Major project work faces coronavirus challenges

The potential to shut down work camps and delay building supplies are among the concerns facing major construction projects as the impact of COVID-19 reverberates around the world. Queensland Major Contractors Association chief executive officer Jon Davies said there may also be issues around whether project contracts covered businesses if problems arising from the coronavirus outbreak halted or held up work. Mr Davies said supply chain interruptions were less likely to have a major impact on the civil infrastructure projects that dominated QMCA work than 'vertical' construction as major input materials came from local sources. "It is possible, but from a civil infrastructure perspective you consider what are the materials that are commonly used? It's concrete and aggregate and maybe steel. Queensland Major Contractors Association CEO Jon Davies. "If steel is coming from China that may be problematic, the concrete less so, although some concrete made locally does rely on imported cement and clinker, so if that supply chain was interrupted it may cause issues. "I think one potential issue - although we haven't seen it yet - is in remote locations where you have a fly in-fly out workforce. You could see a situation where a worker is tested positive and that particular camp is then put into quarantine." Mr Davies said he was concerned that the force majeure provisions in many project contracts would not cover the interruptions stemming from the coronavirus outbreak and attempts to contain it. "We had a conversation with the Department of Transport and Main Roads and their contracts generally speaking wouldn’t necessarily cover a delay caused by an event like this," he said. "But I think under most contracts there are other opportunities for contractors to get relief for that and I think certainly government clients would look favourably on providing relief for such an event as this." Project managers weigh up impacts Australian Institute of Project Management chief executive officer Elizabeth Foley said she had not received reports of major impacts on the delivery of significant construction projects nationwide. But she said many project managers were nervous and starting to review potential effects and options. They would have to look at the procurement side and aim to diversify rather than relying one one supplier or one country, such as China, as a source for major components, and have back-up plans, she said. In cases where that was not possible including projects centred on items with long lead times whose source was locked in, people must consider the potential impacts and do scenario tests, she said. Australian Institute of Project Management CEO Elizabeth Foley. "We can’t be in a bubble and we need to start to do some scenario planning about what the impact will be if something is delayed by one month, two months, three months," Ms Foley said. Earlier this week supply chain consulting firm Logistics Bureau warned that Australia was only just starting to see the effects of significant supply chain disruption globally. Chief executive officer Rob O’Byrne said Australian companies were reporting that reduced supply, and hence lower local stock levels, will start to cause major customer service impacts by mid to late March. He warned of busisness facing the impact of a supply chain 'bull whip' in the medium term. "The effect of this supply chain ‘bull whip’ will be to substantially reduce local demand and then, as the virus becomes controlled, consumer demand will be slow to return," Mr OByrne said. Changing the way we work Mr Davies believed one side effect from the coronavirus response may be a change in work habits. "If people are self-isolating, spending extended periods at home, they will realise there's quite a bit of work they can actually do from home and it may lead to long-term changes in work habits where more and more people start working from home," he said "Obviously the problem for us is you cannot build a road via Skype. "That’s another issue down the track. If we do get to the stage where we start having it recommended that large numbers of people stay at home, that could be another issue for project sites. https://www.i-q.net.au/main/tax-break-for-businesses-taking-hit-from-coronavirus

Major project work faces coronavirus challenges

Industry Queensland

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