Singapore’s top accounting firm KPMG released a survey report on 8th of May this month revealing that there have been more construction project failures in the past 3 years than before. Below is a summary of the findings:
1) 69% of the projects are over-budget by more than 10%
2) 75% are behind project deadlines by more than 10% from the original deadline
3) 68% of the project owners have no high level of trust with their contractors
4) 69% of the project owners see poor contractor performance as the main reason for project under-performance
In the recent months, there have been many reports about poor workmanship surfacing about HDB Built-to-Order (BTO) flats. Construction tenders are often offered to the lowest bidders which result in having contractors undercutting each other by providing the bare minimum standards to their clients. The contractors also took advantage of Manpower Ministry’s loose labour laws by depressing salaries of the construction workers who usually come from third world countries and are often uneducated.
Just in December 2014, the number of work permit holders approved reached a historical high of 991,300, closing on the 1 million work permit holder mark. Although correlation may not be causation, it is hard to divorce from the fact that the increase in foreign workers have resulted in lower quality not only in the construction sector but also the service sector.
Do you think it is time to implement a high unionized Minimum Wage for construction workers to incentivize them to be more productive, achieve higher quality and also at the same time attract locals to work like as in first world countries?
You may view the rest of KPMG’s report here.