What is a capital project?

Capital Projects defined

The loose definition of a “capital project.”  is: a long-term, high-value endeavor with the express purpose of building upon or adding to or improving the property, plant, or equipment. Capital projects typically involve large-scale projects on the higher-end of expenditures compared to those requiring fewer resources.  

Some examples of capital projects include roads, railways, manufacturing plants, nuclear power plant construction, power transmission, and electrical distribution. The consistent element of these projects is the amount of planning is substantive and the benefits are seen long-term, rather than immediately. Corporations usually begin capital projects in anticipation of growth or are contracted by a governmental agency to pursue capital projects for the public good. 

Case Study in Power Plant Construction

Matrix NAC, headquartered in Tulsa, OK and a wholly-owned subsidiary of Matrix Service Company (Nasdaq: MTRX), completed power plant construction for a natural gas turbine capital project in July 2019. This capital project has the capacity to power 500,000 homes. 

The installation of the 500 megawatts GE steam and gas turbine involved the input of federal, state and regional regulatory agencies, financial experts, countless engineers, and planners. Capital projects, from the moment planning, begins, pull interested parties in by the sheer amount of resources involved. This capital project cost in excess of a half-billion dollars. Since new power plant construction is an overwhelmingly complex endeavor, only top power plant construction companies perform capital projects. 

Additionally, new power plant construction is a tremendous capital investment for any utility company. Matrix NAC pulled over 1,000,000 feet of electric cabling, made over 50,000 terminations, and installed 80,000 feet of conduit. To perform these tasks while maintaining their aggressive schedule dates, Matrix NAC utilized their substantial experience in capital projects. 

What Can Top Construction Companies Do for Capital Projects

Matrix employs methodologies like strategic planning and cost-control forecasting tools to help keep your capital project within budget. In a half-billion-dollar project, going over by just 1% means a utility company has to explain to regulators and board and shareholders that an extra five million dollars may be added to their rate base. There are no good surprises in a capital project and having a top power plant construction company means those surprises are kept to a minimum, if at all. 

Project management goes hand in hand with cost management. Any overruns frequently amplify and increase as the project life continues. Matrix, as a leading provider of power plant construction, keeps clients apprised of budget, schedule and progress. 

Conclusion

Whether your capital project is a new power plant construction or nuclear power plant construction or any one of a number of substantial endeavors, large capital investments are daunting tasks. As a contractor, you need to ensure your capital project will operate as promised. As an investor, you want to minimize the number and size of liabilities and risks to guarantee an optimal return on investment. 

Optimize your capital investment with the power plant construction company capital project experts call when they know they want the best: Matrix Services. Matrix uses technology, manpower and experience to optimize your investment and mitigate liability for a robust cross-section of capital projects. 

Matrix NAC can help complete your capital projects with efficiency and economy in mind. Contact us today to learn more about our services.