Speech by MOS Tan Kiat How at the Committee of Supply Debate 2021 – Seizing Opportunities to Transform the Construction Industry

Thursday, 4 March 2021

Seizing Opportunities to Transform the Construction Industry

Introduction

Mr Chairman, I will now elaborate on how we are transforming the construction industry to create more jobs and opportunities for our firms and local workforce.

Progress under the Construction Industry Transformation Map (ITM)

Mr Henry Kwek and Mr Xie Yao Quan spoke about the Construction Industry Transformation Map, or ITM. The ITM was launched in 2017 to rally the construction sector around the shared goal of developing future-ready capabilities that would transform our Built Environment. 

We have made steady progress. We have greened over 40% of our buildings. This has involved making use of sustainable technologies and designs, such as more energy-efficient systems to cool and ventilate our buildings. The overall energy use intensity of our buildings has improved by 10% over the past decade.

At the worksite, we have seen a 7% improvement in productivity since 2017. This is driven by the adoption of innovative building approaches like Design for Manufacturing and Assembly, or DfMA for short, and digital technologies like the Integrated Digital Delivery, or IDD. 

DfMA allows building components to be fabricated off-site in automated facilities, and subsequently assembled on-site. This raises productivity, improves workmanship, and reduces dis-amenities to residents near construction sites. DfMA adoption has doubled over the last three years, from 19% in 2017 to 39% in 2020. 

IDD connects the various parts of the building lifecycle together via a digital spine. This facilitates coordination among project stakeholders, which improves accuracy of design and planning, and reduces abortive work downstream. We have built up IDD competencies in more than 150 firms through 48 demonstration projects over the last three years.

A good example is Techniques Air-Conditioning & Engineering Pte Ltd, an SME specialising in the installation of mechanical services. When I spoke to them earlier, they shared that they have tapped on BCA’s Productivity Innovation Project (PIP) scheme. They have switched over to a prefabricated mechanical, electrical and plumbing (MEP) system.

Techniques shared with me that on-site works involving the installation of pipes and ducts took about two to three weeks in the past. Time was needed to erect scaffolding, perform welding and insulation works, and conduct regular tests on the installation. Today, with the use of prefabricated vertical riser modules, such works are done well within a single day on-site.

Techniques has also leveraged Building Information Modelling (BIM) and automation through its use of computer numerical control (CNC) machines to raise productivity. Cutting instructions to the machines can be automatically generated from the 3D building models – allowing changes to be made quickly and accurately. What used to take 1.5 hours using manual templates can be done in just 15 minutes. And precision is much better.

Furthermore, Techniques shared with me that they have been able to remotely coordinate with other firms and reduce the number of workers required on-site, making it easier to adhere to Safe Management Measures, especially during this period. 

Techniques’ experience is not unique. Without these earlier investments, many of our firms would have been more severely disrupted during the challenging COVID-19 period. 

Window of Opportunity for Transformation 

As many members like Mr Henry Quek, Mr Xie Yao Quan and Ms Poh Li San have pointed out, we have made good progress. But we need to pick up the pace of transformation.
 
We are making a greater, whole-of-nation push on environmental sustainability with the Singapore Green Plan 2030. The Built Environment sector plays an important role in achieving our vision of a greener and more sustainable Singapore. 

There is also greater urgency to strengthen the resilience of our sector, particularly in reducing our reliance on foreign workers. In the near term, we expect our foreign manpower situation to remain in flux while COVID-19 travel restrictions are still in place. To alleviate the current labour shortage in the construction industry, we are working closely with the Ministry of Manpower and Ministry of Health to progressively increase the number of incoming workers, but in a safe way to minimise the risk of COVID-19 transmission in our dorms and into our community.

At the same time, we want to ensure that migrant workers who are already in Singapore can continue to work here, if they choose to. We have invested significantly to keep them safe and they are familiar with our local work culture and environment. In this respect, we are working closely with the Singapore Contractors Association Limited (SCAL) to facilitate a change of employer for construction workers whose contracts have either expired or were terminated, through the SCAL Manpower Exchange.

However, even as we work closely with our firms to overcome near-term challenges, we recognise that COVID-19 has hastened the shift towards a manpower-lean approach to construction, not just in Singapore but across many countries. 

Recently, a local subsidiary of a large Chinese construction firm shared with me that the Chinese construction industry is facing a labour crunch. Imagine, even in one of the world’s largest labour markets. The median age of the parent company’s few million workers in China was 46.5 years old. The managing director lamented to me that it was increasingly difficult to attract young people into the sector, even with competitive wages. Even fewer of them wanted to come and work in Singapore. Like what we are doing in Singapore, the firm is ramping up its investments in DfMA, automation and digitalisation in China, so as to reduce its reliance on manpower, and to build with sustainability in mind.

Mr Chairman, these are longer-term structural shifts confronting our Built Environment sector, accelerated by COVID-19. In the spirit of Emerging Stronger, we have to seize this window of opportunity to transform. Let me elaborate on how we plan to do so.

Pursuing More Ambitious Standards

First, we will raise standards of sustainability and productivity.

Sustainability

Mr Henry Kwek and Mr Xie Yao Quan asked about the Green Building Masterplan and how we plan to curb building emissions. Over the past year, BCA and the Singapore Green Building Council have engaged over 5,000 stakeholders, ranging from developers, consultants, builders, and members of the public, especially our young people. There is strong support for our green buildings agenda, and a collective desire to ramp up our efforts to combat climate change in Singapore. 

But green buildings make commercial sense too. Green buildings reap net savings over their lifecycle, despite the higher upfront cost. For example, a large office building of over 15 storeys can save around $300,000 in operating cost annually by achieving the Green Mark Platinum standards.

Last year, we announced that we would raise minimum energy performance requirements for new buildings and existing buildings that undergo major retrofitting. Under these revised requirements, all new buildings will be 50% more energy-efficient than the 2005 baseline. This is equivalent to our current Green Mark Platinum standards. These requirements will apply to new developments submitted for planning approval from the fourth quarter of this year.

Additionally, we will update the Green Mark scheme. The scheme recognises buildings that pursue sustainability standards beyond the minimum requirements. As Mr Henry Kwek has pointed out, our Green Mark scheme is amongst the world’s leading green building certifications and is the go-to standard for green buildings in the tropics.

The Green Mark scheme already encourages the reduction of not just operational carbon but also embodied carbon through the use of low-carbon materials and sustainable construction. Mr Henry Kwek will also be pleased to know that it already promotes the use of natural ventilation as a passive strategy to cool buildings and improve energy savings.

The revised scheme will raise energy performance standards and place greater emphasis on other aspects of sustainability such as health and well-being, and how the buildings are designed for long-term maintainability. We intend to trial these new standards from the second quarter of this year and will take into account industry feedback before we implement the revised scheme. BCA will provide more details in the coming months.

We will also continue our effort to green our existing stock of buildings. An important step is to enhance data transparency on building energy performance. Currently, we collect and publish the energy performance data of our commercial and institutional buildings. Going forward, we will identify all buildings in the data that we publish, beginning with commercial buildings, from the second half of this year. This will allow building owners to benchmark their buildings against others at no additional cost and spur them to improve their energy efficiency.

We are also exploring other ways to encourage building owners to conduct energy audits and retrofit their buildings to improve energy performance.

We will continue to engage the industry and public to ensure that our plans remain relevant over time, as we transition to a more sustainable, low-carbon Built Environment.

Productivity

Next, let me touch on raising productivity in our sector. We have seen good productivity outcomes from adopting DfMA and aim to make DfMA the default building method for larger projects. 

Under the Buildability framework, projects with Gross Floor Area, or GFA, of at least 5,000 sqm are required to meet minimum Buildable Design Scores, or B-scores, through the adoption of labour-efficient designs and technologies. 

To drive DfMA adoption, we have raised the minimum B-Score for large residential, non-landed developments with GFA of at least 25,000 sqm from December 2019.

We will raise the minimum B-score for large commercial, institutional and industrial developments with GFA of at least 25,000 sqm next year, starting from April 2022. This means that eventually, around 80% of the GFA of all projects submitted for approval will be subject to the higher minimum B-score. BCA will consult the industry in the coming months before firming up the enhanced standards. This move will help us achieve our target of 70% DfMA adoption by 2025.

We are also working closely with the industry to step up our digitalisation and IDD efforts. 

As mentioned by Minister Indranee, the Digitalising Built Environment Alliance for Action (AfA) has identified Common Data Environment (CDE) Data Standards as a key enabler to drive digitalisation across the entire value chain. The common data standards specify what information is required for a project and how it can be structured. Wide adoption of this common standard will facilitate information flow across platforms and enable seamless collaboration amongst the various supply chain partners. 

Supporting Firms to Transform

Ms Poh Li San asked about the support we are providing to local SMEs. SMEs make up 98% of our construction firms, and play a very critical role in our sector. Our firms, especially SMEs can tap on the Construction Productivity and Capability Fund, or CPCF, for support to adopt productive technologies and develop their workforce. For example, the Productivity Innovation Project (PIP) scheme helps defray the costs of adopting DfMA and IDD technologies. Techniques Air-Conditioning & Engineering Pte Ltd, which I mentioned earlier, is a very good example. 

Since its launch in 2010, we have supported over 10,000 firms, and disbursed close to two-thirds of the approximately $850 million that we have allocated in funding.

To support our firms, especially our SMEs, we will extend the CPCF by another year till March 2022. We will also continue the enhanced co-funding support of 80% under the PIP scheme. I encourage all firms to make full use of the CPCF to undertake productivity improvements.

Creating Good Jobs, Building a Strong Talent Pipeline

Mr Henry Kwek talked about the difficulty in encouraging Singaporeans to join the construction industry. Mr Xie Yao Quan also asked about what types of new jobs in the sector Singaporeans can look forward to.

It is common to associate jobs in construction sector with the “three Ds” – “dirty, dangerous and demanding”. However, as part of its transformation efforts, the industry has made strides in redesigning existing jobs, and creating new and higher-skilled jobs with better working environments. There are many exciting career pathways in areas such as digital delivery management and smart facilities management. Many of these job roles did not even exist a decade ago.

I recently met Mr Lee Kong Jian, a bright NTU graduate with a background in Civil Engineering. He is working at an Integrated Construction and Prefabrication Hub (ICPH) operated by local contractor Soilbuild Construction Group. Kong Jian is a DfMA engineer in the ICPH. His day-to-day work involves using various digital platforms to manage the prefab production and delivery of precast concrete components, optimising the process for efficiency, while maintaining quality standards for his clients. His job will not be out of place in a high-tech, manufacturing plant. Think about it – creating good, exciting jobs for Singaporeans.

We are stepping up our efforts to attract local PMETs and more tech-savvy young Singaporeans to join the Built Environment sector. As at end-2020, there were about 7,500 jobs and training opportunities in the construction industry under the SGUnited Jobs and Skills Package. There are many exciting job roles, for example, digital delivery specialists, logistics supply chain planners, and environmental specialists. Exciting job roles for Singaporeans. Good jobs, high skills in demand.

We are also investing in our local workforce to acquire the relevant skills in many areas, especially those in demand - green buildings, DfMA and IDD. In September last year, we rolled out the Skills Framework for the Built Environment. The Framework promotes recognition of skills development to enhance career progression opportunities. BCA is working with the various Trade Associations and Chambers to align accreditation schemes with the various progression pathways and skill requirements for the various job roles. 

We will continue to build a strong talent pipeline through our iBuildSG Scholarship and Sponsorship Programme. As of January 2021, we have awarded more than 3,600 scholarships and sponsorships to local students. But we are not just     focusing on new entrants into the sector. We are taking pains and effort to upgrade our existing workforce as well. 

I had the privilege of speaking to Ms Kartini, a 45-year-old lady who has been working as a 2D drafter at infrastructure consulting firm, AECOM Singapore, for the last 18 years. She was bubbly and passionate. With support from her firm and her supervisor, whom I spoke to as well, Ms Kartini enrolled in the Professional Conversion Programme (PCP) for BIM Professionals to upgrade her skillsets for 3D drafting roles.

Today, Ms Kartini is redeployed as a BIM modeller at AECOM. When I spoke to her, there was a palpable sense of satisfaction and pride in having achieved the skills upgrade. She shared with me that her children were very proud of her, and she was very proud of herself. She had learnt valuable skills from 2D drafting to 3D modelling. She shared that 3D modelling enabled her to troubleshoot early in the construction process. 

We are bringing new entrants into the Built Environment sector, while making the effort to train our local, existing workforce in new skills and job roles. I urge more firms to tap on these training programmes to upskill their mid-career staff to take on these roles.

Through these collective efforts, we aim to train 80,000 professionals in the key transformation areas under the ITM by 2025. And we are making good progress.

Conclusion

The Government is committed to working hand-in-hand with our tripartite partners – industry associations, firms and unions, to transform the Built Environment sector. We envisage a high-tech and integrated construction ecosystem, led by progressive local firms, with a strong local core, poised to capture even more opportunities abroad as we transform our sector.

We hope, and I personally hope, that when we come to talk about jobs in the construction industry, we will no longer associate them with the “three Ds” of “dirty, dangerous and demanding”, but a refreshed set of “three Ds” – “desirable jobs, in-demand skills and dynamic careers”, allowing us to tap on the imagination, passion and capabilities of our firms and Singaporeans to build a much greener, vibrant, and sustainable Singapore for tomorrow.