THE grand vision of transforming Punggol into Singapore's first waterfront public housing town begins in earnest next month when construction gets underway.

A $144.6 million contract for the first part of the Punggol Waterway has been awarded to Koh Brothers Building and Civil Engineering Contractor, said the Housing Board (HDB) on Wednesday.

The 2.4 km stretch - the entire waterway will be 4.2 km - is expected to be completed late next year.

Punggol Waterway is part of the 'Punggol 21-plus' masterplan unveiled by Prime Minister Lee Hsien Loong in his National Day Rally speech in 2007.

The new town will boast features like a freshwater lake and a waterway running through the estate with homes and a town centre built on both banks.

The coastal suburb will also get recreational facilities like water sports, gardens and parks with jogging tracks, and eateries for al-fresco dining, Mr Lee said then.

The Punggol Waterway, which will be connected to Sungei Punggol, will have an average depth of 4 metres with its width varying from 10 to 85 metres.

HDB said on Wednesday its plans to launch the first sale site at Punggol's Town Centre for a mixed commercial and private residential development 'are also on track'.

The HDB launched more than 4,000 flats in Punggol alone last year. It added that by end 2011, there will be about 23,000 completed flats in the area.

In the longer term, a further 21,000 public and private homes will be built 'along the waterway for residents to enjoy waterfront housing', said the HDB.

Read the full report in Thursday's edition of The Straits Times.