More plastics?

Our construction industry has to catch up in terms of productivity. If we benchmark ourselves against Australia, Hong Kong, Japan, we are lagging behind inconstruction productivity.

There are many reasons for under-performing. But whatever the cause, we must fix the problem and raise our construction productivity.

Greater standardisation and off-site precasting of building components are important strategies. There are also other avenues to complement these efforts, which involve some innovation. Every effort counts.

Take the example of water pipes. A typical HDB block with 100 flats would use about 3 kilometres of water pipes.

Traditionally, many buildings use copper pipes. These pipes are jointed using welding. This requires skilled labour and is time consuming.

This is an opportunity for productivity gain.

HDB now uses a more productive method to join copper pipes. Through a “press fit” method, they crimp together the pipes to be jointed. The press fit method does not involve skilled labour nor high temperatures; it has led to substantial productivity gain. Although this is good, HDB continues to explore the use of other materials to push for higher productivity.

In Europe and the US, the industry uses the flexible plastic water piping, for indoor water piping. They use a material called cross-linked polyethylene, or PEX for short, which is a durable and light plastic.

Being plastic, PEX is very flexible and needs less joints compared to the conventional copper piping system. Installing PEX piping also doesn’t require welding.

These advantages mean the time taken to install PEX piping is 40% less than copper pipes using the conventional welding method.  As an illustration, two workers can install PEX piping for 3 toilets in one day, compared to only 2 toilets when using copper piping.

One local plumbing SME contractor, OSK Engineering is a pioneer in using PEX systems and has received funding support from BCA’s Construction Productivity and Capability Fund. The PEX system is now part of PUB’s approved list of indoor piping systems. Currently, more than 20 private sector developments, including, factories, offices, hotels and housing projects, are using the PEX system for their indoor piping needs.

BCA will continue to work with the industry, raise awareness and promote labour-saving technologies. Productivity is the way forward for the industry.  Every bit counts towards better construction productivity.

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Meeting diverse demands

Recently, I posted a blog on CEA’s first year of operation.  In response, many Singaporeans offered valuable feedback and suggestions.  I thank you all.

Not surprisingly, there were differing views on some subjects:

•  Some wanted to prohibit real estate agents from handling HDB resale transactions;
• Others demanded the opposite: a stop to DIY resale transactions;
• Some called for greater protection of consumers from estate agents;
• Others appealed for protection of estate agents from consumers who do not discharge their commitments.

But there were many common calls:

• To improve on dispute resolution mechanism;
• To improve the quality of Continuing Professional Development courses;
• To raise the minimum education qualification of salespersons;
• To enhance public education for consumers.

We will study the ideas and see what are practical.

My bias will be towards the consumers, but to do so in a fair manner.

For instance, I don’t think it is appropriate to prohibit agents from handling HDB resale transactions.  Neither is it necessary to mandate that all resale HDB transactions should be via agents.

Indeed, HDB does not mandate owners to go through an agent to close a deal.  Last year, one in ten conducted their resale transactions the DIY way.

HDB provides a useful DIY checklist to help short cut the process.  In its ongoing consumer education efforts, CEA will help owners better understand their rights and responsibilities if they decide to go DIY.

Should owners decide to engage a salesperson to help them, the amount of commission is something that can be determined between the owner and the salesperson.   However, CEA does encourage the use of the Estate Agency Agreement form to put on record the amount of commission agreed by both parties from the start.  This will avoid future disputes.

Where there is a dispute arising from the Estate Agency Agreement, parties can make use of CEA’s dispute resolution schemes.  Some have suggested shortening the time frame for dispute resolution.  CEA will look into this.

The industry itself can and should do more.  CEA will encourage salespersons caught in disputes to turn to their companies and KEOs for guidance in the first instance.  But if there is evidence of an infringement of CEA’s regulations and policies, CEA will promptly investigate and take appropriate actions against the errant salespersons.

Meanwhile, CEA will introduce more courses for its 30,000 registered salespersons to meet their diverse learning needs and the dynamic nature of the market.

At one year old, CEA is still growing in capability and capacity.  There is more work ahead, and if done well, CEA can make a positive difference.

We are united on one common aim, and that is to continue to raise the professionalism of the industry.  That will be win-win all round.

 

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Record Breaking

Recently, CNN featured a record-breaking construction feat in Changsha, China where a new hotel of 30 storeys was built in 15 days:

Our Building and Construction Authority (BCA) is visiting Changsha to glean some learning points for us.

Different cities have different building challenges. As a result, they deliver different construction speeds. One measurement of construction speed is the cycle time – the average time taken to complete one storey in a typical high-rise building.

If we do a simple comparison of Singapore’s cycle time against Hong Kong and China:

Hong Kong is a star performer. Why?

HK does not allow any foreign construction workers. It has its own pool of local skilled construction workers who command very high wages. Typically their construction labour cost is about 5 times that in Singapore.

With such high labour cost, developers must find ways to standardise the construction work as much as possible to save on labour cost. As a result, their productivity is high and construction pace is fast.

(For the same reason, in Hong Kong, once the design is finalised, developers often do not entertain changes so construction can proceed with minimal disruption.)

China’s construction productivity is actually not that high. (The Changsha project is unusual.) However, China has the advantage of ample resources that can be quickly mobilised to achieve fast construction, often 24 hours round the clock.

That said, we should try to up our construction productivity. BCA is pushing for more buildable designs and construction. Through the new Constructability Scoring system, BCA hopes to get contractors to move away from traditional labour-intensive construction to more off-site and more advanced methods. Its $250 million Construction Productivity and Capability Fund offer incentives for contractors to adopt productive systems and machinery.

We must also raise the skill level of construction workers. We must reduce the influx of less skilled foreign workers and steer the industry towards labour-saving construction methods. BCA is facilitating the upgrading and retention of experienced workers, and grooming a group of productivity managers to lead productivity improvements at construction sites.

BCA is also promoting Building Information Modelling to help the design and construction team to anticipate potential problems and resolve them before construction starts. This will help speed up construction, minimise rework and wastages, without compromising quality. The early involvement of contractors can further smoothen the construction process later on.

Developers leading the productivity drive is a key success factor, as they finance the project and drive the entire construction value chain from consultants to contractors and suppliers. This is evident in the case of HDB where prefabrication and other efficient methods of construction are specified into the building contracts.

As a rule, the more we can make off-site, the less time we need to be on the construction site itself. And the earlier we finalise the design process and involve the contractor, the faster the construction can proceed.

Faster can indeed be better, all round.

A Very Busy First Year

We set up the Council for Estate Agencies (CEA) to raise the professionalism of the industry so as to better protect consumer interest. CEA has now completed its first full year.

It was a busy first year – licensing more than 1,500 estate agents, registering over 33,000 salespersons, setting industry practice guidelines, conducting examinations, organising consumer talks, publishing its first consumer guide, and handling over 1,400 complaints.

Out of the many complaints received, CEA has closed more than 75% of the cases.  Many letters of advice and warnings were issued.  A handful of cases ended up in court or face disciplinary hearings.

We are grateful for the strong support from the industry and the public.  Many have welcomed the regulation and its enforcement.

It takes time to build consumer trust and to fully professionalise the industry, which had been largely unregulated in the past.

We had a good one year, but it is only the first step.

Let us now build on this foundation.  I have asked CEA to press ahead on several fronts.  First, see how the Estate Agency Work Regulations can be further refined.  Second, improve on industry development, especially in Continuing Professional Development and ethics. Third, do more on consumer education so that consumers know their rights and responsibilities, and how to conduct sale/purchase transactions with due diligence.  Fourth, continue to consult and address the industry’s concerns.

As an example, we are reviewing the CEA-Dispute Resolution Mechanism to see how we can incorporate the Small Claims Tribunals to facilitate resolution.

Please continue to support the CEA.  Share your suggestions on how CEA can better serve your needs.

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LEGO’s The Way

Photos courtesy of HDB

This year, public housing will add another 25,000 units through BTO. Together with the earlier BTO projects still in construction, public housing will need some 30,000 construction workers, largely foreigners. The latter will need to be housed, mostly via foreign workers’ dormitories. Locating the dormitories is however a tricky business. Most Singaporeans will rather they be sited miles away. This is becoming increasingly difficult.

But we need to build more flats, and quickly.

We cannot do without foreign construction workers, but we can try to build more with less, if we raise construction productivity through standardisation and pre-fabrication. This is possible if we push for higher buildability and constructability in projects, coupled with the levy and manpower policy controls and other measures in the Construction Productivity Roadmap including, for example, more extensive use of dry walls. I am optimistic that this can be done, especially with HDB’s support as the biggest building developer in town.

Walls, floors, doors, toilets, rubbish chutes etc can all be standardised and building components can be manufactured off-site in bulk, in prefab factories. This will eliminate most of the labour intensive, dirty and cumbersome wet work on site, making construction sites cleaner, tidier, less dusty and less noisy. Off-site conditions are mostly better controlled, allowing productivity measures and quality checks to be carried out more effectively.

We have made some progress in this area in recent years. For public housing, 70% of building components are now precast where various parts of a HDB flat are fabricated off-site and then transported to the construction site for assembly. Prefabrication technology is now indispensable in HDB’s building programme.

I visited two prefab plants recently. They have helped raise construction productivity and it is great.

However, at the next stage of development, the prefab plants themselves also need to be transformed. The plants I visited are still relatively land and labour intensive. While they need less labour than construction sites, they still need many workers.

Our prefab industry is gearing up to up their own productivity. How?

The Netherlands and Germany boast precast plants which are highly computerised and automated, in multi-storey facilities. BCA labels such modern prefab plants as multi-storey Integrated Construction and Precast Hubs (ICPHs). These ICPHs will help us optimise land use and achieve higher productivity through automated production processes. BCA has formulated a masterplan for the development of these multi-storey ICPHs.

A local contractor, Tiong Seng Contractors, is paving the way, setting up Singapore’s first ICPH at Tuas. It will incorporate computerisation and semi-automated precasting. By doing so, they expect to cut their manpower needs by up to 70%:

The new ICPH needs only a third of the workers to produce almost double the tonnage of precast components. BCA is providing Tiong Seng with some funding support through its Construction Productivity and Capability Fund.  BCA will also be making more land available for such ICPHs in its masterplan.

I hope more contractors will come forward to participate in implementing this Construction Productivity Roadmap to transform our construction industry and raise its productivity. We will still need foreign construction workers, but in lesser numbers.

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En-Bloc Fever Receding?

 

I entered politics in 2001 and my first constituency was Moulmein, with a large number of private properties, mostly old apartments.

I was MP there for 5 years. During the latter half of that period, I saw many of my residents in several private estates becoming en-bloc millionaires overnight.  House visits to these estates inevitably ended up chatting about en-bloc, how much money they would be making and where next they would be going.

En-bloc has its pluses and minuses. It can rejuvenate the city by removing old and dilapidated buildings.  It enables owners to trade their units at a premium price if their units are sold collectively.

But if done excessively, en-bloc activities can waste resources, if relatively new buildings are prematurely demolished.

Moreover, not everyone favours living through an en-bloc exercise.  Some owners resent losing the home and community they have grown to be comfortable in.  In some instances, neighbours have turned against each other in the lead-up to obtaining the requisite 80% signatories.

En-bloc activities reached feverish heights in 2006 and 2007, when some 10,200 housing units were sold for redevelopment. This added stress to an already hot property market as housing units were removed from the market, and displaced owners or tenants had to look for replacement properties to stay and invest in, pushing up property and rental prices.

Private residential projects and units sold en bloc by year

Last year, about 1,400 units were sold collectively.  This en-bloc number is low compared to the peak in 2007.

It looks like the en-bloc fever is receding.  If so, it signals the increasing stabilisation of our property market.  This will be a good development for Singapore in the Year of the Dragon.

Happy New Year to all!

 

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We Are What We Eat

 

 

In a recent blog post, I highlighted the significant shift in Singaporeans’ consumption pattern, from fresh/chilled fish to frozen fish.  From 2002 to 2010, frozen fish has expanded its market share from 20% to 40%.

The same trend is observed for the other meat items (except beef which has been high on frozen).  Between 2002 and 2010, the market share of the frozen option has shot up:

The consumption trend for chicken is representative:

Total consumption has gone up by 40% from 115,000T to 161,500T. The increase has largely gone to frozen chicken.

In terms of per capita consumption, the figures for 2010 are tabulated below.

Note the pecking order: chicken tops the chart, followed by fish and pork, with beef and mutton several notches down.

From the health view point, this preference for white meat is commendable.

Even more commendable is the consumption for vegetables.  At 96kg (in 2010), vegetables exceeded all the meat items.  As a former Health Minister and a vegetarian, I say: well done, Singaporeans!  Have a healthy year ahead.

 

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Who Bids High?

 

 

We monitor HDB resale prices, and publish them for information of potential buyers and sellers.  Transparency helps make the market run better.

The data collection and analysis also enable us to track the extent of COVs paid by different buyer groups.

This subject cropped up in Parliament two days ago.  For completeness, I am sharing the data below:

 

                          *PPOs = Private property owners

 

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An Auspicious Start

Our first BTO launch this year, offering 4,000 new flats in several towns, will close shortly.

The first-timer application rate is currently a comfortable 1.5.  Not surprising.  This is similar to the rate of 1.6 in the November BTO.  Both are good rates; they mean that practically all will get a chance to choose a unit.

Our goal to help young couples get their first homes is coming true.

We can now move on to better help the second-timers. Their application rate is currently 23.9, compared to 25.9 in the November BTO.

I hope to be able to announce some changes to BTO balloting rules for the next BTO launch in March.

Let me use this opportunity to wish all Singaporeans a Happy Holiday and for the Chinese a great Dragon Year ahead!

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Changing Lifestyle, Changing Preference

Last month, I attended a Wholesale Fish Market event at the Jurong Fishery Port.  The fish merchants told me that Singaporeans were the second largest consumers of fish, after the Japanese, in Asia, in per capita consumption terms.  However, in the same breath, they lamented that their business has been heading south all these years.

I was confused.  Amidst the loud music, they could not explain to me the discrepancy in the two statements.

I speculated that it had to do with the consumers’ rising preference for frozen fish over chilled fish.  The former does not go through the wholesale fish market.

AVA has confirmed it.  Let me share some of their data.

There are two fishery ports in Singapore: Jurong and Senoko.  At Jurong Fishery Port the amount of fish handled dropped by 24% from 78,524 T in 2001 to 60,027 T in 2010. Over at Senoko, the drop was 32% from 14,019 T to 9,522 T.

This in turn is due to changing consumer preference for frozen versus chilled / live fish.  Our consumption of frozen fish (whole, fillet, cuts/steaks) has doubled from 17,150 T in 2002 to 34,297 T in 2010.

Fig 2 shows the changing market share more starkly.

Within a decade, the market share of chilled/live fish has shrunk from about 80% to 60%.  And the declining trend is likely to continue.

This also explains why wet markets are losing market share to supermarkets.  This reflects modern lifestyles of nuclear families with working couples.

Fishery ports and wet markets have to note this lifestyle change, as they formulate their future business plans.

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