Further Extension of Relief Periods under the COVID-19 (Temporary Measures) Act for Relevant Contracts in the Built Environment Sector

Dec 27, 2021

The Built Environment (“BE”) sector has been adversely impacted by COVID-19. In response, the Government has intervened in an unprecedented way, including providing significant financial assistance through a $1.36 billion construction support package, manpower support, and legislative relief through the COVID-19 (Temporary Measures) Act (the “Act”). Our objective is to ensure that no single segment of the BE value chain bears a disproportionate share of the burden due to COVID-19.

The Government had previously announced that the prescribed periods for legislative relief (“relief periods”) related to the BE sector under Part 2, Part 8B and Part 10A of the Act would be extended up to 31 December 2021.

Part 2 of the Act provides temporary relief for a prescribed period, upon service of a Notification for Relief, from stipulated types of legal and enforcement actions in relation to the inability to perform contractual obligations due to COVID-19. Part 8B of the Act requires the co-sharing of additional non-manpower qualifying costs between contracting parties due to delays caused by COVID-19. Part 10A of the Act provides a relief framework to allow contractors to seek a determination from an Assessor to adjust the contract sum to address the increase in foreign manpower salary costs, i.e. salary costs of construction Work Permit Holders (WPHs), due to COVID-19.

We have seen recovery in the BE sector. For instance, BCA has observed that industry-level certified progress payments have almost reached pre-COVID-19 levels. These indicate that construction works are progressing at a steady pace. However, firms in the BE sector are still facing some challenges including manpower shortage and elevated costs. In this regard, we will extend the temporary legislative relief related to the BE sector in the following manner.

The Government will extend the relief periods under Part 2 of the Act for construction contracts and supply contracts, or any performance bond granted thereto, and Part 8B of the Act for an additional two months, up to 28 February 2022.¹ Barring any unforeseen circumstances, this will be the final extension of these two Parts. We strongly encourage all contracting parties to use this final extension to agree on a sustainable course of action moving forward.

The Government will also extend the relief periods under Part 10A of the Act for an additional three months, up to 31 March 2022. This is in view of the continued increase in foreign manpower salary costs experienced by contractors. It will also complement the extension of Foreign Worker Levy rebates (earlier announced by MOM) 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 WPHs 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.

Further details on the processes under Part 2, Part 8B and Part 10A of the Act can be found at http://www.mlaw.gov.sg/covid19-relief, https://go.gov.sg/bca-guide-cotma-8a-8b and http://go.gov.sg/cotma10a respectively.

We would like to emphasise that the reliefs related to the BE 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.

¹ If there is a dispute as to whether the relief under Part 2 of the Act applies, parties may submit an Application for an Assessor’s Determination up to two months after the end of the relief period, i.e. latest by 30 April 2022.