Protocol to manage disputes in infrastructure projects early

(From left) Indonesia's Minister of State-Owned Enterprises Rini Mariani Soemarno; Finance Minister Heng Swee Keat; Brunei's Minister of Development Haji Suhaimi; Thailand's Minister of Industry Uttama Savanayana; and Ms Indranee Rajah, Minister in t
(From left) Indonesia's Minister of State-Owned Enterprises Rini Mariani Soemarno; Finance Minister Heng Swee Keat; Brunei's Minister of Development Haji Suhaimi; Thailand's Minister of Industry Uttama Savanayana; and Ms Indranee Rajah, Minister in the Prime Minister's Office and Second Minister for Finance and Education, at the launch of Infrastructure Asia yesterday.ST PHOTO: MARK CHEONG

Initiative part of effort to position S'pore as Asia's infrastructure hub

A dispute management protocol has been set up to help parties involved in infrastructure projects to manage disputes and minimise time and cost overruns.

The initiative - part of efforts to establish Singapore as Asia's infrastructure hub - was announced by Finance Minister Heng Swee Keat yesterday.

He also launched an organisation called Infrastructure Asia that will bring together different players to work on infrastructure projects.

Speaking at Enterprise Singapore's Asia-Singapore Infrastructure Roundtable, Mr Heng said: "Infrastructure demands are large. The Asian Development Bank estimates that from 2016 to 2030, infrastructure needs for Developing Asia will reach US$26 trillion (S$35.8 trillion), or US$1.7 trillion a year.

"Singapore hopes to contribute to the global infrastructure effort, especially here in Asia, by leveraging the numerous players across the infrastructure value chain that are present here."

He added that the country hopes to find new ways to mitigate risks and improve the bankability of infrastructure projects.

The Singapore Infrastructure Dispute-Management Protocol (SIDP) launched yesterday involves parties in a project appointing a dispute board comprising up to three neutral professionals who are experts in fields such as engineering, quantity surveying and law.

CRITICAL GAP

Singapore is a leading international dispute resolution hub. We have recently also moved to be an infrastructure hub for Asia. We realised that there is a critical gap in the infrastructure space - the need for more cost-and time-efficient resolution of infrastructure disputes, facilitated by experts.

MS INDRANEE RAJAH, Minister in the Prime Minister's Office and Second Minister for Finance and Education, on the need for more efficient dispute resolution.

The board will follow the project from the start to the end and help manage issues that may arise through dispute avoidance and resolution processes.

Mr Heng noted: "The SIDP takes a more preventive approach by proactively managing differences and disputes using an array of dispute resolution options throughout the project, and prevents them from snowballing."

He added that the protocol leverages Singapore's trusted legal system and expertise in dispute resolution.

The Ministry of Law, which launched the protocol, noted that as infrastructure projects are typically complex and involve multiple parties, differences and disputes are sometimes unavoidable and can result in delays and higher costs if not managed well.

Infrastructure, mining, and oil and gas projects have, on average, cost 80 per cent more than budgeted and run 20 months late, it added.

Ms Indranee Rajah, Minister in the Prime Minister's Office and Second Minister for Finance and Education, said: "Singapore is a leading international dispute resolution hub. We have recently also moved to be an infrastructure hub for Asia.

"We realised that there is a critical gap in the infrastructure space - the need for more cost-and time-efficient resolution of infrastructure disputes, facilitated by experts."

Mr Chow Kok Fong, chairman of the SIDP working group, said the board appointed for a project would understand the parties involved and tailor dispute management strategies to their specific situation, as it would be involved from the outset.

"Issues usually grow in severity and become more costly. With this protocol, problems can be tackled while they are still small. This also gives assurance to investors because it contains their cost risk," he added.

A version of this article appeared in the print edition of The Straits Times on October 24, 2018, with the headline 'Protocol to manage disputes in infrastructure projects early'. Print Edition | Subscribe