COVID 19 Impacts On The Construction Industry

COVID 19 IMPACTS ON THE
CONSTRUCTION INDUSTRY
WUBISHET JEKALE MENGESHA (DR. ENG.)
JUNE, 2020
Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 1

PRESENTATION LAYOUTS
• COVID 19 IMPACTS ON THE CONSTRUCTION INDUSTRY
BACKGROUND
COVID 19 IMPACTS
RECOMMENDED
INTERVENTIONS
FACTS ON SITE
CONTRACTUAL & LEGAL
REQUIREMENTS
FACTS ON VALID CLAIM REQUIREMENTS
CONCLUSIONS
BACKGROUNDS
• COVID 19 AND THE CONSTRUCTION INDUSTRY
SOCIAL DISTANCING/STAY HOME Light to Acute

HYGINE & DISINFECTANT
DONOT TOUCH CONTAMINATED Respiratory
SURFACES Disease Extremely Fast
NO HAND & FACE CONTACT
USE RECOMMENDED PPES
Transmittable
AVOID RAW MEAT & FISHES Disease
QUARANTINE NEW COMERS COVID 19
Only Prevented Kills Within Short
through No Curing / Period of Time
Coordinated Efforts Preventing except
Rehabilitation
Wubishet Jekale Mengesha (Dr. Eng.)
Medicine 01/26/2022 3
BACKGROUNDS
PREVENTION MODES
TRANMISSION AND

BACKGROUNDS
MAJOR SYMPTOMS
OTHER SYMPTOMS
SORE THROAT
FATIGUE / TIREDNESS
LOSS of TASTE

BACKGROUNDS
Contribute to
Vulnerable to Economical & Cost Extensive and
COVID 19 Social Dev’t
2nd Employment
COULD NOT STOP Creation (Direct,
EXECUTED IN DIFFERENT
LOCATION CONSTRUCTIO Indirect & Induced)
ENGAGE MANY & DIVERSE HRS’ N INDUSTRY
HIGH CONTACT & NEARNESS Private Sector
INVOLVE CONSIDERABLE Development (Direct,
TRANSPORT
DELIVER & STORE CONSIDERABLE Contribute to BW & FW Linkages)
INPUT Poverty Reduction
(GNP↑: 2USD/day) 01/26/2022 6
BACKGROUNDS
Foreign Currency
Difficult During for Importing
COVID 19 Inputs
Excellent Supply
Chain for Deliveries
USE CAMPING CONSTRUCTIO
EXTENSIVE TRANSPORTATION
WEEKLY & MONTHLY MEETINGS N INDUSTRY
CONSIDERABLE WORKS ONSITE
Fragile during Price
EXTENSIVE QA SERVICES Instability &
POSITIVE CASH FLOW Considerable Insecurity
Coordination &
Fast Decision
Making 01/26/2022 7
COVID 19 IMPACTS
• GENERAL IMPACTS
Sha Extensive
r H&S M
Co ed So C
Re rpo cia Requirements c t on hain
sp o r a l e C
n si t e
bili Eff pply
ty Su
Management Effect on HRS
COVID 19
become Deployment &
IMPACTS
Intensive Working Apart
e n cy
m erg & Com Virtua
E aws mun l
L lations Productivity i ca t
u io n
Reg Not as Usual
GENERAL IMPACTS
• EXTENSIVE HEALTH & SAFETY REQUIREMENTS
Intensive
Inc Awareness e n t
r qu g &
Ov ease Creation r e
Increase Expenses
erh Idl F nin ng
ead e l e a cti
s C infe
Extensive Dis
Increase Idle Continuous
H&S
HRs & Supply of Unique
Requirement
Machineries PPEs
s
in g Inten
k
or i m e Follo sive
l W
it h T Continuou w Up
p
S unc
&L s Disposal
GENERAL IMPACTS
• DELIVERIES OF CONSTRUCTION MATERIALS NOT TO BE AS USUAL
Global SC
Decrease Productivities
Tra Disruptions SC
Disr nsfer i c
st n s
Increase Expenses
upti m e
ons Do ruptio
Dis
Disinfection Delivery Foreign Currency
Disruptions Delays / LC Disruptions
l ity Prod
a
Qu ances Disr uction
s ur tions upti
s
A up …. o ns
r
Dis
GENERAL IMPACTS
• DEPLOYMENT / AVAILABILITY OF HRS AND WORKING SITUATIONS
Sc a Social
Mig rcity o Distancing
k f rom
ran Wor ome
t HRf
Increase Expenses
s H
Transportation Idle HRs Sickness for

Difficulties Situations Absence
Qu a
r
ping ts Lock New antine f
Camremen Down
Entr or
ants
q u i
Re Absence
GENERAL IMPACTS
• VIRTUAL COMMUNICATION INTRODUCED
Physical to
Virtual Desk al
Une Create Transition rt u
Vi ted
mpl
Increase Expenses
oym
ent Rela nses
x p e
E
Internet & Virtual Adaptation Time
Computer Requirements Loses
Expenses
Ne t w
e g al e Ineff ork
L ta n c icien
cc ep ….. cy
A
GENERAL IMPACTS
• EMERGENCY LAWS TO BE LEGISLATED
Constructio
n Couldn’t
Be rti es
….. Pa ation
Increase Expenses
. Interrupted ig
Obl reased
Regional Lock Inc
Emergency Work Site
Down & Organization
Transport Laws
Redefined
Suspensions
h ift Wor
t e /S Can kers
o i ng
R em
o rk ced Term not be
W du ….. inate
o d
Intr
GENERAL IMPACTS
• MANAGEMENT EFFORTS TO BE EXTENSIVE
Unfamiliar Roles
&
Con e
Responsibilities s om
Deli tinuou Introduced Tire Follow
Increase Expenses
be r a s S
tion H& up
s
Extensive Realistic Program
Cash Flow Management Considering Split
Management Efforts Timing
Awa
r
im
Cla tration Substantial Crea eness
is tion
in Records
Adm
GENERAL IMPACTS
• PRODUCTIVITY OF WORKS AND SERVICES NOT TO BE AS USUAL
Delivery
…… Disruption
Idle ces
Increase Expenses
s o u r
Re
Overzealous
Time Overruns
Contract & Productivity
HRS Scarcities
Claim Effects
Administrations
Slow
o rk / De c i
W te d Mak sion
ru p d Cash Flow ing
Di pende
s
Shortage
Sus
GENERAL IMPACTS
• SOCIAL CORPORATE RESPONSIBILITY TO BE SHARED
Contractor
Ex- Alone Cannot is
Cla Gratia 1 9
im withstand V ID
CO Too
Increase Expenses
Nec when
es s a
ry e rt ain
Shared Social Unc
Advice Dialog, Corporate Client Alone can
Cooperation, Responsibilit not Compensate
Negotiation It
y
t Be P
en ract
e r nm re Real ical &
Gov ll Sha Workers istic
Sha shall Share
GENERAL IMPACTS
• NATIONAL PERSPECTIVE
9.8% National,
Planning & Development
Commission, May 2020
Ou t 20% CI
Red come Unemployment c o me
ucti In ction
on u
Red
Inability to Pay COVID 19 Reduced Foreign
Wages and Bank Impacts + Domestic CI
Loan Business
60 to
& 7
ry
st tors Fore 0%
d u Curr ign
In e Sec ted Cash Flow
e r vic ffec Shor ency
S vy A Shortage ta g e
Wubishet Jekale Mengesha (Dr. Eng.) Hea 01/26/2022 17
GENERAL IMPACTS
• NATIONAL PERSPECTIVE
2.8 to 3.8 % (36.7
Planning & Development
Commission, May 2020
Ou t %) reduction in I G s
Plan come GDP an L
b
Ur come
Disp Vs
arit In ction
y u
R ed
COVID 19 Productivity
COVID Vs
Impacts Driven Time
Starvation Death
Overruns
Pove
kd o w n to In rty Leve
o c Loan & crea l
u l l L haos s
34% e to
F C Assistance
Vs to Reduce
SPECIFIC IMPACTS
• CONSTRUCTION INDUSTRY
ተ. ቁ. መግለጫ የወረርሽኙ ተጽዕኖ
Construction, May 2020
1 የምርታማነት መቀዛቀዝ (የፕሮጀክቶች መዘግየት) 40 በመቶ
Ministry of UD and
2 በጉልበት / በቀን ሰራተኞች ላይ የሚቀንስ ገቢ 2.8 (ህ) እና 2.3 (መ) በመቶ

3 በጥቃቅንና አነስተኛ ተቋማት ላይ የሚቀንስ ገቢ 11.2 በመቶ
4 በግንባታ ስፍራዎች ቀጥተኛ ያልሆነ አገልግሎት የሚሰጡ
የህብረተሰብ ክፍሎች ላይ የሚቀንስ ገቢ ከ75 በመቶ እስከ መዘጋት
5 በመለስተኛና ጀማሪ ባለሙያዎች ላይ የሚቀንስ ገቢ 4.28 (ህ) እና 3.5 (መ) በመቶ
6 የግንባታ ግብአት አምራቾች / አቅራቢዎች ላይ የሚቀንስ
20 (ህ) እና 16 (መ) በመቶ
ገቢ
7 የግንባታ ማሽነሪ አከራዮች ላይ የሚቀንስ ገቢ 2.4 (ህ) እና 6.4 (መ) በመቶ
8 የስራ ተቋራጮች ተጨማሪ ወጪ 12.75 (ህ) እና 17.45 (መ) በመቶ
9 የፋይናንስ ተቋማት ላይ የሚደርስ ተጽዕኖ ከፍተኛ የመንግስት ድጎማ
10 ጂ.ዲ.ፒ. 60 በመቶ
11 የስራ ዕድል የሚቀንሰው 40 በመቶ 01/26/2022 19
SPECIFIC IMPACTS
• RECOMMENDED INTERVENTIONS
Guideline, May 2020
Western Australia
COVID 19 H&S

SPECIFIC IMPACTS
Guideline, May 2020

COVID 19 H&S
Western Australia

RECOMMENDED INTERVENTIONS
• SCREENING WORKERS
DECLARATION
INITIAL
S
DECLARATI
ONGOING
ONS

• SOCIAL / PHYSICAL DISTANCING

• SHARED TOOLS AND EQUIPMENT

SPECIFIC IMPACTS
Ministry of UD and

SPECIFIC IMPACTS
Ministry of UD and

FACTS ON SITE
Ministry of UD and

FACTS ON SITE
Ministry of UD and

CONTRACTUAL & LEGAL REQUIREMENTS
• CONDITIONS OF CONTRACT & APPLICABLE LAW
SBD FPPAA,
S BD 2011 R B,
PPA I D IC nded
20 06 F m e
A
1992
MoUDaC, 1994
Private & COC FIDIC SB, 1995
Regional Applicable DB Contracts
Contracts
a te CI V
r iv IL C
P O
a p d
te acts 19 60 D E ,
Ad ontr …..
C
CONTRACTUAL & LEGAL REMEDIES
Force Majeure /
Per Excepted or
Sup sonnel n f or
p & Special Risks p tio
Disr ly Cha u
Disr EOT
u pt i i n
ons
Covid 19 H&S Contractual
Related & Legal Government Act /
Additional Changes in Laws
Remedies
Payment
for Dela
n
io on ys C
p t Auth aused b
is ru gati Variations / oriti y
D lon es
Pro Costs Alterations
• FORCE MAJEURE / EXCEPTED OR SPECIAL RISKS
FPPAA, GCC 2011
Civil Code, 1960

• FORCE MAJEURE / EXCEPTED OR SPECIAL OR EMPLOYER RISKS
FIDIC RB, 1992

Civil Code, 1960

Civil Code, 1960

FPPAA, GCC 2011

FPPAA, GCC 2011

FPPAA, GCC 2011

FIDIC EPC Turnkey, 1999

FIDIC EPC Turnkey, 1999

• VALID CLIAM REQUIREMENTS

FACTS ON CLAIM VALID REQUIREMENTS
Conditions
C la Precedent: Less ing
Mos rificati Observed y War n
ed
t Pr o r l r v
acti ns Ea s Obs e
ced Les
Compensation Claim Valid
Requirements Notification Some
Computations
What Respected
Not Matured FACTS
l Tim
ta i Subm ely
De lars Less is s io
r ti cu eak ….. R e sp n
Pa ry W ected
Ve 01/26/2022 41
CLAIM TYPES
CLAIM & DISPUTE TYPES
1. CONTRACTUAL CLAIMS & DISPUTES
a. EXTENSION OF TIME
b. ADDITIONAL COST
2. EXTRA CONTRACTUAL CLAIMS & DISPUTES
a. WITH FAULT
b. WITHOUT FAULT
c. PRECARIOUS
3. QUANTUM MERIT CLAIMS & DISPUTES
a. PAYMENTS DUE TO WORKS INSTRUCTED OR CONTRACT REPLACED
4. EX-GRATIA CLAIMS & DISPUTES
a. PAYMENT ARISING OUT OF HARDSHIP WITH NO LEGAL REMEDY (MERCY OR
MORAL LIABILITY OR SYMPATHY CLAIMS)
CONCLUSIONS: ENTITLEMENTS
• ENTITLEMENTS
Extension of
Pro Time of
long on
ti n
Cos ation r ia
Va luatio
t Va
Additional Entitlement Additional Cost

Payment s (???)
….
….. ….
CONCLUSIONS: WHAT FIDIC RECOMMENDED
Specific Contract
Rea including PCC lo g ,
dy t y D ia
Dam o Shar Maters p e nl ate &
O oper tic
ages e Co Realis
Be
Value Social Conclusion Understand
Corporate Emergency Laws
Responsibility s & Impacts
Diffe
l& r
r
u a
act e can COV entiate
t Othe ID Vs
Con l Alon lve Fulfil Claim r Im
g a o pact
L ot Res
e Valid Req. s
n 01/26/2022 44
CONCLUSIONS: MY VIEW
Mec Create Respect Contract alid

han l fil V
Con ism u
F laim ts
ti n u fo r C m en
Imp ous i re
acts eq u
R
Compensate What
Ready to Share Conclusion the Contract
Damages s Allows (EOT &
Deal AP)
c ia l With
S o Con
u e e tract Non
Val rporat lity Use Ex-
Issu ual
Co nsibi Gratia es
es po Claim
Wubishet Jekale Mengesha (Dr. Eng.) R 01/26/2022 45
on s
s t i
ue
&

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COVID 19 IMPACTS ON THE

WUBISHET JEKALE MENGESHA (DR. ENG.)

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 1

SOCIAL DISTANCING/STAY HOME Light to Acute

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 4

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 5

Transportation Idle HRs Sickness for

2 በጉልበት / በቀን ሰራተኞች ላይ የሚቀንስ ገቢ 2.8 (ህ) እና 2.3 (መ) በመቶ

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 20

Guideline, May 2020

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 21

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 22

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 23

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 24

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 25

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 26

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 27

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 28

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 31

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Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 39

Wubishet Jekale Mengesha (Dr. Eng.) 01/26/2022 40

Additional Entitlement Additional Cost

Mec Create Respect Contract alid

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