November 20, 2008

Singapore defers many projects on higher costs

According to Mr Mah Bow Tan Singapore National Development Minister, Singapore is deferring a further USD 1.3 billion of construction projects as material and labor costs rose as much as 5% in the first quarter.

Mr Mah said that this brings the total value of public sector projects deferred in the city state to SAD 4.7 billion. He added that building costs rose 30% in 2007 and labor and equipment prices jumped by 19%.

Mr Mah said that “Projects that are essential to meet Singapore's economic and social needs, such as key infrastructural development, will proceed as planned. We will continue to monitor the situation closely and work with the key industry stakeholders such as developers, builders and quantity surveyors to mitigate the cost increase as much as possible.''

He added that prices of materials used in construction such as steel bars and concrete have risen to record highs because of global demand increasing fuel costs. Singapore is building two casino-resorts that will cost more than USD 3 billion each, as well as an extension of its subway system and a SAD 1.2 billion sports facility to boost economic growth.

Mr Mah said that government will continue to monitor the situation and work with the construction industry to mitigate the cost increase as much as possible.