Speech by 2M Desmond Lee on Construction Restart at the Supplementary Budget Debate 2020

Friday, 5 June 2020

COVID-19 has disrupted all sectors of the economy, including construction. During the Circuit Breaker period, most construction work was suspended. Post-Circuit Breaker, contractors are anxious to resume work quickly. Many have paid for materials, or are leasing equipment, which are now sitting idle. Since contractors are typically paid based on progress payments, no work means no payment. And we understand their anxiety. 

But while we want to resume construction work quickly, it is equally important that we do so safely. The vast majority of our COVID-19 cases has been amongst construction workers. So, we do not want to restart hastily, as a new case could easily cause another outbreak or new cluster among construction workers either on a construction site or in the dormitories. Such a resurgence of infection would not only endanger the health of our workers and the wider community, but also bring the construction industry to a halt again, and this is not in anyone’s interest.

It is in our common interest for construction works to resume in a phased and controlled manner. We had a first tranche of projects, which could not be left idle for long for safety reasons. These have been allowed to restart from 2 June. Beyond this list of projects, if firms have cleared workers and have put in place necessary safe management measures, firms can submit their applications to BCA. Once approved, they will be able to resume those projects. 

On the Government end, my colleagues have been working hard on multiple fronts to allow construction activities to resume faster. First, the Inter-Agency Task Force has been systematically and progressively clearing workers living in dormitories, to ensure they are well, so that they can return to work. 

Many contractors have shared with us their frustration about not knowing what is going on in the dormitories, as workers have been moved several times during these few months. They would also like to know in advance, when their workers can be tested and cleared for work, so that they can make plans for their projects to resume. They have asked for more information and updates on the dorm clearance situation. Members would recognise the scale and complexity of the Taskforce’s operation, as there are 43 Purpose-Built Dormitories and more than 1,000 Factory Converted Dormitories (FCDs) and Construction Temporary Quarters (CTQs), housing more than 300,000 workers and the outbreak situation in each dormitory is different.  

Earlier this week, MOM announced the first batch of 60 cleared dormitories. Another 111 are due to be cleared in the coming weeks. We will provide more regular updates to our industry, including a rolling forecast of the dormitory clearance schedule, to help employers and their clients plan ahead. For workers living in the community, we have also set aside testing capacity to test construction workers regularly to ensure their health and safety, and that of the wider community. 

Er Dr Lee Bee Wah had shared concerns of contractors with the latest MOM announcement on foreign worker levy rebates. We understand the concern. The Government’s intention was to enable workers to be temporarily seconded to other firms to optimise manpower distribution, so that more projects can restart sooner. However, firms have given feedback about this. For example, some of them may require their workers for their own projects that are about to start and cannot second their workers to other projects. MOM and BCA will review this, and we will work with them and the industry to find better ways to achieve this optimisation for the benefit of the entire sector.

Next, on foreign worker accommodation. Er Dr Lee asked about the new requirements for existing Factory Converted Dormitories (FCDs) and Construction Temporary Quarters (CTQs). Let me clarify that these requirements are not compulsory. We have piloted the new space norms for new quick-build dormitories that will be put up by the end of the year. We have been working with industry associations to make sure these requirements are practical, even as we seek to achieve safety, and will be prepared to consider further inputs. So far, we have approved more than 20 requests from contractors who wish to build new CTQs or FCDs for their workers, and we will continue to facilitate such requests where possible. 

We have received feedback that the COVID restart criteria for construction are stringent. Let me try to explain why we need to be careful. There is a project with a single owner on a single site, with all workers staying on-site. The workers have not left the site since end March, even before the circuit breaker. Full attention was given to protection and safety by all levels of management, such as ensuring proper segregation among the workers, including not allowing workers from different levels of the dorms to mix. Yet, that project had an infection prevalence rate of close to 30% among its workers. 

I share this example to show how infectious this disease is, and how difficult it can be to prevent spreading from a single case to affecting many more who live and work together. Imagine how much more challenging it might be, for projects with workers living in different accommodation, or having to move between different sites, as is the case with many projects with main contractors, and several layers of sub-contractors and specialist contractors. But we understand the concerns of companies and will work closely with the industry associations and firms to look at requirements to ensure they are practically implementable 

We are also providing training, to help companies put in place safe management measures, by offering a course for Safety Management Officers (SMOs). In the month of June alone, BCA and SCAL will train close to 20,000 such officers. BCA will give priority to train SMOs for projects that are ready to start first. BCA is also ramping up capacity further through tech-enabled learning modules, so please bear with us. 

We know that there is a lot of information that is being put out about COVID-19 related measures, sometimes from multiple ministries and agencies, day after day. Given how fluid and dynamic the situation is, contractors have told us that they are sometimes confused, lost, overwhelmed. 

To avoid the situation where companies do not know who to approach for information, BCA will be the point-agency in Government or the one-stop shopfront for all matters regarding construction restart. So if companies have questions or concerns, whether about testing their workers or constructing new temporary quarters, they need only approach BCA, who will coordinate with other relevant agencies to make the necessary arrangements or seek the necessary approvals. Because of the current situation, BCA has received a huge surge of calls, emails and queries. We are ramping up our capabilities to better support our sector.

We understand that firms are very concerned about their finances, during this period when their projects have yet to restart. DPM announced during his Fortitude Budget speech that the construction sector will receive enhanced support under the Jobs Support Scheme (JSS) until August. Let me assure Er Dr Lee that similar to construction firms, the consultancy firms will also be eligible for the higher tier of 75% JSS support for wages paid between June and August this year. In addition, companies whose foreign workers are not able to resume work will receive foreign worker levy waivers and rebates until July. The Government has also announced rental offsets for qualifying SME tenants.

Even after construction projects restart, we recognise that firms have to bear additional costs to meet the new COVID requirements which were not priced into their existing contracts. In the short term, the Government will help to bear the additional costs, including paying for the testing costs for workers. In the long term, the Government will continue to support the construction industry and provide assistance to cope with the additional costs. We will share more details on the specific measures when we are ready. We recognise the importance of the construction industry, because without them, we would not have our homes, our schools, our hospitals and other services. So we will do what we can, to help as many companies as possible to tide through this crisis. 

This is also why we have been working closely with our industry partners, such as the Singapore Contractors Association Ltd (SCAL), the Specialists Trade Alliance of Singapore (STAS), and the Real Estate Developers’ Association of Singapore (REDAS), to address the many issues that the industry is facing during this period. In fact, MOS Zaqy Mohamad and I held a video-conference meeting with them just two days ago – this was our third meeting in three weeks and will continue to do so regularly. 

I like to thank Er Dr Lee Bee Wah and Dr Teo Ho Pin for also joining us in the virtual meeting on Wednesday, where there were many constructive suggestions raised. For example, SCAL had earlier provided feedback that there are some Construction S-Pass and Work Permit holders who do not live in dorms, work only in offices and do not visit worksites. In consultation with the Ministry of Health, we agreed to remove the regular testing requirement for this group of employees. There was also feedback that a company had to approach several different agencies to obtain the necessary approvals to build new temporary living quarters, or to convert existing workplaces and factories into living quarters. BCA has since set up a one-stop platform to facilitate such approvals. 

Participants told us that these discussions, which involve a number of Government agencies being brought together, are useful, and we will continue to coordinate closely and keep our lines of engagement with the industry open. 

A/P Walter Theseira spoke yesterday about our dependence on foreign workers, including in the construction sector.  Let me say a few words about this. Our efforts to raise productivity in the construction industry have been ongoing for decades. In line with the Construction Industry Transformation Map (ITM), under the work of the Future Economy Council (FEC), we have indeed been working with the industry to reduce our reliance on foreign workers. This will require major structural changes to the industry and how construction work is done.

We have been pushing for greater adoption of technology such as through Design for Manufacturing and Assembly (DfMA), Building Information Modelling (BIM) and digitalisation of the sector. This will in turn create higher skilled jobs, including many good jobs for Singaporeans. For example, with DfMA, we will need more production managers, quality assurance personnel, and logistics and supply chain planners at automated production facilities. Even our foreign workers that take on such jobs will need to be higher skilled.

However, the construction sector will not be able to reduce our foreign worker reliance to zero, as there will still be many lower skilled jobs in the sector that Singaporeans do not want to take up. We appreciate the contributions of our foreign guest workers who have come here to Singapore to make an honest living for themselves and their families, and it is incumbent on us to also take care of them when they are unwell.

Many firms in the construction sector, including many SMEs, are very anxious about survival and about their future. Let me assure you that our main priority is to restart construction quickly but safely. We will coordinate among various agencies and lean forward, to provide information to you, and work closely with your industry associations and with you to resume construction as soon as we can, and work together to transform our sector in the medium to long term.