The Building and Construction Authority (BCA) has projected the value of construction contracts this year to reach between S$23 billion and S$27 billion, compared to S$24.5 billion in 2007.
The bulk of the projects is expected to come from the private residential and commercial sectors. Related Video Link - http://tinyurl.com/ythd7x
Due to the high demand for resources, the government is encouraging the industry to use more recycled or alternative construction materials. It is also proposing a licensing scheme for importers of materials like sand and granite.
Dr Mohamad Maliki Osman, Parliamentary Secretary, National Development, said: "One of the criteria is the ability of the importer to provide a plan for sudden disruption of supplies, to make sure that their supply is secure in certain times of crisis.
"The situation has stabilised – we have sufficient supply of sand and granite to supply to the industry for the next year or so."
With ample supply in place, the BCA will discontinue its assistance scheme to co-share the risk of importing sand from distant sources. This was implemented when Indonesia banned sand exports to Singapore last year.
The BCA said concrete prices have also stabilised at about S$130 per cubic metre, after hitting a high of some S$190 per cubic metre as a result of supply disruptions.
However, construction costs remain a top concern for contractors as prices look set to increase this year due to surging prices of ocean freight and fuel.
Industry players also expect the licensing scheme for materials importers to affect prices of concrete aggregates by up to 30 percent.
Dr Sujit Ghosh, President of Ready Mixed Concrete Association, said: "It will show some moderate increases in the overall or the average costing of aggregates because you add in the factor - which is the transportation from the non-traditional distant sources - it's basically about S$15 per tonne difference, which comes about by way of shipping cost."
Desmond Hill, President of Singapore Contractor Association, said: "In a matter of three months, steel bar prices have gone up by about S$150. There is this fear that if it spirals up too high, contractors will then be made to bear the crunch.
"I have some advice for developers out there. If they can basically share risk of the essential components of basic construction materials, this will help minimise the uncertainty in prices."
To ease the demand on construction resources, the government will defer more public building projects.
Some S$2 billion worth of public sector developments will be rescheduled to 2010 and beyond. It also plans to bring in more professionals and foreign workers.
This includes expanding the capacity of the BCA's 20 Overseas Testing Centres to facilitate entry of foreign workers. Five more centres are expected to be ready by mid-2008.
Another focus is to develop environmentally sustainable buildings. It is hoped that the industry can tap on the available funds to adopt greater use of green technology for their projects.
The BCA said in 2007, some 39 buildings have been Green Mark certified and so far this year, about 120 projects have been lined up for assessment.
New guidelines on concrete usage will be introduced later this month. The BCA will also be launching guidebooks on the use of steel and recycled materials. - CNA/so
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