Keeping Tabs On Any Extra Costs That May Be Incurred Arising From Acceleration Of The Development of HDB BTO Projects
As may be recalled, HDB recently announced that it is speeding up the completion of BTO flats. I wanted to know whether this entailed HDB incurring acceleration costs over and above the development costs. I therefore filed a PQ seeking a clarification on this matter. In his reply, SMS Tan Kiat How clarified that HDB will be able to meet the completion dates without incurring acceleration costs. He also agreed with me that, whilst HDB look to completing the BTO flats faster, quality should not be compromised. My PQ and his response may be found below.
— — — — — — — — — — — — — — — — — — — — — — — — — -
Mr Murali Pillai asked the Minister for National Development in relation to the move to accelerate the development of ongoing and future Housing and Development Board (HDB) Build-to-Order (BTO) construction projects that have been announced to date (a) whether HDB has or will be incurring acceleration costs for these projects; and (b) if so, what is the estimated total amount of the acceleration costs that have or will be incurred and what percentage does it constitute in relation to the total development costs of the projects.
The Senior Minister of State for National Development (Mr Tan Kiat How) (for the Minister for National Development): Mr Speaker, as the construction industry recovers from the COVID-19 pandemic, HDB has made steady progress in delivering BTO projects to our home buyers. In January 2023, we have reduced the proportion of BTO projects delayed beyond the Estimated Completion Date (ECD) from about 90% in 2021 to about 40%.
HDB’s ongoing and future BTO construction projects that have been announced to date are planned based on the estimated completion dates indicated during the BTO launches. Notwithstanding efforts made to keep up the supply of BTOs to meet the strong housing demand, HDB has been able to meet these completion dates without incurring acceleration costs.
To reduce construction delays, HDB has been working closely with our contractors and agency partners to put in place extensive measures. These include sourcing for workers overseas for contractors to address manpower shortages and streamlining processes to expedite approvals. Overall, these collective efforts have enabled HDB to deliver more homes to flat buyers thus far and minimise delays without compromising safety and quality.
Mr Speaker: Mr Pillai.
Mr Murali Pillai (Bukit Batok): Sir, may I ask a supplementary question in relation to the expediting of the housing projects, the BTOs? Would the issue of quality be a matter for consideration? Because as we expedite the building of BTOs, one area of concern is whether we can ensure the quality of the BTOs that are being built are of sufficient standard so as to avoid issues that the hon Member Carrie Tan spoke about just now — ceiling leakages and so on.
Mr Tan Kiat How: Mr Speaker, I would like to assure the Member that safety and quality are two areas that we will not compromise on. Even as we bring forward and we work together very closely with the construction industry — from the main contractor to the sub-contractor to various other partners in specialist trades, for example — in making sure that our BTO projects are proceeding at a steady pace, we are very mindful of the quality of the build and also the safety of the worksites. The last thing we want is for accidents to happen resulting in the unfortunate losses of life.
These are two areas that we will not compromise on: the quality of the build as well as safety at the worksites.
I would like to assure Mr Pillai on the point about acceleration costs. It is a little bit of a technical term in the industry where we pay the contractor to put in additional resources and thus incur additional cost to bring forward and accelerate the completion of their construction contracts.
In this case, we are in a slightly different situation where we are working very closely with the contractors and the builders to ensure that existing projects continue at pace, at a steady stead, per milestone. They have gone through very tough times over the last two and half years — supply shocks, manpower shortages and many other shocks due to situations outside their control; COVID-19, the war in Ukraine and Russia and so on.
It is a very different situation whereby the contractors actually have the luxury to bring in additional resources by working closely, streamlining processes, working closely and collaboratively across the entire build and value chain to make sure that work continues safely and not compromising quality.
