Tag Archives: Downtown Line

Project delays caused by tighter rules on foreign workers

Singapore’s construction industry is suffering from late payments and project delays, as contractors are squeezed by higher operating costs and the government’s curb on foreign workforce, according to media reports.

“Construction demand is expected to continue with many big projects such as the MRT line extensions, Changi Airport expansion, but a shortage of workers means projects may cost more and take longer to complete,” said KPMG Singapore Partner for the building sector, Teo Han Jo.

In fact, more than half of the payment transactions in the sector were overdue in the second quarter, with the incidence of late payments increasing by 3.8 percentage points to 51.4 percent, revealed the Singapore Commercial Credit Bureau (SCCB).

Payments are considered late when over half of the amount owed is not satisfied on time, while prompt payments are made when at least 90 percent of the total amount is paid on the stipulated date.

But one of the most pressing issues for construction companies are the high levies on foreign workers. In fact, the operation of a subcontractor working on Downtown Line 3′s Upper Changi Station has been disrupted when it failed to pay such fees on three instances due to cashflow problems.

“Works on the DTL3 (Downtown Line 3) Upper Changi Station are progressing as normal. The sub-contractor . . . has foreign worker levy arrears and the main contractor, Samsung C&T Corporation, is in the process of taking over (its) workers. There is no impact to the schedule of the project,” a representative from the Land Transport Authority (LTA) said.

Despite these issues, the prospect of the construction industry appears promising due to the substantial number of projects in the long-term pipeline, particularly government infrastructure developments, noted Teo.

“Government agencies are also placing more emphasis on quality rather than just prices when awarding projects. The net effect of this for the construction industry is good over the longer term, as it raises overall quality and helps construction companies maintain healthy margins,” she added.

Downtown Line 2 to open in Q1 2016

During a site visit to the upcoming Bukit Panjang MRT station on the Downtown Line, Minister for Transport Lui Tuck Yew said the government is confident of opening the Downtown Line 2 (DTL2) earlier by the first quarter of 2016.

Tunnelling of DTL2 has been completed in June this year, two months ahead of the revised schedule, the Ministry of Transport said in a statement.

According to media reports, DTL2 experienced some issues when one of its main contractors went into insolvency and halted work on the Sixth Avenue, King Albert Park and Tan Kah Kee stations.

However, the Land Transport Authority (LTA) and its contractors managed to recover some of the time lost by adding manpower, re-organising the workflow and innovative work processes.

“LTA and all the contractors will continue to work hard to recover more of the time and bring forward the opening to even earlier than first quarter of 2016 … many of them have been working round the clock, seven days a week. But all these acceleration must be done without compromising safety standards,” Lui said in media reports.

DTL2 is 16.6 km long and will comprise 12 stops connecting Bukit Panjang to Bugis.