Covid-19 Delay Impact to Projects

With the quick rise of the Global Coronavirus Pandemic, we are starting to see some fairly immediate effects of the virus on Australian construction projects.

Initial impacts have (and continue) to be supply chain related, Mostly due to slow or no delivery of Chinese manufactured goods (e.g. lifts, escalators, curtain walling, etc). Although those impacts will continue to affect projects for some time, there are likely to be other secondary impacts, as a result of recent government imposed (and most probably necessary) isolation orders of people with or exposed to Covid-19.

This may have a direct impact on availability of construction workers for projects.

Such isolation could be as a result of an individual construction worker being exposed to or contracting the disease at a non-work related location, or worse (for our industry), due to exposure/contraction on a construction site, which no doubt will require that site to be (at least temporarily) shut down, and may result in an immediate loss of workers on that site, and any sites that that worker has been on recently.

In anycase, there is a real possibility that there will be a reduction in available construction workers for projects, therefore slowing the rate of production on construction projects. This applies to both blue and white collar workers equally, albeit some white collar works may be able to work from home.

There is also to potential for productivity on projects to be reduced as a result of new process/procedures on site (e.g. heat testing, & regular health checks, etc) which may slow the rate of progress on site.

We have already heard (unverified) of large mining companies, standing down maintenance (shutdown) programs of mining infrastructure, presumably in an effort to minimise the spread of the virus by FIFO workers . This may free up some construction workers for non-FIFO projects in markets like Perth/Brisbane, but may not assist those in Sydney/Melbourne.

JCA are already seeing some claim related matters come through our office… The construction and mining industry (like every other industry) is no doubt, yet to see the full impact of the pandemic this season, and begs the question, what will be the impact during the next viral season?

From a demonstration of delay point, the onus will be on contractors (for most forms of contract) to prove the unavailability of resources (material & labour) as a result of the virus and or Government imposed restrictions.