UK EXPERT WARNS
OF WORLD OF “DISTRESSED’ CONSTRUCTION
Making a ‘smart’ move for projects and engineering/industrial operations in distress
“The world has certainly been turned on its
collective head in these first few months of 2020
with the COVID-19 pandemic, and the ongoing
global responses to it and the challenges it
presents. And the impact globally on projects
and indeed the broad engineering-oriented
environment is already significant, and becoming
more so”, says Ian McKechnie, CEO and principal
advisor at engineering and project advisory firm
Engenamic.
“Consequently, many projects and engineering/
industrial operations are finding themselves in
distressed conditions and situations,” he says.
“This applies to both ‘conventional’ and publicprivate
partnerships, and to a broad-range of
engineering, resources and industrial sectors”.
He notes that there are reports around the world
of projects with contractors and/or the clients
declaring force majeure or similar, and there is
a growing potential of adversarial/dispute and/
or of failure or other undesirable situations and
outcomes quickly developing. He continued
that these can potentially be very costly and
detrimental to parties and relationships, but that
there are other, and potentially more preferable,
options.
McKechnie says that a ‘smarter move’ in the
circumstances, and certainly at least in the first
instance, would be for the parties to strategically
adopt a ‘pragmatic sustainability’ and disputeavoidance
approach and intervention in such
distressed project and engineering/industrial
operations situations. He says that can be
advantageous to all parties in seeking to alleviate
the distress and ‘rescue’ the situation through
more sustainable and mutually beneficial
outcomes – that is, “seeking the more ‘win-win’
and sustainability types of scenario 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. To move forward smartly.”
While noting that, of course, this preferred
outcome (or approach) is not always possible
or feasible, and disputes and other adversarial
situations can nevertheless arise, he says that
“we advocate strategically adopting and pursuing
such a ‘pragmatic sustainability’ disputeavoidance
approach and process in seeking such
outcomes, as a preferred option” he says.
“This could be the smartest move in the
circumstances”.
McKechnie says that parties should be
encouraged to start such processes as soon
as possible, and that these processes would
benefit from external and independent, objective
facilitation and support.
This is where external expertise in
troubleshooting and fixing as well as strategic
advisory expertise, and an ability to understand
and integrate the ‘big picture’ scenario
(technically and non-technically), can add
significant value to constructively facilitating and
supporting such an approach and process he
says.
24 June 2020
I N F R A S T R U C T U R E