Mr Desmond Hill, President of SCAL

Members of SCAL

Ladies and Gentlemen

A very good evening to you. I am glad to join you tonight at SCAL Annual Dinner.

Brighter Construction Sector Outlook
2 The economic outlook for Singapore is good, and the Government has revised the economic growth forecast for this year to between 6.5 and 7.5 percent. The outlook for the construction sector has also improved. In the middle of 2006, the sector registered positive growth for the first time this year. BCA has also raised the construction demand forecast for this year by about 17%, from between $12 and $13.5 billion, to between $14 and $16 billion. This will be a significant improvement from last year’s demand of $11.3 billion.

3 As key players in the construction industry, I am sure you can already feel the heightened level of activities on the ground. We expect to see more activities in the coming years. A number of exciting developments are in the pipeline, including projects in the Orchard Road area, the Business Financial Centre, and of course, the two Integrated Resorts. There is also strong demand for industrial developments such as petrochemical plants, and from residential projects.

Gearing Up For Excellent Built Environment
4 I am sure that this is welcome news for the building and construction industry. To meet this increased demand, the industry must gear itself up to meet the challenge of delivering high quality products.

5 The industry must strive to make quality its hallmark, and be relentless in its pursuit for excellence. In this regard, BCA has been working closely with you on a number of measures. Let me update you on some of these measures.

Builders Licensing Scheme
6 The level of professionalism forms the bedrock of the construction industry. BCA will be implementing the Builders Licensing Scheme, which aims to elevate the level of professionalism in the industry. Besides good safety records, licensed builders will need competent and qualified personnel in key positions. In determining the required qualifications for these personnel, BCA will take into consideration both academic qualifications and practical experience. Due consideration will be given to personnel who have accumulated a wealth of experience but are lacking in academic qualifications.

Credit Rating of Top Firms
7 Besides professional competency, we also want to pay attention to the financial performance of our construction companies. After several dialogue sessions with the industry, BCA had adopted, from June this year, a credit rating system on a trial basis, to supplement the monitoring of financial health of our top-tier firms. The intention is to provide a useful and practical tool to understand the financial positions of individual companies better, and to improve the level of financial management.

8 BCA will fine-tune the scheme over time. Going forward, BCA intends to incorporate credit rating as a criterion in the Contractors Registry System (CRS). This could possibly be implemented for the top tier companies from 2008 onwards. As top-tier firms take on large-scale public sector projects, it is important for these firms to be financially capable of delivering quality projects in a timely manner.

Construction Registration of Tradesmen (CORETRADE)
9 Besides competent management, we also need to develop a capable construction workforce, equipped with the necessary skills to deliver high quality products. Today, the industry is heavily reliant on foreign workers, and the transient nature of such labour makes it difficult to uplift or even retain the skills base.

10 To this end, BCA is developing a scheme called the Construction Registration of Tradesmen Scheme, or CORETRADE in short. The objective of CORETRADE is to anchor the construction workforce with a core group of registered tradesmen and supervisors. The scheme will be implemented in phases starting with higher value-added trades. When implemented, we will require builders undertaking projects of value $10m and above to deploy a certain number of CoreTrade workers. By doing so, we hope to retain a core group of skilled workers who will act as the anchor for our pool of transient foreign workers.

Additional Areas Of Focus
11 Having professional firms and a progressive workforce will put the industry in a good stead to meet the rising expectations of Singaporeans, specifically the demand for a barrier-free and a sustainable built environment.

Barrier-Free Accessibility
12 As the proportion of our aged population increases, we need to improve accessibility and mobility in our built environment to create an elderly-friendly environment.

13 BCA has started to review the Code on Barrier-Free Accessibility, and to promote the use of Universal Design. We can definitely leverage on your expertise to come up with practical solutions on the ground. Your inputs on how to incorporate barrier-free features into building designs will be much appreciated. As our population ages, the need for barrier-free accessibility will stay, and we should start providing for it in our built environment.

Environmental Sustainability
14 With greater urbanisation, and rising energy prices, we are turning to green building technology for sustainability. Green building technology is an area that is receiving a lot of attention globally. Toyota, the car-maker has started to apply their green technology in the areas of building and related industries. This a new frontier for all of us. I would encourage the industry to view this as an opportunity to differentiate ourselves from our low cost competitors. I was told that one of our local builders, Tiong Seng, has pioneered the industry’s first mobile water recycling system. With more of such innovations, we can develop a niche area of expertise that can position us well regionally, and globally in time to come.

15 On our part, BCA has been actively promoting the Green Mark Scheme since its inception last year. We have received good response, as far-sighted building owners see the economic benefits of having green buildings. The savings from operating an energy-efficient building can be substantial over the lifespan of the building. I therefore urge industry players to participate more actively in the Green Mark Scheme.

Conclusion
16 In conclusion, as the industry gears itself to meet the higher construction market demand, we must not forget the fundamentals of building strong companies and a capable workforce. There is no better time than now. At the same time, I urge the industry to embrace a wider definition of “quality”, and that is to take into consideration the rising demand for barrier-free accessibility and environmental sustainability. We want Singapore to be a distinctive city, and we welcome you as partners for this important journey.

17 I wish you all a wonderful evening. Thank you.

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