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New scheme urges construction players to create 'alliances' for transformation

New scheme urges construction players to create 'alliances' for transformation

A view of a deserted construction site in Singapore on Apr 20, 2020. (Photo: AFP/Roslan Rahman)

SINGAPORE: Under a scheme meant to spur transformation along value chains, players in the construction sector will have to band together to create minimum three-year plans for specific goals, said National Development Minister Desmond Lee on Thursday (Mar 4).

Speaking in Parliament, he gave more details about the new Growth and Transformation Scheme (GTS), which was first announced last month by Deputy Prime Minister Heng Swee Keat as part of Budget 2021 measures.

It was also said then that the built environment sector would be the first to undergo the scheme.

READ: Labour-crunched contractors hit by a brick wall of rising material costs, supply chain disruptions

Mr Lee noted that the built environment sector features heavy inter-dependencies among stakeholders along the value chain, which is why "it is difficult for any one firm in the value chain to transform on its own".

The GTS' approach is thus to transform the entire chain holistically, he said.

Under the scheme, "progressive" developers, builders and consultants, for instance, will be encouraged to form alliances, and develop a minimum three-year business and transformation plan.

This plan has to outline initiatives to reach certain outcomes, such as using digital construction technology to reap productivity savings.

The alliances should also seek to meet sustainability targets, build better capabilities, develop the workforce, and improve business growth and strategic collaboration, said Mr Lee.

The alliance members will be collectively responsible for the outcomes committed to in their business plan.

"In this way, the value chain approach will help alliance members forge long-term collaboration, reap mutual benefits, and build capabilities through knowledge sharing and transfer.

"This will help pave the way for the alliances to take on larger or more complex projects, or develop niche strengths in the future," he said.

READ: Public sector projects to drive bulk of construction sector's recovery in 2021

The approach would also be a shift away from project-based support schemes.

Such schemes can result in contractors "operating at very thin margins to meet short-term targets, without the capacity to invest in long-term transformation", said Mr Lee.

"In contrast, the GTS supports firms in improving their capabilities, not just in completing specific projects," he said.

Mr Lee added that authorities will roll out the GTS with "a few" alliances first, and improve the scheme along the way.

Over time, the hope is for the entire ecosystem to progress, including sub-contractors further down the value chain, he said, adding that more details will be announced later this year.

Source: CNA/cl

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