Another $1.7b of public building projects deferred

Tag : Construction Building Materials

ANOTHER $1.7 billion worth of public-sector building projects willbe pushed back to ease the pressure on the construction industry'scosts, which went up by 30 per cent last year.
This brings the total value of projects that the Government ispostponing to 2010 and beyond to $4.7 billion.
The latest projects identified for deferrment include the mainbuilding of the proposed Jurong General Hospital, which will bepushed back to 2010, and other 'less urgent' improvement works.
National Development Minister Mah Bah Tan disclosed this in hiswritten reply to a question from an MP in Parliament on Monday.
But he gave the assurance that projects that are essential to meetSingapore's economic and social needs, such as key infrastructuraldevelopment, will proceed as planned.
Prices of new Housing Board flats will also not be affected andwill continue to be sold at a discount so that buyers can enjoy thesubsidy, said the minister.
A statement from the Building and Construction Authority's (BCA)on Tuesday said public housing and upgrading programmes are notaffected.
'The additional deferment will allow the existing constructioncapacity and resources to be channeled towards the timely deliveryof some big projects such as the Integrated Resorts, MarinaBusiness Financial Centre and the Downtown MRT line', said BCA.
'Most of these projects are expected to be completed around end2009. The construction resources freed up then would then beavailable for the deferred public sector projects, therebyachieving a better spread of construction resources and activitiesbeyond 2009.
The Government has earlier pushed back $3 billion worth publicsector projects to after 2009 to help moderate construction demandas the building boom is stretching resources and capacity to thelimit.
These delayed projects include the National Addiction ManagementCentre and a section of the Changi Prison Complex, planned for nextyear and 2009, extensions to the Asian Civilisations and Peranakanmuseums, and a new complex to house the Communicable DiseaseCentre.
Replying to MP Cynthia Phua of Aljunied GRC, Mr Mah said theBuilding and Construction Authority's (BCA) Building Tender priceIndex, which tracks mainly manpower and equipment costs, rose by 19per cent last year, and by 4 per cent more in the first quarter ofthis year.
But feedback from leading quantity surveyor firms showed that theincrease in the overall construction was about 20 to 30 per cent in2007, and about 3 to 5 per cent in the first three months of 2008.
Mr Mah said the sharp increase in construction cost was drivenmainly by the high demand for construction resources and materialsworldwide, and exacerbated by the surge in fuel prices.
For example, the price of steel bars has risen by 85 per cent sinceJune last year, while concrete now costs about 18 per cent morethan last year.
On its part, the Government has implemented several measures toease the tight resource supply situation.
The Ministry of Manpower has relaxed the construction sectordependency ratio from 1:5 to 1:7 and raised the S-pass quota from15 per cent to 25 per cent. Experienced foreign workers are alsoexempted from the Man-Year-Entitlement requirement.
BCA is also working closely with the industry to expand itscontracting capacity, including bringing in contracting resourcesfrom overseas. For a start, it has organised two joint-industrytrips to China.
HDB flat prices unaffected
On the impact of rising construction costs on HDB's buildingprogramme and prices of flats, Mr Mah said as new HDB flats pricesare not based on cost, they will not be directly affected by theconstruction cost increases.
'New flats will continue to be priced at a discount to theirequivalent market prices, so that buyers enjoy a generous subsidy',he assured, pointing out that new flat prices had risen by a slowerpace, in tandem with the prevailing market trends.
But he acknowledged that the construction cost increase does pose astrain on HDB's budget for new building projects.
HDB has implemented various measures to mitigate the extent of costincreases as far as possible.
For example, HDB is stepping up overseas promotional efforts toattract more foreign contractors to participate in HDB tenders, andit is also buying cement and sand in bulk to cushion HDBcontractors against price increases of these raw materials.
BCA is also advocating more efficient concrete design to reduceconcrete usage, and promoting the use of recycled materials inconstruction.