Construction projects get four-month extension for completion dates due to Covid-19

ELIGIBLE construction projects will get an extension of up to 122 days for completion, under a Bill introduced in Parliament on Monday.

Under certain circumstances, contractors may be able to claim some qualifying costs related to the longer completion period, from the party for which the work is being done.

These provisions are part of the Covid-19 (Temporary Measures) (Amendment No 3) Bill, which also sets out the proposed Re-Align Framework to aid small and micro enterprises in renegotiating contracts. The Bill will be debated in Parliament on Tuesday.

The construction-related provisions apply to construction contracts entered into before March 25, 2020, which remain in force as of Nov 2, and where as at April 7, any works to be performed under the contract were not certified as completed.

The completion date extension does not apply in certain circumstances, including if construction works were performed at any time between April 20 and June 30 inclusive; or if court, arbitral, or tribunal proceedings regarding a failure to comply with the completion date began before Nov 2.

The Bill allows contractors to claim some qualifying costs incurred by being unable to finish works by the completion date, if this is due to a material extent to Covid-19.

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Qualifying costs include equipment rental and maintenance of the construction site, but do not include manpower costs, the cost of safe management measures, or costs for which the contractor has received relief.

For each month, up to half the total qualifying costs incurred may be claimed, capped at 0.2 per cent of the contract sum. The total amount that can be claimed is up to 1.8 per cent of the contract sum.

The Bill also provides for a similar extension of delivery dates in affected sale and purchase agreements for housing accommodation or commercial property.

This applies to agreements entered into before March 25 or pursuant to an option granted before then, with a delivery date on or after Feb 1, 2020, and where a temporary occupation permit has not been granted as of April 7, 2020. It does not apply if legal proceedings have begun in relation to a failure to deliver possession.