Drive to Raise Construction Productivity in Singapore

Salman Younus
A tightened workforce and more stringent buildability and constructability requirements are impacting construction costs across all sectors.

According to the Building and Construction Authority (BCA), growth in the construction industry in Singapore is projected to remain steady at S$31-38 billion in 2014 as compared to last year's S$35.8 billion expenditures. However, despite this optimism, there is a reason for caution as revisions in government policies will continue to impact both clients and construction firms if traditional construction methods are not updated to meet the changing construction environment.

Government policies

Singapore’s Ministry of Manpower (MOM) continues to urge businesses to invest in productivity growth and reduce reliance on low-cost transient immigrant workforce. Currently, the construction industry accounts for approximately 35-40% of the nation's work permit holders. Reliance on foreign low-skilled labour has been necessary to help support the economic growth, particularly with the rise of the Singaporean workforce into professional, managerial, executive and technical roles. However, the steep increase of foreign workers over the past decade and difficulty in attracting local skilled workers into the industry has prompted Government initiatives and policy revisions to address this issue.

...revisions in government policies will continue to impact both clients and construction firms if traditional construction methods are not updated...

Man-year Entitlement (MYE) - quota for new projects has been periodically reduced by up to 45% since 2010. MYE is a work permit allocation system introduced in April 1998 that regulates the number foreign workers on a specific construction project. The recent cutback further limits conventional resourcing method of builders.

Levies on foreign workers are set to rise in July 2014 and again in July 2015, increasing construction cost.

Mandatory Buildability and Constructability framework - the minimum score for all new projects was increased by 3 points each in July 2013, and is anticipated to rise by another 2 points in July 2014. The initiative is aimed at encouraging builders, architects and engineers to adopt labour-efficient building designs, technologies and methods to enhance productivity and reduce manpower at construction stage. To reinforce the framework, BCA has also introduced the Buildable Design Score and Constructability Score as compulsory quality attributes when evaluating tenders for public sector projects. This mandates the public sectors which form a substantial portion of the construction industry to lead by example. Additionally, it gives recognition to consultants and builders who have achieved higher buildability and constructability in their projects.

Government initiatives

To minimise the impact of rising construction costs, potential project delays resulting from reduced manpower and lower profit margins, BCA has introduced the Construction Productivity and Capability Fund (CPCF), a financial incentive aimed at workforce development, technology adoption and capability development in Singapore's built environment. The overall objective is to raise productivity by 20 to 25 per cent by 2020.

The overall objective is to raise productivity by 20 to 25 per cent by 2020.

Similarly, construction firms will need to play a part by tapping into the CPCF scheme, to assist with fundamental transformations in the way they operate to adapt to the changing construction environment. But it is often met by resistance as the tried and trusted traditional methods are hard to let go. Singapore's dependency on foreign labour and manpower within the construction industry over the years (of up to 50% on some projects) in comparison to Japan and the U.S make these changes a necessity.

Paradigm shift required

As 2014 brings both optimism and caution, a significant paradigm shift to embrace government initiatives that are aimed at implementing productive construction methods to reduce reliance on manpower in construction is necessary among industry players.

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