The Bridgehead Cluster has the following advantages over an individualised approach:
- A broader range of technologies and corresponding commercial proposition is presented to ADNOC (and other relevant players) as a client and to the local JV partner as a vested participant thereby increasing the level of interest to these parties;
- The local partner is remunerated by way of a fixed monthly fee plus a revenues based incentive fee and is obligated to deploy full-time resources to the BCV, replacing the commission model which often results in no cashflow for many months if not years (and so disincentivising the local partner to deploy resources in the early phase);
- The risks, costs and time delays associated with sourcing, assessing, reaching commercial terms and deploying local partners during the bridgehead period are mitigated.
Key factors for the success of the project?
The success of the BCV project will depend primarily on the following factors:
- The 100% commitment of each of the participants to their involvement in the project.
- The verification of the market potential for the services/products of each participant.
- The inputs of the local partner and the development of a strong and trusted business relationship.
- The selection and engagement of an effective general manager.
- The consulting and legal inputs of HFI in bringing the BCV together and supervising it throughout.
- The maintenance of the BCV with adequate funding and cash reserves.
- Teamwork by all concerned.
What are the Key Risks?
The anticipated key risks associated with the project, in addition to normal commercial and operational risks, are as follows:
- Failure to achieve vendor/product approval at ADNOC.
- Lack of teamwork amongst the participants, general manager and local partners.
- Lack of performance and/or loss of the general manager.
- Lack of adequate funding and cashflow especially through participant defaults and uncontracted early withdrawals.
- Disputes and/or deadlock among the participants
- Client and/or third party liability/claims arising