Thursday, April 11, 2013

No delays in construction of BTO flats so far: Khaw

The Business Times  |  APRIL 09, 2013
HDB less affected by tightening of foreign labour due to its use of precast parts

Construction timelines for Build-To-Order (BTO) flats have not been delayed so far by a further tightening of foreign labour, even as the Housing and Development Board (HDB) girds itself for the changes.

To that end, National Development Minister Khaw Boon Wan told Parliament yesterday that HDB will consider replacing contractors unable to cope with the tighter policies.

It may allow another contractor to take over under a new contract if the original one is unable to proceed. The agency may also terminate non-performing contractors and hire a new one to finish the remaining work.

"Regardless of which option is adopted, delivering flats to Singaporeans on time remains our top priority," Mr Khaw said.

He was responding to questions from Members of Parliament about the impact of upcoming changes in the construction sector, which were meant to drive up productivity.

First, the man-year-entitlement (MYE) quota will be cut another 15 per cent in July to bring the cumulative figure to 45 per cent since 2010. Second, foreign worker levies will increase in phases over 2014 and 2015, except for higher skilled workers employed within the MYE quota.

Mr Khaw said that while HDB will be impacted just like other developers, the extent should be smaller given its use of prefabrication in construction, which improves productivity and reduces on-site labour requirements. Between 60 and 70 per cent of the super-structure of HDB projects is constructed with precast parts.

Besides time, Mr Khaw said tighter foreign manpower policies could also affect construction costs.

However, because HDB has not closed any tenders since the increase in foreign worker levy was announced, Mr Khaw said the impact will be clearer when the agency receives the new tender bids. He noted that tender prices have been stable in the last couple of years, which he found "reassuring".

In any case, because BTO flat prices have been delinked from resale prices, should tender costs indeed go up, Mr Khaw said the government will just increase its subsidy and absorb the additional subsidy.

Mr Khaw reiterated the government's stance that there will be no turning back from the tightening of foreign labour. He said the cut in MYE quota was "hefty but doable", pointing out that HDB contractors have been able to keep foreign workers outside the quota to single-digit percentages.

He also noted concerns raised by Lee Bee Wah, MP for Nee Soon Group Representation Constituency (GRC), that precasting yards are feeling the crunch in areas such as shortage of dormitories and talent.

"Their difficulties are my difficulties, and I intend to work together as a team because when they succeed, I succeed."

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

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DTZ Property Network Pte Ltd (L3007960A)

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