On 27 September 2021, TSMP Law Corporation co-head of construction & engineering Derek Loh was quoted in two articles published by the Straits Times on contractors facing potential contractual disputes after the relief period under Covid-19 Act ends. The first article can be read here and the second article can be found here.

In the first article, Derek was quoted saying that the need for early and rapid action meant that Government assistance had to be broad and would not be able to address all possibilities amid a constantly evolving pandemic environment.

He added “Consequently, the effects of the measures were always going to be subjective and could never have been enough to sustain all participants in the industry, in particular those with poor business practices or financial management.”

He also said had the Government not intervened, many more companies would have gone bust and that could have caused “a domino effect of widespread failures and imperilling the industry as a whole.”

In the second article, he said employers may have refrained from pressuring contractors during the relief period due to the Covid-19 (Temporary Measures) Act.

He added “There should be a procedure or method allowing risk sharing, and for contractors to be fairly compensated for black swan events such as pandemics.”

“As there is currently no such mechanism, some contractors are simply increasing their prices to buffer for these risks, and this has contributed to increased construction costs” he said.

He also added “This is inefficient and will lead to pricing imbalances that may favour some contractors and result in unnecessarily higher costs for developers and the government.”