New expressway may cost up to $5b

THE new Marina Coastal Expressway (MCE), which will link the new downtown to the western and north-eastern suburbs, is busting its budget in a big way.

With four out of six major contracts awarded, expenditure on the 5km-long underground and undersea road has already hit $3.1 billion - $600 million more than its $2.5 billion estimated price tag.

When the five-lane dual-carriageway expressway opens in 2013, it could cost between $4 billion and $5 billion, which will make it the costliest road here for years to come.

The Land Transport Authority (LTA) has attributed the cost overrun to a general spike in construction cost, and also to poor soil conditions that required strong temporary walls to prevent accidents.

A former LTA executive said: ‘The cost is staggering. Compared with it, the KPE is nothing.’

The 12km-long, largely underground Kallang-Paya Lebar Expressway (KPE) cost $142 million per km, nearly four times the $37.5 million spent on the Central Expressway in 1991.

Another expensive road to come is the 21km-long, $8 billion North-South Expressway to link Thomson to the city. To be completed in 2020, it is now expected to cost $381 million per km.

But should the MCE hit $5 billion, it would top them all, costing an unprecedented $1 billion per km.

The project is so massive that civil works have to be carved up into six portions, so that the builders are not overstretched.

Even so, industry players said each portion would pose a cash-flow challenge to builders. The civil contracts have so far been secured by Ssangyong Engineering & Construction, Samsung C&T, Penta-Ocean Construction and Sato Kogyo-Daelim Industrial - all foreign groups.

Elaborating on the cost spiral, LTA chief executive Yam Ah Mee said construction costs had gone up.

‘Given the poor soil conditions and the reclaimed land at the location where the MCE will run and the many engineering challenges, it is important that we put in place a more comprehensive and robust temporary wall system for the tunnel excavations.’

Construction industry observers said such beefed-up engineering requirements - mandatory since the Nicoll Highway collapse in 2004 - contribute to the higher costs.

The LTA declined to reveal the revised cost of the project, saying that doing so could influence bids for the remaining contracts.

The MCE joins the newly opened KPE to the Ayer Rajah Expressway. It links the new Marina South financial centre to the rest of Singapore.