Law firm Dillon Eustace has issued a briefing note on the impact of emergency Covid-19 legislation on the construction industry, including RIAI contracts.
Work on all but the three areas of construction will not be able to proceed while the restrictions on movement remain in place. The three exempted areas are:
• essential health and related projects relevant to the Covid-19 crisis, and supplies necessary for such projects.
• repair/construction of critical road and utility infrastructure
• delivery of emergency services to businesses and homes on an emergency call-out basis in areas such as electrical, plumbing, glazing and roofing
Dillon Eustace says developers, contractors and design team consultants are just some of the stakeholders who be affected by the commercial implications and risk associated with Covid-19 project delay.
Landlords and tenants of pre-let premises will also be adversely affected by uncertainty on the potential to achieve project completion dates. Funders will also be concerned to see the extent to which revenue generation may be delayed.
In Association with
Consultant Fiona O’Neill (pictured) commented: “In light of current uncertainties and rapidly changing landscape, it is possible that parties to construction contracts, particularly where they have a history of working together on successful projects, may not be satisfied that their contract reflects the circumstances in which they now find themselves.
“As a result, there is merit in the parties considering the negotiation of some contract amendments. A collaborative approach could potentially result in a more mutually commercially acceptable and less strictly contractual and possibly adversarial response to problems arising out of a Covid-19 delay.
“In adopting a collaborative approach, both parties to the contract would need to consider very carefully the short and long term effects of any agreed change,” O’Neill added.
According to Ulster Bank economist Simon Barry, C-19 containment measures led to a collapse in construction activity in March.
“The headline PMI index fell to levels that have only previously been seen at the height of the global financial crisis, with the largest monthly drop in the survey’s 20-year history underscoring the extent of the disruptions faced by construction firms,” Barry stated.
“The forward-looking elements of the PMI survey also paint an extremely weak picture, signalling that the sector is likely to remain under significant pressure in the near-term. The New Orders index plummeted to an 11-year low in March as respondents mentioned that the cancellation of projects and company shutdowns contributed to the sharp contraction in new business inflows.
“Confidence about the coming year also plunged in March, leaving the Future Activity Index at its lowest level since early-2009.”
The Dillon Eustace briefing note is available to download here.
