Smaller contractors may be hit harder by new requirement for suitable accommodation 

SMALLER contractors may be disproportionately affected by new Ministry of Manpower rules that require employers to provide proof of acceptable accommodation before they can bring new non-Malaysian work permit holders into Singapore.

The new requirement, which takes effect from Tuesday (Sep 19), comes as dormitories are fully occupied after the number of work permit holders surpassed pre-Covid levels in July.

In response to media queries, the Ministry of Manpower said the number of residents in non-dormitory types of accommodation, such as private residences and hostels, has risen quickly in recent months. Pre-housing checks will allow authorities to see if these forms of accommodation are indeed acceptable, it said.

Hooi Yu Koh, chief executive of specialist builder Kori Holdings , said larger industry players have other options, such as housing migrant workers within their own construction temporary quarters (CTQs) on construction sites.

“The smaller players are depending a lot on what is available in the market because they are not in the position to build dormitories on their own. They are restricted to what is available in the market and it is very tight at the moment.”

He said some contractors could resort to temporarily housing workers in budget hotels and hostels while waiting for beds at purpose-built dormitories (PBD). He noted, however, that these could cost around S$80 to S$100 per day.

Hooi has dealt with the current dormitory crunch by planning ahead. When 30 per cent of his workers left the company after borders reopened, he continued to lease their beds at PBD in Sungei Tengah and Kaki Bukit to ensure he would have ready access to accommodation.

“Of course it’s costly, but fortunately we did that. With these beds in hand, we are able to bring in workers.”

The company’s workforce has returned to about 90 per cent of pre-pandemic numbers. He added that the company has enough bed space to further expand its workforce for the rest of this year.

Singapore Contractors Association manpower and policy committee chairman Jacob Wong said it is not easy for companies to secure beds for workers at dormitories at this time.

Citing conversations with the Dormitory Association of Singapore, he said dormitories are full and requests are being put on wait lists for now.

Dormitory costs have risen from S$420 per bed per month in the first quarter of this year to about S$600 currently, he added.

“We have encouraged our members to contribute to dormitory supply by building their own accommodation… to mitigate the supply shortage demand, and to support their subcontractors in these efforts.”

Wong noted that the requirement to secure accommodation for workers before they enter Singapore is not new. The difference with the new rules is that pre-housing checks will now be done for housing such as private residential properties, hotels and hostels.

“(There is a) need for advance planning to ensure sufficient workforce availability at different stages of project construction. Contractors will no longer be able to respond promptly to cope with any sudden surge in manpower demand.”

Expand Construction general manager Kenneth Siew said the company works regularly with a group of subcontractors whom he prioritises when allocating CTQ bed space at his work sites.

He added that contractors will also have to ensure a constant flow of jobs with CTQ bed space. Otherwise, they may have to let their workers go if they are unable to secure additional PBD bed space to house their workers.

“You cannot wait until you get a job, then you start hiring workers… by the time you hire workers your job is delayed, so you must have a minimal workforce on hand,” he said. “(These workers) have to stay somewhere so the moment you get a job they can jumpstart (it).”

He noted that with the dormitory crunch, it has also been easier to secure the relevant approvals to set up CTQs at certain sites, such as Housing and Development Board construction sites.

“Earlier, it was all case-by-case. They didn’t encourage CTQs because if it was too near the residents, you have issues.”

Similarly, Straits Construction chief operating officer Kenneth Loo said it is in a main contractor’s interest to help subcontractors bring their workers in, and keep their accommodation costs in check. “If the main contractor can offer CTQ facilities at a better rate, that will impact the costs for the subcontractor, (versus) if they have to pay a high price for their worker’s accommodation at an external facility that they will probably have to price in.”

With the dormitory crunch, companies have also been trying to do more with fewer workers.

Kori Holdings’ Hooi said the company has been able to improve its productivity by diversifying away from steel works, and into some precasting off-site. He added that the company has been able to complete as much work as it did pre-pandemic with about 90 per cent of the manpower.

“If (we need) a square item, we build the whole square… (and) bring it to the site to install as it is. We assemble on-site, which would require very minimal manpower,” he said, adding that by building these components off-site, the company can leverage heavy machinery, such as cranes, to speed up the construction process.

Straits Construction’s Loo noted that there has been a surge in migrant workers hired in the sector. However, he said it may be a temporary increase, as companies rush to finish projects that were delayed by the pandemic.

“If dormitory costs continue to stay high and the wages stay high, cost per worker stays high, definitely people will react to it by looking into technology and other means to increase productivity.”