Prof. Chandana Jayalath, University of Vocational Technology

Building-product imports from China account for nearly 70 percent of all Sri Lankan building supplies, making China the largest supplier of items such as machinery and equipment, iron and steel, drywall, and other components. Because many raw materials used and consumed in the local site assembly originate from China, the construction market quickly felt the impacts of COVID-19 on trade as well as resultant disruptions to supply chains. Going forward, disruptions will almost certainly impact the prices of construction products and materials. Simply put, we can expect significant delays and disruptions throughout all sectors of the construction industry. They are also a result of shortages of vital personal protective safety equipment—such as respirators—for workers. Furthermore, there are delays stemming from a shortage of craftspeople due to shelter-in-place restrictions and delays occasioned by shortages of government workers available to perform inspections, issue permits, and conduct other actions. A number of contractors report jobsites shutting down daily because they feel bad in case someone on the jobsite the day before has tested positive for the virus, requiring shutdown and extensive cleaning. Meanwhile, there will be an unprecedented loss of productivity among workers because of distancing requirements, new safety protective gear requirements, and safety procedures—all in addition to the sick and quarantined workers who are absent.

Construction projects are not yet being declared critical infrastructure” to allow operations to continue. These lobbying efforts in time to come may result in partial success. The implications of the suspension with no date to resume declared will otherwise undoubtedly mean laborers will be unemployed. The construction industry employs over 1 million people of whom the majority is labourers and semi-skilled workers. Mostly, they belong to the lower echelon in society and are the sole wage earners of the family. As Architect Jayantha Perera rightly said, the companies require a stimulus package as a short term measure to ensure wages to employees for the months of April, May and June.  Additionally, there are reports that with stock market losses, projects in the private sector may slow as investors seek more secure funds. As the impacts of the pandemic are being felt, parties are racing to read what they may have bargained for in the contracts. Legally speaking, force majeure and/or comparable excusable delay, suspension of work, change in law, material escalation, safety/health requirements, protection of work, and notice requirements are a couple of defensive means available to contractors to establish their eligibility for time extension and prolongation costs. Also, the loss may lie where it fell.

COVID-19 is not, broadly speaking, rendering projects altogether impossible to complete. But it is slowing them down, causing delay and disruption, even if only because supply chains have been severally disrupted. Many projects have even stopped, usually with the intention to resume work at a later date. In Sri Lanka, the Construction industry has generally not been the subject of ‘ordered’ shut down. However, sites are implementing the social distancing requirements. In a few countries, there have even been specific orders requiring construction sites to close, or entitling contractors to suspend works and extensions of time until the end of the state of emergency period, especially in public works. Despite, certain activities (e.g., design activities) can be continued, while others cannot. The requirement that the consequences of force majeure cannot be overcome is also potentially significant, because a contractor may be able to take measures to allow the works to continue, although at a reduced rate. Placing restrictions on the movement of people or goods between or within countries, and requiring that certain people be ‘locked down’, usually represents a change of the law, which has an impact – perhaps an impact even greater on a contractor’s ability to progress works than the pandemic itself. For instance, in certain jurisdictions, the hardship may allow parties to seek relief on the basis of an exceptional and unpredictable change of circumstances that affects the businesses. Under many laws, parties must continue to exhaust all reasonably available means to continue performing their obligations, notwithstanding the existence of a force majeure event. For example, mitigation is of high significance. Computer servers, electronic items, manufacturing tools, testing equipment, and documents idle in offices, sites and workshops would be damaged or destroyed due to non-maintenance. Also, there can be damages to important data due to overheating, rats and termite attacks. We all must understand that fact that working from home is not possible unless computer facilities, software, essential hard copies, soft files etc. are provided to the employees. Hence, it is high time the professionals and industry regulators together revisit the circumstances and work out a strategy to work in harmony with Covid 19 for a less interrupted construction move thought-out the Island.