The construction sector was in steep decline before the Covid-19 lockdown and few businesses have the cash reserves to remain sustainable in the current environment, says construction and technology law specialist MDA Attorneys.
The firm indicates that the most pressing concerns for contractors are surviving the lockdown and navigating the impact of the ‘construction mafia’, where work is halted by local business groups demanding work or financial reward.
This emerged in online gatherings hosted by MDA with over 1 000 South African construction sector participants.
Civil construction sites reopened in early May under Level 4 restrictions after a five-week Level 5 lockdown, but as activity levels dropped, the impact of Covid-19 on the construction sector was highlighted as “devastating.”
Taking cost recovery action is crucial for contractors during the this period, where contracts make provision for it, MDA Attorneys highlights.
Contractors are advised to submit required notices timeously, keep detailed records and ensure these are signed off by the relevant responsible person. The speedy submission of certificates for payment is also advised.
Work stoppages related to ‘construction mafia’ have been widely reported, yet MDA director and co-founder Ian Massey says the issue is adequately dealt with in only one of the four standard contract forms.
“Construction companies have also not fared well under the eyes of the law.
"Some of the outcomes of matters referred to our courts where civil unrest has affected the work, have not gone well for the contractors. These court precedents are used as arguments against contractors making claims for cost and time,” he says.
The MDA Lockdown webinars were supported by South African Forum of Civil Engineering Contractors, the Master Builders Association and South African Institution of Civil Engineering.