Written Answer by Ministry of National Development on assistance for HDB BTO flat buyers who face completion delays and evaluation indicators for HDB contractors with poor performance for future projects

Nov 2, 2021

Ms Yeo Wan Ling: To ask the Minister for National Development (a) what are the indicators used in an evaluation that a HDB contractor has shown “poor performance and subsequent failure”; and (b) in the case of Waterway Sunrise II, whether there can be a longer period provided to home owners on rectifying construction and building issues with their flats given the “poor performance” of the original contractor.

Ms Yeo Wan Ling: To ask the Minister for National Development whether special considerations and priorities for interim rental housing are given to home buyers who are affected by completion delays of their HDB BTO flats, in particular home buyers of Waterway Sunrise II where the delay is over a year.

Answer:

HDB tracks the performance of contractors closely during the construction stage, based on a comprehensive monitoring system.  This includes regular tracking of the project progress on site, to ensure early detection of issues to ensure timely and appropriate actions can be taken to bring the project back on track. Contractors are also assessed every six months under HDB’s Contractors Performance Assessment (CPA) framework, which takes into account the progress of site works, the quality of works completed, as well as site safety. Poor performance in any of these indicators during construction will result in lower CPA scores, and impact the contractor’s ability to secure future HDB projects.

For the five HDB Build-To-Order (BTO) projects under former main contractor Greatearth, work at the sites had been progressing satisfactorily, and there had been no signs of slow-down prior to Greatearth informing HDB that they had run into financial difficulties and were unable to complete the projects. HDB then engaged Greatearth to explore possible options such as the provision of advance payments to allow Greatearth to continue with the projects. However, Greatearth did not have the financial ability to continue operations and made the decision to undergo liquidation. 

In the case of Waterway Sunrise II, HDB had detected delays during its regular monitoring of the progress of works on site, and had engaged the contractors on plans to catch up. However, despite HDB’s best efforts, the contractors eventually informed HDB that they were unable to carry on with the project, and would have to cease operations on site. To safeguard the interests of flat buyers, HDB terminated the services of the contractors on 31 July 2020 and commenced proceedings to quickly bring onboard a new contractor to complete the remaining works. In general, once HDB detects any delays on BTO sites, HDB will assess the reasons for the delay and work closely with the contractors to bring the projects back on schedule. As termination will generally add to the delays due to the time required to bring a new contractor on board, such decisions are taken after careful consideration, when HDB assesses that the contractor is unable to fulfill its contractual obligations and that the appointment of a new contractor is the best option to minimise further delays and complete the projects.

Following the appointment of the replacement contractor for Waterway Sunrise II in October 2020, HDB has been working closely with the contractor to minimise the extent of project delays. HDB has also provided assistance to address COVID-19-induced challenges such as manpower shortages and disruptions to material supplies. Despite the Government’s best efforts to provide support and assistance measures, Waterway Sunrise II is expected to be completed about 6 to 9 months after the Delivery Possession Date (DPD). At present, this is the only BTO project where the delay has exceeded one year beyond the original estimated completion date.

HDB has informed the flat buyers of Waterway Sunrise II of the revised completion date, and will continue to keep them updated as construction progresses. HDB will also be providing the maximum reimbursement sum that flat buyers are eligible for under the COVID-19 (Temporary Measures) Act.

We have also taken steps to support flat buyers affected by BTO delays, and who need interim housing. From this year and over the next two years, we are doubling the supply of flats under the Parenthood Provisional Housing Scheme (PPHS), which provides an additional temporary housing option for first-timer households waiting for the completion of their new flats. We have also finetuned the eligibility conditions and allocation process to prioritise families in greater need of subsidised temporary housing. As the supply of PPHS flats will remain limited, we encourage flat buyers waiting for the completion of their BTO flats to continue living with their families or consider renting from the open market. We understand that many are able to do so.

On a case-by-case basis, HDB has also offered Interim Rental Housing (IRH) to affected buyers, including buyers of Waterway Sunrise II, who have lower incomes, no family support, and no other housing options.

Upon the completion of the project, similar to all other BTO projects, HDB will conduct stringent checks to ensure there is no compromise in the quality of the project when the contractor hands over the flat to HDB, and home owners will be accorded the full duration of the Defects Liability Period (DLP) of 12 months starting from the date they collect their keys. If homeowners provide any feedback on quality issues after the DLP, HDB will evaluate the feedback and see how best to assist the resident, on a case-by-case basis.