Speech by MOS Zaqy Mohamad at the BCA-REDAS Built Environment and Property Prospects Seminar 2019
Jan 14, 2019
A very good morning. I am delighted to be here at the BCA-REDAS Built Environment and Property Prospects Seminar. This is my first time joining you and let me begin by wishing all of you a Happy New Year.
Positive turnaround in construction demand
We have had a few tough years for the Built Environment (BE) sector, and many firms have felt the pressure. Construction demand declined for three consecutive years from 2015 to 2017. In response, the Government stepped in to help firms ride out the downturn over those three years. You will recall that we brought forward $1.4 billion in public projects to start between 2017 and early this year. We have also encouraged Government agencies to parcel out large infrastructure projects to create more opportunities for local firms and to diversify risk. For instance, LTA has done so for some of its MRT tunnelling projects.
Our efforts are showing results. Construction demand has picked up significantly. BCA estimates that $30.5 billion worth of projects were awarded last year. This is close to the upper bound of BCA’s estimate of $26 - $31 billion for 2018. This represents a 23% increase in construction demand compared to the year before.
The public sector has continued to lead demand with support from high-value projects such as civil engineering works and institutional buildings. The Government has also awarded close to $60 billion worth of construction contracts over the past four years, contributing to about 60% of the total demand in the same period. The construction demand from the private sector, on the other hand, has also picked up last year. This was underpinned by the en-bloc sales for residential projects earlier on, and greater demand for industrial projects amidst positive growth in the manufacturing sector.
We are cautiously optimistic that this healthy level of construction demand can be sustained over the next three to five years. BCA estimates that between $27 - $32 billion worth of projects will be awarded this year. The public sector will continue to contribute about 60% of these projects.
Beyond 2019, our outlook for the medium-term is still expected to be on a slight uptrend. BCA projects the yearly construction demand would be between $27 - $34 billion from 2020 to 2021, and between $28 - $35 billion from 2022 to 2023.
The Government remains committed to provide a stable stream of construction projects for the sector. Looking ahead, there is a strong pipeline of public sector projects over the next few years, with various developments at the Punggol Digital District and Jurong Lake District, Changi Airport Terminal 5, and new MRT lines such as the Jurong Regional Line and the Cross Island Line.
Innovation is key to support Built Environment sector transformation
It is indeed an exciting time to be a part of the Built Environment sector. With stable and sustainable construction demand fundamentals, firms in the sector will have more opportunities to invest in innovation. This is important given that the way we build is increasingly being transformed by the use of technology.
One good example of this is the adoption of Integrated Digital Delivery, or IDD. In gist, IDD integrates the entire building lifecycle through the use of Building Information Modelling (BIM) – from design to fabrication, to construction, and eventually to operations and maintenance. With IDD, stakeholders such as developers, contractors and facilities management operators can reap benefits in terms of time and cost savings.
With Industry 4.0, robotics and automation, there are opportunities for us to do even more. Building components can be mass-customised and manufactured offsite in optimised assembly lines using robotics and automation. Second, a more advanced and integrated supply network, facilitated by smart logistics systems, will also help to facilitate efficient and just-in-time delivery of components on-site. Third, the use of robotics and automation will not just be confined to the factory environment. We also envision a more efficient assembly process with greater use of robotics and other automation on-site.
There are other burgeoning trends with potential to disrupt the BE sector, including artificial intelligence, and 3D printing technologies. Taken together, these advancements in technologies offer many opportunities for our local industry to build up world-class cutting-edge capabilities to stay ahead of the competition. If we look to the region, China for example, many of these technologies are already in play. We cannot underestimate the impact of competition in the region and the rest of the world. We have to transform. That is one of our key focuses – in terms of helping the industry move ahead and transform for the future. In this regard, let me share one initiative which will help firms in their innovation efforts.
Structured support for innovations through the enhanced Building Innovation Panel (BIP)
In 2011, BCA set up the Building Innovation Panel, or BIP for short, to facilitate the adoption of innovative solutions in the Built Environment sector. The BIP is an inter-agency platform that fast-tracks the evaluation of feasible methods, processes, solutions, technology or materials that could improve construction productivity. So instead of approaching individual Government agencies with a novel idea in a sequential manner, firms can use the BIP as a one-stop platform to simultaneously work together with relevant agencies to overcome regulatory hurdles. This is a much more productive way to facilitate innovations.
To date, the BIP has fast-tracked in-principle approvals for 32 Prefabricated Bathroom Unit (PBU) and 33 Prefabricated Prefinished Volumetric Construction (PPVC) systems. In turn, the increased number of suppliers has widened the adoption of these more productive technologies, leading to reductions in construction costs and time.
Today, I am happy to announce that BCA will be expanding the scope of the BIP, to cover solutions beyond those that raise productivity to any type of innovation that can improve Singapore’s built environment. These include areas such as advanced and sustainable building materials, technologies used for green buildings and the use of automation for construction.
In addition, the BIP will take a more proactive role to facilitate identification, monitoring, and adoption of new technologies or innovations. At the upstream research level, the BIP will match inventors of promising innovations with relevant adopters. We are doing matching to facilitate the implementation of innovations in an actual project, and possibly allow them to be scaled up for wider adoption.
From the regulatory perspective, the BIP will also review policies, regulations and requirements that may inhibit innovations. Where possible, the BIP will also facilitate the early involvement of relevant regulatory agencies – not just BCA but any agency that requires to be involved – as soon as promising solutions have been identified.
BCA will be implementing the enhanced BIP from February 2019. The enhanced BIP will benefit and strengthen Singapore’s built environment by raising the innovative capabilities of our firms. In this regard, we encourage industry stakeholders to come forward and approach BCA with their ideas. We will work with you to trial and implement these projects.
With the positive outlook for the medium term, it is important that our firms look ahead and seize opportunities to pursue innovation-driven growth, and because we want to develop exportable niche capabilities that could succeed both in Singapore and abroad.
I wish everyone a good seminar. I want to thank REDAS again for collaborating with BCA, and I wish all of you a productive and vibrant year ahead. Thank you very much.