S$450m to boost productivity in the construction sector

Singapore

TO raise productivity in the construction sector, the government will set aside S$450 million for the second tranche of the Construction Productivity and Capability Fund (CPCF) for the next three years.

This fresh funding, provided under the Second Construction Productivity Roadmap of the Building and Construction Authority (BCA), was announced by Senior Minister of State for National Development Lee Yi Shyan during the Committee of Supply debate on the ministry on Tuesday.

It follows the S$250 million committed under the first tranche in 2010, which was later topped up to S$335 million to quicken the pace of restructuring in a sector that has largely lagged its peers in productivity.

The additional funding is expected to benefit about 7,000 built-environment firms. For comparison, the first tranche had benefited almost 6,000 firms as at the end of January.

BCA said that the first Roadmap, which ends this May, has yielded good outcomes: average site productivity, which measures the floor area completed per man-day, rose by 1.4 per cent per annum between 2010 and last year.

But output productivity - the deflated construction output per 1,000 employees - grew a mere 0.4 per cent per annum over the same period.

Data from the Ministry of Trade and Industry indicates, however, that labour productivity, measured as the value-added per worker, fell 2.6 per cent year-on-year in Q4 2014.

BCA chief executive John Keung said in a briefing on Monday that labour productivity is subject to business cycles; he added that the construction sector, being a single-sector industry, is unlike the manufacturing sector, which has several segments to "balance out" the overall reading.

With the second Roadmap, BCA's goal is to have more projects adopt Design for Manufacturing and Assembly (DfMA). This is the practice of manufacturing as many building parts as possible in a factory; prefabricated parts are then assembled on site.

To support the shift towards this, a strong core of professionals, managers, executives and technicians (PMETs) will be needed to lead the sector's advancement.

Among work-permit holders, the BCA aims to grow the pool of higher-skilled workers from 19 per cent to at least 30 per cent of by 2020.

To encourage companies to adopt construction technologies that make a difference, the BCA is also raising the funding limit of the Productivity Innovation Projects scheme under the CPCF from S$5 million to S$10 million.

Mr Keung said: "For game-changing technologies that are very new here, there is a cost premium... If you leave it to the market to decide, it's very difficult for anyone to make that decision to spend more, so we need to kick-start this process.

"We have not been doing this for decades, so now, when we want to change the way we build, we have to pay to learn. One way is to give some incentive to defray part of the additional costs that the developer may have to pay, so they will have more incentive to go for these technologies."

Under the Workforce Training and Upgrading Scheme of the CPCF, the BCA will give higher subsidies of up to 90 per cent for locals to attend productivity-related courses.

The BCA is also moving much of the training upstream. Bespoke versions of management programmes are being rolled out to target CEOs and senior management, people who can more effectively influence change in their organisations.

Mr Keung said: "Hopefully, by tackling the workforce at all levels, we stand a better chance in the next few years to really change the way we build."

In line with the national SkillsFuture movement, the BCA will introduce a SkillsFuture Earn-and-Learn programme for the built-environment sector, targeted at fresh graduates of the Institute of Technical Education (ITE). This will help them get relevant work experience and skills, consequently building a stronger pool of competent supervisors.

The Earn-and-Learn programme will complement the existing BCA scholarship for ITE students to build a sustainable pipeline of skilled talents to meet the manpower demands of the built-environment sector.

The BCA will introduce two part-time programmes - a Diploma Sponsorship and Postgraduate Sponsorship - to support more pathways for upgrading.

These enhancements to the schemes under the CPCF take effect this June.

BCA's Mr Keung believes that Singapore has been slower than other developed countries such as Australia, Japan and the US in adopting productive technologies because labour costs, even with levies, are still lower here. The imperative to use these advanced, more costly building methods has thus been weaker.

Nee Soon GRC MP Lee Bee Wah, an engineer herself, earlier spoke against relying on foreign contractors for domestic development projects while Singapore firms are employed as subcontractors, at a time when Singapore is already reducing its dependency on the foreign workforce.

READ MORE: