Antonio Garibay
Director General
IAC México

Attention to Detail in Contract Management

Wed, 02/19/2014 - 17:22

Wind farms and transmission lines make up just one chapter of an ample portfolio owned by Ingeniería en Administración de Contratos (IAC) that includes roads, airports and convention centers. But given Mexico’s current needs, few chapters of that portfolio are more crucial than energy. As IAC’s Director General Antonio Garibay explains, the company has always identified key factors that enable it to participate in the right infrastructure projects.

The company carefully assesses external conditions. In this light, IAC has looked closely at the investment that Mexico has made in the energy sector for the last 15 years, through the actions of CFE and PEMEX. “CFE is very committed to developing new power generation, transmission and distribution projects. This has been a huge opportunity for IAC to find new business,” says Garibay.” IAC can count on its experience of supervising turnkey infrastructure projects as well as EPC for various sectors. Unlike many new players in the Mexican market, IAC masters the make-up of the market, and knows how to navigate the maelstrom of public contracts, applicable laws, and the right norms and codes to follow.” Garibay states this overarching expertise has translated into savings and profits for IAC’s clients, and has formed its reputation as a consulting services provider that it has exported across Latin America.

It is this diverse knowledge base that has allowed IAC to invest US$4 billion in projects since its creation in 2000, including over 120 infrastructure projects in Mexico and Latin America. As one of the few firms with experience in virtually every type of energy project from hydroelectric power stations to combined cycle plants, and even nuclear plants, IAC seeks to work only on important projects. “We understand the importance of the key aspects that can lead to the collapse of an otherwise well-thought out project at any time if executed by a company that does not have the experience to successfully handle the crucially important social and environmental aspects of infrastructure projects,” says Garibay to explain IAC’s track record.

IAC is confident that it can continue to make a big splash in the Mexican energy sector. “We want to be a big player in consulting services to develop green energy projects: mini-hydro, geothermal, wind farms, biomass, biogas, and tidal and ocean energy. We are actively participating in wastewater plants that use waste mud to produce biogas, which is used by the plant operator to produce energy that serves for self-consumption purposes,” says Garibay. To ensure this ambitious plan is achievable, IAC has studied every type of project that can happen in Mexico, both in the public and private sector.

The above priorities have been amalgamated into a key element for IAC: contract management. In order to identify major potential risks and opportunities, IAC conducts deep analysis of every project’s legal and contractual conditions. These include IPP (independent power producer), BOT (build-operate-transfer), and EPC contracts. To ensure that this expertise is a company asset at every level, Garibay explains that all employees are required to understand the strategic thinking and cultural profiles of different clients, both international and Mexican. “We prepare our engineers to think as well as lawyers, to write what they want to transmit in a contract in perfect Spanish and English,” explains Garibay. “We prepare them and encourage them to negotiate in the most convenient terms for our clients during project implementation and execution.” For the public sector, IAC focuses on doing project and contract management by the book, aware that public entities like PEMEX, CONAGUA and CFE will face more regulation and scrutiny to ensure they fulfill all the applicable laws anytime they enter into a contract. For the private sector, IAC adopts a more flexible approach based on the type of law that regulates each investment, the lifecycle of a project and on the fact that building and developing infrastructure in Mexico tends to be faster when involving only private entities.

IAC is clear on where it will turn its broad focus in the future? The renewable energy sector has the firm’s attention in a major way, and not just in wind, solar or waste-to-energy projects. IAC also worked with Alstom on the Los Azufres II and Los Humeros II geothermal power stations, but Garibay has a particular interest in tidal and ocean energy. The federal government has been aggressively investing in the development of these resources, and it is no surprise that IAC is gearing up to participate.