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Speech at Opening of Singapore Construction Productivity Week 2012 and Tiong Seng Prefab Hub

Mr Tharman Shanmugaratnam, Deputy Prime Minister, Tiong Seng Prefab Hub

Skills, training and development
Mr Lee Chuan Seng,
Deputy Chairman, BCA
Dr John Keung,
CEO, Building and Construction Authority
Mr Pek Lian Guan,
Managing Director, Tiong Seng Contractors
Ladies and gentlemen,

  1. I am very happy to join you this morning at the opening of the 2nd Singapore Construction Productivity Week as well as the opening of Singapore's first Integrated Construction and Precast Hub, owned and built by Tiong Seng.
  2. Today is a real milestone in our journey under the Construction Productivity Roadmap. We launched the Roadmap last year and have rolled out various initiatives. Many initiatives include improving standards for buildable designs, pushing for greater adoption of labour-saving technologies. And since 2010, we have been progressively tightening the flows of supply of foreign labour and also raising the foreign worker levies, progressively step by step. That is the painful part, but there is also a positive side – there is very substantial support that the Government is providing via BCA, as well as other agencies, to help our companies, and especially the SMEs within the industry, to upgrade.
  3. I would like to focus on two areas this morning.

    Focus 1: Facilitating the adoption of buildable design
  4. Last July, BCA strengthened the buildability legislation to require a higher level of easy-to-build design, which will require less labour in the construction process. BCA also introduced a new constructability requirement for contractors to adopt labour efficient construction methods and technologies. This will steer the industry towards systems and methods which will raise labour productivity.
  5. One key aspect of buildability is the wider adoption of precast concrete components. To support greater adoption of precast construction, BCA is working with the industry to build Integrated Construction and Precast Hubs, or ICPHs in short. These modern, multi-storey ICPHs will help us to do two things. First, it improves land productivity by optimising our land use. Second, it will improve labour productivity through automation. Tiong Seng's Prefab Hub, which we are launching today, is an excellent case in point. With automation, the Hub will only need one third of the workers to produce almost double the tonnage of precast components. That is real productivity improvement. The ICPHs will also provide a more controlled enclosed manufacturing environment to improve the quality of the precast components and minimise disturbance to surrounding residents and businesses.
  6. BCA has formulated an ICPH masterplan to roll out more of such ICPHs in the next few years. This will enhance the capabilities and efficiency of our local precast production. BCA will soon launch the first tender under this masterplan.
  7. BCA has also developed a new scheme to train and certify construction productivity professionals, who will have the knowledge and skills to plan, coordinate and implement measures to improve the productivity of construction projects, such as recommending the adoption of precast construction. The certified professional will champion continual productivity improvement in the company. He or she will be the ambassador to help raise the awareness of precast construction and other productivity-enhancing technologies, not just within his or her company but among partner building companies. The scheme will also help to raise the level and quality of our construction workforce.

    Focus 2: Helping our SMEs in the construction sector
  8. This is very important because the construction sector comprises mostly SMEs. They will find it particularly challenging to operate in a less labour-intensive growth environment. And they are indeed the ones who face the sharpest impact of our measures to tighten foreign labour supply and to raise foreign worker levies. In the construction sector, SMEs are important because they employ the majority of the workforce. However, they may not have the financial resources and technological know-how to embark on the productivity journey on their own. That's why we want to step up efforts to help SMEs to upgrade their productivity and competitiveness.
  9. BCA will be strengthening its collaboration with industry associations such as the Singapore Contractors Association Limited (SCAL) and the Association of Small and Medium Enterprises (ASME), to help smaller contractors and sub-contractors adopt new technology and review their operations, to make them more productive.
  10. For example, last year, BCA and SCAL have held a number of Productivity Clinic sessions to make it as simple as possible for companies, by handholding contractors, especially the smaller ones, to apply for the $250 million Construction Productivity and Capability Fund (or CPCF). The CPCF is regularly tracked and reviewed to make sure that the criteria for companies to be able to tap on the scheme are not too onerous nor too skewed towards larger companies, which typically have more capital and enjoy economies of scale, and can tap on these schemes more easily. So, we really want our SMEs to be able to take full advantage of this Fund.
  11. We are looking at the existing schemes too, to see if we can help SMEs more. Small companies are already accessing the CPCF, and two-thirds of current beneficiary firms are SMEs. But to further extend our outreach to SMEs in the construction sector, BCA will be working closely with the Enterprise Development Centres at ASME and the Singapore Chinese Chamber of Commerce and Industry. These industrial associations already have established business consultancy products and services to help these SMEs. BCA will work with their business advisors to assist more construction-related SMEs to tap on the CPCF to raise their productivity.
  12. We need the industry to play its part too. It is important that main contractors see their subcontractors as partners and work with them to upgrade their operations. We need all the stakeholders along the construction value chain – from developers, to consultants, contractors, sub-contractors, and suppliers – to work together to take the whole industry up to a whole new level of productivity.

    Productivity gains for Singaporean workers
  13. Productivity gains should also be shared and must be shared with employees through better wages and career development.
  14. I understand that locals in the industry are generally deployed in the higher value-adding trades, e.g. electrical, plumbing, crane operation. A new local entrant to the construction industry typically earns about $1,500-$1,700 a month (basic salary, before overtime). We encourage local tradesmen to upgrade and employers to send their employees for training through BCA's Construction Registration of Tradesmen scheme or CoreTrade, to become a registered Tradesman, and later on, a Foreman. An experienced CoreTrade Tradesman typically earns about $2,400-$2,500 a month, while an experienced CoreTrade Foreman earns about $3,000 a month.
  15. From April this year, BCA introduced a new Supervisor class, which will create further progression opportunities for experienced Foremen. Based on industry feedback, depending on the actual work scope, an experienced supervisor can earn between $3,000 and $5,000 a month. This is a good profession.
  16. On top of this, we are also looking at starting salaries to make the entry pay more attractive to locals. BCA has rolled out the Apprenticeship programme funded by the CPCF, where locals will gain construction experience by working, while studying part-time, so as to graduate with a Trade Diploma in the particular construction trades. The government will work with the industry to offer a starting remuneration package equivalent to $2,000 a month for new entrants under the Apprenticeship programme for locals. This means for ITE graduates or other new entrants, if the job is under the Apprenticeship scheme, they can look forward to a good starting pay of $2,000. But more importantly, beyond the starting pay, they can look forward to progression because after they graduate, they can be registered as CoreTrade Foremen, and as they gain construction experience, they have the chance to earn significantly more.
  17. We are targeting to groom 500 locals, who could be new entrants, ITE graduates, job seekers or relatively new tradesmen with less than three years experience.
  18. These moves, taken together, will create a healthy pipeline of skilled, local construction personnel. They would also improve the industry image and help attract more locals into the sector. There are indeed many attractive jobs with good progression paths in the construction industry.

    Employers must lead the way
  19. We have several employers who are already leading the way. One is Tiong Seng. Mr Pek Lian Guan, the Managing Director of Tiong Seng, is also a member of the National Productivity and Continuing Education Council, and we have found his views extremely useful.
  20. Besides taking the lead by building Singapore’s first integrated Prefab Hub, Tiong Seng provides training for their sub-contractors to upgrade their skills. This is very important, and it is a role of main contractors to proactively work with sub-contractors to transform the entire industry. For example, this new prefab hub is equipped with a Building Information Modelling (BIM) training centre for Tiong Seng to train their project partners and sub-contractors on the use of BIM, which is a 3D software that will change the way the construction industry works. BIM can improve the coordination of the construction value chain and reduce the amount of reworking required on-site.
  21. I would urge more, in fact all main contractors, to play such a leading role in transforming the construction sector to be more productive.

    Conclusion
  22. I believe that even as we have seen some productivity improvements within the construction sector, the journey is just starting and we have a long road ahead. More importantly, there is now impetus for everyone – main contractors, sub-contractors, supplies – to come on board. With the Government’s continued emphasis on productivity-driven economic growth, this is an excellent opportunity now for the construction sector to take a leap forward and effect a transformation. Within this decade, we must achieve a significant transformation in the industry. The Singapore Construction Productivity Week is a very good platform for all the industry stakeholders like yourselves to come forward and share experiences, learn and adapt best practices, and observe first-hand how the new technologies work. Bring in every best practice, every good idea, and find ways to put them into effect. And the Government will provide full support.
  23. It gives me great pleasure now to declare the Singapore Construction Productivity Week and Tiong Seng Prefab Hub open.