Govt to share extra cost Builders hit by rising sand prices

The Sunday Times, February 4, 2007


It will share up to 75% of the extra cost for existing public building contracts.

CONTRACTORS worried about the rising price of sand were assured yesterday that the Government will share their burden on existing public building contracts.

Industry players expect a spike in sand prices to above $50 per tonne from $20 per tonne about two weeks ago after Indonesia announced an immediate ban on the sale of sand to Singapore.

Minister for National Development Mah Bow Tan said the Government is prepared to share up to 75 per cent of the additional cost and hoped that private developers will do the same.

He said: 'Bearing in mind that this is a very sudden disruption, we think it's only fair that all the parties involved share in the additional cost.

'By that, I mean not just the concrete manufacturers but also the contractors and, ultimately, the developers.'

Speaking to reporters yesterday at the Tampines Town Hall Forum, Mr Mah said the proportion shouldered by the Government would vary with each project, depending on what stage it is at and the terms of the contract. He emphasised that this would only be a one-off measure for existing contracts. Future contracts would have to factor in the additional cost.

Indonesia said its ban on sand was to prevent further damage to its environment and protect its borders.

The move stunned the building industry here which is anticipating $19 billion worth of contracts this year, the highest since 1997.

Singapore's construction industry has imported about six to eight million tonnes of sand a year, almost all of it from Indonesia since 1997, when Malaysia banned exports to the Republic.

Yesterday, the Indonesian government announced that it would beef up security between Indonesia and Singapore to enforce the ban. It ordered security personnel to be on high alert and said it would take strong action against those smuggling Indonesian sand overseas.

Singapore started releasing sand from its stockpile on Thursday, which Mr Mah said would be 'enough for us'. He has provided assurance that supplies are coming in from regional countries, but did not specify which ones.

'I think in the last two days, we've already had two shipments coming in and the flow is coming in regularly from now,' he said.

The need for the industry to look at exploring alternative methods and construction materials to reduce the demand for sand remained, he said.


By Melissa Sim