Joint Venture Commercial & Cultural Design


Joint Ventures are a great way to win work and/or share risk in a partnership that is not otherwise possible by a firm on its own. However, JV’s are complex and can very hard to make work. 

Crucial commercial issues such as work scope division, risk sharing and profit sharing can all give rise to tensions between the partners. Understanding each other’s businesses is important – even words like “overhead” and “profit” can legitimately have very different meanings in different companies! Equally important is culture, which affects the behaviour of the participants in the JV and must be aligned to the commercail arrangements if the JV is to operate effectively..

 

I have set up and worked in more than a dozen joint ventures or project alliances, many of them with partners from other industries and countries.


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Examples of joint ventures include the DirectRoute JV formed to pursue Irish PFI road construction and operation, involving three Irish companies and one Austrian company in addition to my own. The JV successfully won and delivered two major concession projects valued at several hundred £M each, including the N8 Rathcormac to Fermoy toll road.


Examples of project alliances, which go one step further towards total integration, include the D154 project at Devonport for the construction of the nuclear submarine refuelling facilities. With a value approaching £1Bn, this highly complex project was delivered by a full risk and reward sharing arrangement between the principal partners which included leading civil and nuclear engineering companies, allowing a successful project outcome.

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