Smart Contracts- How can the construction industry in Kenya can benefit from it

The construction industry in Kenya suffers from a few challenges, including but not limited to:

• Bad/poor construction practices and lack of skills
• Prevalence of fraud & corruption
• Poor project planning and control, etc etc.

There needs to be a way that brings trust to the process and also brings in cost efficiencies — By using smart contracts

Let’s say there’s a deal between a contractor and a client. They agree to a deal to construct a 3 bedroom house, with terms and conditions acceptable to both. These terms and conditions are then encoded into a software program that runs automatically and ensures their enforcement. This is the simplest definition of a smart contract. It cannot be tampered with (unless of course there is a variation). The parties involved can trust the transaction and its outcome, with no need for intermediaries to verify or validate. No one needs to weigh in to say that the transaction really happened as per the agreed terms and conditions, and nobody needs to reconcile any numbers later on.

In a smart construction contract, it could be used to implement the terms of and administer the contract and its costs. It could collate and process information about the progress of the project, and, subject to the agreed terms as translated into code, execute a specified action

The smart contract could be used to:

• Record when site workers clock in
• Monitor the progress on the build
• Monitor weather conditions
• Record materials and when they were delivered, etc etc

These records would be fed into the smart contract which would then, automatically, check the next step in accordance with the contract’s terms as coded and trigger an action (for example, an automated payment at a certain milestone).

Smart contracts could, therefore, make key features of current construction contracts redundant, including payment notices, project bank accounts, project delays, etc. They could even incorporated with a provenance feature that can track the originality, credibility and authenticity of construction materials and even companies involved in the project