Question: Read the case study below and answer ALL the questions that follow.Lockdown forcing construction sector to think more strategically about tech adoptionAccording to the results
Read the case study below and answer ALL the questions that follow.Lockdown forcing construction sector to think more strategically about tech adoptionAccording to the results of a survey conducted by Construction Computer Software CCS amongst its clients,stakeholders and industry partners, the lockdown has compelled the construction industry to think more strategicallyabout the adoption of technology., especially as it relates to communication and collaboration. The survey wasconducted to establish how the construction industry has been affected by the lockdown and what measures playersare putting in place to manage the current situation, as the sector is expected to play a major role in South Africa'seconomic recovery post the Covid pandemic. Project disruptions and delaysSome of respondents said all their projects have been affected by disruptions or delays due to the Covidpandemic and of respondents from companies with a revenue of more than Rbn indicated that of theirprojects have been delayed or disrupted. These disruptions and delays are asa result of the lockdown measuresenforced by government, as well as shortages of materials, plants and equipment and PPE.CCS CEO Andrew Skudder, says while respondents expect all construction sectors to be affected by the pandemicin the shortterm, the building sector is expected to be the most affected."The building sector is primarily funded by private sector clients, who are expected to cut back on investments dueto the anticipated economic decline as a result of the Covid pandemic. Residential and retail investment is likelyto be most affected due to significant job losses, growing consumer financial stress and a lack of confidencefollowing the Covid enforced lockdowns."He adds that infrastructure spending, including civil and roads, is expected to be less affected as this tends to begovernment funded. "Respondents suggest that government is likely to accelerate its infrastructure spendprogramme in a bid to accelerate economic recovery and absorb unemployed labour into the employment marketas quickly as possible. Mining is expected to be least affected."Private clients most affected of respondents said private clients would be the most affected. Business and consumer confidence have beennegatively affected by the Covid pandemic and lockdowns, which is expected to result in a decline in GDPin This supports the view that the building sector will be most affected as it is primarily funded by privateclients.Stateowned enterprises, such as Eskom and Sanral, are expected to be least affected. Eskom, in particular, is anessential service provider and has significant build programmes, under way which have not been affected by thelockdown. In addition, water authorities such as Rand Water, which is an extension of national government, arealso expected to be less affected as they too provide essential services, with infrastructure requiring ongoingmaintenance and upgrading.Skudder, says of respondents indicated that on more than of their projects, clients have invoked forcemajeure clauses on their projects. "Smaller companies seem to have been less affected with of companieswith less than Rm revenue having more than of their projects affected." "This compares to of Rmto Rmn of Rm to Rbn and of Rbnplus revenue companies. Companies with a revenue ofbetween Rm and Rbn seem to have had the highest level of force majeure being invoked, with of Rmto Rm companies having to of their projects being affected, compared to just for companieswith revenue of less than Rbn"Managing the challenges presented by the pandemicSkudder, says a few major themes emerged in the survey. "One was the increased need to keep the channels ofcommunication open, especially with employees, but also with clients and other stakeholders on projects. It isundoubtedly healthier for businesses if people feel informed in times of great uncertainty. "Cost management isanother obvious theme, with companies implementing measures to manage costs and ensure liquidity stretches foras long as possible. Interestingly, organisations, have been terminating rental of plants and negotiating insurancepremiums."He says the construction industry is highly commercially driven, with stringent contracts in place that regulate therelationship between contractors and their clients. "Various steps need to be taken by construction companies toensure they position themselves for recovery and for the commercial entitlement they will need to establish as aresult of the crisis," he adds. He points to a new industry guide introduced by the UK government's ConstructionLeadership Council Covid Task Force, which offers practical advice to help contractors avoid expensive andlongrunning disputes over the effects of the pandemic on projQUESTION MarksBased on the case study and the impact of the pandemic on projects
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