Assistance and Recourse Provided to SME Subcontractors of Main Contractor Dismissed by HDB and Undergoing Liquidation
Ministry of National DevelopmentSpeakers
Summary
This question concerns the assistance and recourse for SME subcontractors when an HDB main contractor is dismissed and undergoes liquidation, as raised by Mr Mohd Fahmi Aliman. Minister for National Development Desmond Lee stated that HDB monitors contractors’ financial health and provides support like advance payments, fortnightly progress payments, and direct payments to subcontractors. When contracts are terminated, HDB appoints replacement contractors and connects them with existing subcontractors to minimize construction delays. Regarding liquidation, the Minister noted that recovering outstanding payments is governed by insolvency rules under the purview of an appointed liquidator. HDB also assists by co-sharing prolongation costs and foreign worker levy rebates to mitigate the impacts of pandemic-related delays.
Transcript
15 Mr Mohd Fahmi Aliman asked the Minister for National Development besides connecting the replacement contractor with existing SME sub-contractors, what other assistance and recourse are provided to sub-contractors of the main contractor of HDB housing projects in a situation where the main contractor was dismissed by HDB and currently undergoing liquidation.
Mr Desmond Lee: The Housing and Development Board (HDB) regularly monitors the financial health of its BTO contractors, including the promptness of payments to subcontractors and suppliers, to ensure timely construction progress. When a main contractor faces financial difficulty, HDB may lean forward to provide additional assistance to improve the situation. These measures include advance payments or more frequent progress payments – that is, fortnightly progress payment instead of the usual monthly progress payment – to the main contractor, arranging direct payments to sub-contractors and co-sharing prolongation costs and foreign worker levy rebates arising due to delays caused by COVID-19.
In the unfortunate event where the contract with the main contractor has to be terminated due to the contractor's financial difficulties, HDB will find a replacement contractor with a strong performance record to minimise completion delays. HDB will connect existing sub-contractors with the replacement contractor, for the main contractor to consider engaging the services of these sub-contractors moving forward. For cases where the main contractor undergoes liquidation, recovery of outstanding payments would be governed by insolvency rules and taken under the purview of the appointed liquidator.