Mr John Lim, Chairman of BCA,

Distinguished Guests,

Ladies and Gentlemen.

Last year, the construction sector shrank by 2.1% due to the weak property market. It is expected to remain in the negative territory this year. The public sector continues to be the main force stabilising construction demand, accounting for about 65% of the projects in terms of value. The industry can look forward to about $8.4 billion worth of public sector projects in 2002. Of these, about 60% will be on building works and the remaining on infrastructure projects.

For the next few years, total construction demand is projected to average between $12 to $13 billion per year. The sector is expected to represent at least 6% of our GDP in the coming years, and it will remain as one of the key local engines of our economy that cannot be neglected.

In the remaking of Singapore’s economy, the construction sector is one sector being studied currently by the Economic Review Sub-Committee for Domestic Enterprises. A Workgroup comprising developers, architects, engineers, contractors and suppliers has been formed to look at ways to ensure that the construction industry remains competitive. Various issues are being examined, which includes restructuring the industry through reviewing public sector procurement policies and upgrading capabilities by encouraging more innovation to flourish on the local market.

The Workgroup is also examining possible measures to assist local firms internationalise. The working group is still deliberating and will be expected to complete its work later in the year together with the rest of the Economic Review Committee. We await their recommendations.

Meanwhile, the Government remains committed to strengthening the local construction industry. The 37 recommended measures of Construction 21 report, formulated in 1999, are now in various stages of implementation. They include raising productivity through legislating buildability, the use of IT, raising minimum skill levels and reducing the reliance of foreign manpower via MYE cuts. It will take some time before we reap the full benefits of the measures but already for Year 2001, the construction industry registered a positive 0.2% productivity growth after several years of negative productivity growth. While this is encouraging, we must press on to upgrade the construction sector.

Tonight, I would like to highlight 3 other areas in our C21 efforts that would have a significant impact on the industry. These are the implementation of BCA’s Contractors’ Registry System, incentive schemes to upgrade the firms’ technological capabilities as well as initiatives to improve construction quality.

The Registry has almost completed the processing of applications and will be informing all firms of their new status by the end of this month. From the applications received so far, it is encouraging to note that some bigger companies are consolidating through mergers and acquisitions. For example, there are a few G8 sized-firms teaming up with smaller sized firms or specialist firms. We hope more companies will follow suit. This will enable them to achieve economies of scale and increase their range of competencies. These will be critical success factors if they hope to take advantage of the great market potential in the region and beyond.

Secondly, incentive schemes for upgrading. Despite the downturn, the government has not reduced its incentive schemes for the industry. However the take up is not as high as in the boom years. Some of these schemes have been remodelled to encourage the application and development of new technologies and best practices. These include schemes to speed up management upgrading, the adoption of IT and infocomm technologies and investment in advanced construction equipment. Over the last 3 years, a total of 991 firms had benefited from more than $26 m of grants under the various financial assistance schemes. BCA, together with other government agencies such as Spring (formerly known as PSB), EDB and IES (formerly known as TDB), will continue to review and streamline existing schemes to ensure they cater to the needs of construction firms.

Thirdly, I would like to touch on an aspect closer to the hearts of local consumers - construction quality. Over the last decade, the construction industry’s efforts to upgrade quality have been challenged by the fiercely competitive climate, the revolving pool of foreign workers and the rising expectations of home buyers.

To raise quality, the CONQUAS (or Construction Quality Assessment System) scheme was introduced by BCA in 1989 and has since become the defacto national quality yardstick for the construction industry. CONQUAS was designed to benchmark the quality of construction works against the workmanship standards and specifications. BCA has dedicated a section of its website on CONQUAS scores of projects, which it has assessed, together with the names of developers and contractors. This is to provide information to the public on the quality of workmanship performance of contractors in the building projects completed. In addition, BCA has encouraged greater use of pre-fabricated products that are less dependent on workers’ hand skills.

I am pleased to note that the industry has also taken much initiative to upgrade and deliver better standards to the consumers. For example, some developers reward contractors who achieve good CONQUAS scores for residential projects with monetary incentives while many contractors themselves have also set up quality management systems to ensure higher consistency in workmanship.

To help homeowners make informed decisions, CASE has recently launched its Homebuyers Guide for Building Quality which provides a checklist on acceptable quality standards of common finishes, fittings and components. Hdbay Pte Ltd, a subsidiary of HDB, has just launched a customer rating service to help homeowners engage reliable renovation contractors. The assessment, which are carried out by previous customers will cover areas like workmanship, service, timeliness, design standards, price and reliability. This can be a relevant source of information for homeowners to base their decisions on the choice of a renovation contractor.

Tonight I wish to announce another initiative by BCA to give special recognition to newly completed residential units that achieve high workmanship standards.

This Quality Mark for Good Workmanship will be available to interested developers for their individual residential units. It will be based on the existing CONQUAS system, but applied to individual landed and apartment units. As in the CONQUAS system, the criteria of assessment will be based on the workmanship of the construction rather than the level of luxury in terms of accessories and materials used. Therefore, any type of residential projects could earn the Quality Mark for Good Workmanship.

By choosing to offer the Quality Mark, developers will send a clear signal to all players involved in the project, their commitment to deliver quality products. More importantly, the home buyer will know that the workmanship standards attained are among the best achievable by the industry.

The BCA Quality Mark scheme will be launched in July. BCA will be providing more details and briefings to the industry next month.

I would also like to highlight the new Energy Efficient Building Award that will be presented tonight. This award is aimed at promoting energy efficiency in air-conditioned buildings by giving recognition to building owners, architects, engineers and energy consultants who have integrated energy efficiency into their building design, operation and maintenance.

The construction industry, even as it tries to cope with the many challenges posed by the difficult economic situation, has to keep up with the higher aspirations of Singaporeans for quality products. Those who are innovative and committed have prevailed. Tonight, many of these winners are here to receive their due recognition and may I congratulate them for their fine contributions.

May I conclude by wishing you all continuing success in the years ahead.