New measures to raise productivity in construction sector

SINGAPORE: Senior Minister of State for National Development Lee Yi Shyan has said the next three years will be a crucial transition period for the construction sector.

Speaking in Parliament on Monday, Mr Lee stressed that firms will have to adapt to the tightened labour supply situation.

This means seizing all opportunities to mechanise, automate and streamline workflow for higher productivity.

This comes on the back of an earlier announcement that the Man—Year Entitlement quota, which is the quota of foreign construction workers that has been allocated to a contractor, for new projects will be cut by 15 per cent in July this year.

This brings the cumulative reduction since 2010 to 45 per cent.

Mr Lee said a paradigm shift needs to be made to create a more efficient industry structure.

This is one that is more professional, better integrated and relies less on manpower.

To achieve this, Mr Lee also announced several new measures to boost productivity in the construction sector.

He said the government will raise both the minimum buildability and constructability score required for all new projects.

It will go up by three points each in July 2013 and be raised by another two points in July 2014.

To improve their buildability score, architects and engineers will need to deliver easier—to—construct design and technologies.

Mr Lee cited the use of prefabricated bathroom units as one example.

A conventional bathroom involves 13 different tasks to construct — including plumbing, plastering and tiling. But for prefabricated bathroom units, these tasks can be conducted offsite.

The completed units are then transported to the work site and hoisted up for installation. Such a method only requires five onsite workers, compared to 20 workers using conventional methods.

Mr Lee added that workers will also be able to install the prefabricated bathroom units twice as fast.

Meanwhile, contractors will also have to make use of more manpower—saving construction methods to meet the higher minimum constructability scores.

Mr Lee said: "For instance, climbing scaffolds, which can be mechanically lifted to the next floor, only require four workers to install it, compared to the traditional scaffold system which requires six workers."

According to the Building and Construction Authority (BCA), most building projects are just meeting the minimum buildability and constructability requirements.

It added that based on past projects, a five—point increase will yield manpower savings of approximately 10 to 15 per cent.

Mr Lee said the public sector will take the lead in supporting the adoption of higher requirements.

The tender process for the public sector will be tweaked.

Mr Lee said: "From July this year, consultants and contractors with high buildability and constructability score records respectively can score higher in the Quality component in their tender bids, giving them an edge over other bids.

"Under our tender evaluation framework, it does not necessarily mean that bids with the lowest price will always win the tender."

As for private developers, Mr Lee said his ministry is exploring for new government land sales for private and industrial development to specify a new requirement of higher buildability and constructability scores.

To further support productivity efforts, BCA will also enhance its S$250 million Construction Productivity and Capability Fund (CPCF) to boost incentives and support for companies.

The co—funding level of the Mechanisation Credit (MechC) will be raised from the current 50 per cent to 70 per cent.

This is for equipment which can achieve at least 30 per cent improvement in productivity.

The funding will help firms lower the cost of acquiring or leasing equipment.

Likewise, it will also raise the support level for the Productivity Improvement Project (PIP) scheme from 50 to 70 per cent.

It is hoped that this will encourage the re—engineering of work processes to achieve at least 30 per cent higher productivity.

The cap for firm—level projects will also be raised from S$100,000 to S$300,000.

To date, S$80 million, or one—third of the S$250 million, has been committed.

The fund is benefiting more than 2,300 individual firms, of which more than 80 per cent are small firms.

BCA said all this could spell good news for Singaporeans.

Dr John Keung, chief executive officer of the Building and Construction Authority, said: "We should see a cleaner construction site — less dusty, less noisy, less impact on residents living around the site.

"The second thing we should see, with more pre—fabrication, pre—cast off—site, is that you can do better co—ordination. So you can shorten your construction time. I think all these are important to the construction industry."

Meanwhile, a new tier for industry—level projects with more productive technologies and methods will also be introduced.

Mr Lee said projects gaining 40 per cent productivity improvement and are game—changing can enjoy PIP funding of up to S$5 million.

The government will also introduce a MechC referral Programme to incentivise main contractors to refer their sub—contractors to CPCF programmes.

Mr Lee added that BCA will continue to help the industry look for other new resources to support the restructuring of the industry.

For instance, BCA will set aside more land for the production and storage of pre—cast, prefabricated components and heavy equipment.

— CNA/de/ms