The Current

Impact of COVID-
19 in Uganda’s
Construction
industry

By Stephen Ray Emer

About Me.

Stephen Ray Emer

 M.ISU, R.SU
 MSc CPM, Loughborough University, BSc (Hons) Building Economics
 MRICS
 C.IQSK, BORAQs
 Director: ICM Consultants Ltd
 Currently working as Quantity Surveyor with SSE Enterprise, UK
Overview of Session

• Introduction and COVID-19 highlights

• Current Issues
• Contract provisions
• Practical Steps to Consider
• Q&A
Introduction & COVID-19 Highlights
• First cases reported in Wuhan, Hubei
province in China-Dec 2019
• Global Pandemic declared by WHO-
11/03/2020
• Gov’t of Uganda instituted in place
restrictive measures on 21/03/2020.
• Construction sites allowed to operate
but with restrictive measures in place.
• The COVID-19 pandemic continues to
evolve rapidly. Gov’t guidelines keep
changing frequently.
Current issues/issues that may arise
• Suspension of works
• Programme delays
• Health & Safety security
• Challenge with Supply Chain & Logistics
• Delays with Possession of Site / Site Handover
• Loss of Jobs
• Potential Contract Terminations
Questions to ask
• Is COVID-19 pandemic a force majeure event?
• If yes, what is the effect of invoking a force majeure provision
• Are there any Contractual entitlement to relief?
• What happens if a contract does not include a force majeure clause?
• Does the current pandemic lead to frustration of the contract?
• What other provisions in the contract may be relevant to current event?
• What happens next after Lockdown restrictions have been lifted?
Contract provisions
• East Africa Institute of Architects- EOT Cl 23(a) force majeure, 23(i) Contractor’s inability for
reasons beyond his control and which he could not reasonably have foreseen. Architect may examine delay Provided always
that the Contractor shall use constantly his best endeavors* to prevent Delay. Termination of Contract Cl 26 c(i) force majeure

• PPDA General Conditions of Contract for the Procurement of Works-

Early Warning Cl 32 (Cl 41.1 2019 Rev) “..The Contractor shall warn the Project Manager at the earliest opportunity….. The
Project Manager may require the Contractor to provide an estimate of the expected effect of the future event or circumstance
on the Contract Price and Completion Date…..” Compensation Events Cl 44 (l) (Cl 53.1 2019 Rev) other CEs described in SCC. Pay
attention to Cl 59. Termination, 59.4 (Cl 68.4 2019 Rev) terminate contract for convenience Cl 62. (Cl 70.1) Release from
Performance . If the Contract is frustrated by the outbreak of war or by any other event entirely outside the control of either
the Employer or the Contractor, the Project Manager shall certify that the Contract has been frustrated.

• JBCC (Green Book) 2018- EOT Cl 36 …..Upon it becoming reasonably apparent that the progress of the
Works is or is likely to be delayed….. the Contractor shall forthwith give written notice of the cause of the delay……. an
application for adjustment of time shall not be valid unless accompanied by adequate supporting details to the satisfaction of
the Architect. Unlike the above Force Majeure is defined. Cl 36.2.10 Reasons beyond Contractor’s control, Nominated subies,
delay to secure skilled labour due to forces beyond his control. Cl 40.4 Termination by Either Party …..suspension of works for a
Continuous period of 60 days due to Force Majeure…
Contract provisions
• FIDIC- Has been proactive and created guidelines to deal with COVID-19 related issues (obviously no fit it all solution due
to variances created by amendments). The purpose in drafting the guidance memorandum is to help parties to a FIDIC contract
to consider mutually satisfactory solutions and avoid disputes arising between them.

• JCT Contracts- There’s no definition the term ‘force majeure’ and it is instead classified under Clause 2.26 as a
‘Relevant Event’ but not a Relevant Matter. As a relevant event, it potentially entitles the contractor to an extension of time but
will not result in loss and expense (as it is not a Relevant Matter)

• NEC Contracts- Cl 60.1.9 describes Force Majeure in everything except in name. AS a CE, this clause should give rise
to not only an extension of time, but additional monies as well. Under NEC, the Force Majeure Event must stop completion of
the Works, or completion of the Works by the dates shown on the Accepted Programme. EWNs need to be as soon as either the
Contractor or the Project Manager “becomes aware” of any matter which could increase the Prices, delay Completion etc.

• Bespoke/Non-Standard Contracts-
What happens if a contract does not include a force
majeure clause?
• Look at existing provisions in the contract. Look out for terms like ‘unforeseen conditions, prevent, hinder etc.

• Look out for details/entitlements under common clauses like Delays, EOT, termination,

• Doctrine of frustration- In the case of Howard & Co. (Africa) Ltd v. Burton (supra) Sir Daniel Crawshaw, J.A., stated: The onus
of proving frustration is on the party alleging it, and if that is proved, the onus is upon the other party to prove that it was self-
induced. Monday Eliab v Attorney General ((Civil Appeal No 16 Of 2010)) [2011] UGSC 12 (14 November 2011)-”Whether or
not there was frustration of contract is a question of fact and the respondent had a duty to prove it.” It is the respondent who
sought to rely on frustration to justify the termination of the contract. This being so, it was incumbent on the respondent to lead
evidence to prove that the contract was discharged by frustration as a result of the accident”

• If the contract lacks a force majeure clause, no particular relief will necessarily flow from situations the parties might consider
force majeure

• Request suspension by way of a contract variation (renegotiate terms) e.g. payment mechanisms, insurance provisions, etc

• The United Nations Convention on Contracts

Conclusion
Pay attention to
• Current legislation; Laws, Acts of Parliament etc. Occupational Safety and Health Act, 2006 –
why…because Employers are under an obligation to provide a safe working environment. Employment Act,
2006

• Delays by others (nominated sub-contractors),

• notice periods, acting upon notices,…avoid no justifiable grounds are given for the failure to act.*

• Loss & Expense contract provisions & claims. Expenses the contractor may be entitled to and are not
reimbursable under any other provision of the contract.*

• Be vigilant for opportunism from counterparties., global claims etc

• Clauses that are more onerous like “best endeavors”

• Fluctuation clauses and escalation clauses. Escalation clauses allow a contractor to receive an increase in
its contract price if the costs go up
Opportunities
• Collaboration and working together*.
• Responsible and fair contractual behaviour- like
– being reasonable and proportionate in responding to performance issues and
enforcing contracts,
– requesting, and giving, relief for impaired performance, including in respect of the
time for delivery and completion
– requesting, and allowing, extensions of time
– making, and responding to, force majeure, frustration, change in law, relief event,
delay event, compensation event and excusing cause claims
– making, payment on time
• Leadership! Jobs- handling claims
• New ideas and innovations
The End