Speech by Mr Kenneth Loo, SCAL President At SCAL Contracts & Practice Seminar 2018
Mr Wong Meng Meng, Senior Counsel & Founder Consultant, Wong Partnership LLP
Fellow Council Members
Ladies and Gentlemen
Good morning and welcome to SCAL’s Contracts and Practice Seminar 2018. Today’s seminar will provide insights on the practical issues dealing with Conditions of Contract and legal obligations in Design for Safety, or DfS and Building Information Modelling, or BIM.
Based on advanced estimates by the Ministry of Trade and Industry, the construction sector contracted by 4.4 per cent on a year-on-year basis in the second quarter, extending the 5.2 per cent decline in the first quarter. The sector was weighed down primarily by the continued weakness in private sector construction activities.
Early this year, the Building and Construction Authority, or BCA, had projected the total construction demand in 2018 to be between $26.0 billion and $31.0 billion with public construction demand projecting to strengthen from the $15.5 billion in 2017 to between $16.0 billion and $19.0 billion, contributing to about 60% of the total demand.
The private sector construction demand is also projected to improve slightly from $9.0 billion in 2017 to between $10 billion and $12 billion in 2018 with a strengthened economic outlook and the upturn in property market sentiment.
Voice for the Construction Industry
As the voice of the construction industry, SCAL has been dedicated to fulfilling its mission to advocate business-friendly practices, promote industry development, and foster a safe and productive work environment. Since inception, SCAL has been proactive to collate feedback from our members and ensure that the industry’s voice is heard by the government.
I am pleased to note some of the successes in our advocacy efforts. Some recent notable examples are:
(1) Recognition of environmental, health and safety workers as higher skilled R1 workers,
(2) Bringing forward $1.4 billion worth of government projects to help tide over lull in construction activities, and
(3) Raising of the non-price weightage for price-quality method, or PQM from 30% to around 40% to 60% with greater emphasis on quality, productivity and safety records.
On contracts and practices, SCAL has over the years, highlighted the need for more equitable allocation of risks to contractors vis-à-vis the contract obligations and liabilities. Last year, we submitted our proposals for amendments on the Public Sector Standard Conditions of Contract, or PSSCOC. In 2016 we recommended changes to the Security of Payment, or SOP Act. Since then, BCA had engaged SCAL for discussions and some of our recommendations have been taken while others are still under consideration.
I would like to take this opportunity to express my sincere appreciation to the Chairman of the Contracts and Practice subcommittee, Mr Wilson Wong, and members of the subcommittee and the working groups who have committed their professional expertise to undertake review of the PSSCOC and SOP Act.
Greater transparency on performance assessment
To help construction firms identify areas for improvement on performance assessment, SCAL has provided feedback to BCA to disclose the C41 report for contractors’ review and evaluation.
BCA has also provided an avenue for feedback to contractors on their performance in past projects by enhancing the Electronic Builders Licensing and Contractors Registration Systems (eBACs) to allow CRS contractors to assess their track record performance electronically since June last year. This is in line with PQM enhancement to provide greater transparency on contractor’s performance.
Topics at the seminar
Contracts are crucial components of the construction process. As the construction industry shifts to an increased adoption of advanced technologies, contractors need to stay updated on the evolving legal landscape.
Today, we are privileged to have with us speakers who are experts in their field to share on topics such as the responsibilities of individual parties in the construction value chain for Design for Safety, and the contractual obligations with respect to BIM. We also have with us speakers who will provide updates on the recent development in the SOP Act, SCAL’s recommendation for revision of PSSCOC, REDAS D&B conditions of Contract and Liability for Defects.
In conclusion, I would like to express my appreciation to our invited speakers and panellists who have availed themselves for the seminar. Special thanks also go to our Guest-of-Honour Mr Wong Meng Meng, and to Mr Desmond Hill, Past President and Honorary Life Member, Council member and Contracts and Practice Sub-committee Advisor who will be moderating the Q&A sessions later. Last but not least, I would like to thank the organising committee and the secretariat for putting together this seminar.
I wish you all a productive and informative session ahead. Thank you.