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Further extension of relief periods under the COVID-19 (Temporary Measures) act for relevant contracts

A foreign worker works as a Safety Supervisor in a big construction company; Image by dr David Sing/Shutterstock

Singapore, 4 October 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 S$1.36 billion construction support package, manpower support, and legislative relief through the COVID-19 (Temporary Measures) Act.

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 Work Permit Holders (WPHs), 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 end on 30 September 2021.

However, as Singapore navigates towards becoming a COVID-resilient nation, challenges for firms in the BE sector persist. Labour cost has increased due to restrictions in the inflow of migrant workers. Projects are facing delays due to manpower tightness. In this regard, the government will extend the temporary legislative relief related to the BE sector to help firms tide through this period.

The government will extend the relief periods under Part 2, Part 8B and Part 10A of the Act for an additional three months, up to 31 December 2021, in the following manner:

a) Extension of relief period under Part 2 of the Act

Construction firms affected by COVID-19 can seek temporary relief from legal and enforcement action for construction contracts or supply contracts, or any performance bond granted thereto, by serving a Notification for Relief by 31 December 2021 on their contracting parties.

During this period, parties are encouraged to negotiate and resolve their differences in an amicable and mutually beneficial manner. If an agreement cannot be reached and there is a dispute as to whether the relief triggered by the Notification for Relief applies, either party may submit an application for an Assessor’s determination up to two months after the end of the relief period, i.e., latest by 28 February 2022.

b) Extension of relief period under Part 8B of the Act

Cost-sharing relief under Part 8B applies to non-manpower qualifying costs, which arise due to delays caused by COVID-19 during the period from 7 April 2020 to 31 December 2021.

c) Extension of relief period under Part 10A of the Act

Contractors should negotiate with their clients to reach a mutually agreeable arrangement to address the increase in foreign manpower salary costs. If contracting parties are unable to reach an amicable outcome, contractors in eligible contracts can apply to seek a determination by an Assessor to adjust the contract sum for the increase in foreign manpower salary costs due to COVID-19 during the period from 1 October 2020 to 31 December 2021. Contractors may submit an application for an Assessor’s determination up to two months after the end of the relief period, i.e., latest by 28 February 2022.

– Construction+ Online