SPEECH BY ER DR LEE BEE WAH MP FOR NEE SOON GRC AT PARLIAMENT’S BUDGET 2018 COMMITTEE OF SUPPLY DEBATE
During the Budget, the Minister announced that an Infrastructure Office will be set up by Enterprise Singapore and the MAS to help Singapore Firms to tap on infrastructure opportunities in Asia, such as China’s Belt and Road Initiative. I would like to ask Minister: who will this Office serve? Government-linked companies? Temasek-linked companies like Surbana-Jurong? Or our private sector? How will local consultants and contractors benefit?
I strongly believe that the government should do more to develop local enterprises in the construction sector so that we can benefit from the booming infrastructure projects in the region.
One of the ways to do this is to give a helping hand and groom local consultants and contractors and give them opportunities to participate in large government-led projects in Singapore so that they can build their track record.
In this aspect, it is very disappointing. I was told that some of the pre qualifications called for Government projects are so onerous that none of the local contractors or consultants can qualify. In cases like that, has Government thought of how to involved the local companies instead of just having them as smaller players down the value chain? This puts local contractors at a disadvantage. They may possess the skills, capabilities and willingness to invest, but due to their lack of a track record, they have difficulties in venture abroad. Some had done better and become sub-contractors of multi-national companies and doing work overseas.
If the government is serious about helping the local companies. I am sure you are able to find out more information from members of Singapore Contractors Association. I had a earful from them when I met them recently.
I am pleased to note that the Government plans to strengthen its funding support through the Partnerships for Capability Transformation (PACT) scheme to encourage firms to forge regional collaborations and internationalise. I hope through this scheme and the Infrastructure Office, there can be greater encouragement and fostering of deeper partnerships between government agencies, major firms in Singapore’s construction industry, and contractors from the smaller companies, so everyone gets a share of the pie. Ultimately this will result in an overall increase in quality and reputation in our construction sector.
Furthermore, to encourage more construction firms to internationalise, there are a number of possible solutions to make this option more accessible and appealing for all.
One way is to help our Companies is to understand the tax regime of foreign countries that they are operating in as taxation in foreign countries can be quite complicated. As you know, most Singaporeans are law abiding and they are very afraid of running into problems in foreign countries. Many companies also do not have deep pockets and cannot afford to go through steep learning Curve.
May I also suggest to our ministries to actively negotiate with their counterparts to streamline and make the application of work permits less onerous, so more Singaporean PMETs can work overseas.
The Infrastructure Office will work closely with private sector players, which I think is the point that Dr Lee Bee Wah raised, in the infrastructure ecosystem, supported by Government agencies like Enterprise Singapore, EDB, MAS and the Professional Services Programme Office.
In short, the aim is really to bring together the different players in the infrastructure ecosystem that we have in Singapore – from the public sector the private sector, from the large companies to the small companies, those in professional services to those in financial services, and those who can execute projects – so that we can bring our capabilities together to address this opportunity as a group.
As Er Dr Lee Bee Wah noted, local contractors also need to build up their capabilities and track record to succeed both locally and abroad. In this regard, Er Dr Lee said that stringent pre-qualifications in government projects could prevent local firms from qualifying and hence building up relevant experience. We should clarify that pre-qualifications are not intended to limit opportunities, but to ensure that tenderers have the ability to tackle important and complex public works, such as MRT or deep tunnelling projects. While it is up to agencies to set their own requirements, they certainly have to be fair, and not be unduly onerous. They should also ensure that their tenders obtain an adequate number of bids, to ensure fair competition.
Our approach to help firms is to give them the resources they need to build up their capabilities, so they become more competitive. For example, contractors can tap on various schemes under BCA’s Construction Productivity and Capability Fund (CPCF), to build up their capabilities and to upgrade their workforce. About $530 million in funds have already been committed under the CPCF, benefiting over 9,000 firms, 90% of which are our SMEs. In tandem, we also reviewed our procurement framework to place more emphasis on quality and this will facilitate healthier and more sustainable competition. With improved capabilities, local contractors will better their chances of qualifying for more construction projects.
In addition, we will also try to help our local firms internationalise if they wish to do so, by finding opportunities for them to team up for large overseas ventures. If our firms can offer together a unique “Singaporean” way of undertaking the entire development cycle, such as through BIM and IDD, this will certainly enhance their competitive edge. One example of an opportunity is in Amaravati, the new capital city of the state of Andhra Pradesh in India. A Singaporean consortium comprising Ascendas-Singbridge and Sembcorp has secured a start-up area to kick-start the new city’s development. Singapore companies with the relevant expertise should consider whether they can export their services there as part of the consortium.