Construction companies struggle to get back on track amid Covid-19 pandemic

As companies in various sectors grapple with the impact of Covid-19, Zaihan Mohamed Yusof and Tee Zhuo look at how some construction companies and workers are coping

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Many construction firms have only recently restarted operations despite being given the go-ahead in June. The Straits Times visited a worksite to take a closer look at the safety measures and challenges involved.
On the weekend of Aug 22, two Covid-19 clusters were detected in Sungei Tengah Lodge (below) and Homestay Lodge in Kaki Bukit, putting the brakes on some projects that had only recently resumed work.
On the weekend of Aug 22, two Covid-19 clusters were detected in Sungei Tengah Lodge (above) and Homestay Lodge in Kaki Bukit, putting the brakes on some projects that had only recently resumed work. ST PHOTO: KELVIN CHNG

The Covid-19 pandemic has sent the construction sector into a tailspin, but the impact on firms in the industry has been uneven.

While some of the bigger firms had the resources to tide over the circuit breaker and prepare for the reopening, the smaller firms are facing the financial squeeze of not having enough work and yet having to pay their workers.

Straits Construction, with about 400 workers, started to make plans in April even as the circuit breaker kicked in, which helped it to start work promptly at its six sites in July.

Executive director and chief operating officer Kenneth Loo detailed the vast logistics involved from April, including converting spaces to house workers on-site, implementing zoning to prevent workers from mixing, and training staff in safe management procedures.

"Construction work is like doing a jigsaw puzzle. Without any one piece, if there is any piece that is missing, you can't do much," he said.

He is now exploring the possibility of doing on-site testing, to save workers from having to go to regional centres to be tested, and also piloting the use of Bluetooth contact-tracing tokens.

For 200-strong construction company Kori Holdings, the good news of work resumption was short-lived.

On the weekend of Aug 22, it was announced that two Covid-19 clusters were detected in Sungei Tengah Lodge and Homestay Lodge in Kaki Bukit, where its workers were staying.

"Our productivity was badly affected," Mr Hooi Yu Koh, chief executive of Kori Holdings, told The Straits Times. "All of a sudden, 20 per cent of our personnel had to go back into quarantine."

Similarly, about 70 of Mr Nixon Loh's 280 workers had to be put on stay-home notice (SHN) after the resurgence of cases in Sungei Tengah Lodge, resulting in disruptions to work.

Two of the four projects under Loh & Loh Construction, where Mr Loh is general manager, had to be shut down, taking three or four days before work could resume.

Although originally supposed to end their stay-home period last Friday, his workers on SHN - who are cleared of Covid-19 - have had the period extended to Sept 14. About 50 of them have also been transferred out of the dorm to hotels.

Like his workers, Mr Hooi was hopeful things had changed for the better last month.

By Aug 10, 90 per cent of his workforce had achieved the green code, certifying they were virus-free and had fulfilled the requirements set by the Building and Construction Authority, Ministry of Manpower (MOM) and the Health Ministry.

Completing construction jobs would mean his company would be able to pay workers their salaries.

Mr Hooi, 49, said of his workers: "They were disappointed. If this keeps recurring, many are contemplating going home."

Roughly 5 per cent of his workers have decided to return home, while another 5 per cent are recovering from the coronavirus.

At a time like this, construction companies appreciate all the help they can get from the authorities.

The foreign worker levy waiver and rebate, as well as a one-off compensation of $100 a day for returning workers who were initially put on SHN in hotels, were helpful, said Mr Hooi, who requested more support schemes for companies affected by the recent quarantine order.

But the financial burden continues to be heavy, especially for the industry's smaller players.

A construction company owner shared his financial worries, including his tussle with a dorm operator in the west, which wanted payment despite him having rehoused 35 out of 50 of his workers in a hotel before the circuit breaker.

"Whether you stay in the dorm or not, as long as your name is in the tenancy agreement, you still have to pay the rent," said the man, who gave his name only as Mr Salman. "We have to keep paying the dorm because the 'parking meter' has not stopped."

He took issue with having to "pay two sides" for accommodation, and showed The Straits Times an MOM advisory to employers with foreign workers staying in dormitories, dated May 7.

While the ministry had advised employers to continue paying rent promptly to dorm operators according to the rental contracts for workers housed in dormitories, the advisory also addressed employers in Mr Salman's predicament.

It stated: "Employers who had voluntarily made their own housing arrangements for their workers before movement at the dormitories was controlled, and are paying for the new accommodation, may terminate or suspend their existing rental contracts with the dormitory operators, in accordance with their contracts with the dormitory operators."

Aside from his workers' salaries, Mr Salman's monthly bills include $26,000 for 35 workers staying in a hotel in Geylang, $47,500 for levy payments for 50 workers and $15,000 in dorm rental for 50 workers.

It comes as no surprise that some companies have closed shop under such financial strain, said Mr Salman, who added he knows some people who have given up the trade.

Another construction employer, who wanted to be known only as Mr Wong, agreed, saying many of his friends are feeling the squeeze amid rising costs.

Several of them declined to speak to The Straits Times, citing sensitivities as they were working on government-related contracts.

Rules against the mixing of workers working on different projects have been very difficult for Mr Wong's firm of only 20 workers.

While he could previously rotate them more efficiently to have more on a site at a time, he now needs to split his limited manpower between different sites.

"We are already stretched and it's hard for smaller contractors like us to on-board added manpower in a short time. So in the end, we can't do much," he said.

Accommodation is an issue for Mr Wong too. While he used to be able to pay for the exact number of beds he needed in a dorm, he now has to pay more to get a whole room because his workers cannot share a room with those of another employer.

"I am at the mercy of the dorm operator," Mr Wong said.

A problem that remains is communication, several contractors said.

Mr Loh said the authorities need to inform employers when and why certain decisions are made.

"Nothing is made clear to us. Someone tells us tomorrow 'you can't go to work', but we don't know why. I can call and ask, but I am given the run-around," he said.

"We can't give our clients a straight answer because we have trouble getting a straight answer. There needs to be more openness and transparency, but unfortunately that hasn't been the case."

Mr Loo, who heads a task force looking into the sector's restart at the Singapore Contractors Association, of which he is the immediate past president, said the lack of information remains the biggest challenge for the industry.

"Big players may have the infrastructure in place and know what is going on, but smaller ones may not have that luxury. There is also a lot of hearsay and basic gaps in knowledge," he said.

But there have been significant improvements in the flow of information since June, he said.

Now that the sector has restarted, the question is how sustainable this restart will be, said Mr Loo.

He warned of a "multiplying effect" should there be casualties in the industry, due to the closely interlinked work of contractors and sub-contractors.

"The industry's financial health is quite drained. We came out from a period of downturn, were just about to see some light, and then Covid-19 happened," he said.

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A version of this article appeared in the print edition of The Straits Times on September 07, 2020, with the headline Construction companies struggle to get back on track amid Covid-19 pandemic. Subscribe