The meaning and significance of a Turnkey project is explained in this article
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, stands for anything that is ‘complete and ready to use immediately. When applied to project development, a turnkey project meaning remains the same. A turnkey project is one that is designed, developed, and equipped with all facilities by a company under a contract. It is handed over to a buyer when it becomes ready to operate a business. Obviously, the company responsible for building a turnkey project does it for the cost as agreed in the contract. The work of the company includes design, fabrication, installation, aftermarket support, and technical service for the turnkey project.
Turnkey project features
In this mode of carrying out international projects, a company in need of a manufacturing or services facility hires a third-party operator to design and build, rather than doing everything on its own. The third-party contractor is responsible for providing everything from manufacturing to supply chain services.
Turnkey project examples
A majority of government-funded, large-scale infrastructure projects are developed on a turnkey basis. The upcoming Jewar Airport project, for example, is a turnkey project. It is being developed by Swiss company Zurich Airport International. Once it is fully developed, the airport will be handed over to the 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.
Benefits of turnkey projects
Also spelled as turn-key, such projects are mutually beneficial for the firm that develops them and the player that eventually takes control of such projects. Some of the major benefits of turnkey projects are listed below:
- Cost-saving: A company hires firms that are willing to make projects at a cost mentioned in the contract.
- Time-saving: As there is no need for companies to waste their time and energy on developing a facility, they get time to grow their own businesses.
- Hassle-free: As someone is dedicating time and energy to build the facility, the main operator is free from all sorts of legal and technical challenges, an inherent feature of the project development, especially in a country like India.
- Access to expert knowledge and technical know-how: A company running a textile business may not be an expert in building and operating a textile manufacturing unit. So, turnkey projects offer them a chance to hire experts in the concerned field.