Massive construction boom on the horizon

At least $55b of transport projects lined up, plus housing and others

By Maria Almenoar & Royston Sim, The Straits Times, 31 Aug 2012

WITH news of the latest mega-project to build the 30km Thomson rail line, Singapore is on the path of another construction boom.

Based on costs that have been announced, at least $55 billion worth of transport infrastructure is currently being built, or will be built, until 2021.

In comparison, Singapore's upcoming Sports Hub has a $1.33 billion price tag.

The biggest projects are the $18 billion Thomson Line and $20.7 billion Downtown Line, which will open in stages from next year to 2017.

Construction of the former will begin in the third quarter of next year, with tenders for civil contracts being called as early as next month.

Other rail projects include the Tuas West extension and North-South Line extension.

All these translate into 80.5km more of rail lines and 61 new MRT stations, including 17 new interchanges.

They come on top of the Circle Line, which was completed in October last year.

Two of the more significant road projects are the $4.3 billion Marina Coastal Expressway and the $8 billion North-South Expressway.

Still more projects are expected to be announced early next year, including rail lines.

The projects will put a spike in demand for - and costs of - engineering expertise, foreign workers, building materials and equipment, said industry observers.

Contractors said they are gearing up for this wave of projects, which exclude another slew of massive non-transport as well as housing projects.

Mr Or Toh Wat, the group managing director of OKP Holdings, which has snagged a number of road projects, said OKP has hired more people and added to its inventory of equipment in preparation for new contracts.

Mr Or added that the coming years will be the busiest the industry has been since the last construction boom between 2007 and 2010, when the two integrated resorts were built.

Industry watchers expect a rise in the cost of building equipment and a labour crunch. Already, the demand for construction vehicles like cement mixers has nearly doubled the cost of Certificates of Entitlement for them to nearly $60,000 in the last one year.

Singapore Contractors Association president Ho Nyok Yong noted that there are also major transport projects in the rest of Asia.

He said there is a need for more business-friendly measures to reduce the impact of the labour crunch on the industry. In 2010, there were some 355,000 construction workers in Singapore.

Contractors will feel squeezed by the Government's move to cut the number of workers allowed for a specific project and to raise foreign worker levies in a bid to reduce Singapore's reliance on foreign workers.

But Professor Chew Soon Beng of the Nanyang Technological University's division of economics said he expects the Government to stay "quite liberal" about letting foreign construction workers in to meet the demand for labour.

Major rail and road projects

RAIL PROJECTS

- 42km Downtown Line: $20.7 billion, ready in stages from 2013 to 2017. 

- 1km North-South Line extension to Marina Bay: $357.5 million, ready in 2014. 

- 7.5km Tuas West extension on the East-West Line: $3.5 billion, ready in 2016. 

- 30km Thomson Line: $18 billion, ready in stages from 2019 to 2021.

ROAD PROJECTS

- 5km Marina Coastal Expressway: $4.3 billion, ready by the end of 2013. 

- New underpass and widening of roads in Kallang: $254 million, ready by 2014. 

- Road tunnel linking Sentosa to the mainland, widening of surrounding roads: $537 million, ready in 2015. 

- Interchange connecting three expressways and the Seletar Aerospace Park: $255 million, ready in 2015. 

- Major arterial road from the Central Expressway to Yishun Avenue 6: $354 million, ready in 2015. 

- 21.5km North-South Expressway: between $7 billion and $8 billion, ready in 2020.