Government unveils $1.36bil support package for the construction sector

Dubbed the Construction Support Package, the fund aims to help construction firms offset additional compliance costs due to COVID-19.

With migrant workers in dormitories comprising the majority of COVID-19 cases in Singapore, the government has set up a $1.36 billion fund to help construction firms resume work safely and quickly, announced the Building and Construction Authority (BCA) on 27 June.

Dubbed the Construction Support Package, the fund aims to help construction firms offset additional compliance costs due to COVID-19, extend advance payment for public sector projects as well as provide support for prolongation costs.

BCA revealed that a $525.8 million fund will be made available to construction firms to help them in procuring additional material/equipment, such as PPEs, masks, barricades and additional portable toilets, to comply with safety measures requirements.

“The funding will be given to construction projects regardless of whether they have restarted or are pending restart, as these compliance costs would eventually be incurred,” said BCA.

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To ensure that the construction sector will have a safe restart, the government will continue to shoulder the costs of COVID-19 testing for the sector until 31 March next year.

A $48 million fund will also be set aside to co-fund 50% of salaries of Safe Management Officers (SMOs) from September 2020 to February 2021, while a $793 million fund will see Government Procurement Entities (GPEs) co-share 50% the prolongations cost, which is capped at 1.8% of the contract sum, for public sector construction contracts.

BCA said developers undertaking private sector projects can also adopt the practice of co-sharing prolongation costs with contractors.

The government will also extend advance payments to construction firms working on public sector projects to the point when the projects secured approval to restart, capped at 5% of the contract sum or $10 million, whichever is lower.

Previously granted advance payments for April and May, main contractors for such projects are mandated to pass on a part of the advance payment to sub-contractors.

Aside from the support measures, construction firms can also avail of foreign worker levy rebates at $90 per month per work permit holder from August to December next year.

BCA said that it “has been working and will continue to work closely with the industry and its partners such as Singapore Contractors Association Ltd (SCAL), the Specialists Trade Alliance of Singapore (STAS), Real Estate Developers Association of Singapore (REDAS) to streamline processes and information to help the construction sector restart safely”.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg