Rationale for Restructuring

In May 02, Minister for National Development Mr Mah Bow Tan announced in Parliament that the Government was looking into the restructuring of HDB, in particular the corporatisation of BDD. HDB is now ready to proceed with the restructuring exercise.

BDD is responsible for the design and development of HDB flats, implementation of upgrading programmes, township development, procurement of construction services and resources, project management, building and design of building structures and infrastructure, and land surveying and administration.

The division has accumulated a wealth of technical experience and expertise relating to the design and development of HDB estates over the past four decades. The formation of HDB Corp will give BDD the autonomy and flexibility to leverage on its current strengths to venture into housing development projects overseas.

The building programme has slowed down, and HDB is moving to the Build-to-Order system. As the funding of BDD’s operation is based on volume of works, it will have to be re-positioned to be more flexible.

The restructuring is also to focus HDB’s role as the public housing authority in policy formulation and implementation, to ensure that its policies and management are in tune with the changing needs of society. It will also pave the way for greater private sector participation in the public housing sector.

Restructured HDB

HDB will continue to provide affordable public housing of high quality to eligible Singaporeans. It will continue to sell HDB flats and ensure their affordability, formulate and administer public housing policies/schemes, administer lease and tenancy matters pertaining to HDB flats, provide mortgage financing to eligible HDB flat buyers, and carry out other functions as the public housing authority.

After restructuring, the current Building and Development Division will be re-organised into three new departments under the 'Building Group'. It will exercise building control and regulatory functions. It will also be responsible for the planning and research of public housing developments, co-ordinating the upgrading programmes, project cost / contracts management, processing and approval of building plans, construction safety, and research and development of building technology. Please refer to Annex 1 for the new organisation chart.

The restructuring of HDB will be implemented such that it will not affect the quality of the various public housing programmes and the impact on the public will be minimal.

For the first three years, the design and development projects of all HDB projects, including the various estate renewal programmes, such as MUP, IUP Plus and SERS will be assigned by HDB to HDB Corp to provide continuity and minimise disruption to the public. In the 4th year, 10% of HDB projects will be outsourced to the private sector. This will increase to 30% in the 5th year and to 50% in the 6th year. The pace of outsourcing thereafter will be reviewed by the end of Year 6. HDB Corp will be allowed to compete for non-HDB jobs only from Year 5 onwards when 30% of HDB projects are outsourced. From Year 6 onwards, it will also be able to compete for HDB jobs that will be outsourced to the private sector. This phased approach will pave the way for the private sector to be more involved in the development of public housing.

The Ministry of National Development (MND), HDB management and HDB Staff Union have been working closely together to ensure that, in this restructuring exercise, the welfare of all HDB staff is looked after. HDB CEO had briefed all the 8,000 HDB staff, including the 3,000 in BDD, on the rationale of the changes and how they will be affected.

The new HDB Corp will take in about 800 to 1,000 staff. Another 800 Clerks-of-Work will be employed by HDB Corp on contract basis. 600 to 800 BDD staff will be needed to carry out the functions of the new Building Group while others may be redeployed to fill vacated posts elsewhere in HDB, subject to availability and skills match.

HDB has conducted a survey to gauge the preferences of all HDB staff for the options available to them. Based on the survey results, about 900 staff have indicated that they would opt for early retirement under the Special Resignation Scheme (SRS) and have asked to leave HDB voluntarily. HDB will proceed to plan its manpower requirements and redeploy and retrain staff accordingly. HDB assesses that it is unlikely that there will be any retrenchments of HDB staff as a result of this restructuring exercise.

________________________________________________________________

Issued by : Ministry of National Development/

Date : 26 February 2003

-------------------------------------------

Annex 1