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Diagnosing the Impact of a Global Pandemic on the Sponsors of Capital Projects

By Randall Coxworth, Melissa Morea Evola, Harold G. Dorbin

March 24, 2020

Global organizations operate in a complex and interconnected landscape. Over the last few years, industries have been impacted by geopolitical shocks that have cascading effects on highly relevant issues such as the availability of labor, supplies, and financing. Enter COVID-19.  Now, geopolitical analysis – the comprehensive examination of the political economic, social, and environmental factors that can affect the outcome of a construction project – is a necessary element of project feasibility. We offer a multi-disciplinary approach that global companies use to anticipate unexpected events and estimate their probable values on their capital projects.

Industries across the globe are bracing for impact from the COVID-19 pandemic. Owners and lenders are facing their own set of unique risks that need to be addressed and mitigated including change orders and claims on their capital projects from their contractors.

Ask yourself the following questions as you consider potential impacts to your project and your business:

  • Have you considered the potential schedule delays that may arise from the current COVID-19 pandemic and are you prepared to properly evaluate those delays?
  • Will the shortage of labor, materials, and potentially quarantined or delayed shipment of materials impact the overall schedule and/or cost of your project?
  • What will the impact of delays and/or additional costs on one or multiple projects have on your broader business?
  • Are you prepared to determine the direct impact of COVID-19 delay and cost to ensure your contractor isn’t using the current conditions to “mask” previous self-imposed project challenges or impacts?
  • Is the financial structure of the project(s) still adequate based on known and potential unknown impacts?

How We Can Help:

Our Construction Disputes & Advisory experts provide rigorous analysis of complex issues and quantify the impact on a project’s schedule and overall costs based on independent and fact-based analyses. Our findings are delivered in a clear and concise manner and when required, presented through experienced testimony before tribunals around the world.

We provide owners the ability to identify and mitigate risks during the planning and execution phases of a capital project. Ankura also supports owners when a situation requires independent analyses to quantify the impacts to schedule and/or costs when mandated by contract or in the event of a dispute.

Further, our Real Estate and restructuring professionals can assess the project’s financial structure and help assess the feasibility of the project to meet your business goals based on the current capital structure and market outlook. We are experienced in capital project financial analyses, financial restructuring, rescue financing, and forbearance services in all asset classes.

Key areas for consideration to engage Ankura’s Construction Disputes & Advisory teams are:

Schedule/Programme

Determine discrete delays along a project’s critical path and assign responsibility for each independent delay.

Cost/Quantum

Value construction works and analyze complex construction claims and variations.

Real Estate Analysis / Restructuring:

Analyze the capital structure of the project, develop a response to alternative outcomes and execute the financial restructuring of the project.

Damages

Analyze project documentation and records to assert or rebut damage calculations.

Professional Liability and Defective Construction

Analyze the performance of the design and construction teams relating to design completeness, accuracy and coordination and address the responsibility for defective construction.

First-Party Claims

Support the quantification and documentation of complex insurance claims including time element (i.e., loss of income, loss of rents), “soft costs” and property damage losses.

The Ankura Difference

Our 200+ Construction industry professionals combine real-world industry experience, robust credentials, and technical expertise in finance, accounting, architecture, engineering, real estate, critical path method scheduling, program and project analysis, and construction management. 

For more on Ankura’s construction services and experts, please visit:  www.ankura.com/construction