reporter2
06-03-13, 16:53
http://www.straitstimes.com/archive/wednesday/premium/top-the-news/story/construction-smaller-companies-may-fold-project-delays-likely-20130227
Construction: Smaller companies may fold, project delays likely
Published on Feb 27, 2013
By Cheryl Ong
A KEY industry body for the construction sector said increasing foreign worker levies could result in smaller construction firms merging or folding.
Contractors would not have factored the increases into their pricing when they took on jobs and will have no way to recover their costs now, Singapore Contractors Association president Ho Nyok Yong told The Straits Times yesterday. "The weaker ones (sub-contractors) with restricted resources might need to consolidate to face the storm that is coming," he said.
Contractors too warned that project delays might become commonplace if smaller players pull out while construction is still under way.
Mr Ng Yek Meng, managing director of Progressive Builders, said: "If our sub-contractor abandons the project, it will of course disrupt our operations, and we have to find another one. It might lead to delays."
Foreign worker levies are being raised by an average of between $50 and $160, but construction will be one of the hardest-hit sectors, with levies for a basic unskilled worker rising from $400 this year to $600 in July 2015.
Levies for unskilled foreign workers whom contractors hire above their Man-Year Entitlement (MYE) quota will rise from $650 to $1,050 in the same period.
The MYE quota dictates the total number of foreign workers allocated to a main contractor for a specific building project.
Some contractors feel the measures will do little to help boost productivity as the issue lies with how buildings are designed.
"In the long term, to increase the adoption of labour-saving systems, we also need to look from the design point of view," said Hexacon Construction general manager Dominic Choy.
"There can be a more holistic approach to this. Because of the way it's being designed, you can't use pre-cast systems. In that sense, when you keep on increasing the levy, it doesn't really solve the problem."
Mr Lew Kok Leong, partner at sub-contractor Bohonly General Contractor, said the measures could mean laying off half the 20 foreign workers the firm employs if things get too tough.
"It's going to be very difficult to survive," he said. "Costs of workers' quarters are going up, everything is getting very expensive now. So maybe we'll do less, and maybe we'll change and do renovation work, not projects."
[email protected]
Construction: Smaller companies may fold, project delays likely
Published on Feb 27, 2013
By Cheryl Ong
A KEY industry body for the construction sector said increasing foreign worker levies could result in smaller construction firms merging or folding.
Contractors would not have factored the increases into their pricing when they took on jobs and will have no way to recover their costs now, Singapore Contractors Association president Ho Nyok Yong told The Straits Times yesterday. "The weaker ones (sub-contractors) with restricted resources might need to consolidate to face the storm that is coming," he said.
Contractors too warned that project delays might become commonplace if smaller players pull out while construction is still under way.
Mr Ng Yek Meng, managing director of Progressive Builders, said: "If our sub-contractor abandons the project, it will of course disrupt our operations, and we have to find another one. It might lead to delays."
Foreign worker levies are being raised by an average of between $50 and $160, but construction will be one of the hardest-hit sectors, with levies for a basic unskilled worker rising from $400 this year to $600 in July 2015.
Levies for unskilled foreign workers whom contractors hire above their Man-Year Entitlement (MYE) quota will rise from $650 to $1,050 in the same period.
The MYE quota dictates the total number of foreign workers allocated to a main contractor for a specific building project.
Some contractors feel the measures will do little to help boost productivity as the issue lies with how buildings are designed.
"In the long term, to increase the adoption of labour-saving systems, we also need to look from the design point of view," said Hexacon Construction general manager Dominic Choy.
"There can be a more holistic approach to this. Because of the way it's being designed, you can't use pre-cast systems. In that sense, when you keep on increasing the levy, it doesn't really solve the problem."
Mr Lew Kok Leong, partner at sub-contractor Bohonly General Contractor, said the measures could mean laying off half the 20 foreign workers the firm employs if things get too tough.
"It's going to be very difficult to survive," he said. "Costs of workers' quarters are going up, everything is getting very expensive now. So maybe we'll do less, and maybe we'll change and do renovation work, not projects."
[email protected]