ith several new projects expected to come on stream in 2020, process construction and maintenance (PCM) engineering service providers (ESPs) in Singapore were looking forward to a better year, as 2019 wasn’t such a good one for most of them.
What they didn’t expect was that the Coronavirus outbreak which surfaced in China’s Wuhan in December 2019 would change everything. The outbreak morphed into a pandemic and swept across the world, forcing countries into lockdown in an attempt to contain it.
Officially named Covid-19, the virus claimed its first victim in Singapore on 23 January 2002. After that, it razed through foreign workers’ dormitories and other accommodations causing many working in the process industry to be isolated.
The rapid-fire transmission amongst the foreign workers community, including those in the construction and marine services sectors, caught the PCM service providers off guard, setting off the worst crisis they had ever faced. It dashed their hopes for a busy year.
During Singapore’s partial lockdown, called Circuit Breaker, between 7 April and 1 June, plants were shut, and offices were closed except for those in essential services.
PCM service providers had to suspend all their activities, except for essential maintenance services. A limited number of foreign workers could be deployed, as many were isolated or locked down in their living quarters. Office staff had to work from home and business meetings were conducted online.
By mid-August, when all the workers in the dormitories and other living quarters were cleared of Covid-19 and companies were allowed to resume project and shutdown maintenance services, the number of infections globally had crossed the 20 million mark, with about 750,000 deaths, and still climbing. In Singapore, the infected number had exceeded 55,000 with 27 deaths.
The unprecedented crises nulled all earlier forecasts for the oil and gas industry.
Local main PCM contractors feel the heat
Performance amongst public-listed PCM service providers in 2019-2020 was inevitably impacted. PEC Limited had earlier turned in a creditable set of results for the six months ended 31 December 2019 (1HFY20) when it reported a 46% jump in revenue to S$292.3 million. Net profit after tax increased by 32% year-on-year to S$6.7 million.
For the full year ended 30 June 2020, the Group’s revenue increased by S$102.4 million from S$392.7 million in FY2019 to S$495.1 million, mainly due to revenue contribution from overseas project works in FY2020.
However, the company said its cost of sales for FY2020 increased by S$104.9 million or 34% to S$410.6 million from S$305.7 million in the previous financial year. In its financial statement released on 28 August 2020, it attributed the rise in cost mainly to “increase in subcontractors’ costs, materials and other direct operating costs”.
“The increase was partially offset by foreign worker levy waiver and rebate granted by the Singapore government to reduce the business operating costs impacted by Covid-19,” it said.
It reported a full-year loss of S$45 million attributable to equity shareholders, compared to a profit of S$8.3 million in FY2019. The company had earlier on 20 August issued a profit warning through the stock exchange.
PEC said the pandemic had disrupted economic activity and was “potentially impacting ongoing work and award of new projects in our key Asia and Middle East markets”.
“Though the circuit breaker period has been lifted in Singapore, the Covid-19 Safe Restart criteria has presented several challenges to our sector as all construction activities remain suspended until approval from government agencies are obtained for the relevant works to be restarted. Besides adhering to Safe Management Measures at worksites, PEC must also comply with additional Covid-19 Safe Restart Criteria covering the workforce, worksite, accommodation, and transport,” it added.
Hai Leck’s revenue for the three quarters to 31 March 2020 declined by S$9.8 million to S$57.6 million compared to S$67.5 million for the previous corresponding three quarters, “due to lower project and maintenance services revenue, partially offset by higher contact centre services revenue”.
Its profit attributable to shareholders for the nine months increased by S$0.5 million to S$2.6 million compared to S$2.1 million in previous corresponding period.
In its statement, Hai Leck said the Circuit Breaker measures implemented since 7 April 2020, safe distancing as well as the isolation of affected workers “have resulted in substantial scaling down of the Group's project and maintenance services operations and is also expected to significantly reduce the Group's productivity. The duration of the impact of these factors remain uncertain and unpredictable”.
On 30 April 2020, Hai Leck had issued an advisory to the Singapore Stock Exchange saying that notwithstanding the Group’s preventive efforts, “some confirmed cases of the Covid-19 infection have been found in one of the Group’s dormitories”.
“As the Covid-19 situation is still uncertain, the Group continues to monitor and assess the impact on its operations,” Hai Leck said in its update.
Another listed company that was impacted by the health crisis was Mun Siong, which saw its revenue for the first six months to 30 June 2020 decline by 14.4% to S$22.1 million against the corresponding 2019 period. It reported a comprehensive loss attributable to shareholders of S$1.25 million, compared to a loss of S$601,000 in the prior six-month period.
Mun Siong attributed the lower revenue for the Singapore operations to the slowdown in job activities to the Covid-19 pandemic.
The company said, “A number of our job sites saw a reduction in labour productivity due to the Circuit Breaker period as well as the imposition of safe distancing measures by the relevant authorities.”
The company said it had to reduce the number of workers at each job site, and its “overall labour productivity declined by 24%”.
“In addition, some of our business partners have deferred projects that were previously awarded to the Group,” it added.
Due to the Movement Control Order in Malaysia between March and June 2020, the Group also faced delays and “lesser job activities at the Malaysia operations”.
Local SME process service players struggle with partial lockdown
When the first case of the Coronavirus was reported in Singapore, most businesses were caught unprepared. Various measures were put into place by the government to prevent it from spreading.
Plant owners were cautious and companies such as ExxonMobil, Linde and Neste suspended work on construction of new construction projects.
In view of the government COVID-19 measures to protect the health of the contractor workforce, the plants were allowed to have their contractors perform only essential maintenance services on site. They also had their own precautionary measures.
Small and medium-size PCM companies’ ability to work was restrained by precautionary measures to control the spread of the virus, especially during the Circuit Breaker. Most of their workers were for a period isolated in dormitories that had clusters of infection.
Fortunately, many of them were proactive enough to decant some of their workers from the dormitories and other living quarters in the latter part of March after the first infected cluster was reported in the process industry.
The number of decanted workers varied. The companies we had spoken to indicated that they decanted between 5% and 30% of their workers to perform essential services for clients. Even then they could not deploy most of the available workers as only about half the usual required number were allowed to be assigned to work.
One of the companies was CYC International Pte Ltd, which moved about 40 of its work permit holders out of their dormitories into temporary quarters within the company premises.
“We sensed that it would be safer for our workers and it would ensure that they would not be exposed to mass gatherings in the dormitory. We had applied for a permit to do so earlier and the authorities were very supportive, and expeditious in giving us the go ahead,” said its Managing Director Danny Chua.
“We were fortunate to have sufficient capacity for essential maintenance jobs. We heard that there were other companies that did the same thing,” added Mr Chua who is also Secretary of the 13th ASPRI Executive Council.
However, there was barely enough work to go around as project construction and shutdowns/turnaround, except for critical plant maintenance services, had been suspended. Furthermore, their clients were cautious about having too many external workers on their premises.
Hampered by the mandated wearing of personal protective equipment (PPE) and safe distancing, productivity suffered.
For Mr C. H. Mak, Director of Constructive Engineering Pte Ltd, productivity was “very low”.
“Having to wear the PPE and keep a safe distance from each other, the workers seem to tire easily and take more breaks,” he said.
Mr Koh Yak Boo, Singapore Site Turnaround Manage, ExxonMobil Asia Pacific Pte Ltd concurred that the workers “were somewhat less productive because of sub-optimum staffing and skills mix”.
“But all is not lost,” he noted,” there were some positive instances where we had worked together to overcome these challenges and get the most critical done effectively.” Mr Koh, who is also the Chair of the Productivity Council added, “going forward, we hope that the positive learnings of the COVID-19 experience will take us all to new levels of contractor workforce productivity,” something that the plant owners, contractors and government agencies have been working on for years.
The companies suffered financially too, as it meant that they were paying workers that had much less work to do, not counting those who were locked down at their various dormitories.
The same was true in the building construction sector where the bulk of the infected foreign workers were employed.
There was also a lot of anxiety in the early days of the outbreak as the government continued to introduce one precautionary measure after another for foreign workers in the dormitories and other accommodations, as the number of infected clusters climbed from April.
Many were left scratching their heads over notifications from the Ministry of Manpower (MOM), Ministry of Trade & Industry/The Singapore Economic Development Board (EDB) and Building & Construction Authority (BCA), especially their implications, and what and how to comply with them. Explaining every new measure to the workers was also not easy, as one requirement superseded another in a flurry of updates.
It was understandable, as everyone including the authorities were coming to grips with a rapidly evolving situation.
E&I and engineering works company Showa Denki (Singapore) Co Pte Ltd said it was allowed to put about 50% of its usual team members to work on essential maintenance services due to the lockdown.
“Some urgent work was done by the clients’ own in-house teams and we were asked to provide some support,” said its General Manager Philip Kok.
Another company in Electrical and Mechanical services which chose not to be named, said after the virus outbreak it was able to work at “only 50% of its strength”. With few permit holders available, it deployed locals and S-passholders to supplement its team for critical maintenance work.
Others were not so lucky to have sufficient numbers of S-pass holders as some of their Malaysian workers who had returned home before the Circuit Breaker were not allowed to return until later.
After the Circuit Breaker was lifted, companies continued to struggle with little or no income as either fewer workers were available, or clients had limited their deployment. In spite of this, they had to continue to pay their workers’ salaries and accommodation costs.
Project work has remained scarce. A major construction project on Jurong Island was said to be cancelled and probably would be renegotiated by the plant owner or put out on tender again. Other new projects that had been announced in the last two years and scheduled to start in 2020 are currently awaiting approvals to restart.
“No jobs mean no revenue and we still have to pay for so many idled workers,” lamented one PCM contractor.
Job delays & precautionary measures means higher costs
Meanwhile, costs had escalated by up to 40%. They include additional cost incurred for decanted workers, transport for workers with safe distancing and PPE equipment.
Mr Chua of CYC International Pte Ltd, said, “Our costs during the Circuit Breaker shot up tremendously. We were double-paying for most of our operations due to the precautionary measures. These include food, transportation and additional lodging.”
“It was certainly very tough for those that had no work to do after relocating their workers from dormitories to safer accommodation. Many companies had to dip into their own pockets to pay salaries and additional costs arising from the lockdown,” said Mr Francis Tay, Director, Aedge Technologies Pte Ltd and Honorary Member of the 13th ASPRI Executive Committee.
On top of the monthly wages, employers also had to pay the Foreign Workers Levy (FWL) for each of their Work Permit Holders (WPH). For companies with a sizeable workforce, it was an extremely onerous burden. Many were also very concerned and were looking forward to some relief from the government.
Government support packages were still not enough
As the government began to forecast a deep recession for the Singapore economy in its battle against the unprecedented effects of the Coronavirus pandemic, it rolled out several support packages progressively to help keep businesses across the economy afloat to save jobs.
Between February and July, the government provided temporary relief packages totalling about S$90 billion. Another S$8 billion of additional support packages for businesses and workers was announced by Deputy Prime Minister Heng Swee Keat in August.
Among the support measures, the Job Support Scheme for local employees and the FWL waiver and rebates were deemed most helpful for the PCM sector as it grappled with workers stuck in isolated dormitories and accommodations with minimum work.
Jobs Support Scheme (JSS)
JSS was introduced under the Unity Budget in February, and initially provided an offset of 75% of wages on the first S$4,600 for all local employees across all sectors for the month of April. Under the Fortitude Budget announced on 26 May, the offset of 75% was subsequently extended until August, the month when firms were expected to reopen for business.
In August, the JSS for the process sector was adjusted further with the government funding 10% of wages from September 2020 to March 2021.
Waiver of FWL
In the Solidarity Budget, the government also provided a waiver of the monthly FWL that was due in April 2020 and an FWL Rebate of S$750 for each Work Permit or S Pass holder in April 2020.
The waiver and rebate were extended until July 2020 under the Fortitude Budget.
For June, the waiver and rebate remained at 100% and S$750 respectively, while for July they were reduced to 50% and S$375 respectively. The waiver was to cease in August.
On 27 June, the government had set aside up to S$920 million to extend FWL rebates till end 2022 for the Construction, Marine Shipyard and Process sectors. It said it was “to better support the estimated 15,000 firms in these sectors, which have to adjust to much more stringent Safe Management Measures (SMM) as a result of Covid-19”. From August 2020, firms in these sectors would receive a S$90 FWL rebate monthly for each WPH until December 2021.
ASPRI helps SMEs appeal for extension of FWL waiver
In July, many firms became edgy as they faced the prospect of losing the FWL waiver, which was a big component of their cost. Some got together and approached ASPRI for help to appeal to the government for an extension. With most of their workers still locked down in the dormitories they were not expecting to resume work fully in August. With little information then about the dormitory clearance situation, companies were also unable to do any planning for restart.
In response, ASPRI joined hands with the Association of Singapore Marine Industry (ASMI) to conduct an online survey that covered 36,103 foreign workers across 359 marine companies (consisting of both ASMI members and non-members), along with 199 ASPRI corporate member companies. It highlighted “the stark disconnect between forecasted cleared dormitories and actual expected start date of foreign workers to work”.
With the findings of the survey, the two Associations jointly wrote a letter to the Minister for Manpower highlighting the real situation on the ground, that the Marine and Process sectors were expecting only 50% of their foreign workforce to resume work after the first half of August and 75% only after the second half the month.
It said that with their foreign workers confined to the dormitories, the companies were still suffering losses every month and were trying their best to cope without any income, and that the pandemic had “evolved to a matter of corporate survivability”.
ASMI together with ASPRI appealed to the Minister to extend the 100% FWL waiver and S$750 FWL rebate until their workers could be deployed for actual work to “help us pull through this challenge together”.
MOM responded positively to the appeal and on 1 August it announced that for those in the construction, marine and process sectors, whose workers were still unable to resume work, the waiver for levies due in July would be increased to 100%. Employers who had paid the 50% levies originally due in July would have the amount refunded to them.
In its statement, MOM also said that levies due in August and September would also be fully waived.
For the rest of the months in 2020, the statement said: “As the Construction, Marine Shipyard and Process sectors restart, MOM expects them to take some time to raise the tempo of activities and operate at higher efficiency. We will therefore taper down the FWL waiver support from October to December 2020. The FWL waiver will be stepped down to 75% for levies due in October, followed by 50% FWL waiver for levies due in November, and 25% FWL waiver for levies due in December 2020. The gradual reduction of the FWL waiver will give firms more time to adjust.”
Additionally, the S$375 FWL rebate would be extended for another two months, to August and September 2020. The S$375 FWL rebate was to replace the existing S$90 FWL rebate for each WPH, announced by the government on 27 June for the months of August and September 2020.
The S$90 FWL rebate was also extended from October up to December 2021. MOM said in a footnote that closer to December 2021, the government would decide if there was a need to further extend the S$90 FWL rebate by another year to December 2022.
While companies welcomed the extension of the government support packages which had in some measure helped reduce the financial pressure, many of them had to dig into their reserves to stay afloat. They said that it was more important to be able to resume work on projects so that they could hopefully cover their costs.
“Without the budget measures such as JSS, the foreign worker levy rebates and the levy waivers given for each work pass holder employed by the companies, it is possible that some of them could already have gone bust, said Mr Steven Nah, Managing Director of Shing Leck Engineering Service Pte Ltd.
He said although it was understandable that business owners had hoped the government could do more, they also had to recognise that its coffers are not bottomless and it is simply not realistic for the government to prop up companies or industries indefinitely.
“Some issues could already be systemic within companies pre-Covid-19, hence the crisis merely exacerbated their challenges and made long-term business viability a serious question mark. As for other measures in the budget, it would have helped companies even more if employers’ CPF contribution rates were temporarily cut and restored after the economy recovers,” said Mr Nah, who is also the Treasurer in the 13th ASPRI Executive Council.
ASPRI soldiers on to help distressed members amid Covid-19 restraints
The Secretariat and ASPRI-IPI probably had their busiest year ever since ASPRI’s inception. It was especially difficult during the Circuit Breaker period when all the staff had to work from home.
Headed by Executive Director Wayne Yap, the team clocked many extra hours. All available resources were marshalled to ensure that members were kept informed regularly, and sometimes instantaneously, whether it was new precautionary and containment measures or updates from the various government ministries and agencies.
Besides the time-sapping effort to carry out the survey of members to help with the appeal for the FWL extension from August, the Secretariat was also preoccupied with helping members to prepare for restart after the Circuit Breaker.
On 1 June, it organised a webinar on “Safe Management Measures for the Process Construction and Maintenance (PCM) Industry” in collaboration with MOM, Enterprise Singapore (ESG) and JTC Corporation. The webinar was designed to specifically address any concerns and unanswered questions related to the Restart Criteria when companies resume work on site. The online session was attended by an overwhelming 327 participants from 203 member companies.
In another related effort, ASPRI engaged the plant owners through collaboration with the Singapore Chemical Industry Council (SCIC) to help companies plan for Restart. A Work Group was formed between the two organisations to look into having an agreement on cohorting requirements for the Process workers.
Cohorting, generally, requires organising a specific number of workers into groups that stay together in the same accommodation, and ensuring that they leave the premises in the same transport to go for work at the sites where they work, eat and rest together without mixing with other groups. They would be required to return in the same transport to the same shared living quarters at the end of the day.
With the slew of support measures being updated over the months, ASPRI found that members needed to be clear about the types of reliefs they were entitled to. On 15 July, it organised a webinar to help explain the grants and support schemes that were rolled out by the government to help PCM companies tide over the effects of the Covid-19 pandemic. The session was presented in collaboration with Infocomm Media Development Authority (IMDA), Singapore National Employers Federation (SNEF), SkillsFuture Singapore (SSG) and Workforce Singapore (WSG).
As the sector inched closer to Restart, ASPRI’s Government Advocacy Work Group worked together with the Ministry of Health (MOH) and MOM to organise a Zoom webinar to share MOH’s medium-term medical support plans for migrant workers.
It was to ensure that employers knew where to get necessary medical support when their foreign workers fell sick and needed to determine whether they were infected, so as to help contain the spread of the virus. They were also informed of the two facets of the plan – one funded by the government and the other not funded.
Pressing on with capability improvement activities for members
In spite of the restriction on the movement of staff and constraints arising from the precautionary measures during the health crisis, ASPRI continued to carry out various training and capability enhancement programmes for members on the online platform.
In a big solidarity gesture to members, ASPRI granted extension of the 50% Training Subsidy for WSQ programme course fees, which was launched in the last financial year, until 30 June 2020. It would eventually cost the Association up to S$750,000 and benefit more than 2,200 workers.
Training courses go online
ASPRI-IPI, the association’s training division, was also quick to convert its programmes to the e-learning platform and acquire new ones for Process workers at a time when most of them were confined to their dormitories. A total of 26 e-courses were made available free to members’ workers – 17 of them through IPI Connect and nine micro-learning modules on the Bolster Safety e-platform.
Launched in June, the e-courses very quickly attracted more than 50,000 participants from 394 member companies, accounting for about 80% of the total ASPRI membership. The Covid-19 Safe Restart Series topped the list with some 25,000 workers logging in to learn about the Safe Restart Criteria and Measures.
To help workers keep themselves occupied usefully during the lockdown period, ASPRI-IPI also provided regular newsfeeds, relevant safety videos, technical information and quizzes for them to enjoy refreshers in various skills and knowledge.
Pushing the boundaries on transformation
The Association also continued to encourage members to further pursue digital transformation. On 28 February 2020, it organised a “Digitalise Your Business for Higher Profitability” seminar to help them better understand the need to transform and adopt digital-supported work solutions. During the Circuit Breaker period every business realised the importance of digital connectivity, since their staff mostly had to work from home.
The evolving crisis situation, which hampered worker deployment as well as productivity, was a big lesson for all. Thus, the Association held a timely session for the members in the last week of July to revisit the “Digitalisation Roadmap for PCM Sector”, which was developed by the Infocomm & Media Development Authority (IMDA).
In the session on 30 July, members were walked through the three proposed stages of the transformation roadmap and were asked for feedback to validate the most immediately impactful areas to consider for implementation.
The response was very encouraging. The session ended with consensus on what should be done in the first stage of the digitalisation journey for the Process sector.
Helping companies manage workforce needs
As companies were preparing for Restart in August in anticipation of the calibrated release of workers from cleared dormitories, ASPRI partnered with MOM in a temporary scheme to help member companies hire PCM WPHs who were in Singapore with the agreement of their current employers. The scheme also allowed employers to make available on the portal any excess Process sector WPHs that they wished to release to other companies that were experiencing a shortage of manpower. The service would be provided free by ASPRI until 31 January 2021.
PCM employers could also use a web portal that was developed by ASPRI-IPI with the support of MOM to help provide online support to facilitate the matching of WPHs within the sector. Called ASPRI ManpowerConnect, the portal allowed companies to acquire the needed workers more quickly and at the same time help save on search and recruitment expenses.
3-phase approach to Safe Restart
It wasn’t easy for companies with workers confined to dormitories during and after the Circuit Breaker, as they waited anxiously every day for news that would bring them hope for reopening and for work to resume.
On 19 May 2020, the Multi-Ministry Taskforce announced that Singapore would exit the Circuit Breaker on 1 June and embark on a three-phased approach to resume activities safely.
In phase one, businesses deemed to have higher-risk activities were not included. For higher-risk activities in phase two, – “which typically involve large numbers of people interacting with one another, often in enclosed space, and for prolonged periods of time” – the government said it would engage businesses and organisations on how and when they may resume safely, with the necessary safe management measures and safeguards.
However, because infections at foreign workers dormitories remained at alarming levels, re-opening for the Process sector would have to wait. The government was also concerned that new daily cases would likely increase once activities resumed.
On 23 June, MOM said that the Inter-agency Task Force (ITF) would be clearing all remaining dormitories in the coming months, and that they would have to test and clear workers as quickly as possible, while ensuring that the health of others was safeguarded. The indication was given to help employers and dormitory operators in their planning.
Workers might have to undergo a few stages of testing with a mix of serology (blood) and swab tests, depending on the level of infection at the various affected dormitories.
Then on July 24, Education Minister Lawrence Wong, co-chair of the Covid-19 multi-ministry taskforce, indicated that all dormitories should be cleared of Covid-19 by 7 August, except for those dormitories that served as quarantine facilities.
More affirmative news came on 11 August when MOM officially declared that with effect from that day, “all dormitories have been declared cleared of Covid-19, with the exception of 17 standalone blocks in six Purpose-Built Dormitories (PBDs) which serve as quarantine facilities”. It added that 81% (315,000) of Construction, Marine Shipyard and Process (CMP) foreign workers had the Green AccessCode.
It also said that all workers living in dormitories had either recovered or had been tested to be free from the virus, except for 22,500 workers in isolation in Centralised Government Quarantine Facilities and the remaining 17 standalone blocks in PBDs.
For companies, it meant that after receiving Covid-19 clearance the workers would be able to resume work once they had made the necessary preparations to do so in a safe manner. A day before, the Building & Construction Authority (BCA) had given permission for all workers with Green AccessCode to resume work.
MOM in a separate statement also said that the testing of all migrant workers staying in dormitories had been completed. It said dormitories were putting in place safe living measures, such as having staggered pick-up/drop-off timings, updating of the workers' residence addresses, and minimising mixing between blocks.
It reminded employers to observe proper safe distancing measures at the workplace and everyone to remain vigilant to guard against new infections.
The Ministry also said it expected “dormitory operators, employers and workers to need about a week to implement the required measures before they can resume work. If the requirements are met sooner, workers will be allowed to resume work earlier”.
It said, “There have already been instances where new cases of Covid-19 cases are detected at previously cleared dormitories. The Inter-agency Task Force (ITF) is actively monitoring the dormitories to manage the risk of new outbreaks.”
MOM said there were four key layers of safeguards:
1. Workers were required to self-monitor their health and report their temperature and, also if they have any acute respiratory illness symptoms, through the FWMOMCare App twice a day. Those with symptoms would be identified and cared for immediately.
2. ITF would monitor closely the number of migrant workers who report sick at the medical posts, as an early indication of any possible infections.
3. ITF would monitor the wastewater from higher risk dormitories for traces of the Covid-19 virus.
4. Workers in higher risk settings would be put through regular routine testing, including a swab test every 14 days, except those who were infected previously and have recovered.
Workers were required to install mobile applications as part of the contact tracing and containment efforts. The TraceTogether application would enable the government to know who the worker came into close contact with when he left the dormitory for work. The FWMOMCare application would allow workers to update their mobile numbers with MOM, so that Quarantine Orders could be served quickly.
Any worker identified with potential infection would be quickly isolated and quarantined within the block that was housing the infected worker as a precautionary measure. Aggressive testing would be conducted to identify any further spread of the virus.
Getting back to work and bracing for a tough end to 2020
For many companies, the calibrated clearance and release of workers for the resumption of work in August was a welcome relief for them. Workers need not be cooped up in their dormitories and having work to do meant income for them.
However, not many workers could be deployed as precautionary measures continue to put some restrain on how many could be crowded into one worksite.
Mr Mak of Constructive Engineering said the majority of his workers had been cleared and had resumed work on Jurong Island, but productivity was still very low.
However, he still had some workers that were stuck in Malaysia and was making arrangements to bring them back after the travel restrictions were lifted as they could enter Singapore by land under the Periodic Commuting Arrangement (PCA) scheme from 17 August.
The workers would be required to serve a seven-day Stay Home Notice (SHN) upon arrival and would be administered the Covid-19 test before the end of the mandatory period. Under the PCA scheme, such workers have to remain in Singapore for at least 90 days before returning to Malaysia for home leave.
Over at Showa Denki, workers had also been cleared and had begun plant shutdown maintenance work on Jurong Island, with another similar assignment lined up in mid-October. It did not face any difficult issues at the restart of work.
Mr Kok said that the company was making arrangements to relocate their decanted workers back to the dormitory.
Close to 70% of the workforce at Shing Leck Engineering had resumed working by the third week of August. Mr Nah said the remaining 30% was made up of a combination of workers in the process of recovery and serving SHN, and those fit to resume work but had yet to obtain approval from the client to report for restart.
Mr Nah said most project work was still suspended.
For CYC International, its workers had started work on an assignment with more lined up in the following months. Almost all its workers had been cleared.
Mr Chua said he would continue housing them at its temporary living quarters.
“There are still a lot of uncertainties in the dorms. We may be incurring a lot more costs, especially in logistics when housing my workers outside the dorms. Then again, at least they can work,” he said.
Mr Tay said not all his workers had resumed work.
“We have been able to deploy only about 40% of our workers. We are mainly doing maintenance work as projects have been either delayed or postponed. Some site co-horting issues have yet be resolved,” he said.
He added that his company had used the MOM’s workers matching scheme to get headcounts from other companies for its assignments, as it was very difficult to bring in new workers from overseas during this period.
For some PCM service providers there was still anxiety over when some of the major greenfield and brownfield projects would be restarted.
“There are also those who are concerned whether the jobs already lined up in the months ahead would be suspended indefinitely. They are also worried about the continued number of infections, although small, and feared a second wave of work stoppage,” said Mr James Goh, ASPRI’s Immediate Past President, who is Chief Executive Officer of FRP Products Co Pte Ltd.
Supportive staff help to keep the business going
Most of the companies have been kept going because of the continuing support of their staff, and the resilience of the many foreign workers who had suffered isolation during the crisis.
Asked what kept them going, Mr Chua and Mr Nah were in concurrence that the staff was their strength of the moment. They worked from home and kept themselves safe to help manage many of the issues faced by the companies, especially the foreign workers’ wellbeing and their accommodation and responding to various measures and permit requirements for essential maintenance work.
“They understood the situation we were in and were very determined to keep themselves safe. They were personally responsible and complied with all the precautionary measures. The only people out on site were our project managers,” said Mr Chua.
“My team is ready to gear up for new ways of doing things, especially involving the use of more technology,” he added.
Mr Nah said, “Support, understanding and cooperation of the employees are critical and this stems from having trust and faith in what the company and its senior management is doing. We will emerge stronger post Covid-19.”
Chipping in, Mr Goh said, “Going forward, effectively and efficiently managing the workforce will be one of the most challenging issues in our sector, as the companies had spent much time and money training their workers before the pandemic and will be reluctant to let them go.”
In the short term, productivity may continue to suffer as fewer workers could be deployed for each job, while costs remain higher than before. They would have to quote for new jobs bearing in mind the higher costs, which would mean more competitive biddings ahead.
Meanwhile, companies will have to manage their cash flow more tightly. Some might even have to borrow from the bank to stay afloat.
Almost everyone had suffered about six months of zero income. With billions of dollars’ worth of new projects canned by major oil and gas companies around the world they worried about the reverberating impact on Singapore. PCM service providers here need sufficient work this year and the next, otherwise they will be in for a rough time.
In their financial report for the first two quarters of 2020, major international engineering, procurement and construction (EPC) companies had already warned of the potential impact of Covid-19 on their backlog of projects.
The Boston Consulting Group in a report on “Covid-19’s Impact on the Petrochemical Industry” published on 24 June 2020 said “virtually all players started to revisit the CAPEX pipeline and structure and level of engagement into JV projects, balancing future benefits vs. current liquidity needs; several CAPEX delay announcements have already been made”.
For the global economy, the International Monetary Fund (IMF) had in June forecast growth for 2020 to be at minus 4.9%, 1.9% points below its April 2020 projection.
It said in its World Economic Outlook report “The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4%.”
The Singapore economy slumped to a record minus 12.6% year on year in the second quarter of 2020. The glum figures were set against official forecast for a full-year decline of 7% to 4%, and economists' expectations of a 10.5% drop. It was said to be the worst quarter since the Asian Financial Crisis in 1998, which saw third quarter GDP in that year plummet 15.0%.
What lessons have been learned from this unprecedented crisis?
Questions hang over the future of the industry.
What now, going forward?
What have we learned that will help us to emerge stronger than ever before?
It’s clear that there will be changes that will impact the performance of PCM companies, and all those relying on foreign workers.
Nobody knows when a vaccine will be available, and how long Covid-19 will be around in the new uncertain normal. The longer the precautionary measures are in place, the longer companies would have to put up with increased costs.
In the new normal where the density of workers per room in the dormitory will be reduced by at least half, it will mean greater cost burden for employers in the sector. Will the government continue to help?
On the other hand, the government will continue to discourage the use of foreign workers. It has for a long time exhorted businesses to rely less on them. Levies are expected to be tweaked again, and the quantum allowed into the workforce will continue to be cut.
For certain, the sector will have to gradually wean itself away from relying on too many foreign workers. It will have to use more mechanical and automated means to supplement its manual processes.
More importantly, companies had learned during the pandemic that digital technology had been a saviour. During the lockdown, staff had to work from home and meetings as well as dealings with clients and the authorities had to be done online.
It was also observed that employers were able to engage their staff more as they often had to discuss work using e-conferencing platforms such as Zoom.
Foreign workers were able to keep in touch with their loved ones back home using their smart phones. And with the device, they could “attend” various e-courses provided free of charge by the Association and engage their fellow workers online while in lockdown or isolation.
Through the IPI Connect app specially developed for them, the workers could enjoy regular updates of newsfeeds, relevant safety videos, technical information and quizzes to refresh skillset knowledge.
The silver lining, said Mr Wayne Yap, ASPRI’s Executive Director, is that this will push more companies to embrace digitalisation more seriously.
There’s hope. An increasing number of PCM companies now more than ever agree that they must embark on the transformation of their business by adopting the first stage of the proposed Process Industry Digital Transformation Map. It will mean changing and improving some of their existing processes and upgrading their systems to more connected and integrated ones, which will increase productivity and give them peace of mind.
Plant owners are also digitalising their operations. Now, more than ever, the Process sector will have to speed up its transformation efforts to be able to respond to their needs in the future.