Building Boom Set To Extend Past 2010 As Govt Delays Projects

Source : The Straits Times, Nov 15, 2007

Industry welcomes move that will ease strain on resources such as manpower

SINGAPORE'S construction boom now looks assured to keep rolling until 2010 and beyond, major industry players said yesterday.

They were welcoming a government move to postpone some public sector building projects in order to ease the squeeze on resources such as labour and materials.

On Tuesday, the Building and Construction Authority (BCA) announced the rescheduling of public projects worth at least $2 billion to 2010 and beyond.

Mr Desmond Hill, the president of the Singapore Contractors Association, which represents local contractors, said yesterday that it 'makes sense that construction demand should be spread out'.

'The uptake of projects has been too fast, and we're facing a manpower shortage. This move ensures that our construction boom can be extended past 2010,' he said.

Mr Andrew Khng, a director of Tiong Seng Contractors, added: 'Contractors' books are quite filled. With this move, ongoing projects will not have to fight tooth and nail with projects coming onstream for resources. People will be more relaxed.'

The complete list of projects to be postponed has yet to be finalised.

But they will range in value from about $10 million to $400 million each, BCA told The Straits Times yesterday.

Projects affected include the National Addiction Management Centre, the Communicable Disease Centre and an extension of the Changi Prison Complex.

Extensions for both the Asian Civilisations Museum and the Peranakan Museum, worth some $67 million, will also be rescheduled, BCA said.

This will help cut overall demand for extra manpower in the next two years by a sizeable 20 to 40 per cent.

Annual construction demand, in the doldrums for the last three years, is expected to hit $19 billion to $22 billion from this year to 2009.

Besides manpower, the industry is facing a resources crunch too, as it scrambles to meet deadlines. The prices of raw materials such as steel bars and cement have risen by more than 20 per cent over the last year, and construction equipment is in short supply.

This is due partly to a global rise in building activity, especially in markets such as China and India.

But prices of raw materials are expected to stabilise in the next year or so, when demand eases, said Mr Ong Pang Aik, the chairman of construction group Lian Beng Group.

Mr Hill also called for a review of the industry's dependency ratio of local to foreign workers, recently changed to one local worker to every five foreign workers.

With the buoyant economy fuelling high pay packages in some sectors, the building industry is facing difficulties finding local workers, said Mr Hill. 'Perhaps a 1:6 or 1:8 ratio could be allowed.'

BCA has said that most resources for the next two years will be channelled to major projects such as the two integrated resorts and infrastructure projects, and to meet social housing needs.

Singapore Chinese Chamber of Commerce & Industry president Chua Thian Poh said that the Government's move will 'go a long way towards alleviating the critical resource shortage fuelled by the boom in the industry'.

Real Estate Developers Association of Singapore executive director Chia Hock Ji said yesterday that the move was 'helpful as the situation is quite tight'. He added that most firms would welcome more foreign workers.

Ultimately, any ease in demand that will help bring down prices would be a relief for the industry, said Mr Hill.