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1 Mr Chairman, the construction sector is a key economic growth sector and is of strategic importance in supporting the future development of Singapore. It is thus important that we sustain and grow the construction sector by enhancing its productivity and capabilities.
Key Challenges
2 Mr Heng Chee How has asked for an update on the Construction 21 (or C21) report and our plans moving forward.
3 The industry has made progress since the release of the C21 report in 1999. Between 1995 and 1999, the industry saw negative productivity growth ranging from -2.1% to -4.1%. For the last ten years, the industry has experienced an annual productivity growth of 0.7%. We had increased the proportion of skilled workers as recommended by C21, and also implemented the Construction Registration of Tradesmen or CoreTrade scheme last year to nurture a pool of localised workers in the higher value adding trades. Today, there are about 7,000 registered CoreTrade personnel earning monthly wages ranging from $1,200 to $2,400. For some higher value-adding trades such as crane operation, wages are even higher, up to $3,000 per month.
4 Mr Chairman, over the last 10 years, we had plucked the low-hanging fruits in growing our construction industry. For the next 10 years, we need to do more to achieve a sustainable long-term growth. First, we need to increase the productivity of our workers. Second, we need to build up key competencies and capabilities in complex civil engineering and building projects locally.
5 Mr Cedric Foo, Mr Heng Chee How, Ms Lee Bee Wah, Mr Zainudin Nordin and Mr Liang Eng Hwa have asked about the measures to help the industry move towards technology adoption and manpower development to improve productivity. Let me now elaborate.
New Construction Productivity & Capability Fund
6 In line with the Economic Strategies Committee (ESC)’s recommendation to shift towards productivity-driven economic growth, we will increase the quality of both the local and foreign workforce through a new levy framework that recognises skills and experience. As announced by the Minister for Finance in his Budget speech, up to $250 million from the National Productivity Fund will be used to support productivity enhancement and capability building in the construction sector over the next 5 years.
For Workers
7 First, at the workers’ level, we will set aside funds to defray the upgrading costs for workers to be trained and certified in CoreTrade. We will expand the CoreTrade scheme to include additional trades such as drywall installation, fire protection system, lift installation and others, which will be eligible for this training incentive. We will also co-fund the cost of specialised skills training and certification for workers taking on greater responsibilities and expanded work scope. The aim is to build up a larger pool of skilled and experienced workers to help boost productivity.
8 Mr Zainudin Nordin asked how we can attract more Singaporeans into this industry. BCA together with NTUC, has actively worked with firms to recruit locals through the Job Recreation Programme (JRP) into selected higher value trades. BCA will step up its JRP to publicise subsidised training opportunities at BCA Academy. We will also explore new classes of CoreTrade personnel such as construction supervisors, which can cater more for locals. BCA is enhancing its outreach to students who form the potential pipeline of new local construction personnel in higher value trades or in supervisory positions.
For Firms
9 Next, at the firm level, we will help finance firms’ efforts to adopt technology, innovate and re-engineer their construction processes.
10 For smaller firms which specialise in more labour- intensive trades, we will provide support for the purchase and leasing of equipment. We recognise that the cost of technology adoption can be an impediment to firms which want to switch to a greater use of machines and technology. For example, a trained worker using spray machines can reduce the time needed to complete a paint job by at least 20%, compared to the use of rollers and brushes. The spray machines can cost about $6,000 to $10,000. With the Government helping to co-fund such equipment, we hope to help small builders switch to a greater use of machineries to improve their productivity.
11 For firms seeking to upgrade their productivity levels, we will provide funding support for the adoption of technology and re-engineering of workflow. For example, the use of precast façade with coloured finishes done in the factory is more productive than the conventional way of constructing walls, followed by plastering and painting works. Such works on-site and the use of scaffoldings can be eliminated. There is scope for the main builder, precast suppliers and installers to collaborate, and to seek Government support to improve their workflow. In addition to financing part of the equipment cost, firms can also use the fund to cover the training cost for workers to operate the equipment, as well as the engagement of specialist consultants to enhance productivity level.
For Industry
12 For the industry as a whole, we will provide financing to help build capabilities through the use of new construction methods, and improve productivity among different firms across the value chain. For instance, firms can adopt the 3D Building Information Modelling (or B-I-M in short) which is an IT solution that enhances collaboration and streamlines the sharing of information across the construction value chain - from the architects to the engineers and the builders.
13 BCA will collaborate with industry partners to test-bed and adapt new construction technology to our local context for industry-wide adoption.
14 Further upstream, developers and architects will have to design for greater buildability. Since 2001, BCA’s Buildability Score Framework has improved the efficiency in designs requiring the wider use of prefabrication and precast technology. The use of buildable structural systems has doubled from 31% before 2001 to 65% today, and the use of prefabricated wall components has increased from 22% to 45%.
15 We can and will do more. Mr Cedric Foo asked about our efforts to raise buildability. BCA will require more buildable design, including the regulation of more labour-efficient construction technologies. The industry can seek Government funding to build capability in areas such as prefabrication, precast technology, and other construction technology to meet the new buildability requirements. For example, builders can utilise integrated system formwork which has proven to be labour-efficient and is widely used in countries like Germany.
16 Mr Heng Chee How asked how we will be partnering with the industry in this productivity drive. BCA will set up a construction productivity centre to champion innovative solutions and technologies in the construction sector. We recognise that the challenges faced by small firms can be quite different from the larger ones. I have asked BCA to set up dedicated teams to look into the specific needs of firms of different sizes.
Capability Building
17 Ms Lee Bee Wah has enquired about the measures to improve the capability of the industry. BCA will work with progressive builders to build new capabilities in complex civil engineering and building works. With a strong pipeline of projects in underground expressways and rail projects, firms can tap on the fund to build up their in-house technical competence for such complex projects. Funds can be used to defray the procurement costs of performance bonds to facilitate cashflow as well as engage external specialists. We will also introduce a new postgraduate scholarship programme and an immersion programme to develop engineering expertise to undertake these complex projects.
Cost Impact
18 Mr Liang Eng Hwa has asked how the levy increases will impact the industry and whether we would see further construction bottlenecks as a result of the economic recovery and market buoyancy. In general, we estimate that the higher levies could result in 1 to 2% rise in construction costs for the industry, although the actual cost impact will vary from firm to firm. The $250 million fund will support the construction firms, be they large or small, to adopt a wide spectrum of productivity improvement measures. In 2008, we saw a peak construction demand of $36 billion which dropped to $21 billion in 2009 as a result of economic recession. With a projected construction demand of between $18 billion and $27 billion for the next 3 years, there is an urgent need to improve productivity so that our construction capacity can raise its output without having to increase its workforce significantly.
Greening Our Buildings
19 Mr Cedric Foo has asked how HDB estates can be more sustainable. Our existing HDB estates have designs which facilitate cross-ventilation and natural lighting. For new estates, we will continue to incorporate environmentally friendly features and green technologies. For example, HDB is pushing forward the installation of solar photovoltaic panels (PV) at four precincts at Tampines, Bukit Panjang, Tanjong Pagar and Marine Parade.
20 HDB, together with Town Councils, also aims to reduce the energy consumption of common areas in new and existing HDB estates by 20% and 30% respectively. This is done by introducing features such as energy efficient light fittings and lift systems.
21 In addition, HDB has piloted centralised recycling chute systems in our existing estates (Blk 297C and 297D Chua Chu Kang). The results of the pilot study were encouraging, with about 3 times more recyclables collected as compared to conventional door-to-door collection method. With the plan to position Punggol as an Eco-Town for the tropics, such technologies will be explored for testing on a larger scale in Punggol.
22 Our sustainable development efforts must extend beyond our public housing estates. In April 2009, the Government released Sustainable Singapore Blueprint which outlined our efforts to improve our overall energy efficiency by 35% from 2005 levels by 2030. All sectors, including the building sector will need to play their part towards meeting this target.
Raising Minimum Standards for New Buildings
23 By the end of this year, we will raise the mandatory minimum energy efficiency standard for Green Mark certified level for new buildings by 10% from today’s standard. Correspondingly, the energy efficiency standards for other Green Mark levels, i.e. Gold, GoldPlus, and Platinum will be raised. Building owners can enjoy cost savings in the long run by being more energy efficient.
Mandatory Submission of Energy Data
24 To better understand energy consumption patterns, and to monitor the effectiveness of our energy efficiency measures, BCA will require building owners and utilities companies to submit energy and other building related data such as Gross Floor Area (GFA) and specifications of building systems on an annual basis starting from 2011. Building owners can also use the information to pro-actively improve their buildings’ energy efficiency.
25 Going forward, BCA will consult the industry on the possibility of mandating a minimum energy efficiency standard for existing buildings.
Conclusion
26 Mr Chairman, the Government will work closely with the industry stakeholders to support the growth of a capable and productive construction industry. While foreign workers will still form the bulk of the industry’s workforce, we will work towards building a pool of skilled and experienced local and foreign workers, and a group of competent builders who can lead the industry and support Singapore’s growth and development in the future.
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