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Industry counts the cost of ash cloud

The industry was this week counting the cost of the volcanic ash cloud hanging over Europe, with reports that some contractors have been experiencing problems securing components for machines.

The industry is also dealing with the huge dislocation of staff, with those away on holiday or business unable to return, and many more unable to travel to meetings.

The Government has asked the Construction Products Association to assess the damage caused to the UK construction industry by the cloud of volcanic ash drifting across Europe from Iceland.

The Department for Business, Innovation and Skills called on a number of industry bodies to investigate the impact of Europe becoming a no-fly zone for most of the past week.

Construction Products Association director of external affairs Simon Storer said: “There are already a few instances where there is a problem getting spare parts for machinery, causing production lines to shut down, and
elsewhere isolated projects that are being put back as a result of the disruption of supply of materials.

“There may also be difficulties over original certification paperwork, which is couriered by air, being delayed for some sectors.”

Mr Storer said the longer the flight delays went on, the more sectors would be affected. The volcanic ash cloud is forecast to cost the UK’s wider economy hundreds of millions of pounds. A spokeswoman for BIS said: “We’re looking into how the volcanic eruption may affect business. We are continuing to keep an eye on the situation.”

Robert Crossingham, a partner in the construction team at law firm Weightmans, said contractors would be going through their contracts to avoid liability for delays caused by the ash cloud.

He said: “It is not uncommon for acts of God to feature in delay claims.

“It will depend on the contract that has been signed and whether there is any leeway provided for acts of God. But I can see some potential for dispute arising.”

Mr Crossingham said small and medium-sized construction firms may be hit harder by key workers being stuck abroad. He said that while those workers may have insurance to cover their travel disruption, it would not cover business interruption.

He added that larger firms would struggle to get people out of the country to crucial stages of overseas contract negotiations.

“It could be that UK and European firms could lose the advantage to Asian and US firms in bidding for some international jobs that are at tender stage and have very tight deadlines.”

The Electrical Contractors Association said there had been no significant delays to materials and equipment deliveries coming into the UK, with the majority of equipment the industry needs not having to be imported by air.

But it warned construction firms to be wary of the possibility that volcanic ash in the UK atmosphere could affect the running of construction equipment.

Chief executive David Pollock said: “It would be wise of the industry to begin to look at the physical consequences of the ash being in the atmosphere. It is possible that it may cause problems.”