Turnkey contract is a business arrangement in which a project is delivered in a completed state.

Rather than contracting with an owner to develop a project in stages, the developer/constructor is hired to finish the entire project. The constructor or developer is separate from the final owner or operator, and the project is turned over only once it is fully operational. In effect, the developer is finishing the project and hand over it to the owner. A turnkey project or contract as described by "#$%&' is( ). a contract where the essential design emanates from, or is supplied by, the *ontractor and not the owner, so that the legal responsibility for the design, suitability and performance of the work after completion will be made to rest ) with the contractor ). +Turnkey+ is treated as merely signifying the design responsibility as the contractor+s. ,akaria -atim ., refers to uncan !allace/s and said, uncan !allace

0The turnkey system, however, may be modified. The owner may engage consultants to do the foundation or sub1structure designs leaving only the superstructure the subject of the lumps sum turnkey arrangements. This known as a 0mi2ed 3 turnkey4 contracts. In a design/build contract or 56*I* package, the owner enters into a single agreement by which the design/build contractor agrees to perform both the design and construction of the project. This more comprehensive arrangement is often referred to as a 0turnkey4 contract. In either a design/build or turnkey arrangement, the contractor/s objective is to satisfy the owner/s broad performance specifications rather than to adhere rigidly to the design professional/s plans and specifications. As well as being responsible for faulty workmanship in construction, the contractor is also liable for any deficiencies in design under this arrangement. In the turnkey or 0package deal4 design/build arrangement, the owner may find it convenient to engage an independent third party professional advisor to advise on the design offered by the design/build joint venture of contractor/engineer at the pre1contract stage, and perhaps to supervise construction to ascertain compliance with the owner/s project re7uirements. The third party advisor may also be re7uired to make valuations for the purpose of determining interim payments under the design/build arrangement. It is often thought necessary to engage such a third party "be he project manager, engineer or 7uantity surveyor' because of the inherent conflict of interest that pertains when a single entity, the design/builder, is responsible for the total package of design and construction on behalf of the owner, with no one to protect the owner/s best interests. 8rom an owner/s perspective, the design/build contract provides a

single source of responsibility. The contractor has singular responsibility for both construction and design defects. The owner can recover directly from the contractor for deficiencies in either design or construction of the project. Therefore, the owner need not determine initially whether a defect was caused by an error in design or construction. In a more traditional construction contract, this issue must be resolved so that the owner can determine whether the design professional or the contractor is at fault. Another feature favourable to the owner is that the contractor bears any additional costs that may occur as a result of using defective or inade7uate plans prepared by his engineer. 9ecause the owner warrants the sufficiency of the plans in a typical construction contract, he is liable for any increased costs because of defective or inade7uate plans. In a design/build contract, the contractor is responsible for design as well as construction and agrees to meet the owner/s performance specifications rather than merely build the structure. Thus, if the plans are inade7uately designed, the contractor is then unable to look to the owner for additional compensation. :ormally the *ontractor has to e2ecute and deliver the project within an agreed time and budget, commonly known as a ;ump <um Turn =ey ";T<=' *ontract. An ;<T= *ontract places the risk for schedule and budget on the *ontractor. The 6roject >wner or client to the *ontractors will normally have a presence in the *ontractors offices during the e2ecution of the *ontract. The *lient places what can be termed a 6roject ?anagment Team or 6?T to overlook the *ontractor. The client 6?T may re7uire specialist help and bring on board 6roject ?anagement *onsultants or 6?* to assist. The 6?T / 6?* will ensure the *ontractor is carrying out the works in accordance with the agreed scope of works and in accordance with the *ontract. It is 7uite common for the 5ngineering and *onstruction *ontractor which delivered the 855 to be offered a 6roject ?anagement *onsultancy "6?*' *ontract. <o, in conclusion Turn =ey *ontract will make the tender winner "contractor' responsible for design and construction phase until the project is finished. 6erformance output of the project also became the responsibility of the contractor, if the performance is not #@@A as e2pected, there is a possibility that penalty of payment given to the contractor from the owner. The contractor also responsible for any mistake during design or construction phase so they cannot ask more funding from the owner if any mistake that cause increased cost happened. And if there is any delay of the project, the contractor must take any responsibility even though it is caused by the vendor or subcontractor.

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