The President of the Singapore Contractors Association (SCAL) Dr Ho Nyok Yong has urged its members to be vigilant when it comes to tendering new projects.
Speaking at the 77th SCAL Annual Dinner on 2 September 2014, he added contractors must ensure all costs are included in the bidding.
There have been numerous factors which have raised operational costs significantly, such as the substantial increase in workers’ levies. “Just in this year’s Budget, the levy for basic skilled workers (R2) has increased again from $600 to $700 with effective from July 2016. Like previous years, once again construction companies involved in longer-term projects will feel the immediate impact of this hike,” Dr Ho said.
“Additionally, the market has become very competitive. The tender prices for new projects are generally low and some projects have already experienced cost overrun,” he added.
Dr Ho also said private sector demand for construction is expected to moderate while public sector projects are expected to contribute to the bulk of the industry’s total demand at about 60 percent. “The less favourable outlook for private projects is due to a series of cooling measures by the government to stabilise the property market and the substantial supply of completed housing units coming on-stream over the next few years.”
For 2015 and 2016, average construction demand is projected to be sustained at between $25 billion to $34 billion annually, he added.
Photo by Ziad; Wikimedia Commons
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
