“The world has certainly been turned on its collective head in these first few months of 2020 with the Covid-19 pandemic and the challenges it presents,” says Ian McKechnie, CEO and principal advisor at engineering and project advisory firm, Engenamic. “The global impact on projects, and indeed the broad engineering-oriented environment, is already significant, and becoming more so.
“Consequently, many projects and engineering/industrial operations are finding themselves in distressed conditions and situations. This applies to both conventional projects, public-private partnerships, and to a broad range of engineering, resources and industrial sectors.”
He adds that there are reports around the world of projects with contractors and/or clients declaring force majeure or similar, and there is growing potential for adversarial dispute and failure, or other undesirable situations and outcomes.
A smarter move, at least in the first instance, would be for the parties to adopt a pragmatic sustainability and dispute-avoidance approach in such distressed project or operations situations. This can be advantageous to all parties in seeking to alleviate the distress and rescue the situation through sustainable and mutually beneficial outcomes.
“Such an approach creates opportunity, for those willing to embrace it, to evaluate, rethink, reset, change and find positive, broadly beneficial and, perhaps most importantly, sustainable ways forward,” explains McKechnie.
Whilst noting that, of course, this preferred outcome (or approach) is not always possible or feasible, and disputes and other adversarial situations can nevertheless arise, McKechnie states: “We advocate adopting and pursuing such a pragmatic sustainability and dispute-avoidance approach, seeking such outcomes, as a preferred option. This could be the smartest move in the circumstances.
“Parties should be encouraged to start such processes as soon as possible, and these processes often benefit from external and independent facilitation and support. This is where Engenamic, with our troubleshooting and fixing as well as strategic advisory expertise, and an ability to understand big picture scenarios, technical and non-technical, can add significant value.”
On Thursday 7 May, the Construction Leadership Council in the UK published its Covid-19 Contractual Best Practice Guidance. The introduction to this document notes, "there is a real concern that the construction (including maintenance) industry will become embroiled in costly and long-running disputes, if it does not look to engage in collaborative discussions..."
McKechnie comments that this resonates with the pragmatic sustainability approach advocated by Engenamic and of course pertains to other sectors as well. He concludes by noting that Engenamic is particularly geared to provide advisory and support services worldwide, in the virtual as well as physical space, leveraging technology and bridging physical, country and time-zone barriers.
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