Singapore will spend S$3.5 billion ($2.5 billion) on information and communications technology in the current financial year as it prepares to develop and deploy new tools like sensors and contact-tracing devices to combat Covid-19.

The estimated expenditure is 30% more than what the city-state had projected last year, the Government Technology Agency said in a statement. Small- and medium-sized companies will be eligible to participate in 80% of the estimated procurement opportunities, it said.

“Covid-19 has illustrated the importance of digitalization, and the need to accelerate it within and beyond the public sector,” Kok Ping Soon, chief executive officer of GovTech, the agency driving Singapore’s Smart Nation initiatives, said in the statement.

The announcement comes as authorities prepare to deliver the first batch of a new portable and wearable device -- called TraceTogether Token -- to all residents later this month. Like its TraceTogether mobile app, which debuted in March, the token uses Bluetooth signals to record other nearby contact-tracing devices and would function in the same way.

So far, about 1.8 million residents, or just under a third of the population, have downloaded the phone app.

While the wearable token isn’t mandatory for now, that may change depending on the take-up rate, according to Minister-in-charge of the Smart Nation Initiative Vivian Balakrishnan.

“I’m going to do my best to try to push the participation rates up without having to go down the mandatory route,” Balakrishnan said at a media briefing on Monday. The stance may change if the virus circumstances worsen and the health ministry determines there is no other choice. “That is something we cannot predict at this point in time,” he added.

The move to introduce the wearable device has sparked public resistance. More than 37,000 people have signed an online Change.org petition started on June 7.