Value for money in Large Public Sector Infrastructure Projects

Date: 4 February 2013

Parliamentary Question for Oral Answer by Laurence Lien:

To ask the Deputy Prime Minister and Minister for Finance what measures are in place to ensure that there is sufficient procurement, project management and quantity surveying expertise such that the large public sector infrastructure projects are truly value for money.

Reply by DPM and Finance Minister Tharman Shanmugaratnam: 

1. The government’s approach to maximising value-for-money in large public sector infrastructure projects is first, to put in place systems and processes to optimise project design and cost efficiency; and second, to strengthen procurement and project management capabilities.

Let me touch on processes to optimise project design and cost efficiency.

2. We introduced the MOF Gateway Process in 2010 to strengthen the rigour of the approval process for large development projects. Under this process, projects above $500m in value are subject to a series of reviews - spanning concept, design and costs - by a Development Projects Advisory Panel (or DPAP). The panel comprises senior public officers and industry practitioners with deep technical expertise and experience in major infrastructure development. In addition, large projects are also put through Value Management workshops to refine their design in order to maximise value and cost efficiency.

Let me say something about how we strengthen public sector project management capabilities

3. So apart from this Gateway process, we are focusing on procurement and project management capabilities. Government agencies that undertake large infrastructure projects on a regular basis, such as the Land Transport Authority and JTC Corporation, have dedicated units and staff overseeing the management of infrastructure projects. Over the years, they have built up substantial in-house capabilities in procurement and project management.

4. To address the needs of Government agencies which do not have such expertise, the Centre for Public Project Management or CP2M was set up in January 2011 with the aim of strengthening project management capabilities across the whole of government. CP2M is staffed by experienced officers from various construction-related disciplines such as quantity surveying and project management. It provides advice and guidance to Government agencies both on design optimization, as well as robust project management, including risk management. CP2M also helps agencies build their own capabilities in these areas, and in some instances provides project management services directly to agencies upon request.

5. I would like to share an example to illustrate these points. This has to do with the Singapore University of Technology and Design. In order to promote and improve value for money, the Gateway review of the project, together with inputs from the CP2M team, helped to reduce the footprint of the campus, freeing up land for other uses. This was achieved through the re-routing of a service driveway and the relocation of the tennis courts to the roof of the indoor sports hall instead of the adjacent grounds.

So finally, as part of a broader effort to ensure value for money in government expenditure, the Value-for-Money Review Office under the Accountant-General’s Department conducts reviews of completed infrastructure projects to identify learning points and best practices. The lessons learnt are shared with government agencies, and contribute to building the public sector’s capabilities in infrastructure development.