Planning Financial Absorptions on Infrastructure Projects through Adjusted S-curves in FIDIC Contracts

Abstract

Today it is hard to imagine new things, inventions and any accomplishments without projects standing behind them. Projects of any kind are a crucial part of our world; they have become the way of thinking and inevitable foundation for successful businesses. In order to produce a desirable impact on the community, project goals must be achieved – in other words, projects must be successful. Nevertheless, it often seems that we live in a world of unsuccessful project endeavors. Many authors agree that problems occurring in implementation phase could have been foreseen in conceptualization and planning. Therefore, planning has been recognized as a critical phase for projects to succeed. High-quality plans enable easier procurement, contracting, monitoring and control – leading to a better project management and overall project success. One of the most popular project management tools for project planning, especially when it comes to budgets, is a well-known S-curve. S-curve is simple, clean, report and user-friendly. All the above is stressed on the special manner when it comes to the largest and most complex projects – infrastructure projects. In Croatia, as well as other EU members, infrastructure projects are mostly EU co-financed, and often contracted via FIDIC terms of contract, which makes planning phases even more important. This research was conducted in order to contribute to the improvement of baselines and projection of financial realization. Theoretical baseline and empirical S-curves on portfolio of FIDIC Red and Yellow Book contracted projects in water sector were analyzed and compared, with the aim of proposing adjusted prognostic S-curves of financial absorption and therefore contribute to more efficient planning and implementation of projects.