One more delay
Construction at Sengkang blocks halted as contractor faces financial meltdown
By Leong Pik Yin
WORK on seven new 17-storey blocks at Rivervale Crescent in Sengkang has come to a complete halt - the fifth Housing Board delay this year.
SLOW, SLOW WORK
A SNAPSHOT of building and upgrading delays over the past four months.
• MARINE TERRACE
Project: Nine blocks at Marine Terrace undergoing Main Upgrading Programme
Original completion date: Next June
Delay: Possibly two months
• PUNGGOL FIELD
Project: Seven new blocks at Punggol Field
Original completion date: Third quarter of this year
Delay: Three to 11 months
• PUNGGOL CENTRAL
Project: 612 new flats at Punggol Central
Original completion date: April this year
Delay: Three months; the project was completed in July
• FERNVALE ROAD
Project: Five new blocks at Fernvale Road
Original completion date: Between this November and next February
Delay: Five to 10 months
• RIVERVALE CRESENT
Project: Seven new blocks at Rivervale Crescent
Original completion date: November next year
Delay: To be confirmed
Scheduled for completion in November next year, the handover of keys to the 700-odd homebuyers is now expected to be delayed.
It is not clear when actual delivery will be, but The Straits Times understands that efforts will be made by the HDB to help those affected by any delay to find alternative accommodation.
They will either be given alternative flats or temporary rental flats.
The latest delay, like those before it, has been blamed on the financial woes of the contractors.
This time round, it is 24-year-old construction firm Chip Huat Construction which is facing financial meltdown.
The contractor of the Rivervale Crescent project, was granted judicial management yesterday after struggling for months to deal with debts totalling $14.3 million, as well as lawsuits and demands for payment by suppliers and sub-contractors.
Some of its creditors had told the company that they would stop supplying materials or doing work for the Sengkang project, while a few insisted on cash payment, causing work to stop about three weeks ago.
Chip Huat, a familiar name in the industry, had taken on numerous HDB projects, including building and electrical works in Sembawang, Jurong West, Bishan North and Pasir Ris.
The company, which made a net profit of $1.87 million in 1999, however booked a loss of $326,820 the following year, a check with the Registry of Companies and Businesses showed.
Chip Huat's spectacular fall is, however, not unusual.
Just six days earlier, an HDB project at Fernvale Road, also in Sengkang, was reported as being delayed by almost a year.
That development was left only 90 per cent complete because its main contractor, Malaysia's Koru Bena, had run into difficulties and was being replaced.
Then, of course, there's the infamous delay in upgrading works in Marine Terrace which not only sparked a debate in Parliament, but also resulted in a review of the tendering process for contractors.
Hit by a triple whammy of low profit margins, a slowing economy and cut-throat competition, the construction industry has halved to just about $13 billion.
In the first three months of this year, six building and civil contractors have shut their doors.
Ms Penny Low, an MP for Pasir Ris-Punggol GRC who represents the Rivervale Crescent area, called for those affected by the latest delay to be understanding.
'The economic condition has caused many companies to go under and the construction industry has been badly hit. While my sympathy and heart are with the consumers, my plea to them is not to be hard and harsh, but to work together with the HDB for a solution.'
She said that she had yet to receive any complaints from those who had been affected.
But, she said she hoped the HDB would put 'Plan B into action quickly or it won't be very palatable for those who are waiting for their flats'.
She said: 'Some could be stranded without a place to stay.'