Channel NewsAsia
Updated: 11/15/2012 00:40 | By Channel NewsAsia

Budget increase for Downtown Line due to higher costs

Budget increase for Downtown Line due to higher costs

Budget increase for Downtown Line due to higher costs

SINGAPORE: The budget for constructing the Downtown Line rail network increased from S$12 billion to S$20.7 billion, mostly due to construction cost increases.

Transport Minister Lui Tuck Yew revealed in Parliament on Wednesday that much of the S$8.7—billion increase can be attributed to the first stage of the project.

He said the tender was called at a time when construction costs were significantly higher.

Mr Lui said that from late 2007, the sharp growth in overall construction demand in Singapore led to higher costs.

He cited an increase in prices for key materials such as steel bars, which went up by 60 per cent from late 2007 to mid—2008.

He noted that changes made to the original designs of the line also contributed to the increase in costs.

Mr Lui said: "Detailed engineering and architectural plans were finalised only later, as is typically the case for such major projects.

"These detailed plans also took into account URA’s long—term land use plans which were updated after 2007, and hence resulted in significant changes to the original plans for the Downtown Line."

The line was extended from 40 kilometres to 42 kilometres, and an additional 30 entrances were also added to various stages of the line to improve accessibility.

The first stage of the Downtown line began construction in February 2008.

The minister said the Land Transport Authority can still expect some savings from the revised budget if prices of construction materials remain at current levels.

Mr Lui said: "We are very prudent in managing public funds. For all development projects, we ensure thorough scrutiny and review at various stages, and work closely with the Ministry of Finance on cost management and value maximisation."

The minister also cited measures such as bulk supply contracts and the inclusion of overseas international contractors in the tendering process to keep prices competitive.

— CNA/jc

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