SINGAPORE – A new $1.36 billion fund has been set up to help construction companies, among the hardest-hit by the Covid-19 pandemic, to safely restart work.
The Construction Support Package, as it is called, will go towards co-funding some of the extra costs construction companies have to incur to comply with more stringent virus-safety measures to prevent a resurgence of cases.
It will also help to relieve half of the non-manpower costs – capped at 1.8 per cent of the contract sum – construction firms in public sector projects will incur due to the prolongation of projects during this period, said the Building and Construction Authority in announcing the fund on Saturday (June 27).
The Government will also continue to bear the costs of Covid-19 testing for the sector until March 31 next year.
The Construction Support Package is part of the Fortitude Budget, which is one of four Budgets totalling almost $100 billion in Covid-19 support measures passed in Parliament earlier this year.
On Saturday (June 27), during a tour of the worksite of the future circle line Prince Edward station, Minister of Manpower Josephine Teo said that safety measures in the construction and marine sectors are “far more stringent” because the virus spreads very easily at worksites. This means construction work is going to progress at a slower pace for quite a period of time.
She said: “Why is it important to help them?…The companies are involved in businesses that really helped to build up Singapore’s infrastructure, and we don’t want this to stop. We still want to have our MRT lines (and) our build-to-order flats.
“All of these measures that we are asking the companies to undertake. They are for the protection of the workers and also for the protection of the community.”
Following the restart of work, contractors are required to deploy safe management officers at worksites, with the Government co-funding 50 per cent of their salaries if they are Singapore citizens or permanent residents for six months from September.
Advance payment to firms working on public sector projects will also be given until they have been granted permission to restart work, although this is subject to a cap of 5 per cent of the project’s awarded contract sum or $10 million, whichever is lower.
Mr Francis Koh, the 58-year-old group chief executive officer of construction firm Koh Brothers, said the fund was “timely” although it will not cover all costs. He said it will help to reduce losses.
“Each bus used to ferry workers now hascapacity reduced by 30 per cent,” he said. “We are also facing increased costs of up to 40 per cent for each month that the project is taking longer than expected to complete.”
Minister for Social and Family Development Desmond Lee, who was also at the event, said sweeping changes are confronting the construction sector – from testing and clearing workers of the virus, to accommodation, transport and zoning of worksites – to ensure workers do not intermingle.
“The sector is overwhelmed by a lot of requirements from different agencies that change (from) day to day. The BCA has taken on the role as a one-stop platform and all information is cited on its website (and) telegram channel, which I encourage all contractor partners to download and subscribe to.”
The details of the Construction Support Package were the result of discussions between the Building and Construction Authority, the Singapore Contractors Association, the Specialists Trade Alliance of Singapore and other trade associations, as the sector looks to resume a new normal with more migrant workers being cleared of the virus through systematic testing.
About 80,000 of the 323,000 workers living in dormitories in Singapore have so far been cleared of the virus, although only about 17,000 can start work after fulfilling conditions including downloading the TraceTogether mobile app for contact tracing.
Dormitory operators must also have implemented safe living measures and arranged with employers such as construction firms to pick up and drop off workers at work sites at staggered timings, all of which constitute extra costs for companies that are not factored into their tender bids made before the coronavirus hit.
Separately, foreign worker levy rebates of $90 per month will also be given for each work permit holder from August this year to end 2021, with a possibility of extension till end-2022. This falls under a separate $920 million fund that will benefit 15,000 companies in the construction, marine shipyard and process sectors, announced by the Ministry of Manpower and the Ministry of Trade and Industry on Saturday (June 27).