Construction workers' leave of absence raises fears of project delays

Singapore

CONSTRUCTION players are bracing themselves for possible missed deadlines, with some workers stuck in mainland China or away from work and the epidemic shaping up to be a force majeure event.

The sector employs 341,200 foreigners - three-quarters of the construction workforce - although there is no public breakdown of their nationality.

On Saturday morning, as work pass holders returning from mainland China fell under a 14-day leave of absence, the Building and Construction Authority (BCA) noted in an industry circular that "there are concerns raised over potential project delays arising from absence of workers".

For instance, Lian Beng Group, whose 60 per cent-owned United Tec Construction bagged a S$178 million private-home deal in December, sees disruption to progress on some projects amid "an immediate shortage of manpower", executive director Ong Lay Koon told The Business Times.

Mainland Chinese labour makes up as much as two-fifths of workers at each of its sites, including manpower supplied by sub-contractors.

But, to be sure, remedies in place include contract extension requests.

Public-sector project contractors can submit claims for more time, while government procuring entities and contract superintending officers have been told to prepare to evaluate such claims, in the latest BCA move.

"BCA has also sought the support of Redas for private-sector projects similarly affected," a spokesman later told BT, referring to the Real Estate Developers' Association of Singapore.

Koong Len Sheng, a partner at David Lim & Partners who specialises in construction and engineering, told BT that the virus epidemic likely constitutes a force majeure event - which refers to unforeseen, external circumstances that could not be avoided.

China's international trade promotion agency last week began issuing force majeure certificates to Chinese businesses that cannot fulfil contractual obligations to overseas partners.

But Mr Koong advised contractors planning to seek extensions to submit the claims within the timeframe allowed by their contracts.

Eldan Law partner Looi Ming Ming, who does construction-related claims, noted that not every project may get an extension, based on factors like whether other delaying events, for which the contractors were responsible, took place at the same time.

"The contractor will likely also have to show that all steps were taken to minimise delay, including working at other areas of the work site."

Under the BCA's advisory, public-works contractors who ask for more time must have taken all necessary mitigating measures, and must also offer proof that site progress was affected by the virus outbreaks.

All the same, some of the sting is relieved by the variety of regional markets from which the Manpower Ministry lets construction firms do their hiring.

Besides Malaysia, mainland China, Hong Kong, Macau and Taiwan, the construction industry can also employ foreigners from South Korea, India, Sri Lanka, Thailand, Bangladesh, Myanmar and the Philippines.

A spokesman for Koh Brothers told BT that mainland Chinese workers make up under 4 per cent of staff.

This jives with Mr Koong's understanding from construction clients that "there isn't any major impact to the progress of the projects that they are working on" so far, as these firms employ workers from diverse places.

Similar, Ms Looi told BT that her construction clients finishing up projects are also not badly hit, with staff from China making up less than one-tenth of the headcount deployed.

"But for projects in full swing and /or with heavy reliance on skilled workers from China, the progress of construction will likely be considerably affected," she added.

Said Lian Beng's Ms Ong: "We have invested considerable resources to train our workforce, so it is not just a simple matter of replacing the PRC workforce with other nationalities. We need to retrain the new workers.

"We hope the government will introduce more measures to help the industry tide through this period."

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