MND set to extend relief period for built environment contracts due to Covid-19

THE Singapore government is set to extend the relief period for firms in the built environment sector that face difficulty performing contractual obligations due to the Covid-19 pandemic.

This will be done through an amendment of the Covid-19 (Temporary Measures) Act, which the Ministry of National Development (MND) is planning to introduce in Parliament on April 5, the ministry said in a statement on Friday.

If the amendment bill is passed by Parliament, it will allow the government to extend the relief periods under Part 2 and Part 8B of the Act, which were set to end on March 31.

Under Part 2 of the Act, the relief period for construction contracts, supply contracts or any performance bond, would be extended for an additional six months, up to Sept 30. This would allow construction firms affected by Covid-19 to seek temporary relief from legal and enforcement action.

The relief period for options to purchase and sale and purchase agreements would be extended for an additional three months, up to June 30.

The ministry said this would be helpful for purchasers of residential, commercial and industrial properties who require more time to make their payments.

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During this period, parties are encouraged to negotiate and resolve their differences in an amicable and mutually-beneficial way, MND said.

Part 8B of the Act requires the co-sharing of additional non-manpower-related qualifying costs between contracting parties due to delays caused by Covid-19.

With the amendment, the relief period would be extended for an additional six months, up to Sept 30. Cost-sharing relief would also now apply to qualifying costs, which arise due to delays caused by the pandemic during the period from April 7, 2020 to Sept 30, 2021.

The ministry said the extension will allow the industry to stabilise and ride out the lingering impact of the pandemic.

"While construction works have restarted, challenges for firms persist. Labour cost has increased due to restrictions in the inflow of migrant workers. Firms are also operating at lower capacity due to the need to comply with safe management measures," said MND, adding that it will continue to help firms tide through this period.

"Our objective is to ensure that no single segment of the built environment value chain bears a disproportionate share of the burden due to Covid-19," the ministry said.

The government has so far provided financial assistance through a S$1.36 billion construction support package, manpower support and legislative relief through the Act.