TO help the construction industry ride out the current economic crisis, the Government will bring back some of the smaller public sector projects of up to $50 million that were deferred earlier, and advance other suitable new projects in the pipeline.
It has also put in place several credit assistance measures to help construction firms facing credit squeeze and cashflow problems.
For instance, public sector agencies will be making or frequent, prompt and full progress payments for completed and certified building jobs done.
They will also lower the amount of security deposits for government construction jobs from 5 per cent to 2.5 per cent, or even to zero.
These measures were announced by National Development Minister Mah Bow Tan on Wednesday morning, and come as construction demand has started to moderate due to the global economic downturn.
Speaking at a property seminar organised by the Building and Construction Authority (BCA) and Real Estate Developers Association of Singapore (Redas), Mr Mah said the building and construction sector enjoyed an 'exceptionally strong growth' in 2008, with a record high $34.6 billion of contracts awarded.
This stronger than expected construction demand was driven mainly by robust private sector demand in the first half of 2008, as well as the award of several major public sector infrastructure projects, such as the Marina Coastal Expressway and the MRT Downtown Line 1, in the last quarter.
But it, too, will not be left unscathed by the economic slowdown.
Mr Mah said BCA's projection shows that construction demand has started to moderate. For 2009, the value of construction contracts awarded will likely reach between $22 billion and $28 billion, and for 2010 and 2011, between $20 billion and $27 billion.
While the larger construction firms will be occupied with ongoing contracts awarded over the last two years and the pipeline of large government infrastructural works, small and medium sized firms have started to feel the drying up of projects, as private sector construction demand softens.
The number of tenderers for projects of up to $30 milion has doubled, compared to six months ago, said Mr Mah.
To help the industry and sustain the flow of jobs, the Government will focus attention on two areas of immediate concern - the slower construction demand and the liquidity squeeze.
It will bring back some of the smaller public sector projects, of up to $50 million in value, that were earlier deferred to ease the pressure on construction resources.
'We will also bring forward other suitable new projects in the pipeline, in addition to the projects that were originally planned for 2009. The details are being finalised and will be announced during the 2009 Budget Statement,' added Mr Mah.
Amid the gloom, there is a silver lining.
Mr Mah said public sector demand for construction services will remain strong in the next few years, as several large public infrastructure projects are scheduled to be rolled out.
These include the extension of MRT lines such as the Downtown Line, the North-South Line, Jurong East Connection, major road works, redevelopment of the Pathology Education Research Building of the Singapore General Hospital, National Heart Centre, the new International Cruise Terminal, as well new HDB flats to meet the ongoing demand for public housing.
He added that despite the projected dip in construction demand from 2009 to 2011, the level of demand is still considerably higher than the average annual demand of $13 billion from 1998 to 2006.
He also urged job seekers, especially those at Professional, Managerial, Executive and Technical (PMET) levels, to seriously consider career options in the built environment, where there are good long-term prospects and growing niche areas.
For example, with the demand for green buildings growing steadily, not just locally but also in many overseas markets, Green Building Technologies will be a new growth area for the local industry, noted Mr Mah.
Summing up, he said: 'The construction sector remains a vital pillar of our economy. It is therefore important that this sector continues to anchor itself on firm foundations, through continual manpower development and technological advancement. We can each play our part in building up a resilient and strong construction industry.
'While we cannot prevent the up and down cycles of the business sector, the government has and will continue to put in place measures to mitigate the impact of the down cycle. The quick turn of events in the global markets over the last six months holds many valuable lessons for all of us. We need to remain vigilant, be quick to adapt and be forward looking. '
