Sir Vivian Ramsey, the international judge and arbiter, has warned construction and legal experts that sustainability, flexibility and moves towards collaboration are driving change across the global infrastructure.
Speaking to construction and legal experts, Sir Vivian Ramsey has set out the major influences affecting construction and infrastructure around the world right now, ranging from the immediate impact of the pandemic, to the lasting need for net zero.
Sir Vivian has warned that while everyone becomes a statistician when it comes to Covid-19, “the unprecedented scientific development of the vaccine” indicates that we may have to adapt to the pandemic for the foreseeable future.
“We need to look at the approach we’ve taken. The individual country approach rather than a global approach has caused enormous problems,” explained Sir Vivian, who explained, “You can’t solve the problem in one country without solving it around the world.”
He therefore welcomed investment in vaccine production globally but noted that the effects were still driving change. “Travel is heavily effected and the whole of supply chains have been disrupted by the pandemic. So the light at the end of the tunnel may come, but we need to learn the global lessons from it.”
“Traditionally, price was the central diver of project decision-making,” he accepted, before warning that this has changed somewhat. “Certainly, looking at sustainability is something which goes on through the life of a project and whole life costs come with questions about what we will be doing in future.”
He added, however, that there were unknowns about how new infrastructure might be used in years to come, with transitions potentially involving electric cars and aeroplanes or moves to more hydrogen power. So he warned that planning for long term sustainability comes with long term uncertainty.
Additionally, there is the net zero aim following COP26. New buildings can adopt solutions to help achieve net zero through new technology but he warned that older buildings were a bigger issue. “95% of the building stock will still be our existing buildings and making them fit for purpose will be a challenge that governments and companies must address.”
Skills and materials shortages
Sir Vivian then spoke about the skills and materials shortages being faced.
“One of the impacts of the pandemic has been skills shortages – both craft skills and engineering and management skills. That is one area where FIDIC credentialing is at the forefront of ensuring that people are well qualified and able to be trained and qualified globally – so there is a gold standard.”
Material shortages are one of the other major difficulties for the construction industry. Sir Vivian stressed that “What we have to do is see how traditional materials we have been using may not be the best choice in the long term and we have to find viable alternatives.”
He also pointed out an immediate impetus for such change, saying “A recent study showed that building materials such as steel and timber have increased in price over the past year to the order of 40%. That goes back to the previous point of material shortages and the way in which we must use materials more efficiently.”
The global economy contracted by 3.3% last year and inflation has become a way of life in most places. Looking to where growth is presently coming from. Sir Vivian said: “The economies set to drive global growth right now are India and China. So we can look at these areas of ‘the East’ to be the drivers of growth around the world. But one of the difficulties as we return to economic activity is the unevenness between countries, regions and sectors that is more apparent now after the pandemic.”
Then he noted that growth will also have changed. “We have all seen a need for hybrid working patterns, remote working and changes in lifestyles. We’ve seen people need more data centres and distribution centres than ever before.”
Looking to dispute resolution in construction and infrastructure, Sir Vivian sounded an optimistic note.
“There’s been a realisation by both the client sector and contracting and consultancy sectors. This has been because of the realisation that disputes in contracts are just a waste of time in the long run and one therefore has to move to collaboration and collaborative forms of contracts – as well as collaboration between the parties in the construction process.”
He suggested that instead of issuing court proceedings, “Timely introduction of Dispute Avoidance and Adjudication Boards (DAABs) for large projects” would be important, and stressed “I don’t think any employer can consider a contract not having a DAAB and I think in particular, the avoidance role of that group of experts is absolutely key in keeping the show on the road and ensuring disputes don’t fester.”
And Sir Vivian pointed out that there was now greater flexibility in how to engage in dispute resolution. Along with the role of international courts, he said that hearings were now conducted “by zoom, in person and some hybrid hearings and that will be the pattern for some time to come.”
Sir Vivian Ramsey was speaking at the FIDIC Contract Users Conference.