Improving Design Performance by Alliance Between C
Improving Design Performance by Alliance Between C
Improving Design Performance by Alliance Between C
Article
Improving Design Performance by Alliance between
Contractors and Designers in International
Hydropower EPC Projects from the Perspective of
Chinese Construction Companies
Qingzhen Zhang 1 , Wenzhe Tang 1, *, Jersey Liu 1 , Colin F. Duffiel 2 , Felix Kin Peng Hui 2 ,
Lihai Zhang 2 ID and Xuteng Zhang 1
1 Department of Hydraulic Engineering, State Key Laboratory of Hydroscience and Engineering,
Tsinghua University, Beijing 100084, China; zqz15@mails.tsinghua.edu.cn (Q.Z.);
jersey.liu@foxmail.com (J.L.); zhangxut17@mails.tsinghua.edu.cn (X.Z.)
2 Department of Infrastructure Engineering, The University of Melbourne, Melbourne, VIC 3010, Australia;
colinfd@unimelb.edu.au (C.F.D.); kin.hui@unimelb.edu.au (F.K.P.H.); lihzhang@unimelb.edu.au (L.Z.)
* Correspondence: twz@mail.tsinghua.edu.cn; Tel.: +86-10-6279-4324
Received: 19 March 2018; Accepted: 11 April 2018; Published: 13 April 2018
Abstract: Extant literature lacks a systematic framework addressing the mechanisms of the alliance
functional process and its impacts on management activities together with performance in delivering
Engineering–procurement–construction (EPC) projects. This study quantitatively investigates the
cause–effect relationships among these themes by building and validating a conceptual model
of contractor–designer alliance in international hydropower EPC projects. With the support of
data collected from an industry survey, the results reveal the key design problems, application of
contractor–designer alliance, design management level and performance, which form a sound basis
for design management emphasis in EPC activities, e.g., sufficiently considering sustainability of
hydropower projects by incorporating environmental, social, and economic factors into designs. The
path analysis indicates that the contractor–designer alliance can not only improve design performance
by enhancing design management, but also directly promote design performance. This research has
significant contributions to the body of knowledge by building interdisciplinary linkages between the
areas of alliance, design management, and performance, theoretically demonstrating the mechanism
of how interfirm cooperation functions to achieve superior design outcomes of hydropower EPC
projects. Understanding these causal relationships will be crucial for contractors and designers to
optimally allocate their complementary resources for seeking better design solutions in dealing with
both technical issues and sustainability factors.
1. Introduction
With the pressure of controlling climate change [1], hydropower, as a renewable energy,
is a significant way to reduce greenhouse gas emissions, and the development of hydropower
has become a trend for implementing the long-term strategy for sustainable energy worldwide,
especially in developing countries of Asia, Africa, and Latin America [2–5]. For example, hydropower
accounts for 99% and 85% of all electricity supply of Zambia and Brazil, respectively [6–8].
In developing countries, the engineering–procurement–construction (EPC) approach has been
increasingly adopted to deliver hydropower projects by international contractors due to its high
solutions in dealing with various hydropower project design problems related to technical, social,
and environmental issues.
This paper is organized as follows. After the introduction, a conceptual model of contractor–
designer alliance in international hydropower EPC projects is established. The following section details
the research methodology. Then, the outcomes of survey analysis are presented. Furthermore, the path
analysis is adopted to validate and interpret the relationships among alliance, design management,
and design performance. Finally, the results of this study are given.
2. Conceptual Model
2.1. Background
International hydropower EPC projects are typically large and complex with many design
challenges [15,34]. Extant studies on design problems in international hydropower EPC projects
mainly regard: (1) causes of uncompetitive preliminary design in bidding, such as inadequate design
information collection, technically uncompetitive design option, high construction cost of project,
and unclear project scope [31,32]; (2) unfamiliarity with project-related standards or laws, especially
for the differences in project standards or HSE laws at home and abroad [9,33]; (3) problems on
design quality and time, e.g., design errors or defects, difficulty in obtaining approval from consulting
engineers, design rework, and design delays [34,35]; (4) lack of incentives for promoting designs,
mainly involving insufficient design optimization and low design fee causing inadequate design
inputs [15]; (5) design-related interface management problems, including insufficient depth of design
causing procurement delay, poor constructability of design option, inefficient coordination among EPC
activities, ineffective communication with consulting engineers, poor management of design variation
processes, and unstandardized information management of design [36].
Meeting with the above challenges requires EPC contractors to select suitable designers as their
partners to form alliances with when dealing with various design problems [35,36]. Alliance facilitates
contractors and designers to provide complementary resources to improve the design performance of
hydropower EPC projects [31,37]. However, the interplay between of alliance, design management,
and design performance are still unclear. This is attributed to the lack of a systematic framework
addressing the mechanism by which performance improvements are actually generated from alliance
partners’ co-creating value in design management of EPC projects. Thus, a conceptual model of
contractor–designer alliance has been established to help understand the causal relationships among
contractor–designer alliance, design management, and design performance in delivering international
hydropower EPC projects, as seen in Figure 1.
2.2. Alliance
Alliance, as a kind of relational governance, is a critical way to achieve a competitive advantage for
the partners [38]. Parties in alliance contractually commit to their inputs and required rewards, and use
an appropriate risk allocation, thereby aligning their objectives to manage the project activities [31]. The
needs for adopting alliance can be attributed to two aspects. Firstly, contractual governance alone is
incapable of adapting to complex systems [25], e.g., hydropower project development involving
sophisticated engineering, social and environmental issues, and formal contracts and relational
governance as factors that jointly impact the performance [22,23,26]. Secondly, alliance facilitates
resource complementation among individual partners, and fosters their combined capabilities in
achieving superior performance [16,27–29]. Studies of the critical components of alliance have been
conducted by many researchers by identifying the key factors of alliance. The main key factors
identified include jointly tendering, equity, trust, effective communication, problem resolution,
incentives, and strategic partnership [15,28,29,37,39–41].
Nevertheless, existing research typically focuses on only one theoretical perspective [24], and there
is a lack of coherent framework to address the interactions of the key alliance factors. Thus, this study
has incorporated the above factors into an integrated framework of alliance functional process, as seen
in Figure 2.
Alliance between contractors and designers starts with joint tendering at the bidding stage
of international hydropower EPC projects [42]. The alliance appropriately identifying, classifying,
and analyzing risks is critical for designers to fulfill satisfactory preliminary design as the basis of
assigning risks in bidding documents [43]. Designers should not only be selected on the basis of their
expertise to meet stringent design criteria, but also need to match the contractors’ capabilities, such as
their construction technology, human resources, and plans for preparing financially and technically
competent bids [28,44].
After successfully winning the bids, contractors and designers should equitably allocate rewards
and risks during project implementation and foster a trust-based relationship with each other. By
establishing trust, the boundaries of contractors and designers will gradually merge and become more
permeable, allowing effective communication in collaboratively dealing with EPC activities [21,45–47].
Effective communication between contractors and designers assists necessary information to be
appropriately integrated in design processes, which is critical to resolving complex problems such as
Sustainability 2018, 10, 1171 5 of 24
meeting requirements of occupation health, safety, and environment (HSE), optimizing designs for
cost saving, and improving constructability [48,49].
After successfully resolving design-related problems, incentive schemes should be executed to
ensure that real equity between contractors and designers is achieved. Incentive schemes should be not
only linked to design problem resolution processes but also tied with final hydropower EPC project
outcomes, enabling designers to have strong motivations and necessary resources to achieve better
design performance [9,15,33,41]. Successful delivery of hydropower EPC projects will form a sound
basis for contractors and designers to establish long-term strategic partnerships, which facilitates joint
tendering for future hydropower EPC projects to expand their international market share [39,40].
work flows in the implementation of EPC projects [65,66]. Contractor–designer alliance can improve
design-related interface management and reduce problems arising from miscommunication and
incomplete information throughout overlapping EPC phases [51,60].
3. Research Methods
Based on the above literature review, the questionnaire has been designed to collect data for
validating the conceptual model (Figure 1), which was the main data collection instrument. A five-point
Likert scale was adopted to evaluate international hydropower EPC project design problems, alliance,
design management, and design performance in a quantitative manner. As Chinese contractors account
for about 50% of market share in the global hydropower industry [34], we decided to collect data
from Chinese construction companies who have delivered international hydropower EPC projects. To
avoid the low response rate of postal surveys [71], four fieldtrips had been conducted to survey four
Chinese construction companies (one trip to one firm). These four Chinese construction companies
were chosen for surveying because the firms, as main contractors, have delivered a large number of
international hydropower EPC projects that are scattered in Africa, Asia, South America, and Oceania,
which is consistent with the share of Chinese contractors’ international business. These construction
companies normally select Chinese consulting companies as partnered designers, and their alliance
starts from jointly tendering for international hydropower EPC projects.
The respondents from the four companies were initially identified and contacted through personal
relationships, and then direct communication with them confirmed the survey arrangements for
this study. Fieldtrip survey enabled all distributed questionnaires to be returned, and a total of
134 questionnaires have been collected. Excluding 32 invalid ones with incomplete information,
102 questionnaires were used for analysis. Fieldtrip surveys facilitate immediate semi-structured
interviews with the respondents holding senior positions after finishing the questionnaire. The themes
of questionnaire were used as the interview topics, enabling data collected from interviews to confirm
and interpret the results from the questionnaires. Overall, 35 respondents were interviewed. The
profiles of the respondents and interviewees are shown in Table 1.
Number of
Roles of Respondents Working Years of Distribution of Samples
Respondents
/Interviewees Respondents/Interviewees (Respondents/Interviewees)
/Interviewees
Southeast and Latin
3–5 6–10 11–20 >20 Africa Oceania
South Asia America
CEOs/Deputy CEOs 5/5 5/5 1/1 2/2 1/1 1/1
Project managers 16/10 6/3 10/7 4/3 6/4 4/2 2/1
Heads/Deputy heads of
project management 46/20 4/0 23/6 12/9 7/5 15/6 19/9 9/4 3/1
department
Engineers 35/0 5/0 18/0 7/0 5/0 10/0 15/0 7/0 3/0
Total 102/35 9/0 41/6 25/12 27/17 30/10 42/15 21/7 9/3
The respondents of 102 questionnaires are classified as: 5 (CEOs/Deputy CEOs), 16 (Project
managers), 46 (Heads/Deputy heads of project management department), and 35 (Engineers). Among
the respondents, 91.2% have more than 6 working years. The respondents, who are engaged in
managing design, procurement, construction, HSE, and contracting, have rich experience in delivering
international hydropower EPC projects. Specifically, as key management staff of EPC contractors,
the respondents’ experiences are closely related to design activities. For example, they need to evaluate
constructability of designs considering requirements of local HSE laws, review whether design option
is technically and financially feasible, and ensure sufficient depth of design for meeting lead times of
equipment manufacture and installation. The distribution of samples was: Southeast and South Asia
(30), Africa (42), Latin America (21), and Oceania (9).
The interviewed respondents include 5 CEOs/deputy CEOs, 10 project managers, and
20 heads/deputy heads of project management department. Among the interviewees, 82.9% have
more than 11 working years. Interviews revealed some of the specific experiences and lessons of
hydropower EPC projects, which can also help to explain the questionnaire survey results.
Sustainability 2018, 10, 1171 8 of 24
In addition, data of two cases were gathered by interviews and collection of project documents.
The data of two cases were used to verify and illustrate the relationships established in the conceptual
model. One case is the Nadarivatu Hydropower Project, comprising of a 41.5 m high dam and a power
plant with a 44 MW generator, located in the main Island of Fiji. The total investment of the project is
approximately US $131 million, and the project implementation duration was about 4 years. Another
case is the Djiploho Hydropower Project, comprising of a 26 m high dam and a power plant with four
30 MW generators, located on the middle of Wele River near Djiploho in Equatorial Guinea. The total
investment of the project is approximately US $257 million, and the project implementation duration
was about 3.5 years. Both projects were undertaken by Chinese construction companies with the EPC
project delivery approach.
4. Survey Analysis
(1) Design Problems Related to Unfamiliarity with Project-Related Standards and Laws
“Unfamiliarity with the differences in project standards at home and abroad” (1st) obtains the
highest rating, and “unfamiliarity with the local HSE laws” (10th) is also considered as an important
issue. This suggests that sufficiently understanding the project required standards and involved
local laws is challenging to international hydropower EPC project designers. This can be attributed
to foreign international hydropower project-related standards/laws potentially being substantially
different from Chinese standards/laws, not only in specific requirements, but also in underlying
philosophy (Lei et al., 2017). Interviews confirm that, as the experience of designers has primarily been
accumulated from domestic hydropower projects that normally adopt home standards, the designers’
biggest problem is the unfamiliarity with foreign standards, especially when the designers are new
entrants in an international market. For example, the design work of Nadarivatu hydropower EPC
project in Fiji required the use of Australian and New Zealand standards, which were new to a designer.
The designer’s unfamiliarity with the standards was closely related to “design errors or defects” (2nd),
resulting in “designs are difficult to obtain approval from consulting engineers” (6th) at the early stage
Sustainability 2018, 10, 1171 9 of 24
of project delivery. These design problems further led to “design rework” (7th) and “design delays”
(4th), which significantly affected the implementation of the project, e.g., causing a project delay of
one year.
Preliminary design starts from reviewing conceptual design given by consulting engineers in
the tender documents. As many conceptual designs of hydropower EPC projects only generally
define clients’ needs and expectations, leaving high uncertainties for bidding, it is a great challenge
for designers to prepare satisfactory preliminary designs to win the contracts. The most common
preliminary design problem in bidding is “inadequate design information collection” (5th). This
problem arises from not only the lack of ascertaining the clarity of clients’ requirements and
sufficiency of tender documents, but also insufficient input during the collection of important data,
such as project geological conditions, climate, ecological and environmental issues, transportation,
economic and political circumstances, suppliers, local human resources, and affected communities.
Insufficient site data can cause problems such as inappropriate treatment of geological conditions
and unsuitable dealing with social and environmental issues, leading to “design option is technically
uncompetitive” (13th). Interviewed project managers indicated that inadequate design data can also
cause “high construction cost of design option” (8th) and “uncertainty of projects’ specific scope and
unclear parameters of equipment cause deviation in project cost” (12th), which result in proposed
preliminary design option being economically uncompetitive. These findings explicitly illustrate how
preparing hydropower EPC project bids with insufficient information reduces the chances of obtaining
satisfactory design solutions in the tenders (Xia et al., 2013).
“Insufficient depth of design causes delays in the preparation of procurement plans and
equipment manufacture” (3rd) is the third highest ranked rating, indicating the criticality of effectively
coordinating design and procurement. The interviewed hydropower project managers pointed out that
the major equipment of international hydropower EPC projects are normally purchased from global
markets, which need long lead times from preparing procurement plan, equipment manufacture,
and transport to installation at site. Insufficient depth of design will significantly reduce the lead time
of procurement, creating high pressure in equipment manufacture and installation.
“Poor constructability of design option” (9th), “coordination efficiency between design,
procurement and construction is low” (11th), “communication with consulting engineers is inefficient”
(15th), “poor management of design variation processes” (17th), and “information management of
design is not standardized” (18th) are also design-related interface management problems. These
problems are attributed to project participants’ intentions and needs have not been efficiently conveyed
to relevant parties and clearly understood by them. For instance, poor constructability of design
options normally arises from the designers not having sufficiently incorporated contractors’ feedback
into the design process.
4.2. Alliance
As shown in Table 3, “jointly tendering” (1st), “trust” (2nd), “strategic partnership” (3rd) and
“problem resolution” (4th) obtain high ratings ranging from 4 to 4.13, showing that these key factors
of alliance between contractors and designers have been achieved at a considerably higher level.
Interviews confirm that contractors and designers made efforts to jointly win the international
hydropower EPC project contracts and collaboratively resolve problems in project implementation,
and after successful project delivery, they tended to form long-term partnerships underpinned by the
established trust to tender for new projects.
“Effective communication” (5th), a moderate rating, indicates that achieving effectiveness and
efficiency in communication is not easy. This is in line with that severity of “insufficient depth of design
causes delays in the preparation of procurement plans and equipment manufacture” which ranks third
(see Table 2), due to the complexity of managing various interfaces in EPC project implementation.
“Equity” (6th) and “incentives” (7th) have the lowest ratings, suggesting that achieving real
gain-share/pain-share is most difficult in alliance between contractors and designers in international
hydropower EPC projects. At the beginning of their cooperation, parties need to clearly specify
equitable allocation of rewards/risks, and during project execution, establish appropriate incentives
to promote design optimization, reduce project cost, and improve the constructability of designed
work. The interviewed hydropower project managers pointed out that the difficulties in allocating
rewards/risks arose from the high uncertainty experienced at the early stage of EPC projects, and the
difficulty of using incentives lay in how to ensure the incentives are effective. For instance, the set
incentives may be inadequate in motivating designers for optimization. Due to the information
asymmetry between designers and contractors, the measurement of the value of design optimization
also poses some challenges when deciding the amount of rewards to give the designers.
As shown in Table 4, all seven key alliance factors of jointly tendering, equity, trust, effective
communication, problem resolution, incentives, and strategic partnership are significantly correlated
with each other at the 0.01 level. The correlations among the key alliance factors demonstrate that
Sustainability 2018, 10, 1171 12 of 24
alliance achievements arise from the interactions of the above factors, confirming the relationships
established in alliance functional process of Figure 2. Specifically, trust has high correlations with
equity and effective communication (r = 0.672 **), respectively, validating that trust is not only closely
influenced by equitable allocation rewards/risks, but is also the basis of effective communication in
project implementation (see Figure 2). The correlation between effective communication and problem
resolution is the strongest (r = 0.685 **), confirming that effective communication can significantly
facilitate solving problems in a timely manner during EPC project delivery, as shown in Figure 2.
As shown in Table 5, the typical index of jointly tendering is the highest (0.381), which can be
considered as the representative factor and generally reflects the variance of alliance. This is not
surprising, as contractors and designers jointly winning hydropower EPC project contracts is the
basis of in-depth collaboration involving subsequent key alliance factors in project implementation.
Contractors and designers being able to repetitively succeed in joint tendering can also illustrate
that the two parties have stable and high level of alliance in delivery of international hydropower
EPC projects.
“Internal review” (3rd) has the third highest rating, demonstrating that contractor–designer
alliance has considerably formal internal design review processes. Interviews show that
contractor–designer alliance largely relied on their own expertise to conduct quality audits,
cost evaluations, construction schedule analysis, constructability analysis, and optimization of
design options for technically promoting designs. However, “external review” (8th) and “using
specific expertise as complements to designers” (9th) obtain the lowest ratings. These suggest that
contractor–designer alliance has a large margin for improvement in seeking external expertise
assistance to deal with difficult technical issues. The interviewed hydropower project managers
indicated that selecting local consultancy firms with experience suitable in solving specific design
problems can significantly reduce construction cost and time.
The results of Table 8 show that: (1) the regression coefficient of design performance predicted by
alliance is 0.494 (p < 0.01) with the amount of variance explained by alliance being 23.1% (R2 = 0.231), at
the significance level of 0.01; (2) the regression coefficient of design management predicted by alliance
is 0.687 (p < 0.01) with the amount of variance explained by alliance being 37.60% (R2 = 0.376), at the
significance level of 0.01; and (3) the regression coefficients of design performance jointly predicted by
alliance and design management are 0.240 (p < 0.05) and 0.370 (p < 0.01) with the amount of variance
explained being 33.2% (R2 = 0.332), meeting the significance hurdle of 0.05, and the effect that alliance
exerts on design performance has decreased from the original 0.494 to 0.240. These results indicate
a partial mediation, as alliance has less effect on design performance when design management is
included in the regression model. Thus, the conceptual model is supported, as shown in Figure 3.
Figure 3. Relationships among alliance, design management, and design performance. Note:
** = p < 0.01; * = p < 0.05.
The above results indicate two significant paths from alliance to design performance. One path
is alliance → design management → design performance, and the other path is alliance → design
Sustainability 2018, 10, 1171 16 of 24
performance. The results of path analysis confirm the mediation model (Figure 1), showing that the
contractor–designer alliance can not only exert effect on design performance through enhancing design
management, but also directly promote design performance. In general, the cause–effect relationships
established in the conceptual model of alliance between contractors and designers in international
hydropower EPC projects have been validated (see Figure 3), as interpreted below.
activities. Effective communication can assist contractors and designers to properly exchange the
necessary information for reciprocal interdependent engineering, procurement, and construction
processes, thereby helping to solve the problems such as “information management of design
is not standardized”, “coordination efficiency between design, procurement and construction is
low”, “inadequate design information collection”, and “communication with consulting engineers is
inefficient”, as shown in Table 2.
6.1. Findings
The EPC approach has been increasingly adopted to deliver international hydropower projects for
implementing the long-term strategy on sustainable energy worldwide. In this study, the relationships
among contractor–designer alliance, design management, and design performance of international
hydropower EPC project demonstrated in the conceptual model have been tested and confirmed based
on the perspective of Chinese hydropower construction contractors (see Figures 1 and 3). The major
findings are as follows.
The survey results (see Table 2) reveal the key design problems in international hydropower
EPC project delivery. The major problems in design mainly result from unfamiliarity with project
involved standards and laws, uncompetitive preliminary design in bidding, poor design-related
interface management, and lack of incentives for promoting designs.
All seven key alliance factors (i.e., jointly tendering, equity, trust, effective communication,
problem resolution, incentives, and strategic partnership) are significantly correlated with each other
(see Table 4). These significant correlations lead to the establishment of an alliance functional process
(see Figure 2), in which alliance achievements arise from the interactions of these seven factors.
Sustainability 2018, 10, 1171 19 of 24
Typical analysis shows that jointly tendering can be considered as the representative factor, which is
because jointly winning EPC project contracts is the basis of in-depth collaboration between contractors
and designers.
The survey results outline the status of design management and performance in international
hydropower EPC projects. All the ratings of design management indicators are lower than 4, indicating
that the level of design management has large room for improvement, especially regarding external
review and using specific expertise as complements to designers. The outcomes of design performance
show that all indicators of the final design have much lower ratings than those of preliminary design.
This indicates that it is challenging to fulfil the technically complex design tasks at the implementation
stage of international hydropower EPC projects.
The path analysis indicates two significant pathways from contractor–designer alliance to design
performance in international hydropower EPC projects (see Figure 3). One pathway is alliance →
design management → design performance, and the other one is alliance → design performance.
The results of pathway analysis confirm the conceptual model of alliance between contractors and
designers in international hydropower EPC hydropower projects (see Figure 1), showing that the
contractor–designer alliance can not only influence design performance through enhancing design
management, but can also directly promote design performance.
Contractor–designer alliance can greatly facilitate design-related contract management on
the basis of jointly tendering, help technically promoting designs by emphasizing collaborative
problem resolution, and enhance design-related interface management with effective communication.
Design management significantly predicting design performance is because design-related contract
management largely governs the design deliverables; technically promoting designs is significant
in ensuring design outcomes are technically and financially feasible; and design-related interface
management is essential to coordinate EPC activities.
In addition to design management playing a partial mediation role between alliance and design
performance, contractor–designer alliance can also directly enhance design performance. This means
that key contractor–designer alliance factors such as trust, incentives and strategic partnership
can provide the partners with strong motivation and necessary resources (e.g., partners inputting
complementary resources into each other, and sharing rewards from project cost-saving) to achieve
higher design performance by adding resources to the whole value-creation process of business.
The above findings imply broad practical strategies for improving international hydropower EPC
project design performance. At the preliminary design stage, contractors and designers should not
only understand the standards and laws required for project implementation, but also need to jointly
collect a range of data related to site conditions, environment, local economy, and affected communities
for managing the risks in bidding. This suggests that it is critical to sufficiently consider sustainability
of hydropower projects by incorporating environmental, social, and economic factors into designs. At
the final design stage, the contractor–designer alliance should use appropriate incentives to motivate
technically promoting designs and to enhance management of interfaces among design, procurement,
and construction.
6.2. Discussions
Extant literature lacks a systematic framework for addressing the mechanism of alliance functional
process and its impacts on management activities together with performance, and existing studies
largely remain at prescriptive level with limited rigorous empirical evidence support. By addressing
the above-mentioned gaps, this study has made significant contributions to both theory and practice,
as demonstrated below:
(1) This research established the conceptual model of contractor–designer alliance in international
hydropower EPC projects, which theoretically demonstrated the interdisciplinary linkages
among alliance, design management, and design performance from a holistic perspective. This
theoretical contribution advanced the research outcomes on the complementary relationship
Sustainability 2018, 10, 1171 20 of 24
between contractual and relational governance [22–26] and revealed the mechanism as to how
improved performances are generated by optimally sharing partners’ complementary resources
and by fostering their combined capabilities.
(2) Existing research typically focuses on only one theoretical perspective [24], and there is a lack
of a coherent framework to address the interactions of the key alliance factors, including jointly
tendering, equity, trust, effective communication, problem resolution, incentives, and strategic
partnership [15,28,29,37,39–41]. This study has incorporated the key factors into an integrated
framework of alliance functional process and promoted the theoretical understanding of how
alliance achievements can arise from the interactions of these factors. For instance, this study
illustrated that strategic partnership is the outcome of interactions of the other alliance factors
that were demonstrated in the framework, which can clearly explain the previous finding that
relational length influences interplay between contractual and relational governance [24].
(3) With the support of data collected from the industry survey, this research validated the causal
relationships built in the conceptual model, and specifically revealed that alliance can not only
exert influence on the improvement of design performance by facilitating design management,
but can also directly enhance design performance. This shows that design management plays a
partial mediation role between alliance and design performance, and illustrates that, in addition
to design management, partners’ complementary resources and combined capabilities in alliance
are also significant in adding value to design outcomes.
(4) The survey results have provided sound empirical evidence, and thereby revealed that the
main design problems are related to the unfamiliarity with the standards and laws involved
with the project, uncompetitive preliminary design in bidding, poor interface management,
and lack of incentives. The results suggested that management should be emphasized to improve
international hydropower EPC project design performance at both the bidding and project
implementation stages.
(5) The above theoretical insights have significant practical implications and will help practitioners
to optimally share their complementary resources in order to seek better solutions in dealing
with various design problems. This is especially important for developing hydropower projects,
as hydropower development involves a range of stakeholders who have specific interests in
project outcomes. Appropriately incorporating social, economic, and environmental factors into
the design of hydropower projects is critical in facilitating good public–private relationships,
which is confirmed by the two cases in Fiji and Equatorial Guinea. From a broad view,
the findings of this study can help to improve the integration management of hydropower
development worldwide, especially for developing countries with a policy emphasis on the use
of sustainable energy.
incentives to technically promote designs in one specific project, and to form a strategic partnership
for achieving a long-term market expansion.
Acknowledgments: Many thanks are offered to the National Natural Science Foundation of China (Grant Nos.
51379104, 51579135, 51079070), and State Key Laboratory of Hydroscience and Engineering (Grant Nos. 2013-KY-5,
2015-KY-5). Major Science and Technology Research Project of Power China (Grant Nos. DJ-ZDZX-2015-01-02,
DJ-ZDZX-2015-01-07).
Author Contributions: Qingzhen Zhang and Wenzhe Tang collaboratively conceived the study, and wrote the
paper. Colin F. Duffiel, Felix Kin Peng Hui and Lihai Zhang contributed to analysis and discuss. Jersey Liu and
Xuteng Zhang assisted in the data collection. All the authors read carefully and approved the final version of
the manuscript.
Conflicts of Interest: The authors declare no conflict of interest.
References
1. Jager-Waldau, A. Snapshot of photovoltaics-march 2017. Sustainability 2017, 9, 783. [CrossRef]
2. Tang, W.Y.; Li, Z.M.; Tu, Y. Sustainability risk evaluation for large-scale hydropower projects with hybrid
uncertainty. Sustainability 2018, 10, 138. [CrossRef]
3. Tang, W.Z.; Li, Z.Y.; Qiang, M.S.; Wang, S.L.; Lu, Y.M. Risk management of hydropower development in
China. Energy 2013, 60, 316–324. [CrossRef]
4. Liang, X.D.; Si, D.Y.; Xu, J. Quantitative evaluation of the sustainable development capacity of hydropower
in China based on information entropy. Sustainability 2018, 10, 529. [CrossRef]
5. He, L.; Li, C.L.; Nie, Q.Y.; Men, Y.; Shao, H.; Zhu, J. Core abilities evaluation index system exploration and
empirical study on distributed PV-generation projects. Energies 2017, 10, 2083. [CrossRef]
6. Tembo, B.; Merven, B. Policy options for the sustainable development of Zambia’s electricity sector. J. Energy
S. Afr. 2013, 24, 16–27.
7. Soito, J.L.D.; Freitas, M.A.V. Amazon and the expansion of hydropower in Brazil: Vulnerability, impacts and
possibilities for adaptation to global climate change. Renew. Sust. Energy Rev. 2011, 15, 3165–3177. [CrossRef]
8. Kahn, J.R.; Freitas, C.E.; Petrere, M. False shades of green: The case of Brazilian Amazonian hydropower.
Energies 2014, 7, 6063–6082. [CrossRef]
9. Du, L.; Tang, W.Z.; Liu, C.N.; Wang, S.L.; Wang, T.F.; Shen, W.X.; Huang, M.; Zhou, Y.Z. Enhancing
engineer-procure-construct project performance by partnering in international markets: Perspective from
Chinese construction companies. Int. J. Proj. Manag. 2016, 34, 30–43. [CrossRef]
10. Micheli, G.J.L.; Cagno, E. The role of procurement in performance deviation recovery in large EPC projects.
Int. J. Eng. Bus. Manag. 2016, 8, 1–17. [CrossRef]
11. Chan, A.P.C.; Scott, D.; Lam, E.W.M. Framework of success criteria for design/build projects. J. Manag. Eng.
2002, 18, 120–128. [CrossRef]
12. AlMaian, R.Y.; Needy, K.L.; Walsh, K.D.; Alves, T.D.L. A qualitative data analysis for supplier
quality-management practices for engineer-procure-construct projects. J. Constr. Eng. Manag. 2016, 142.
[CrossRef]
13. Pal, R.; Wang, P.; Liang, X.P. The critical factors in managing relationships in international engineering,
procurement, and construction (IEPC) projects of Chinese organizations. Int. J. Proj. Manag. 2017, 35,
1225–1237. [CrossRef]
14. Chiambaretto, P.; Fernandez, A.S. The evolution of coopetitive and collaborative alliances in an alliance
portfolio: The Air France case. Ind. Market. Manag. 2016, 57, 75–85. [CrossRef]
15. Wang, T.F.; Tang, W.Z.; Qi, D.S.; Shen, W.X.; Huang, M. Enhancing design management by partnering in
delivery of international EPC projects: Evidence from Chinese construction companies. J. Constr. Eng. Manag.
2016, 142. [CrossRef]
16. Ge, H.F.; Chen, S.L.; Chen, Y.J. International alliance of green hotels to reach sustainable competitive
advantages. Sustainability 2018, 10, 573. [CrossRef]
17. Liu, A.J.; Liu, H.Y.; Xiao, Y.X.; Tsai, S.B.; Lu, H. An empirical study on design partner selection in green
product collaboration design. Sustainability 2018, 10, 133. [CrossRef]
18. Walker, D.; Lloyd-Walker, B. Understanding collaboration in integrated forms of project delivery by taking a
risk-uncertainty based perspective. Adm. Sci. 2016, 6. [CrossRef]
Sustainability 2018, 10, 1171 22 of 24
19. Hauck, A.J.; Walker, D.H.T.; Hampson, K.D.; Peters, R.J. Project alliancing at national museum of
Australia—Collaborative process. J. Constr. Eng. Manag. 2004, 130, 143–152. [CrossRef]
20. Lloyd-Walker, B.; Walker, D. Authentic leadership for 21st century project delivery. Int. J. Proj. Manag. 2011,
29, 383–395. [CrossRef]
21. Anvuur, A.M.; Kumaraswamy, M.M. Conceptual model of partnering and alliancing. J. Constr. Eng. Manag.
2007, 133, 225–234. [CrossRef]
22. Poppo, L.; Zenger, T. Do formal contracts and relational governance function as substitutes or complements?
Strat. Manag. J. 2002, 23, 707–725. [CrossRef]
23. Zheng, J.; Roehrich, J.K.; Lewis, M.A. The dynamics of contractual and relational governance: Evidence from
long-term public–private procurement arrangements. J. Purch. Supply Manag. 2008, 14, 43–54. [CrossRef]
24. Cao, Z.; Lumineau, F. Revisiting the interplay between contractual and relational governance: A qualitative
and meta-analytic investigation. J. Oper. Manag. 2015, 33–34, 15–42. [CrossRef]
25. Roehrich, J.; Lewis, M. Procuring complex performance: Implications for exchange governance complexity.
Int. J. Oper. Prod. Manag. 2014, 34, 221–241. [CrossRef]
26. Kreye, M.E.; Roehrich, J.K.; Lewis, M.A. Servitising manufacturers: The impact of service complexity and
contractual and relational capabilities. Prod. Plan. Control 2015, 26, 1233–1246. [CrossRef]
27. Yoon, C.; Lee, K.; Yoon, B.; Toulan, O. Typology and success factors of collaboration for sustainable growth
in the it service industry. Sustainability 2017, 9, 2017. [CrossRef]
28. Chen, H.H.; Lee, A.H.I.; Xing, X.Q.; Chen, H. The relationships of different modes of international alliance
with performance of renewable energy enterprises. Renew. Energy 2014, 69, 464–472. [CrossRef]
29. Wang, Y.Z.; Rajagopalan, N. Alliance capabilities: Review and research agenda. J. Manag. 2015, 41, 236–260.
[CrossRef]
30. Marques, R.C.; Berg, S. Public-private partnership contracts: A tale of two cities with different contractual
arrangements. Public Adm. 2011, 89, 1585–1603. [CrossRef]
31. Tang, W.Z.; Duffield, C.F.; Young, D.M. Partnering mechanism in construction: An empirical study on the
Chinese construction industry. J. Constr. Eng. Manag. 2006, 132, 217–229. [CrossRef]
32. Palacios, J.L.; Gonzalez, V.; Alarcon, L.F. Selection of third-party relationships in construction. J. Constr.
Eng. Manag. 2014, 140. [CrossRef]
33. Tang, W.H.; Qiang, M.S.; Duffield, C.F.; Young, D.M.; Lu, Y.M. Incentives in the Chinese construction industry.
J. Constr. Eng. Manag. 2008, 134, 457–467. [CrossRef]
34. Shen, W.X.; Tang, W.Z.; Yu, W.Y.; Duffield, C.F.; Hui, F.K.P.; Wei, Y.P.; Fang, J. Causes of contractors’ claims
in international engineering-procurement-construction projects. J. Civ. Eng. Manag. 2017, 23, 727–739.
[CrossRef]
35. Love, P.E.D.; Lopez, R.; Kim, J.T.; Kim, M.J. Probabilistic assessment of design error costs. J. Perform.
Constr. Facil. 2014, 28, 518–527. [CrossRef]
36. Arditi, D.; Elhassan, A.; Toklu, Y.C. Closure to “Constructability analysis in the design firm” by David Arditi,
Ahmed Elhassan, and Y. Cengiz Toklu. J. Constr. Eng. Manag. 2004, 130, 302–304. [CrossRef]
37. Johnson, T.R.; Feng, P.; Sitzabee, W.; Jernigan, M. Federal acquisition regulation applied to alliancing contract
practices. J. Constr. Eng. Manag. 2013, 139, 480–487. [CrossRef]
38. Das, T.K.; Teng, B.S. A resource-based theory of strategic alliances. J. Manag. 2000, 26, 31–61. [CrossRef]
39. Love, P.E.D.; Mistry, D.; Davis, P.R. Price competitive alliance projects: Identification of success factors for
public clients. J. Constr. Eng. Manag. 2010, 136, 947–956. [CrossRef]
40. Judge, W.Q.; Dooley, R. Strategic alliance outcomes: A transaction-cost economics perspective. Br. J. Manag.
2006, 17, 23–37. [CrossRef]
41. Rowlinson, S.; Cheung, F.Y.K.; Simons, R.; Rafferty, A. Alliancing in Australia-no-litigation contracts: A
tautology? J. Prof. Issue Eng. Educ. Pract. 2006, 132, 77–81. [CrossRef]
42. Wang, T.F.; Tang, W.Z.; Du, L.; Duffield, C.F.; Wei, Y.P. Relationships among risk management, partnering,
and contractor capability in international EPC project delivery. J. Manag. Eng. 2016, 32. [CrossRef]
43. Marques, R.C.; Berg, S. Risks, Contracts, and private-sector participation in infrastructure. J. Constr.
Eng. Manag. 2011, 137, 925–932. [CrossRef]
44. Vashani, H.; Sullivan, J.; El Asmar, M. DB 2020: Analyzing and forecasting design-build market trends.
J. Constr. Eng. Manag. 2016, 142. [CrossRef]
45. Crowley, L.G.; Karim, A. Conceptual-model of partnering. J. Manag. Eng. 1995, 11, 33–39. [CrossRef]
Sustainability 2018, 10, 1171 23 of 24
46. Rahman, M.M.; Kumaraswamy, M.M. Contracting relationship trends and transitions. J. Manag. Eng. 2004,
20, 147–161. [CrossRef]
47. Kumaraswamy, M.M.; Ling, F.Y.Y.; Rahman, M.M.; Phng, S.T. Constructing relationally integrated teams.
J. Constr. Eng. Manag. 2005, 131, 1076–1086. [CrossRef]
48. Pulaski, M.H.; Horman, M.J. Organizing constructability knowledge for design. J. Constr. Eng. Manag. 2005,
131, 911–919. [CrossRef]
49. Grau, D.; Back, W.E.; Prince, J.R. Benefits of on-site design to project performance measures. J. Manag. Eng.
2012, 28, 232–242. [CrossRef]
50. Liu, C.Y.; Tong, L.I. Developing automatic form and design system using integrated grey relational analysis
and affective engineering. Appl. Sci. 2018, 8. [CrossRef]
51. Shen, W.X.; Tang, W.Z.; Wang, S.L.; Duffield, C.F.; Hui, F.K.P.; You, R.C. Enhancing trust-based interface
management in international engineering-procurement-construction projects. J. Constr. Eng. Manag. 2017,
143. [CrossRef]
52. Song, L.G.; Mohamed, Y.; AbouRizk, S.M. Early contractor involvement in design and its impact on
construction schedule performance. J. Manag. Eng. 2009, 25, 12–20. [CrossRef]
53. Ezeldin, A.S.; Abu-Ghazala, H. Quality management system for design consultants: Development and
application on projects in the Middle East. J. Manag. Eng. 2007, 23, 75–87. [CrossRef]
54. Gransberg, D.D.; Windel, E. Communicating design quality requirements for public sector design/build
projects. J. Manag. Eng. 2008, 24, 105–110. [CrossRef]
55. Franz, B.; Leicht, R.; Molenaar, K.; Messner, J. Impact of team integration and group cohesion on project
delivery performance. J. Constr. Eng. Manag. 2017, 143. [CrossRef]
56. Love, P.E.D.; Edwards, D.J.; Irani, Z.; Goh, Y.M. Dynamics of rework in complex offshore hydrocarbon
projects. J. Constr. Eng. Manag. 2011, 137, 1060–1070. [CrossRef]
57. Xia, B.; Molenaar, K.; Chan, A.; Skitmore, M.; Zuo, J. Determining optimal proportion of design in
design-build request for proposals. J. Constr. Eng. Manag. 2013, 139, 620–627. [CrossRef]
58. Klanac, G.P.; Nelson, E.L. Trends in construction lost productivity claims. J. Prof. Issue Eng. Educ. Pract. 2004,
130, 226–236. [CrossRef]
59. Lopez, R.; Love, P.E.D. Design error costs in construction projects. J. Constr. Eng. Manag. 2012, 138, 585–593.
[CrossRef]
60. Chang, A.S.; Shen, F.Y.; Ibbs, W. Design and construction coordination problems and planning for
design-build project new users. Can. J. Civ. Eng. 2010, 37, 1525–1534. [CrossRef]
61. Weshah, N.; El Ghandour, W.; Jergeas, G.; Falls, L.C. Factor analysis of the interface management (IM)
problems for construction projects in Alberta. Can. J. Civ. Eng. 2013, 40, 848–860. [CrossRef]
62. Siao, F.C.; Lin, Y.C. Enhancing construction interface management using multilevel interface matrix approach.
J. Civ. Eng. Manag. 2012, 18, 133–144. [CrossRef]
63. AL Mousli, M.H.; El-Sayegh, S.M. Assessment of the design-construction interface problems in the UAE.
Archit. Eng. Des. Manag. 2016, 12, 353–366. [CrossRef]
64. Chen, Q.; Reichard, G.; Beliveau, Y. Multiperspective approach to exploring comprehensive cause factors for
interface issues. J. Constr. Eng. Manag. 2008, 134, 432–441. [CrossRef]
65. Lin, Y.C. Construction network-based interface management system. Automat. Constr. 2013, 30, 228–241.
[CrossRef]
66. Chen, Q.; Reichard, G.; Beliveau, Y. Object model framework for interface modeling and it-oriented interface
management. J. Constr. Eng. Manag. 2010, 136, 187–198. [CrossRef]
67. El Asmar, M.; Hanna, A.S.; Loh, W.Y. Quantifying performance for the integrated project delivery system as
compared to established delivery systems. J. Constr. Eng. Manag. 2013, 139. [CrossRef]
68. Ke, H.; Cui, Z.P.; Govindan, K.; Zavadskas, E.K. The impact of contractual governance and trust on epc
projects in construction supply chain performance. Inz. Ekon. 2015, 26, 349–363. [CrossRef]
69. Lei, Z.; Tang, W.Z.; Duffield, C.; Zhang, L.H.; Hui, F.K.P. The impact of technical standards on international
project performance: Chinese contractors’ experience. Int. J. Proj. Manag. 2017, 35, 1597–1607. [CrossRef]
70. Tang, W.Z.; Qiang, M.S.; Duffield, C.F.; Young, D.M.; Lu, Y.M. Risk management in the Chinese construction
industry. J. Constr. Eng. Manag. 2007, 133, 944–956. [CrossRef]
71. Akintola, S.A.; MacLeod, J.M. Risk analysis and management in construction. Int. J. Proj. Manag. 1997, 15,
31–38. [CrossRef]
Sustainability 2018, 10, 1171 24 of 24
72. Wang, S.L.; Tang, W.Z.; Li, Y.X. Relationship between owners’ capabilities and project performance on
development of hydropower projects in China. J. Constr. Eng. Manag. 2013, 139, 1168–1178. [CrossRef]
73. Wu, G.D.; Zhao, X.B.; Zuo, J. Relationship between project’s added value and the trust-conflict interaction
among project teams. J. Manag. Eng. 2017, 33. [CrossRef]
74. Harper, D.G.; Bernold, L.E. Success of supplier alliances for capital projects. J. Constr. Eng. Manag. 2005, 131,
979–985. [CrossRef]
© 2018 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access
article distributed under the terms and conditions of the Creative Commons Attribution
(CC BY) license (http://creativecommons.org/licenses/by/4.0/).