The Government welcomed the passage of the Construction Industry Security of Payment Bill today that ameliorates the persistent payment problems in the construction industry and provides better protection for the stakeholders.

The ordinance will improve contractual payment terms, prohibiting the use of unfair payment terms such as "pay when paid". It also introduces an adjudication mechanism to provide a speedy, cost-effective and binding resolution process for payment disputes in the interim in the construction industry.
 
The bill aims to reform the longstanding payment problems in the industry and provide better protection for the stakeholders in the supply chains of the construction industry to receive their entitled payment on time, while seeking to reduce occurrence of wage arrears of workers.
 
The Government also expects that the project procurement cost could be reduced over time as price premiums for risk in association with payment problems will gradually decline following improved security of payment.
 
The ordinance applies to main contracts for carrying construction work with contract values not less than $5 million, and main contracts for the supply of goods or services related to the construction work with contract value not less than $500,000.
 
It applies to both public and private projects, with a wider scope of application for the former.
 
The ordinance will be published in the Government Gazette on December 27, while the power of Secretary for Development for registration and administration of Adjudicator Nominating Bodies (ANBs) will take effect on the gazettal date. The remaining provisions of the ordinance will come into operation on August 28, 2025.
 
Construction contracts entered into on or after that date will be governed by the ordinance.
 
Prior to the implementation of the remaining provisions in August next year, the Government and the industry will undertake a series of preparatory work, including registering ANBs, training a sufficient number of adjudicators, reviewing and revising the standard contract and subcontract templates, and conducting publicity and promotion activities.
 
The Government strives to publish relevant documents and accept ANB applications in January next year, allowing the relevant organisations to submit their applications in a timely manner to align with the implementation timeline of the ordinance.