As first published in EIC Survive and Thrive Volume VI 2022, July 2022, Pages 78-79

How is HKA thriving?

As part of its strategy to provide a more holistic dispute service for energy sector clients, HKA is increasingly involving itself earlier in project lifecycles. Appreciative that this requires a highly bespoke and tailored approach for each development, HKA worked closely with a key client in Malaysia in 2018, when a US$1.1 billion project to build a natural gas-fired power plant commenced. Fast-forward to the present day, and the plant has been in successful operations since completion, after encountering delays and disruption during the various phases of the project and, of course, made worse by the COVID-19 pandemic. HKA was at hand playing a key role in resolving these disputes in collaboration with the client.

The challenge

As a firm renowned for resolving difficult disputes on complex construction and engineering projects, HKA broke away as a separate entity from Hill International in 2017 and has progressed since to be the world leading consultancy in risk mitigation and dispute resolution.

Today, a central part of its business objective is to operate reactively to dispute resolution, as a facilitator and a proactive dispute mitigation partner; a company that clients can turn to on complex projects, no matter where in the development cycle it is.

Following HKA’s successful service collaboration with a Malaysian stakeholder in a major first-of-a-kind IWPP in Saudi Arabia, HKA was invited to tender for a contract involving a natural gas-fired power plant in South Malaysia developed by Southern Power Generation (SPG). The US$1.1 billion, 1.44 GW plant is equipped with advanced power technologies, including the world’s first GE 9HA.02 gas turbines. The project’s engineering, procurement and construction (EPC) contract was executed between a Taiwanese and American contractor consortium with SPG. The plant commenced commercial operations in January 2021.

The challenge?

To support SPG, in ensuring minimal disruption from claims and disputes as much as possible. This was done through anticipating, investigating and resolving potential disputes, which can only be effectively achieved when working collaboratively with the client team.

The solution

HKA was selected as a project partner to SPG in March 2018 to provide advisory expertise on the EPC contract. HKA’s scope mirrored the various power projects it completed, both locally and abroad, where HKA facilitated the avoidance of claims and disputes by monitoring risk and providing real-time progress reviews and strategic advice to help mitigate delays and costs.

A bespoke, tailored approach was needed, one based on HKA’s formidable combination of in-house technical, risk, contractual and commercial competence.

Extensive support was provided: regular reviews of the contractor’s programme updates, identification of any misreporting, analysis of possible delay events, assessment of variation and other cost claims for accuracy and robustness, and generally strategy advice in defending SPG’s position.

The first two years were relatively straightforward, except for technical issues which leveraged on HKA’s forensic team to resolve engineering disputes. In March 2020, the first significant delays to the EPC work were reported due to planning, workmanship and other defects. The simultaneous untimely onset of COVID-19 restrictions imposed by the Malaysian government exacerbated the situation. This prompted HKA to investigate a series of claims for costs as well as extension of time. Its analysis showed the claims presented were not entirely substantiated as a direct consequence of an excusable event, including force majeure. Indeed, with HKA’s assistance, several claims around commissioning defects, unreadiness for integration with grid, and significant loss of productivity not linked to COVID-19 management were rebutted.

With further claims made in 2021 eventually resolved amicably with HKA’s support, HKA continued to be critical in devising appropriate mitigation measures. The plant is operating profitably with SPG more than satisfied with the facilitating role HKA has played throughout.

The project’s success is all the more impressive given the element of risk involved. The plant’s use of cutting-edge technology, which is by no means widely adopted, meant there was little to no track record of implementation to predict how the process would play out. However, the fact that HKA was involved early certainly paid dividends in avoiding large disputes towards the end of the EPC contract, not least because of the unforeseen pandemic impact.

With over 1,000 professionals operating across 18 countries around the world, this is just one leading example of the company’s 45-plus years of experience helping to push the power sector forward.

About HKA

HKA is the leading global consultancy in risk mitigation and dispute resolution, using its multi-disciplinary expertise to provide a comprehensive set of specialist services:

• Expert, Claims and Advisory services for the capital projects and infrastructure sector
• Forensic Accounting and Commercial Damages services for all types of contracts, including commercial and investment treaty disputes
• Cybersecurity & Privacy services and training to protect critical systems and data, and comply with legal and contractual standards
• Consulting services to support companies working on US Federal Government contracts

HKA brings a proud record of excellent service and high achievement to bear on today’s challenges. As trusted independent consultants, experts and advisers, HKA helps clients manage disputes, risk and uncertainty on complex contracts and challenging projects.

The company works with government agencies, local authorities, contractors, legal firms and other professional service providers, as well as owners and operators, financial institutions and insurers.

HKA’s global portfolio includes some of the world’s largest and most prestigious commissions across a wide range of industries including buildings, industrial and manufacturing, power and utilities, resources, transportation infrastructure, technology, financial services, government contracts and non-profit.

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Media Contact:
Crystal Lim
CrystalLim@hka.com