Government modifies policy to support construction industry

The Government's payment policy has been modified to provide additional support to the construction industry.

Traditionally, Government has followed industry best practice of paying the majority of outstanding payment when work is completed, but retaining an agreed proportion until the contractor is no longer liable for any defects occurring.

In order to support the industry during the Covid-19 pandemic, Government departments are being given the discretion to not apply the policy, and to release all the money due, provided that the risk of defects occurring is low or can be mitigated in other ways. Main contractors are obliged to pass the retention money on through their own supply chains.

The Minister for Infrastructure, Deputy Kevin Lewis, said: “The release of retention monies does not relieve the contractor of their contractual obligations to rectify defects, should they occur, but it will assist many local businesses with current and impending cash-flow issues, and help them to retain staff and be able to best serve the Island when we are able to proceed again.”

The decision to release retention will be made by Government departments on a case-by-case basis following an assessment of risk and agreement by contractors to act in the spirit of this arrangement.

Chairman of the Jersey Construction Council, Martin Holmes, said: “This initiative, which has been developed by the Construction Industry Response Team in partnership with the Jersey Construction Council, will provide welcome and timely cash flow assistance to our industry as we manage the financial implications of the period of site closures and their gradual re-opening operating under permits and adopting Covid-19 protocols.”