http://www.businesstimes.com.sg/arch...ity-3-20130312
Published March 12, 2013
New building rules to help boost productivity to 3%
By ong chor hao
[SINGAPORE] Developers may have to face a higher set of construction standards for private and industrial developments for new Government Land Sales (GLS) sites than that which is already to be raised over the next two years.
They may also have to meet productivity requirements for existing bonus gross floor area (GFA) schemes.
Senior Minister of State for National Development Lee Yi Shyan said yesterday that the government was exploring these options, as part of a broader package of measures to boost productivity in the construction sector.
Overall, the new measures by the Building and Construction Authority (BCA) cover two areas: higher buildability and constructability requirements and enhancing the Construction Productivity and Capability Fund (CPCF).
BCA will raise the minimum buildability and constructability score requirements by three points each for all new projects from July, and another two points in July next year.
Buildability refers to how the design of a project affects labour usage. The constructability score measures the level of adoption of labour-efficient construction methods and processes.
Mr Lee, who was speaking at the Committee of Supply debate for MND, said this was aimed at encouraging stakeholders to come together early "for upstream coordination and integration".
"Our Government Procurement Entities (GPEs) with new projects will adopt standards higher than the minimum standard, starting later this year, to lead the way of change," Mr Lee said. This will affect new public-sector projects and potentially private residential and industrial developments.
BCA said a five-point increase in the buildability score can yield manpower savings of about 10-15 per cent, based on past projects.
"So getting it right from day one is very important," said John Keung, CEO of BCA, in a separate briefing. He noted that many projects meet just the minimum scores required.
BCA will also give tendering advantage to consultants and contractors with good buildability and constructability records for public sector projects from July 15. Bonus incentives are also being explored.
As for enhancing the $250 million CPCF, BCA will raise the funding level for the Mechanisation Credit (MechC) scheme and the Productivity Improvement Project (PIP) Scheme to 70 per cent from the current 50 per cent, for firms that improve productivity by 30 per cent. This will take place from April 1.
Further, funding caps under the PIP scheme will be raised to encourage more firms to bring in new technologies. The cap for firm-level projects will be raised to $300,000 from $100,000. At the industry level, projects gaining 40 per cent productivity improvement and are "game changing" can have PIP funding up to $5 million.
Finally, contractors can earn an additional $20,000 credit to increase their funding cap for each successful referral to the MechC scheme.
The list of construction equipment that qualifies for the Productivity and Innovation Credit has also been increased from four to 39.
The goal for the construction sector is to have productivity growth of up to 3 per cent each year up to 2020. Last year, the figure was minus 0.2 per cent.
Mr Lee said he was aware of the "severe pressures of manpower crunch and rising costs" faced by the sector, and referred to the 15 per cent cut in Man-Year Entitlement (MYE) quota in July and higher foreign worker levies.
But Mr Lee said unconstrained growth of foreign workers is unsustainable: "We must therefore give up the old ways of doing things and we must innovate."
Rising construction costs could have a knock-on effect, noted Png Poh Soon, head of research and consultancy at Knight Frank Singapore.
It may affect developers' ability in cutting prices to drive sales or to pass the cost to consumers, with an uncertain demand outlook following the latest cooling measures and given a steady supply of upcoming projects.
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