Extending Relief Framework under COVID-19 (Temporary Measures) Act to Include Material Costs to Further Support Built Sector

Mr Kwek Hian Chuan Henry asked the Minister for National Development (a) whether the relief framework under the COVID-19 (Temporary Measures) Act (COTMA) can be expanded to include material costs to assist built environment sector firms cope with rising material prices; and (b) whether the Ministry will consider establishing a dedicated BCA team to assist these firms in applying for and exercising their rights under COTMA.

Mr Desmond Lee: With the COVID-19 (Temporary Measures) Act, or COTMA, the government has put in place unprecedented legislation that addresses contractual obligations that have been significantly impacted by the COVID-19 pandemic. We do not take decisions to intervene in private contracts lightly. Construction material prices fluctuate for a variety of reasons other than COVID-19, such as changes in global demand and export tariffs. In this regard, it is not appropriate to expand COTMA to cover such existing business risks.

Firms should negotiate in good faith and leverage their own contractual mechanisms to manage such material price fluctuations between contract parties. For example, public sector construction contracts include a fluctuation clause that allows contract prices to be adjusted according to the prevailing material price indices of key construction materials.

On assisting firms with issues relating to COTMA, BCA has conducted a series of industry webinars, and published detailed COTMA guides and claim templates since the commencement of COTMA. Firms can direct COTMA-related queries to BCA or trade associations such as the Singapore Contractors Association Ltd and the Specialists Trade Alliance of Singapore. However, BCA would not be able to provide legal advice to firms on their rights under COTMA for specific projects. Firms should seek their own advice from the relevant professionals.