Singapore-bound granite barges still being held

The Straits Times, March 13, 2007


TWO weeks on, the Singapore-bound granite barges detained by Indonesian authorities have still not been released, the Building and Construction Authority (BCA) said on Tuesday.

Supply of granite aggregate to Singapore has been disrupted since the Indonesian navy detained several barges on suspicion of smuggling sand, exports of which were banned a month ago.

The Straits Times understands that no Singaporeans have been detained.

Meanwhile, Indonesian Trade Minister Mari Elka Pangestu was reported by Xinhua news agency as saying that Jakarta 'would adopt more strict rules' on the export of granite aggregate to Singapore.

The Indonesian government will hold more meetings to flesh out the details, she said, though she would not elaborate further.

Singapore's Ministry of Foreign Affairs said it sought clarification on a possible granite ban with Indonesian charge d'affaires Andradjati on Monday morning.

Defence Minister Teo Chee Hean reiterated Singapore's position on Tuesday when he was asked about newspaper reports on discussions in Indonesia on a ban on granite exports and how this would affect bilateral relations.

Speaking at a polytechnic graduation ceremony, he said: 'There are many different remarks being made by our counterparts in Indonesia. It's very hard to tell exactly who speaks and what that represents. So we have to clarify with them. I think that's probably the wisest thing to do right now.'

Supplies of both sand and granite to the local construction industry have been disrupted. The Government has released supplies of both materials from its stockpiles to help make up the shortfall. Importers here are also looking for new sources of supplies.

The disruption to granite supplies has contributed to another wave of price hikes in the construction industry.

The price of granite aggregate from BCA's stockpile has shot up from $25 to $70 a tonne. Since March 1, the price of sand has also risen dramatically, from $25 to $60 a tonne.

As a result, the price of concrete has been pushed up to about $200 per cubic metre from $70, putting a strain on the finances of some contractors, said industry sources.

One concrete supplier, who declined to be named, said his business had been affected, but he believes the situation will stabilise in the long term.

'Even if Indonesia really bans granite, we can find other sources. It's just a matter of paying more,' he said.

Local companies are already sourcing aggregate supplies from elsewhere, including Johor Baru, sources said.

Major construction player Hong Leong Asia said it was 'already looking for alternative sources of supply from neighbouring countries'.

A spokesman for Johor aggregate supplier Afdal Bukit Mor Quarry told The Straits Times that the company usually does not supply Singapore, but has recently started getting inquiries.

'We are still negotiating this possibility,' said the spokesman.

Export permits will have to be approved by the Malaysian government before any supplies can be sent here.

Currently, a tonne of basic aggregate is selling from RM9 (S$3.90) upwards.

'It will be profitable selling to Singapore as many quarries here are still not at full capacity yet,' he said.