Effects of Corona Virus on the Construction Industry of Kurdistan Region

Spreading of the Corona virus (COVID-19) seriously affects almost all of our day to day life activities. The major problem and difficulties faced by us inthe Kurdistan Region especially after the order of the Head of Ministry of Kurdistan Region is the stoppage of work due to avoid getting people affected and also preventive measures taken by imposing the quarantines to stop spreading the deadly virus.

One of the problems dealing with the construction industry leading to occurring disagreement between owners and contractors due to the stoppage and suspension of the projects. Once a suspension on a project has occurred, numerous thoughts are probably running through to the owner and contractor. The owners of most of the projects in the Kurdistan Region are Governmental foundations of different sectors that will be faced with financial difficulties. The only source of funding is through the oil revenues that price decreased profoundly.

So, the owners may be exercising their contractual rights to terminate or suspend projects (partially or fully) in order to mitigate adverse economic impacts.

Similarly, the contractor is calling for additional cost and time. The best solution for this problem is by referring to the contract document which is mainly Conditions of Contract for Civil Engineering Works, 1987.

several questions may be asked here:

1.Would the owner be authorized to suspend the works of the project?

2. Have owner informed the contractor to suspend the works?

3. What would be the duration if suspension to be continued?

4. What are the effects of suspension on the project program?

5. Would the contractor be entitled to receive the cost of time?

The detailed answer to the above questions will be discussed in the next article.