HDB revealed that it would extend the duration of steel price protection by nine months, up from its earlier extension of four months, to help cushion the impact of price hikes.
Construction firms working on HDB projects will receive more support in the form of protected prices for some raw materials such as steel, reported Channel News Asia (CNA).
HDB revealed that it would extend the duration of steel price protection by nine months, up from its earlier extension of four months, to help cushion the impact of price hikes.
The agency expects the extension to benefit about 35 projects.
The steel price protection previously offered by HDB was for 18 or 22 months, which typically cover the duration of structural works.
With the extension, contractors who commenced structural works in January will be protected against fluctuations in steel prices until March next year.
From October, contractors carrying out pre-cast production locally can also apply for additional supplies of concreting materials at protected prices, beyond the amount they had opted for earlier in their tender.
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“This protects our contractors against material price fluctuations and potential supply disruptions for concreting materials, as the risk is borne by HDB,” said HDB as quoted by CNA.
It noted that the prices of steel have increased by around 25%, while that of concreting materials rose 15%.
In a Facebook post, Minister for National Development Desmond Lee said the various measures introduced so far are targeted at minimising delays to Build-to-Order (BTO) projects.
“The construction industry has been badly battered by the COVID-19 pandemic,” said Lee as quoted by CNA. According to him, supply chain disruptions, manpower shortages, rising shipping and material costs as well as stringent health measures have placed “significant strain” on local contractors, who are finding it hard to meet project timelines.
“We recognise that these delays have also affected home buyers and disrupted many of their life plans,” added Lee.
“We will do our best to assist affected homebuyers. HDB will continue to keep homebuyers updated on the completion date of their new flats through letters as well as the My HDBPage as construction progresses.”
HDB’s support measures come after the main contractors of five BTO projects were unable to continue the projects due to financial difficulties.
The affected projects are Senja Heights, Senja Ridges, Marsiling Grove, Sky Vista @ Bukit Batok and West Coast Parkview.
Lee said an “extensive set of assistance measures” have been introduced by the government to support the construction industry.
Among them was the $170 million in advance payments to help ease the cashflow of contractors. A fact sheet from the HDB showed that the money was disbursed to 36 contractors of 74 residential projects that are under construction.
Around $36 million was also paid to 50 contractors of 96 residential projects, as part of the effort of HDB to co-share the hike in non-manpower related operating expenses due to the prolongation of construction contracts.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
