Construction projects are often suspended or terminated unexpectedly for reasons outside the control of the project team. These may include:
- Sovereign risk – e.g., expropriation, change in government policy, civil unrest;
- Epidemic or pandemic – e.g., COVID-19, Ebola;
- Collapse in business case – e.g., fall in commodity prices, collapse of demand, loss of forward contracts;
- Technical failure – asset cannot be built or will never meet operating parameters due to flawed assumptions;
- Unforeseen conditions, e.g., significant geotechnical concerns, hazardous materials; or
- Extreme natural events – bushfire, flood, earthquake, cyclone, etc.
How can Corvative help? Drawing on past experience of similar situations, we can:
- Identify and capture necessary closure activities;
- Develop a closure plan, including stakeholder communications;
- Plan and execute the process for communication with contractors, terminating the contracts and resolving the claims quickly, fairly, and at the lowest reasonable cost;
- Support the owners to protect their reputation and social licence-to-operate, e.g., by finding cost-effective solutions to assist small local businesses at financial risk due to the cancellation; and
- Assess project systems and procedures for retention, retirement or redeployment, and preserving project value (especially developed IP).