Source : Straits Times - 7 Feb 2009
THE Government is helping struggling small- and medium-sized contractors to get through this crisis with the offering of a range of small projects, each valued at $50 million or less.
About $1.3 billion worth of such projects, from upgrading lifts and parks to schools, will be tendered out this year.
It will bring the total value of small- and medium-sized public-sector projects this year to $4.8 billion.
This is a significant rise of 67 per cent over the average annual value of such projects awarded in the past five years, said Ms Grace Fu, Senior Minister of State (National Development) during the Budget debate on estimates for her ministry.
She was answering questions raised on the sustenance of the construction industry.
Overall, government demand, estimated at $18 billion to $20 billion this year, will make up for the slack in private-sector demand, she said.
The value of private-sector contracts is projected to drop by 55 per cent to 75 per cent, to anywhere between $5 billion and $9 billion this year. Thanks to government demand, total contracts to be awarded this year are estimated at $22 billion to $29 billion, compared with a record $34.6 billion last year.
‘Although the total annual demand will moderate to between $20 billion and $29 billion from 2009 to 2011, this is still substantially higher than the average annual demand of $13 billion from 1998 to 2006,’ Ms Fu said.
Public-sector demand will remain strong over the next two to three years, and help generate a sustained level of construction activities, she said.
Some of the small projects costing between $1 million and $8 million include the upgrading of hospital facilities, community clubs and parks and park connectors.
The medium-sized projects are set to include road improvement works worth about $2 million to $25 million, and the construction of indoor sports halls worth up to $27 million per bulk project.
The projects that may cost as much as $50 million include the upgrading of schools, lift upgrading and construction of rental flats.
The Government is ramping up lift upgrading and rental flat construction. It had earlier said the move to bring back these small projects, which were deferred during the building boom, is aimed at helping small- and medium-sized firms as the bigger firms already have jobs on hand.
The move will also help to sustain manpower demand in the construction sector, which requires a core group of professionals and skilled workers.
‘Many construction firms are, in fact, looking to hire more workers,’ Ms Fu said.
In a recent Building and Construction Authority survey of about 1,500 firms in the sector, half of them indicated that they are short of manpower, she added.
‘While we tackle the immediate concerns of the economic downturn, the Government will also remain focused on the long-term goal to upgrade the construction sector,’ said Ms Fu.
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