Urban Renewal a Growing Prospect for Builders, as Well as Risk

• 31 December 2015
• Local News
• 865 Views

By Mr. David Ng, Vice President of Forte Insurance (Cambodia)

Cambodia is a peaceful developing country and offers vast opportunities for both local investments and foreign direct investments. With the flow of new local and foreign investments, engineering and building construction companies can see a growing market to offer their specialised services to the developers.

For Phnom Penh where there is an emerging trend of urban renewal where dilapidated buildings give way to new skyscrapers, and building and construction activities increasingly encroach on older areas of Phnom Penh, construction risks increase as the city undergoes its urban renewal phase.

Developers and construction companies alike would encounter various exposures to third party liabilities apart from the inherent construction risks.

Work stop orders have been issued in many cases of developers and contractors alike that have ignored their risks to liabilities to third parties affected by their direct activities, especially in close proximity to heavily built-up areas of the city.

Lack of development control and building standards, and a building design code of practice are factors that allow most developers to try to maximise their land development without any consideration of issues relating to their adjoining neighbours, for example, the blending of architectural aesthetics of the particular locality. Hence new buildings can abut with the existing ones or with minimal clearance or without any road set-back as usually found in a well planned city.

Building construction close to third party properties could give rise to many negative effects of vibrations, like cracks, soil subsidence and compaction, when foundation machines work in close proximity to very old and sometimes weak dilapidated buildings. Builders are expected to pre-empt some of the safety issues surrounding the work site, such as conducting a dilapidation survey for work process safety planning.

Contractor’s All Risks insurance protection is designed to offer the builder a more comprehensive indemnity protection from the adverse effects of work-related accidents and also third party issues and stop work orders, which can mean disruptions to both the developer and the contractor’s business commitments.

Forte Insurance understands this current high exposure situation and can offer a role to help risk manage projects through our dedicated service and inputs on risk identification, assessment and recommendations to mitigate their exposures and facilitate their projects to be completed on time, and, in any event of loss, their turnaround will be much shortened to minimise the impacts from delays.