Remarks by Minister Desmond Lee at Visit to Northshore Edge BTO project

May 27, 2022

Good morning. Thank you for taking the time to join me today at Northshore Edge. This is one of the many BTO projects that were affected by the COVID-19 pandemic.

This morning, I was pleased to meet a couple and their two children, who have just collected their keys today - we are one of their first visitors. They shared that they plan to do some renovation works, hopefully before the end of the year. While they had to put up with a few months of delay, they eventually collected their keys and are excited about their new home.

Many homebuyers have been affected by the housing delays, both for HDB flats as well as private housing. Business proprietors waiting for their business premises have also been affected. For the many Singaporeans who have been waiting for the flats patiently, I thank them for their forbearance and understanding. We hope to be able to deliver their flats to them so they can set up their homes and families, and proceed with their life plans.

Over the last two years, the construction sector in Singapore has gone through one of its worst challenges. We have witnessed the perfect storm that has seized the construction sector and put it under tremendous stress. We are not out of the woods yet.

Throughout this period, we have been engaging and working closely with the industry and trade associations, as well as with the builders, architects, and engineers on the macro-level issues and the challenges that they face. My colleagues have visited the various BTO construction sites and engaged the construction contractors, subcontractors and suppliers. We also visited private housing developments under construction and some of the transport infrastructure projects that were underway. We held discussions with people working at the construction sites to better understand the impact and challenges that they have to overcome, and work with them in a practical way so that our homebuyers get their homes with as little delay as we possibly could manage.

If you cast your mind back three years ago during the circuit breaker, all construction works came to a complete halt. All sites, barring basic maintenance, had to cease their work. After the circuit breaker ended, it was a painful few months to get construction works re-started. It was sometime in August or September when the work could really begin in earnest.

Many of our migrant workers in the dormitories had to grapple with COVID-19. We were concerned about the well-being of our migrant workers and the risk of COVID-19 seeping into the community. It was a very difficult time for the migrant worker community, contractors, dormitory operators and Singaporeans. It was tough to begin construction works because these involved many contractors, subcontractors, suppliers, builders, engineers and architects across the different stages.

When work could resume, we had to implement the safe management measures (SMMs) to avoid an outbreak or locking down the construction sites. The contractors had to segment their worksite. They also could not get their entire workforce on site at the same time, and had to restrict the number of people on site. All of them had to go for regular COVID-19 PCR tests at various test centres. All of these severely impacted their productivity and their ability to build as they did before the pandemic.

The sector was also hit by foreign worker shortages. As recently as six to eight months ago, HDB had a shortage of 25% of our workforce needed to build our HDB BTO projects. Many countries had to close their borders due to the COVID-19 situation. We also had to close our own borders. These resulted in a severe shortage of workers, which affected HDB and private sector projects. This added to the woes of the sector and exacerbated the delays. Today, we have managed to get our workers back on track.

Various countries implemented lockdowns and movement control orders. As a result, worksites had to be shut and precast sites had to be closed. Logistics was affected and freight charges doubled or tripled. Supply chain disruptions made things much worse. Now, we observe high prices for commodities and construction materials, such as aggregate, sand, precast materials, steel and rebars. Some contractors could not get access to the necessary materials and struggled to find replacement sources.  Even when they found replacement sources, they had to consider the pricing and viability. These are the things that the contractors shared with us, and we could see the impact of all these in the form of a perfect storm that dragged down the construction sector for over two years.

But, I want to thank my colleagues from HDB for working very closely with our built environment sector and industry stakeholders, down to the individual project, to help them in various ways. Firstly, HDB helped them to recruit safely and sustainably so that they could get their workforce replenished. Second, HDB helped them with increased manpower costs and non-manpower costs, and extended advanced payments. HDB also helped them by building up stockpiles of supplies or essential materials. These measures support our contractors and prevent them from falling into difficulties. Otherwise, the impact on homebuyers will be even more severe. While it was a time of great trial and tribulation, it was also an opportunity for the Government and the built environment sector to collaborate more closely throughout this challenging period so as to minimise the extent of delays for homebuyers.

With all these difficulties, it is hard to get back to the pre-COVID situation. However, the single-minded commitment of HDB as well as our contractors and consultants was to build in a way that ensures as little delay as possible to homebuyers so that they can get on with their life plans.

But we also wanted to do so without compromising the safety of our workers. As you would have heard from the Ministry of Manpower, these two years have been a difficult time for workplace safety. Nonetheless, the safety and well-being of workers are critical. HDB and the contractors will not compromise on the quality and structural safety of the projects. We don't want to rush to deliver with little delay, but end up compromising on the safety and quality of construction.

Nonetheless, we are gradually turning the corner. There will still be delays but we monitor the improvements closely, day by day, project by project. We are also watching current developments such as the COVID-19 situation, the surge in dengue cases, possible impact on supplies and materials, and the war in Ukraine.

Still, we have been able to make some progress. For example, if you look at the number of BTO projects which have been delayed by six months or more, some 74 BTO projects were delayed by six months or longer in April 2021. This has come down to 58 projects in April 2022. In terms of percentage, more than 80% of projects were delayed by six months or longer in 2021. This has come down to below 60% in April 2022. This is due a confluence of factors. This is partly due to our HDB colleagues and contractors working very closely to make the necessary adjustments to work harder in a safe way. This can also be attributed to HDB launching new projects as well as handing over completed projects. This confluence of factors has resulted in a reduction in the percentage of projects delayed by six months or more.

In 2021, my HDB colleagues were able to hand over close to 15,000 keys to new homebuyers. This is a result of the hard work and sacrifice of the contractors, builders, architects, suppliers and HDB colleagues. We have exceeded our pre-COVID levels in 2019, where we handed over 13,500 homes. My HDB colleagues are quietly confident that we will be able to deliver even more keys this year. In fact, every day, HDB is handing over keys to households, thanking them for their patience and understanding.

Our priority is to minimise delays, keep projects going as they are, and helping the sector recover. At the same time, we are working to launch more BTO flats in order to meet the high demand for housing during this period. This year, we will launch up to 23,000 new flats. Between 2021 to 2025, up to 100,000 new HDB homes will be launched to meet the demand from buyers. The May BTO sales exercise will open on 27 May 2022 and conclude on 2 June 2022. I'm sure many people are looking forward to the BTO launch.

Thank you.