To encourage importers to seek alternative sources of sand and granite, the Government plans to share some of the extra costs involved in importing these materials.
Announcing this yesterday at an industry event, Minister for National Development (MND) Mah Bow Tan said: “If you are buying from a different source … the raw material cost may be the same price (but) when you factor in the logistics and transportation, the final cost may be higher, so this is a risk and importers may not be so keen to diversify under normal circumstances.”
But the Government was willing to share the risk and make a commitment to purchase the sand at “a certain price” if importers are not able to sell their stock because of market fluctuations, he added.
The new scheme would mitigate the perceived risks, and encourage importers to seek alternative sources, he told industry executives at the Building and Construction Authority’s (BCA’s) Award night yesterday. Details from BCA are expected soon.
Singapore’s supply of the construction material was disrupted by Indonesia’s decision to ban sand exports in January, with the shortage hitting many industry players and sending prices skyrocketing.
Addressing industry sentiment that the new extradition treaty with Indonesia was likely to see a lifting of the ban on sand, Mr Mah said the two were not related.
“As the Indonesians have said, the sand ban was due to environmental reasons,” he pointed out. “We have indicated that we are very willing to deal with the environmental issue and the offer is still available. If we can work on that basis, I think there may be a resumption of the sand (supply), but I think we will wait and see what happens.”
But even as the situation with Indonesia is being monitored, Mr Mah said that alternate sources and reduced use has helped “restore stability and calmness in the market”. The cost of concrete came down this month to about $170 to $175 per cubic metre, from about $200 in March.
He also urged the industry associations in the private sector to “facilitate” sharing schemes with their players, even as progress payments from the Government are easing the woes of contractors in the public sector.
But diversifying supply was just one of the “prongs” in building a more resilient and sustainable construction sector, said Mr Mah. Another approach is to decrease the dependence on concrete.
Thus the MND is driving research and development efforts into suitable and economically viable alternatives to concrete through schemes such as a $50 million Research Fund for the Built Environment.
Mr Mah noted that some of the 13 proposals picked for funding support under this scheme are geared towards such alternatives.
Source: Today, 11 May 2007