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THE DAMAGE OF COVID 19 ON THE CONSTRUCTION INDUSTRY

The damage of Covid 19: The Coronavirus and the related shutdown of businesses and restriction of movement is no longer news. The number of cases in Nigeria is growing and this has, of course, impacted all industries and most especially, the construction industry.

Unlike most businesses that can move their operations online and continue working, the construction industry is peculiar in the sense that it needs the physical presence of its workers on site for effectiveness.

Nigeria has always relied on skilled personnel from outside the country in its construction projects, but this person cannot travel freely anymore due to the shutdown of airspaces and restriction of movements.  This unavailability of the foreign expertise and the inability of workers to move to the project sites due to the movement restrictions will certainly affect the delivery of the projects.

Current Impact

The delivery of infrastructural projects meant to be completed this year has been delayed, e.g., the Federal Rail project, the Lagos Ikorodu road upgrade etc. The production shutdown and disruption in supply chains due to closure of ports has meant that access to the industrial components meant for these projects has been delayed.

A global forecast for growth in the construction sector by Fitch Solutions Country Risk & Industry Research Global forecast now stands at 0.9% y-o-y for 2020, following a series of substantial downward revisions to construction markets globally as lockdowns and economic challenges are set to hit project activity.

There is general uncertainty in the business and financial industry, and this will affect access to funding for some of these projects which in turn will lead to reduced cash flow and financial limitations for developers.

Going Forward

It is inevitable that business will resume, and work will continue on all projects that were delayed but it will not be business as usual. Safety measures will have to be put in place to ensure the health of the workers are protected and social distancing is observed. Where possible, workers in close proximity will have to be issued protective gear and a system of isolating them from each other will have to be devised.

The Role of Communications

As soon as businesses resume and work commences on outstanding projects, it is important that all parties come together to assess the impact the pandemic has had on the project.

There will be disputes and claims and counterclaims will be made by both the contractor and the Contracting Party. Whilst it is understandable that the global pandemic will affect the rate of delivery on projects, the contractor has an obligation to do all within their power to ensure delivery on the project.

A strategic communication model can ensure that both parties come together and reach a mutually beneficial arrangement without recourse to dispute resolution channels. An effective communications approach can show that due to the pandemic, all projections, timelines, and plans have been adversely affected and will need a re-evaluation.

All industry stakeholders will need to establish communication channels with all members involved in the construction project. In this case, this will include the workers, lawyers, suppliers, landowners, and even the insurance companies affiliated with the project.

Unfortunately, The COVID 19 virus was unexpected and unprecedented in its effect globally, and as such it caught the world unawares. It has however acted as an eye-opener and it is essential to be prepared in managing the fallout and ensuring that the negative impact on businesses is kept as minimal as possible.

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