Building firms get 'final' 2-month extension of Covid-19 relief from contractual obligations

The extensions also apply to the rest of the built environment sector.
The extensions also apply to the rest of the built environment sector. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Construction companies in Singapore will get an additional two-month reprieve from legal and enforcement action for their building and supply contracts. The relief period will be extended until Feb 28 next year.

The relief period for co-sharing of additional non-manpower qualifying costs between contracting parties due to Covid-19-related delays will also be extended to that date.

Meanwhile, a relief framework that permits contractors to seek an adjusted contract sum to defray higher foreign manpower salary costs, subject to an assessor's determination, will be extended by another three months, till March 31 next year.

The relief periods for legal and enforcement action, as well as cost sharing, were previously extended in September to Dec 31.

The Ministry of National Development (MND) said on Monday (Dec 27) that the extensions till Feb 28 for these two relief periods will be the final ones, "barring any unforeseen circumstances".

"We strongly encourage all contracting parties to use this final extension to agree on a sustainable course of action moving forward."

MND added that the extension of the relief period for adjusted contract sums to defray increased labour costs was in view of the continued increase in foreign manpower salary costs faced by contractors.

It also said this extension will complement the extension of foreign worker levy rebates for the same duration.

"To ensure the safe inflow of workers while minimising importation risk, we encourage firms to continue to tap on the two viable and safe entry lanes for construction work permit holders to bring in workers to meet their immediate needs - the tightened end-to-end process led by the industry, and the work pass holder general lane."

The Straits Times has reported that the cost of bringing in foreign workers rose as much as five times for some construction companies. This was after it was announced earlier in December that the construction, marine shipyard and process sectors cannot apply to bring in foreign workers via quarantine-free vaccinated travel lanes.

Recovery has been seen in the built environment sector, which also covers real estate, environment services and security.

For instance, the Building and Construction Authority has observed that industry-level certified progress payments have almost reached pre-Covid-19 levels, said MND.

"These indicate that construction works are progressing at a steady pace.

"However, firms in the built environment sector are still facing some challenges, including manpower shortage and elevated costs."

The three forms of relief which will be extended originate from a $1.36 billion construction support package, manpower support and legislative relief under the Covid-19 (Temporary Measures) Act.

MND said further details can be found here.

"We would like to emphasise that the reliefs related to the built environment sector under the Covid-19 (Temporary Measures) Act are meant to be time-limited.

"As the sector continues to recover and as we shift towards living with Covid-19, firms will need to partner each other even more closely for long-term sustainability and resilience."

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