PUBLISHED ONApril 07, 2026 10:58 AMBYSean LerAs part of the Government's first tranche of support measures for businesses, households and industry sectors impacted by the ongoing Middle East conflict, it will share 50 per cent of cost increases for critical public sector construction projects.
This was announced by Minister for National Development Chee Hong Tat in a social media post on Tuesday (April 7).
Chee said: "It will be difficult for these firms to fully absorb the cost increases over a sustained period.
"The Government will provide support to affected firms working on critical public sector projects by sharing 50 per cent of the cost increases due to additional diesel and bitumen costs incurred.
"These include firms involved in earthworks, piling, roadworks, and reclamation."
He also urged private sector developers to similarly support their contractors by sharing the cost increases.
The minister also highlighted other existing schemes that can provide relief for contractors.
For example, public sector developers such as HDB are already contractually required to share the burden of cost escalation for essential materials such as concrete and steel reinforcements.
Turning to the uncertainties ahead, Chee pointed to how the built environment sector overcame challenges during the Covid-19 pandemic.
"The key is how we respond to it — that will determine how the world views Singapore after the crisis, whether global investors have higher or lower confidence in Singapore after watching us in action, and whether we as a society become more cohesive or less united," he said.
In a circular to contractors involved in such projects, the Building and Construction Authority (BCA) said it is aware that earthworks, foundation and piling works, roadworks, and reclamation contractors have been "severely affected" due to their heavy reliance on diesel-powered machinery, vehicles, and vessels.
BCA added that procuring entities such as HDB and Land Transport Authority will share the direct additional costs incurred by contractors from March 1 to May 31, 2026, on an ex-gratia basis.
The entities will inform main contractors of eligible critical contracts, who may then submit their claims for cost sharing and provide the necessary documentation for the entities to make assessments.
Main contractors are expected to pass down the ex-gratia payment to their sub-contractors and may be asked to submit record of their payment responses.
Those who fail to do so may have their payment recovered.
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