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Speech By Mr Tharman Shanmugaratnam, Deputy Prime Minister & Minister For Finance At Opening Of The Third Singapore Construction Productivity Week

31 Jul 2013

Mr Quek See Tiat
Chairman, Building and Construction Authority

Dr John Keung
CEO, Building and Construction Authority

Mr Chua Wee Phong
Chairman, Sphere Exhibits

Ladies and gentlemen,

1. I am delighted to join you this morning at the opening of the Singapore Construction Productivity Week.

2. When the Building and Construction Authority (or BCA) launched the Construction Productivity Roadmap in 2010, we knew that it would be a challenging task to raise construction productivity by 2% to 3% per annum over the next 10 years. Productivity growth for the sector in the previous decade had been very weak (averaging about 0.4% per year in the decade to 2009).

3. I have always taken the view, however, that underperformance in the past gives us the potential for catch-up and outperformance in the future.

4. We have made gradual progress in the last few years1 , but a major journey in productivity lies ahead. There is great scope for us to catch up with practices in several of the developed countries, by adopting better technologies and work processes and upgrading our skills.

5. Everyone knows that the tightness of the labour market is not a temporary situation. The survival and growth of companies in the sector will hence depend on how quickly and effectively we innovate - bringing in solutions that have been found to reduce dependence on labour in other countries, and investing in our own, local innovations as well.

6. The combination of a tight labour market and increased foreign worker levies, together with strong government subsidies for every form of industry innovation - in other words, this combination of pain and gain - is a strong incentive for the upgrading of the sector.

7. We will have to let this process work itself out, so that we move the sector to a new level in the coming years - technologically advanced, highly-integrated, led by forward-looking and dynamic firms and supported by a skilled and experienced workforce.

8. It is both a collective task and one for each player in the construction sector. We must build up new capabilities in the sector, as well as achieve much tighter integration within the construction value chain – from developers to contractors and suppliers. Let me talk about each of these major directions in turn.

I. Building capabilities in new technologies and raising skills

Investing in new technologies

9. There is much scope for the sector to embrace new, labour-saving technologies.

10. Two such technologies are showcased for the first time here at the BuildTechAsia Exhibition: Prefabricated Prefinished Volumetric Construction (PPVC in short) and cross laminated timber (CLT in short). 
While new in Singapore, they have been tested and quickly adopted in countries such as the UK, France, the US and Australia, and shown to yield significant productivity improvements.

11. Adopting these technologies will help the sector to achieve higher buildability and constructability, for which the requirements will be raised in September this year.

12. PPVC involves manufacturing apartment-sized units complete with internal finishes, fixtures and fittings in the factory, which are then transported to the construction site for installation and assembly, in a LEGO-like manner. In Australia, PPVC has been shown to produce savings of up to 50% of both manpower and construction time when compared to conventional methods. And quite apart from cutting down manhours needed on-site, dust and noise are minimised, reducing inconvenience to the public. Volumetric construction also offers better outcomes for quality and site safety as it involves prefabrication in a factory-controlled environment.

13. I am pleased to learn that Nanyang Technological University plans to use PPVC in its new hostel project. When confirmed, it will be the first major high-rise development in Singapore to use this technology.

14. Cross laminated timber or CLT refers to prefabricated solid timber panels that can be used in lieu of concrete and steel for building construction. Like PPVC, it has shown to significantly improve productivity. For instance, the world’s tallest CLT apartment structure, The Forté, a residential project in Melbourne by the Lend Lease group took 30% less time to build with CLT. BCA is thus keen to encourage the test-bedding of CLT in Singapore. Lend Lease Singapore is currently exploring pilot projects to demonstrate CLT’s potential locally.

15. The Government will strongly support the adoption of game-changing technologies and construction methods through co-funding from the Construction Productivity and Capability Fund (CPCF). We are seeing more firms tapping on the fund to adopt a whole range of labour-saving equipment and construction technologies.

16. This includes smaller firms which now comprise 80% of the 2,800 firms that have tapped on the CPCF. B-Mech Engineering Pte Ltd, a subcontractor for fire sprinkler works, received funding to purchase a flexible dropper for sprinkler installation. With this new system, one worker can now install 32 sprinklers in a day, compared to 8 previously – a four-fold improvement. The CPCF was enhanced in April this year2 and I would like to urge more firms to come on board and try out new technologies and methods.

17. As we encourage more pre-casting and pre-fabrication, we will also need more off-site pre-fabrication facilities. We will release sites for Integrated Construction and Precast Hubs (ICPH). The first site was launched by BCA at Kaki Bukit earlier this week. Today, BCA will call the tender for a second ICPH site, and more sites will be available for tender in the coming months. With pre-fabrication, we will see faster construction, cleaner and more environmental-friendly work sites, and fewer workers on-site.

Investing in talent and skills development

18. The second initiative is to invest in talent development and new skills. We have put in place a suite of programmes to attract local professional talent into the construction sector, and raise the skills of tradesmen and workers.

19. BCA Academy is making a further move. It will be starting a new Bachelor programme focusing on construction management. It will be the Academy’s first full-time degree programme, and aims to nurture industry professionals who will be well-versed on the different aspects of the construction cycle, and who in time can help to lead efforts to transform the industry. BCA will announce further details in due course.

20. I would also like to use this opportunity to urge companies to do more in tapping on the BCA’s many programmes and courses to upgrade the skills of your workforce. Under BCA’s Workforce Training and Upgrading (WTU) Scheme, companies will enjoy up to 80% funding support for upgrading their workers, and up to 70% funding support to enrol their PMET staff in productivity-related courses.
II. Tighter integration along the construction value-chain

21. There is another major priority for the sector, besides investing in technologies and skills.

22. We must achieve stronger integration along the value chain of construction, because this too is critical to raising productivity. This refers to integration among developers, architects, engineers, surveyors, project managers, contractors - including better integration between main contractors and sub-contractors - and suppliers. We can use new project management tools and processes to accelerate in this integration. 

23. Developers of course play a key role. They can specify less complex building designs and the choice of construction methods, instead of leaving this to the initiative of the architects and contractors. The idea is not about going for boring designs. Through closer collaboration with these other project stakeholders, developers can achieve distinctive designs while pushing the boundaries of constructability and standardisation.

24. There is particular potential in Building Information Modelling or BIM (a technology that involves the generation and management of detailed 3D building designs). It is not just about technology but a whole new way of working amongst the players in the value chain.

The resulting building models can be easily shared among all stakeholders with minimal loss of information compared to traditional 2D drawings – architects, engineers and builders can co-ordinate, amend and check designs, and receive real-time updates. BIM also allows designs to be tested rigorously and virtually, which minimises errors and reworking on-site, saving time and money.

25. BCA’s survey findings show that 65% of the industry has adopted BIM, more than three times the level of 20% in 2009. Several developers have not only embraced BIM but helped spur its take-up among their partners. I encourage more developers to take the lead in this way.

26. To achieve sector-wide adoption of BIM by 2015, BCA is working with industry associations and our local universities to build capabilities in BIM at all levels. More than 2,000 students and professionals each year are now trained in BIM at our various Institutes of Higher Learning.

27. The Singapore Institute of Architects (SIA) and other members of the Construction Industry Joint Committee will also be collaborating to create a BIM objects library that can be shared. This will save industry players the time and effort to create their own objects such as digital doors and windows.

28. BCA is also collaborating with NUS and NTU to set up Centres of Excellence in BIM. These centres will conduct applied BIM R&D and create new software applications to address the sector’s longer term needs. (In addition, BCA is rolling out a new series of essential BIM guides customised to help beginners across the industry to learn to use BIM in the shortest possible time.)

29. Besides BIM, the Early Contractor Involvement or ECI procurement approach is another important form of integration. It allows contractors to provide inputs to building design and construction methods upstream in the development process, which again can help greatly in ensuring constructability and higher productivity. There are a few ECI models, of which the Design and Build (D&B) and Design-Development-Build (DDB) approaches are familiar to the sector. I hope that you will embrace ECI further in your projects.


30. Over the next few years, public sector projects will account for about half of total construction demand in Singapore. The public sector must therefore continue to lead in pushing construction productivity efforts. We will also continue to work closely with the industry and support our companies in this journey of transformation in the built environment sector.
31. The Singapore Construction Productivity Week is an excellent platform for industry stakeholders to share their experiences in building capabilities in new technologies and skills. Besides the technological exhibits at the BuildTechAsia Exhibition, the Build Smart Conference will allow participants to learn from the experiences of firms that have adopted BIM and other productivity solutions. This will I am sure be a rewarding week.

32. It gives me great pleasure now to declare the Singapore Construction Productivity Week open.

1. Construction productivity, in value-added per worker, grew by an average of about 1% per year in 2010, 2011 and 2012. Site productivity measured in m2 per man-day has grown at approximately the same rate.

2. Since 1 April 2013, the funding level of the MechC and PIP schemes has increased from 50% to 70% for construction firms that can achieve a higher productivity improvement of at least 30%. Smaller contractors, in particular, will benefit from the enhanced Mech C scheme as they can receive higher funding for the purchase or leasing of smaller equipment.