Speech by SMS Desmond Lee at the BCA-REDAS Built Environment and Property Prospects Seminar 2016

Jan 15, 2016

I am privileged to join you at this year’s BCA-REDAS Built Environment and Property Prospects Seminar.

Sustained construction demand 

Last year, we know that about $27 billion worth of building and construction contracts were awarded in Singapore. And at the same time in 2015, we saw the completion of a number of large projects, such as the Downtown Line Phase 2, the Ng Teng Fong Hospital and the Yishun Community Hospital. Other key projects, such as Jewel Changi Airport, are ongoing.

This year, BCA estimates that about $27 billion to $34 billion worth of building and construction contracts may be awarded. Despite the slowdown in private sector construction demand, there is still a strong pipeline of public sector projects, such as the upcoming MRT lines and Changi Airport Terminal 5, all of which are needed for Singapore’s long term needs.

Over the next four years, BCA expects construction demand to range between $26 billion to $37 billion per year.

A dynamic built environment sector 

The sustained pipeline of public projects presents an opportunity for us to innovate and push for greater construction productivity here in Singapore.

Just last week, we witnessed an historic first in Singapore – the construction of our first public high-rise building using an advanced construction method called Prefabricated Pre-finished Volumetric Construction or PPVC. Some of us had the privilege to visit this development and many call this PPVC construction methodology like building Lego, putting things together. This is being adopted for NTU’s new residential halls at North Hill, and is estimated to save anything between 25 to 40% in manpower and between 15 to 20% in construction time as compared to traditional modes of construction which are familiar with here in Singapore. It involves the building whole rooms in factories whether locally or abroad, in the form of modularised boxes, and its built volumetrically, not only do you have the structure, you also have the interior, we have the M&E fittings, we have the fixtures such as lighting, you have windows, sometimes it comes with carpeting, and sanitation. All these are then brought to site and then fitted together, precision of course is key in such engineering work. But doing so, as I said earlier, saves manpower, saves time, but also will help reduce noise and dust pollutions as we find that many and more of our projects are in infill locations, amidst a dense urban environment especially surrounded by residential developments that are already lived in.

We ask ourselves why do we need to keep pushing towards higher productivity, it is a mantra which we repeat over and over again, but one that is founded on good basis. 

First, we will continue to face manpower challenges. So we need to fundamentally change the way we design and build by transforming construction into a process that more akin to the manufacturing process, with more work done off-site. Through wider adoption of game-changing construction technologies like PPVC, firms can achieve significant productivity improvements to overcome our tight manpower situation.

Second, adopting such technologies will also change the nature of jobs in our built environment sector, hopefully with higher quality, more challenging jobs using more technology, requiring more precision and using IT as well, we can attract more Singaporeans to join the sector.

Third, if we can transform mind-sets across the entire construction value chain to embrace productivity as the way forward, we will be better poised to achieve continuous growth and remain competitive both locally and abroad. And I say the whole value chain because construction is a complex process, but one in which involves many stakeholders and everyone needs to come on board before we can adopt some of these technologies effectively.

While many firms have already started to embrace these more impactful construction technologies, some of you have shared with us your concerns and worries about implementing these productivity solutions.

Some of you have shared with us that you face challenges overcoming the cost premium of new technologies. Some others tell us that you worry about taking the plunge because you are not sure whether there will be a robust ecosystem that will support such technology adoption. Very valid considerations before you take the first step.

We hear your concerns and, on the part of the Government, we are taking all the steps we can to address these issues. Let me address some of these.

First, we will create lead demand to help lower the cost of adopting new impactful technologies like PPVC, or others like Cross Laminated Timber, Glulam and other technologies. Public sector projects will account for more than half of the construction demand in the next few years. So the public sector will take the lead in transforming the way we build in Singapore. We will plan for productivity improvements in our projects, emphasise the role of Design for Manufacturing and Assembly (DfMA), and adopt impactful technologies or processes where it is feasible.

To create strong lead demand for the adoption of DfMA, selected sites under GLS, or Government Land Sales programmes, are required to adopt PPVC. BCA will also incorporate more DfMA principles in the buildability framework and we will certainly consult the industry when we are ready.

As part of the second Construction Productivity Roadmap, BCA has set aside an additional $450 million under the Construction Productivity and Capability Fund (CPCF) last year, so that we can provide enhanced funding for the adoption of game-changing technologies. As of the end of last year some $38 million has been committed for the second batch of CPCF applications, supporting more than 3,900 of our built environment firms. We hope this will help to off-set the cost premiums that you face in adopting these new technologies.

Second, the transformation to DfMA will require firms in our sector to change our mind-sets to focus on driving innovation and improving collaboration across the entire construction value chain.

Last month, I had the opportunity to visit BCA’s new Centre for Lean and Virtual Construction. The Centre is the first of its kind in Singapore and the largest in Southeast Asia. Designers and builders can use a range of technologies. For example, you can don 3D glasses; you can look through giant virtual reality screens to walk through a building model. And of course, on site itself, project managers can use their phones and apps to allow their workers on site to visualise some of the developments that they are about to build both at a macro scale as well as a micro scale. The adoption of Building Information Modelling (BIM) and technologies that support Virtual Design and Construction (VDC) foster closer collaboration among stakeholders across the value chain. Through upstream discussion, abortive works can be minimised, resulting in substantial cost and time savings. In fact when we visited the Centre, we saw architects, project managers, contractors, working together on the 3D model, to try and address upstream – through virtual construction phases, some of the inconsistencies and clashes that we tend to see today on the ground that will result in hacking and re-directing of M&E and other services, beams that block your pathways, things like that that can be ironed out upstream that will make the actual construction phase that much more effective, smooth and productive, We certainly hope more firms will use the Centre to transform their construction processes through innovation and collaboration. 

Third, we are building up the supply chain to support DfMA. To supplement the overseas supply of productive technologies and more importantly to develop production capacity to support DfMA locally, we have set aside land for multi-storey Integrated Construction and Prefabrication Hubs, or ICPHs, to meet our sector’s demand for prefab and precast components in the years ahead. We will continue to raise the quality of workforce through incentivising workforce upgrading and retention to ensure the right job-fit for the DfMA approach, and provide opportunities for workers in this sector to develop skills mastery and pursue lifelong learning through our SkillsFuture initiatives. 

A forward looking built environment sector

So far, I’ve talked about our plans to partner all of you in our sector’s transformation.

Apart from raising productivity, the built environment sector will also need to anticipate and adapt to global challenges such as climate change.

Last December, climate change talks in Paris saw 195 countries, including Singapore, commit to a new global climate agreement.

This agreement aims to keep the global average temperature rise this century to well below 2 degrees Celsius and pursue efforts to limit the temperature increase to 1.5 degrees Celsius.

At the global level, there is significant potential for the built environment sector to play its part to help mitigate climate change as buildings account for a third of global greenhouse emissions. So we ask ourselves, how can we ready ourselves for the future?

We certainly need to catalyse greater adoption of highly effective green buildings. This means high-rise buildings that consume little energy, medium-rise buildings that are zero-energy, and low-rise buildings that can even produce nett positive energy if possible.

This is an ambitious longer term target and requires breakthroughs in research and development in green building design, construction and operation.

Last week, our Prime Minister announced that $19 billion will be pumped into science and technology research under the Research, Innovation and Enterprise 2020 plan.

Out of this, some $900 million will be set aside for the urban solutions and sustainability sector to develop sustainable and liveable cities. For example, this could involve research to use membranes to dehumidify air in air conditioners, to significantly reduce power consumption. 

With the strong funding support for R&D into green buildings, and the availability of key R&D facilities like the BCA SkyLab, I urge all of us to work closely with BCA and our research institutions to make this happen.

In addition to conserving resources, studies have shown that there is a strong business case and many long term benefits to green buildings.

For instance, the cost premium for a Green Mark Platinum building could be as low as 3% today. The additional cost can be recovered through energy savings in six to seven years. Green buildings also significantly improve the health, well-being and productivity of those who live, work and play in them.

The Bullitt Center in Seattle, USA, is one of the greenest and most sustainable office buildings in the world. I am told that all of its energy use is generated from solar panels, and the building maximises the use of natural lighting. Almost of its water is provided by harvesting rainwater and the building has indoor composting toilets. The building is effectively independent of the municipal water and sewage systems. This is an ideal that we can all strive and aspire towards.

Conclusion

In conclusion, the built environment sector will always be a pillar of our domestic economy. We must be dynamic and forward looking, continuing to innovate and come up with creative solutions in a liveable and sustainable city, to improve the way we build for a better living environment. Asia and the region around us are urbanising rapidly and there are opportunities that we can seize. Let us work together, and all make this happen. Thank you and have a very good seminar today.