HDB Project Delays Caused by Contractors Facing Financial Difficulty Since Start of COVID-19 Pandemic and Measures Taken

Mr Zhulkarnain Abdul Rahim asked the Minister for National Development (a) since the start of the COVID-19 pandemic, what is the number of projects involving HDB commercial properties that have faced delays either in construction or renovation because the contractors have faced financial difficulty or have gone into liquidation; and (b) what are the measures taken and the frequency of checks conducted to track the contractors’ progress and their financial health during the course of the projects.

There are currently 10 HDB commercial complexes undergoing construction or upgrading. Of these, eight projects have been delayed by about three to 15 months due to the COVID-19 situation, and the need to comply with prevailing on-site Safe Management Measures (SMMs). The extent of the delay varies by project and depends on site-specific factors such as manpower availability, contractor’s performance and the supply of materials. Most of the shops and markets in the HDB commercial complexes undergoing upgrading are either still in operation or have resumed operation and the impact on the delay is mitigated as there are sufficient alternatives in the vicinity to continue to serve the residents’ needs.

One new project has not incurred any delays as the construction works have just started. As for the remaining upgrading project, the contractor went into liquidation in late January 2022. HDB is actively working to minimise further delays to the projects and will be calling a new tender for the balance works.

HDB holds regular meetings with its contractors and monitors the progress of the projects through its monthly payment to the contractors. Any deviation to the progress claims based on the approved construction schedule will be highlighted and deliberated at these meetings. HDB will also look out for tell-tale signs, such as persistent slow progress or a sudden reduction of workers on site and if necessary, immediately engage the contractors to discuss measures to ensure that the projects remain on schedule as far as possible.

For new upgrading tenders, HDB has adopted the pandemic resilient contracting practices included in the Public Sector Conditions of Contract to effect equitable risk sharing amongst project parties for pandemic events. These practices seek to minimise the likelihood of project failure by including provisions that will allow the contractor to claim for extension of time and expenses arising from pandemic events. It will also allow the contractor to provide provisional sums so that it is not required to price for items for which cost is unknown at the point of tender.

HDB will continue to closely monitor the progress of its construction and upgrading works.