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Module Professional Ethics and Related Studies Module

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1
IMPACT OF COVID 19 ON CONSTRUCTION

INDUSTRY & ENGINEERING

PERSPECTIVES TO OVERCOME THEM AND

OPERATE THECONSTRUCTIONS DURING

POST PANDEMIC SITUATION

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ACKNOWLEDGMENT

I would like to express my appreciation to our lecturer, Mr. Gavithra Udayakumara, for her help
and support in the development of this design report. He always supported us to understand the
subject topic and have a wider view of the subject than the standard subject matter.

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CONTENTS

LIST OF FIGURES ....................................................................................................................5

ABSTRACT ...............................................................................................................................6
INTRODUCTION ......................................................................................................................7
MAIN ISSUES ...........................................................................................................................9
1. Ensuring the safety of employees .........................................................................................9
2. Postponement or suspension of current and future projects ..................................................9
3. Corruption and withhold of site works due to curfew, lockdown, quarantine and isolation ...9
4. Materials, subcontractor and supply chain delays and impacts. .......................................... 10
5. Financial impacts ............................................................................................................... 10
6. The current projects has contractual and legal problems ..................................................... 10
DISCUSSION ........................................................................................................................... 12
1. Ensuring the safety of employees ....................................................................................... 12
2. Postponement or suspension of current and future projects ................................................ 13
3. Corruption and withhold of site works due to curfew, lockdown, quarantine and isolation. 13
4. Materials, subcontractor and supply chain delays and impacts. .......................................... 14
5. Financial impacts ............................................................................................................... 15
6. The current projects has contractual and legal problems ..................................................... 15
CONCLUSION ......................................................................................................................... 17
REFERENCE ........................................................................................................................... 19

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LIST OF FIGURES

Figure 1 – COVID 19 construction site post

Figure 2 – COVID 19 situation in Sri Lanka & worldwide 12/04/2021

Figure 3 – Vaccination world wide data 13/04/2021

Figure 4 – Contractual and legal problems of COVID 19

Figure 5 – Construction foreman worker wearing facemask at the construction site

Figure 6 – Construction materials and supply chain

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ABSTRACT

Corona virus (COVID – 19) is an infection caused by a virus. COVID -19 was discovered for the
first time in December 2019 in Wuhan, China. It spread very rapidly in most of the countries all
around the word since then and has become a global pandemic influencing all parts of the world.
This resulted in a massive loss of human life all over the world.

On January 27, 2020, the first confirmed case of the corona virus was identified in Sri Lanka.
Since that time it spread all over the regions in Sri Lanka. As a result of that Sri Lankan
government imposed to lock down all the regions in the island under the quarantine rules and
regulations since 20th March 2020. Curfew was continued time to time since that time to until
present. First wave was happened until October in 2020 and after that started the second wave
began and continues in the country.

When considering the effect of that COVID – 19 virus specially the construction industry and
also many industries has suffered from many problems. In that lock down periods the most
construction sites have been closed due to the government orders in Sri Lanka. The curfew was
lifted with the implementation of the vaccine, and it was time for employees to return to work.
Because of the COVID -19 first and second waves, the construction sector has faced several
significant challenges. This study addressed six of these significant issues, difficulties and
engineering solutions to those problems.

1. Ensuring the safety of employees

2. Postponement or suspension of current and future projects

3. Corruption and withhold of site works due to curfew, lockdown, quarantine and isolation

4. Materials, subcontractor and supply chain delays and impacts.

5. Financial impacts

6. The current projects has contractual and legal problems

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INTRODUCTION

In December 2019 Corona virus (COVID – 19) for the first human case was discovered from in
Wuhan, China. Since then for the first five months of 2020, the corona virus pandemic has begun
to spread rapidly across the world because of global travel. Now it has been more than 12 months
and this pandemic is still spreading all over the countries. On January 30, 2020, the World
Health Organization (WHO) declared the Corona virus (COVID – 19) outbreak a Public Health
Emergency of International Concern, and on March 11, 2020, it was declared a global pandemic.

Many nations were struck hard by the first wave of the pandemic, with many people dying. The
first recorded case of the virus was identified in Sri Lanka on January 27. Since then started the
first wave until October. On 4th of October started the second wave in Sri Lanka and still
continue the situation. 95394 confirmatory cases were reported on 12 April 2021 and 91926
recovered and discharged cases, 602 deaths were reported as well. As a consequence of an
outbreak of COVID-19 in Sri Lanka, a lock-down curfew was obligatory after 20 March 2020.

COVID-19 is having a significant effect on building projects, although the legal implications
differ between countries and contracts. All the projects and activities in the country have come to
halt as a result of this stage. As a result of this, country economy also has slow down
significantly.

Figure 01: Covid 19 construction site post (Source: www.ajg.com. 2021)

After the introduction of the Covid vaccine, construction work resumed as usual, as did other
industry activities.The introduction of COVID-19 vaccinations promises a return to a semblance
of normalcy in the workplace, and the resume of in-person activities, for many employers. On
the other hand some problems related to vaccination among employees may arise such as refusal
of vaccination, post vaccination allergies and other side effects.

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Six key problems that have arisen in the construction industry as a result of the COVID-19 crisis
will be addressed in this article, along with engineering solutions for those problems from both
the employer and employee's perspectives.

Figure 02: COVID 19 situation in Sri Lanka

& worldwide 12/04/2021 (Source : Wikipedia,
2021)

Figure 03: Vaccination world wide data

13/04/2021 (Source : Our World in
Data, 2021)

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MAIN ISSUES
1. Ensuring the safety of employees

One of the most difficult problems faced by construction firms during the COVID-19 situation
was maintaining the safety and well-being of workers. The continuity of work and provision of
accommodation in accordance with social distancing measures appears to be the biggest
problem. Engineering and construction firms, unlike most businesses, must have employees on
the job site. Since the construction sector has an intrinsic labor-intensive nature, people work
very closely together, using basic facilities such as accommodations, toilets that can easily
provide for the spread of viruses. In the first wave all the employees don’t know how adopted to
the pandemic situation. But after introducing vaccine for COVID 19 employers and employees
are working under the numerous questions in the construction sites such as between first and
second weeks employees have faced for some side health issues.

2. Postponement or suspension of current and future projects

The COVID-19 pandemic has hit every section of the global economy and few industries other
than homes and businesses have been affected. As a result of the effects of COVID-19 on the
governments and companies that commissioned them, certain construction projects have been
postponed or cancelled. Possible equipment and inventory bottlenecks in the supply chain like
including structural steel and glass could also lead to a reduction in project implementation for
projects that are already financed or decrease funding for potential projects. The investment
appetite of real estate developers and corporate has been greatly limited, and they are currently
surviving. As a result, several upcoming programs that were supposed to start shortly have been
canceled or delayed. This has led to the lack of potential revenues, making the future of
construction companies uncertain. While introducing the vaccine country tax rate also raised.

3. Corruption and withhold of site works due to curfew, lockdown, quarantine and
isolation

Sri Lanka has been under the lockdown and isolation areas with quarantine guidelines since 20th
March 2020. Because of confined to accommodations allocated by the construction site
following concerns arise among employees. Basis needs such as food, drinking water, sanitary
facilities, and medications. There is impact of transport due to COVID 19 guide lines related to
travel and transport there is a limitation of public transport usage. Due to sudden cessation of
ongoing projects due to COVID 19 crisis made a major issue in salaries of employees. Due to the
lock down essentials supplement to construction sites interrupted. Most of the constructions were
unable to complete according to the project proposal time. Some construction had to end up

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completely when there was no alternative method to continue them. Above situations sometimes
ended up with legal issues.

4. Materials, subcontractor and supply chain delays and impacts.

COVID-19 has unmistakably impacted certain facets of the construction industry. The
construction industry is facing significant difficulties in operating normally and meeting
deadlines as a result of supply chain disturbances. For any project or perhaps even for the
duration of the project, the impact of material delays or shortages would probably be noticeable
for a time duration. The propagation of COVID-19 has disturbed the timing of subcontractor
companies and delivery of products and services and is expected to continue to interrupt it.
Manufacturing and manufacturing facilities are expected to be affected depending upon their
own existing staff and facility management problems created by the pandemic. The above-
mentioned COVID-19 curfew prevented local suppliers from working as normal and interrupted
their activities of construction sites. Imported building materials originating mostly from China
experienced considerable delays as a consequence of a crisis in COVID-19. The Chinese
government has permitted firms to reopen in the country, but the process has been still slow.
Then the construction projects are getting delays and facing challenges to meet the deadlines.

5. Financial impacts

The COVID-19 now has a huge financial effect on companies. As a result of the halting of
construction projects, revenue sources have dried up, although fixed costs such as leases,
salaries, and other expenses have remained relatively constant. While it does not be obvious, the
impact on the construction industry is probable and substantial, and would have significant
systemic effects on the supply chain in the field, the corona virus has caused serious economic
shocks for many parts of the country. The financial condition in the future does not look
promising either. The demand for building projects such as the apartments would also be
decreased substantially due to lower middle class spending. This scenario would generate intense
presence for projects between existing companies and will dramatically decrease the negotiating
power of construction organizations leading to lower incomes and earnings for everyone in the
sector.

6. The current projects has contractual and legal problems

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Since the COVID-19 situation postpones current projects, significant contractual and legal issues
have arisen around project contracts. Governments are affecting construction and infrastructure
programs by passing laws or regulations, or also issuing orders, to address the pandemic.
Contractually, unforeseen disasters like the COVID-19 pandemic usually cause contractual
clauses dealing with the effects of those incidents. In most cases, if a contractor fails to reach the
deadlines settled upon at the time of contract signing, the client can charge fees for the financial
damage incurred as a result of the delay. However, since a major construction contract deal
normally entails several parties with diverse interests, substantial legal agreements will be
necessary to resolve certain questions which could lead to an increase in the company's legal
fees.

Figure 04: Contractual and legal problems of COVID 19 (Source : Tollers Solicitors, 2021)

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DISCUSSION

As stated in the previous part, the COVID-19 pandemic now has a significant impact on the
construction industry. Engineering solutions for such issues will be addressed in this part by both
the employer's and employee's perspectives.

1. Ensuring the safety of employees

After introducing the COVID 19 vaccine the pandemic situation seems to be changed at the
present time. But from a variety of perspectives, ensuring the wellbeing of workers is necessary
for companies. It is the employer's ethical responsibility to protect the company's employees
from any damages.

Before being allowed to enter the worksite, all employees must be properly monitored.
Employees must stay home while they are sick to ensure the health and safety of those on the
construction site. If employee suffering from illness like fever, coughing or congestion, should
not attempt to the work place and must contact the supervisor and Human Resources Department
to take the necessary health care action for such employees. After the vaccination also employees
should inform about if any unhealthy situation before returning to the site. Employees'
temperatures should be tested at the gate to ensure that no one with even minor symptoms
reaches the workplace.

Ethically, both employees and employers should consider about the vaccination policies in the
current situation. Within the construction site, the company should make it mandatory to wear
personal protective equipments. The company should provide employees with face masks and
gloves. They should also be trained how to preserve personal hygiene well and right ways. The
leaders would set a good example by following all of the rules and procedures at the site.

Social distancing must be maintained in meeting at the construction sites. In the business
meeting regarding to the project should postponed or moved to the virtual meeting. Furthermore,
for example in common area of the site such as lunch room the social distance must be
maintained. Project team must be introduced schedule for the lunch time by minimizing the
number of people near one another. Another very common area is toilets. Company should be
provided portable temporary toilets for works to maintain the social distancing. Company team
should enhance and increase cleaning and sanitizing for high touch surfaces, vehicles, tools and
equipments at the site.

Figure 05: Construction foreman worker wearing

facemask at the construction site. (Source:Freepik, 2021).

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2. Postponement or suspension of current and future projects

The corona virus has affected the construction industry and caused project delays and
cancelations. It even negatively impacts the employment of all of these employees of the
construction companies. To continue construction during the crisis, construction firms must form
relationships and negotiate with clients such as real estate developers. Until the covid pandemic
resolved client may be recover their needs. The corona virus has also affected the productivity of
the sector as companies across the world are changing their way of working to protect staff and
the public. Government funded constructing projects is an option to restore the companies related
to construction companies. This supports infrastructure developments projects highways,
apartments, roads, harbors, expressways, water plants, bridges, irrigation works, etc. In this
pandemic situation that construction costs likely increased as a result of a delays and
cancelations.

After the resolve off covid pandemic of certain extent targets of projects can be achieved by
enhancing in the manpower. But there may be unsatisfied salaries relevant to work performed by
of the project. First pandemic was a new experience for construction industry. Responsible
authorities had lack of knowledge about preparation and precautions related to facing such
pandemic and preventing project delaying. But with the guidance of consultants and expertise
projects launching adopted to a new interface which concern on ethical validations of the
employees. It also avoided the project delaying due to a interruption or a withhold. With the
introduction of vaccination against covid 19 a new confidence inculcated in employee related to
beginning of new construction projects.

3. Corruption and withhold of site works due to curfew, lockdown, quarantine and
isolation.

Virtual meetings and discussions can be arranged to get the guidance from construction expertise
y avoiding unnecessary physical contaminations to the working site. Due to limitation of public
transport usage during COVID 19 companies can arrange transport system for employee and
employers. Ethically valid insurance system related to pandemic situations can be introduced to
construction workers which will leads to satisfactions.

Given recent travel restrictions and the general confusion surrounding travel worldwide,
contractors, especially foreign contractors, will wish to consider hiring more local manpower to
mitigate any disturbance caused by COVID-19 related movement restrictions, or even more
closely manage their personnel's movements. Introducing loans for construction works which
were withhold during COVID I9 first wave. Then the companies understand how to finish the
projects without any delays. It is a hope for employees to continue their works in this crisis. In

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the second wave due to the introduction of vaccinations workers participation to constructions
increased.

4. Materials, subcontractor and supply chain delays and impacts.

The global campaign to combat corona virus has greatly affected delivery services and material
reserves, so contracting companies are taking additional steps to ensure that their products are
available when they are needed and when they need them. Covid-19 impacts both labor and
materials, the major cost elements of construction projects, thereby challenging the continued of
projects, liquidity of companies and entire business strategies. Some key companies of supply
chain and materials distributions are situated in high risk areas in the country. Construction
works are getting delayed and that effected directly to the company project costs and most of
companies release employees because of disturbance in salary payments to them in first &
second waves.

Ethically, to continue the company projects construction companies can request from the Sri
Lanka governments to sort out this problem of employees by requesting more vaccines from
WHO and other parties to consider how important this is economically in country. On the other
hand ethically, in order to help suppliers restart their activities in regular order in shortest time to
help construction companies to reset their site operations, construction companies must
coordinate with their suppliers to create appropriate relationships. Since the manufacturers are
overseas, foreign imports can be a much more complex problem. In order to ensure that the
company's buying department is aware of the needs, it can deal proactively with distributors and
service. To continue the site works as normal, alternative supplies can be found from countries
other than China. Such changes must however be approved by the client for the suppliers.
Ethically, contractors who are affected by distribution problems should assess their attempts to
prepare for or work through these issues carefully.

Figure 06: Construction materials

and supply chain (Source:Caleb
Mayo,2021)

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5. Financial impacts

Due to the current Corona virus situation, the health and wellbeing of the workers is a priority of
most construction companies and the delays in projects resulting from failure to procure jobs or
supplies are being addressed. The financial effects of the corona virus become paramount after
the health problems and project delays are resolved. It would also be important for contractors
and lenders, contractors, subcontractors and manufacturers to be able to advance the curve and
manage the claims and to preserve claims and defend against claims.

Companies have become more difficult to work normally and pay properly for their employees.
Sri Lanka government can support construction companies by releasing payments due to
construction firms, concessionary working capital loans, and debt moratoriums to the SME
industry in the short term.

In this situation some companies failed to meet the employee’s salaries on right time. As a result
of that, the companies lay off employees under downward economy system. Employee laying off
must be a last option for companies and it is a morally difficult decision. Financial impacts of the
companies interrupt to pass tendering of future projects. Ethically all the parties can support each
others by discussing and understanding the real situation for continue firms as normal.
Construction companies and labor unions should work together to reach an agreement that is
agreeable to all parties. This will show that the company's leadership is leading by example
rather than necessarily lay off or reducing the salary of relevant staff.

6. The current projects has contractual and legal problems

While the pandemic of corona virus was unpredictable, contractor could be held liable for delays
or cost overruns for existing projects could be still contractually liable. During this period
between the client and construction team, contractual and legal disputes of existing contracts will
be a challenging topic of negotiation. In this negotiating phase, the construction company must
therefore ensure that no ethical bonds are violated which will affect the company's future
business. In the building sense, FIDIC's globally used Contractual Conditions define "Force
Maeurej"1 as an exceptional occurrence or situation that is beyond the influence of the party
concerned and which the party involved could not, before entering into the construction contract,
have foreseen or prevented or stopped until the construction contract has come into being. Nor
would the other side be responsible for the case.

Where, however, developments in country law can be shown that have impaired companies'
ability to carry out contract commitments such as a government enforced curfew, contractual

15
requirements may apply where a date extension is extended to the construction firm and the
expenses accrued during that time are then paid for by the company's contractual obligations.

In most cases, if a contractor fails to reach the deadlines settled upon at the time of contract
signing, companies should discuss with all the parties as ethically and practically. Companies do
not understand about how to face for these contractual and legal problems in the first wave. After
finishing the lock down period construction companies adopted to face that problems which are
raised again in second wave by adhere a system.

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CONCLUSION

This study addressed in detail six main problems which have arisen in view of the COVID-19
crisis in the construction industry. In addition engineering solutions for these issues were
discussed from employer and employees perspectives.

1. Ensuring the safety of employees

This is still main problem especially in between labors to work in the sites under health risks.
Safety guidelines like employee monitoring (check temperature), the usage of personal masks
and gloves, ensuring good standards of personal hygiene, social distancing and routine
disinfection can all help to ensure employee protection when working in the construction
industry throughout the second wave era. Employees can go to work more than first wave period
because of introducing the vaccine in that time. Ethically government and construction company
management should facilitate health care to their employees to reactive the construction works
for balance the economy.

2. Postponement or suspension of current and future projects

Several upcoming construction projects were scheduled to start have been postponed and
canceled because the effect of corona virus especially in first wave. But while introducing
vaccine some project started as normally. Employees can come to work in the construction sites
as a schedule which was given by the government quarantine guidelines. At the present time
more employees work rather than the beginning of the Covid 19. Construction companies are
able to negotiate the matters regarding the proposals with potential clients and to allow them to
restart their projects. Until resolving the COVID 19 pandemic situation construction project can
get support from the government funding systems related to infrastructure development projects.

3. Corruption and withhold of site works due to curfew, lockdown, quarantine and
isolation

Due to travel restrictions there is limitation of gaining essentials such as food, water and
medications. Private transport system should be maintained instead of workers travel through
public transport, Ethically favourable salaries, loans, insurance system can be introduced to
avoid frustration of workers due to the impact of COVID 19.

4. Materials, subcontractor and supply chain delays and impacts.

The construction companies are facing more challenges due to the current corona virus situation.
Ethically, construction companies can request from the Sri Lanka governments to sort out this
problem of employees by requesting more vaccines from WHO and other parties to consider how
important this is economically in country. Other countries can be used as an overseas supplier

17
instead of China. In addition, the construction industry can ask the government to take action and
to solve the matter in diplomatic capacity with Chinese supplies.

5. Financial impacts

The financial influence of COVID-19 on the construction industry has been enormous. In the
first wave, the income flows slowed down and the expense remained constant. When introducing
the vaccine companies reopen to employees for works under the time lines and safety guidelines.
Ethically governments also encourage employees to work as earlier while isolating only high
risks areas. As a result of that economy is balancing rather than beginning of the situation. As a
result of the economy unbalance the company lay off employees but it is the last option and
morally difficult decision. Companies could shortly request support from the government to
survive. The company must concentrate on a mode of survival in the immediate future.

6. The current projects has contractual and legal problems

Construction companies are facing significant legal and contractual problems as a result of
delays in projects caused by the COVID-19. In the course of discussions on such legal cases,
companies should still be careful not to compromise any ethical issues. Companies in the first
wave are unsure how to deal with these contractual and regulatory issues. Most of the employers
and employees understood the situation in that time and they are balancing their works in the
second wave as well considered. The result of these negotiations would depend on the
internationally used Contractual Conditions of FIDIC characterize "Force Maeurej"1 as an
extraordinary circumstance or event outside the control of the party in question. Companies in
the first wave are unsure how to deal with these contractual and regulatory issues.

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1. De Silva, N., Rajakaruna, R.W.D.W.C.A.B. and Bandara, K.A.T.N., 2008. Challenges

faced by the construction industry in Sri Lanka: perspective of clients and
contractors. Building Resilience, p.158.

2. Coronavirus (COVID-19) Sri Lanka - Analytics Dashboard. 2021. Coronavirus (COVID-

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9. Coronavirus outbreak: The legal implications | Global law firm | Norton Rose Fulbright.
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11. Our World in Data. 2021. Coronavirus (COVID-19) Vaccinations - Statistics and
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[ONLINE] Available at: https://www.tollers.co.uk/coronavirus-and-force-majeure/.
[Accessed 03 May 2021].

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