Govt co-shares up to 75% of price increases in sand, granite

By Priyia Paramajothi, Channel NewsAsia | Posted: 09 April 2007 1903 hrs

SINGAPORE: The price of land sand has tripled from about S$20 to some S$60 a tonne, following the sand export ban by Indonesia.

According to the Ministry of National Development, much of the increase is due to transportation costs as sand has to be brought in from places much further away than Indonesia.

Granite prices too have gone up following the disruptions in supply from Indonesia.

These have, in turn, led to an overall 2 percent increase in construction costs in Singapore.

Addressing these concerns in Parliament, Minister of State for National Development Grace Fu said the government would monitor the situation closely and look into specific cases of unjustifiable increases in prices.

Contractors working on existing government projects are also being given a helping hand.

The government is co-sharing up to 75 percent of the price increases in sand and granite with them.

Ms Fu said: "We are already making progress payments to help the contractors meet the higher costs of sand and granite at this point in time. We hope that the private sector will follow suit and we encourage all parties to look at this issue in totality and work together as an industry to overcome the problem."

But new projects will have to factor in the current market prices for sand and granite.

She said: "For new projects, it will be a different matter. The contractor, the developer, the owner will be able to discuss cost issues in a different manner because they are not bound by existing contracts.

"Contractors will price the construction costs at the new costs of sand and granite. It's really not tenable for the government to subsidise point blank across the board because there are projects, for example, that will enter into new phase of awarding contracts and we definitely want these contracts to reflect the replacement costs which is the current market price of sand and granite."

In a further move to keep construction costs down, the Ministry also announced that it is releasing suitable sites for the setting up of new ready-mixed concrete batching plants.

These will cater to contractors who want to produce their own ready-mixed concrete.

- CNA/so