.
Understanding
the Purpose of a Project Review
A project review is a systematic
evaluation of a project’s:
- Technical concept
- Engineering assumptions
- Cost and schedule estimates
- Execution readiness
- Operational and long-term sustainability
The objective is simple:
👉 to determine whether the project is technically sound,
commercially viable, and realistically executable.
Independent reviews are especially
valuable when conducted during:
- Concept development
- Feasibility Study (FS)
- Pre-FEED or FEED stages
At these stages, decisions have
long-term consequences, yet flexibility still exists.
Common
Issues Identified During Project Reviews
Based on experience across multiple
industrial and energy projects, independent reviews frequently identify
recurring issues.
1.
Over-Optimistic Technical Assumptions
Many feasibility studies rely on:
- Ideal operating conditions
- Vendor data without verification
- Best-case performance scenarios
In reality, industrial facilities
operate under variable conditions. Over-optimistic assumptions often result in:
- Under-sized equipment
- Insufficient redundancy
- Poor operational reliability
A project review challenges these
assumptions and aligns them with realistic operating experience.
2.
Incomplete Scope Definition
Projects often move forward with:
- Undefined utilities interfaces
- Unclear battery limits
- Missing auxiliary systems
This leads to scope creep during EPC
execution, causing:
- Cost overruns
- Schedule delays
- Contractual disputes
An independent review helps clarify
scope boundaries early, reducing downstream risk.
3.
CAPEX and OPEX Underestimation
Cost estimates prepared during early
project stages are frequently optimistic, particularly for:
- Imported equipment
- Specialized technologies
- Operations and maintenance
A robust project review examines:
- Estimation methodology
- Benchmarking against similar projects
- Sensitivity to market conditions
This ensures decision-makers
understand the true financial exposure of the project.
4.
Weak Execution Readiness
Many projects appear attractive on
paper but are not ready for execution. Common gaps include:
- Unrealistic schedules
- Long-lead equipment not identified
- Insufficient constructability analysis
Independent reviews assess whether a
project is genuinely ready to proceed or requires further development before
committing significant capital.
Why
Independence Matters
Project teams are often deeply
invested in the success of their own concepts. While this commitment is
valuable, it can also create confirmation bias.
Independent reviewers bring:
- Objective judgment
- Experience from multiple projects
- Freedom from internal pressure
This independence enables honest
assessment and constructive challenge, which ultimately strengthens the
project.
Case-Based
Insight: Energy and Industrial Projects
Across energy and industrial
sectors—including power plants, gas facilities, utilities, and bioenergy
projects—similar patterns emerge:
- Early-stage decisions dominate long-term performance
- Small design changes during FS or FEED can save
millions during operation
- Projects without independent review are more exposed to
cost and schedule risk
In bioenergy and biogas projects,
for example, reviews often reveal that feedstock assumptions and operational
complexity are underestimated, leading to performance shortfalls after
commissioning.
The
Value of Early-Stage Reviews
The greatest value of a project
review is achieved before EPC commitment. At this stage:
- Design flexibility is still available
- Capital exposure is limited
- Risk mitigation is affordable
Waiting until construction or
operation to address fundamental issues is significantly more costly.
How
Project Reviews Support Better Decision-Making
Independent project reviews support
stakeholders by:
- Improving decision confidence
- Highlighting hidden risks
- Aligning technical and commercial objectives
- Supporting go / no-go decisions
- Enhancing communication between engineering and
management
For investors and project owners,
this clarity is often more valuable than overly optimistic projections.
Who
Should Consider an Independent Project Review?
Independent project reviews are
particularly relevant for:
- Project owners and developers
- Investors and financial institutions
- EPC contractors seeking risk mitigation
- Management teams making capital allocation decisions
Any organization facing a significant
capital investment can benefit from an objective review.
Final
Thoughts
Successful industrial and energy
projects are not defined by advanced technology alone. They are built on sound
engineering judgment, realistic assumptions, and disciplined decision-making.
Independent project reviews play a
critical role in bridging the gap between concept and execution. They do not
slow projects down; instead, they help ensure that projects move forward with
clarity, confidence, and reduced risk.
How
This Applies to Your Project
This type of analysis is commonly
performed during:
- Feasibility Studies (FS)
- FEED and pre-FEED reviews
- Independent project assessments for investors and
owners
If you are planning or reviewing an
industrial, energy, or bioenergy project, an early-stage independent review can
significantly improve outcomes.
📩 Email: afakar@gmail.com
📱 WhatsApp: +62 813-6864-3249
🔍 About the Author
This article is published by Project,
Industry & Engineering Review Hub, providing independent project
reviews, engineering consulting, and industry analysis for energy and
industrial projects worldwide.
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