Written answer by Ministry of National Development on assistance and recourse provided to sub-contractors of HDB housing projects, in a situation where the main contractor was dismissed by HDB and currently undergoing liquidation

Feb 26, 2024

Question No: 5752

Question by: Mr Mohd Fahmi Bin Aliman

To ask the Minister for National Development besides connecting the replacement contractor with existing SME sub-contractors, what other assistance and recourse are provided to sub-contractors of the main contractor of HDB housing projects in a situation where the main contractor was dismissed by HDB and currently undergoing liquidation.

Answer:

          HDB regularly monitors the financial health of its BTO contractors, including the promptness of payments to subcontractors and suppliers, to ensure timely construction progress. When a main contractor faces financial difficulty, HDB may lean forward to provide additional assistance to improve the situation. These measures include advance payments or more frequent progress payments (i.e. fortnightly progress payment instead of the usual monthly progress payment) to the main contractor, arranging direct payments to sub-contractors, and co-sharing prolongation costs and foreign worker levy rebates arising due to delays caused by COVID-19.

2.       In the unfortunate event where the contract with the main contractor has to be terminated due to the contractor’s financial difficulties, HDB will find a replacement contractor with a strong performance record to minimise completion delays. HDB will connect existing sub-contractors with the replacement contractor, for the main contractor to consider engaging the services of these sub-contractors moving forward. For cases where the main contractor undergoes liquidation, recovery of outstanding payments would be governed by insolvency rules, and taken under the purview of the appointed liquidator.