Optimal Buyer Credit Arrangements for Chinese Procured Dam-building Projects: An Iranian Perspective

Dam-building projects in Iran procured under buyer credit arrangements from foreign providers experience high rates of construction stoppages. An understanding of the financial and technical issues that give rise to problems is needed. This study provides an analysis of internal and external factors impacting Iran’s bank-to-bank buyer credit-based dams procurement process. By way of TOWS matrix, optimal strategies in such procurement arrangements are identified. Data supporting the matrix are extracted through focus groups comprised of industry experts. Findings facilitating a better dams procurement process include: 1) formulation of an execution structure comprising comprehensive control, management, and implementation; 2) utilization of an omnibus buyer credit dispute review board involving financial, legal and technical representation; and 3) comprehensive stakeholder participation. Strategies identified are applicable at addressing ongoing challenges regarding off-shore dam project procurement, both from the viewpoint of host country and international provider.