Speech by MOS Zaqy Mohamad at the Committee of Supply Debate 2019: Transforming the Built Environment Sector

Mar 6, 2019

Introduction

Mr Alex Yam asked about our plans to create a future-ready built environment (BE) sector that supports the nation’s changing needs. In October 2017 and February 2018, we launched the Construction ITM and the Real Estate ITM (REITM), which target to fundamentally change the way we design, build, maintain, and rejuvenate our city, while creating good jobs for Singaporeans. Since then, we have been partnering the industry, unions, and institutes of higher learning (IHLs) to implement the ITMs. Let me elaborate on our progress and upcoming plans.

Partner the industry to implement the Construction ITM

First, on the Construction ITM. To drive change at the workforce, firm, and ecosystem level, BCA set up the BuildSG transformation office last year, to partner the industry in growing progressive firms and preparing the workforce for the future. BuildSG has been working with the Trade Associations and Chambers (TACs), to help them build expertise in the three transformation areas, namely Design for Manufacturing and Assembly (DfMA), Integrated Digital Delivery (IDD), and Green Buildings. 

Six TACs have developed their own action plans to support the Construction ITM, and 3 more are due to complete theirs by the end of the month. These plans underline the TACs’ commitment to guide firms and individuals through the transformation journey.

BCA is also partnering industry stakeholders through the IDD Steering Committee to guide the development of IDD, and encourage greater integration across the construction value chain.

As Er Dr Lee Bee Wah and Dr Teo Ho Pin noted, Building Information Modelling (BIM) is not yet seamlessly adopted across different project parties. To address this, BCA and IMDA have launched a $4 million joint call to support construction and technology firms in developing digital platforms for the BE sector, as part of the IDD implementation plan launched in November last year. The intent is to facilitate the use of a single BIM model across the construction value chain, from design, to construction, and to operation and maintenance.

Build a skilled and competent workforce

We have also undertaken various initiatives to upgrade and augment the BE workforce, who are key to industry transformation. Beyond just the infrastructure, manpower capability is also something we need to build.

Last month, BCA set up the iBuildSG Tripartite Committee to oversee the implementation of leadership and talent development strategies. Let me share three key updates.

First, IHLs will be updating their curricula to better equip undergraduates with skills and competencies to support transformation. As a start, NUS will pilot an inter-disciplinary module on prefabricated prefinished volumetric construction (PPVC) later this year. With PPVC, components are pre-fabricated under controlled factory conditions, and assembled like Lego blocks. This can significantly speed up on-site construction, and save up to 40 per cent manpower. The pilot module will not only familiarise students with this technology, but also expose them to real work conditions where different stakeholders work together to deliver a project. 

Second, the Committee has developed internship guidelines to help companies structure more effective internships. Good internships offer students a valuable opportunity to get a taste of work in the BE sector. The hands-on experience will also prepare students for joining the workforce.

For example, Ms Tan Zi Rui went on a year-long internship with Aurecon while studying at the Singapore Institute of Technology. She helped to retrofit buildings with energy-efficient cooling systems and gained engineering experience. Aurecon was also able to assess Zi Rui’s technical and behavioural competencies and offered her the iBuildSG undergraduate scholarship, and subsequently a full-time position. It is wonderful that we see a young woman joining the BE sector – and in this case, the construction industry as well. 

The Committee’s guidelines aim to help more firms and students benefit from such positive internship experiences. I encourage firms to refer to them on BCA’s Building Careers portal when planning your internship programmes.

Third, the Committee will upgrade and augment the industry’s competencies through enhancing continuing education and training. The Committee is developing a skills framework to identify skills and competencies of the future and guide training programmes to help PMETs remain relevant, as well as a leadership framework to groom a core group of industry leaders. 

We will also continue to support firms in training and bringing in mid-career professionals through Professional Conversion Programmes (PCPs). Last year, we introduced the PCP for Building Information Modelling (BIM) Professionals. After learning about the promising career prospects of a BIM modeller, Mr Mohamad Saifullizan Bin Abd Rahman took up the PCP. He has been receiving structured training in essential BIM skills, as well as on-the-job training with his industry sponsor, Lum Chang Building Contractors. To help more people like Saiful enter the BE sector, BCA is now working with Workforce Singapore to expand the PCP offerings to other BE transformation areas, such as for professionals supporting DfMA projects and off-site facilities.

Support creation of good jobs

We will also do more to improve the attractiveness of construction industry jobs. The use of productive technologies already improves working conditions and can create attractive new jobs, such as prefabrication supervisors. As Mr Zainal Sapari pointed out, it is also important to provide rest areas for workers. I announced at MOM’s COS session yesterday that we’ll be looking into companies’ practices in this regard. MND will also look at how best to ensure adequate provision of rest areas from a planning perspective.

Another important aspect of good jobs is remuneration. With the move towards higher skilled jobs, wages should also keep up. I urge industry leaders to continue your efforts in enhancing pay and career prospect for employees, so as to build up a strong local core of PMETs to support sustainable industry transformation.

The Government will also do our part to ensure that wages remain competitive. Last year, we announced a Progressive Wage Model (PWM) for the lift industry. BCA is working with the industry to phase in implementation, while ensuring sufficient lead time for buyers and firms to adjust. In the meantime, the Government will take the lead to drive early PWM adoption by procuring only from firms that have registered their PWM status, starting this May. So far, 21 lift companies have pledged their commitment towards the PWM, and I hope that more will join them. 

Review of foreign worker policy to boost industry transformation

I am heartened to see progressive firms adopt productive construction technologies like DfMA. Take for instance INSTAD Pre Fabrication Pte Ltd, which set up a facility for prefabricated Mechanical, Electrical and Plumbing (MEP) systems in 2017. Through automation, the firm has achieved higher construction quality, with up to 40% time savings and 60% productivity improvement. Workers in the MEP factory also enjoy improved working conditions – similar to the manufacturing sector – compared to traditional construction sites. 

We want to support more firms in their transformation journey, and shift the industry towards adopting productive technologies like DfMA. To do this, we will need to complement existing funding schemes and manpower development initiatives with changes to our foreign manpower policies.

Currently, construction projects are subject to the Man-Year-Entitlement (MYE) framework, which manages foreign worker numbers at the project level. MYE quotas are allocated to main contractors based on project type and value. Main contractors then decide how to allocate these quotas to their sub-contractors.  

We have received feedback from the industry that such an arrangement is not optimal. For example, a main contractor may only pass on a small proportion of the allocated MYE quota to sub-contractors. DfMA facilities are also not allocated MYE quotas directly as they are not project-based. So, most workers in DfMA facilities are employed on the higher MYE waiver levy rates. This means that the manpower cost for off-site DfMA works is typically higher compared to on-site works at construction sites. 

While we have received industry feedback as Er Lee said about the allocation of MYE quotas, increasing our reliance on foreign workers cannot be the way forward. Instead, to better align our manpower policies with our transformation outcomes, we will have to review the existing MYE framework for the construction industry. Our intent is to progressively reduce the MYE quota for on-site works, and eventually remove the MYE framework altogether. We want to replace the MYE with a system that better enables the industry to optimise their foreign workforce, be it on-site or at DfMA facilities. But this will take time and BCA will consult the industry in working out these changes on the MYE framework.

Meanwhile, to encourage more off-site works in the interim, we will introduce a new voluntary Off-site Construction Special Scheme (OCSS) for DfMA facilities. Firms on the OCSS will be able to hire an allocated number of workers at MYE levy rates. This will lower the cost premium for DfMA, and hopefully encourage more firms to shift towards off-site work. BCA will be engaging eligible companies to explain the details of the scheme, which will be implemented later this year.

Enhance support for firms 

Er Lee and Mr Ang Wei Neng underscored the importance of efficient and streamlined regulations and processes for the construction industry – and we agree. The Inter-Agency Coordinating Committee, or IACC, was established by BCA in 2011 to resolve cross-agency regulatory issues. Instead of meeting only when issues are surfaced, the IACC has started to hold monthly meetings this year to proactively engage the industry. Where there are changes to regulations, we will do what we can to help firms transition. 

Er Lee asked about rebates to absorb the diesel duty increase. As announced by the Finance Minister, three years of road tax rebates will be provided for commercial diesel vehicles. The rebates will also apply to commercial vehicles used in the construction industry.

Er Lee also provided specific feedback on services diversion works and the Workplace Safety and Health (WSH) regulations. As many of our projects are on brownfield sites, preparatory works such as services diversion may be required prior to development works. It is inefficient for Government to undertake all such land preparations before tendering out sites for sale. Instead, our approach is to make known in the tender documents, any encumbrances on-site, so that interested bidders can factor these accordingly into their timelines and tender price.

As for workplace safety, our WSH regulations adopt a risk-based approach for the supervision for high-risk construction works. Supervisors need not be present at all times if the risks are sufficiently addressed, for example, by adequately briefing workers on the potential risks, and the proper use of tools and safety equipment. The WSH regulations have contributed to reducing construction workplace fatality rates, from 8.1 per 100,000 workers in 2007, to 3.1 per 100,000 workers in 2018. So as I elaborated in my MOM speech yesterday, one of the strongest links to many of these fatalities, is inexperienced workers.

Er Lee also asked about our efforts to support local contractors. We know that the industry has been experiencing a slowdown in recent years. We have introduced a number of measures to help. In 2017, we announced that we would bring forward $1.4 billion’s worth of public sector projects, to boost construction demand over the next few years. To help local companies build up a track record, we have parcelled out large infrastructure projects into smaller contracts that SMEs can take on, and allowed smaller consultancy firms to band together to bid for higher value projects.
 
So just for Er Lee, rest assured that we want to provide as much support as we can for local firms, and certainly within our procurement guidelines. That is also why we have to continue to review our processes, our policies, and how we work with inter-agency regulations. It is one of the reasons why we are looking at the MYE framework as well.  

Our longer term focus remains on helping firms build capabilities and strengthen their competitiveness. We currently provide funding support to firms in various areas, including construction productivity, manpower development, and research and innovation.

To help firms navigate the schemes more easily, we will consolidate our existing schemes under an umbrella BuildSG Transformation Fund, or BTF, amounting to about $770 million.

This includes top-ups to two existing schemes, namely the Productivity Innovation Project, or PIP, and the Public Sector Construction Productivity Fund, or PSCPF. More than 300 firms have benefited from the PIP, which co-funds capability development initiatives that improve site productivity. So the good news is that we will add about $200 million to the PIP, to support more firms in adopting productive technologies. The PSCPF supports Government agencies in procuring innovative and productive solutions for public sector projects. Since its launch in 2017, most of the $154 million fund has been committed. We will add another $95 million to the fund to sustain the effort.

Transform and digitalise the Real Estate industry

Next, let me provide an update on the progress of transformation efforts in the Real Estate industry. 

In April last year, BCA formed the tripartite Facilities Management Implementation Committee (FMIC) to transform the FM industry into one that is more productive, and that leverages data analytics, predictive maintenance and smart solutions.

To this end, the FMIC, which comprises representatives from both the Government and industry, has proposed recommendations in four areas, namely designing for maintainability; enhancing maintenance productivity and quality through smart FM; enhancing guidelines for FM procurement; and ensuring adequate training and development for the FM workforce. While implementation details are being worked out, the public sector will take the lead to uplift the FM industry through various initiatives, such as by adopting outcome-based procurement guidelines. This provides flexibility for FM service providers to focus on improving outcomes, instead of meeting headcount requirements.

On the property transaction front, we will continue to enhance and streamline the transaction processes for users through automation and digitalisation. A key thrust is to make it easier for industry players to access property-related Government data, thereby enabling the automation of time-consuming administrative processes. 

We have done this for data related to rental transactions since February. This means that checks like whether a seller is the legal owner of the property, and whether a landlord is eligible to lease out a HDB unit, can now be done with the click of a button. I believe this will benefit many, as rental transactions account for about 60% of all residential property transactions.

I am happy to share that we will be doing likewise for data related to the sale and purchase of residential properties from the end of this year. We encourage the industry to take advantage of this to streamline processes, and better serve your customers.

We are not stopping here. Our long term goal is to facilitate seamless and digitalised property transactions from start-to-finish. To chart the way forward, CEA is chairing a digitalisation workgroup with representatives from both Government and industry. By reducing the hardcopy documents and physical payments, consumers can spend less time on paperwork and queuing up at banks and property agents, bankers, and lawyers can focus on higher value-added services to customers.

Building our future city and home

As Mr Chong Kee Hiong noted in his speech, good infrastructure is essential in supporting our future economy. We have a rigorous framework to ensure that our buildings are safe. Developments involving structural works undergo checks to ensure that they have been designed and built according to the approved plans and building regulations. Developers are required to engage trained professionals known as Qualified Persons and Accredited Checkers at various stages of the project, from the building design phase, to supervising the construction works on-site, to certifying the works upon project completion. BCA also conducts sampling checks on building plans and targeted inspections on structural works, and will take enforcement action against any party who contravenes the regulations. 

Going forward, the various ITMs under the Built Environment sector will strengthen the industry’s capabilities in continuing to build and maintain quality infrastructure. 

MND will continue to partner our stakeholders as we ride the waves of transformation to a high-tech and more productive BE sector.