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Welcome Address by Mr Kenneth Loo, SCAL President at the SCAL Contracts and Practice Conference 2016 21 July 2016, Orchard Hotel

 

Dr Jimmy Koh, Managing Director of Antara Koh Pte Ltd, Past president and Honorary Life member of SCAL Distinguished guests  Council Members Speakers Ladies and Gentlemen   


1. Good morning and welcome to SCAL’s Contracts and Practice Seminar 2016. This is the fifth consecutive year SCAL is organising this seminar. I would like to thank all of you for your presence here today. I am encouraged by the strong turnout and support we receive every year.   


2. Indeed, construction contracts and practices can be complex. Through these seminars, we hope to provide deeper insights on some of the common provisions in construction contracts and their important aspects. By understanding the necessary administrative contractual requirements, companies will be able to better manage the potential risks involved and avoid unnecessary disputes.    

 
3. Early this year, BCA projected the total construction demand in 2016 to be between $27.0 billion and $34.0 billion. This will come mainly from public sector demand for civil engineering works, projected to strengthen significantly to between $18.5 billion and $21.5 billion. Major infrastructure works include the new MRT lines, North-South Expressway, Changi Airport Terminal 5 Development (Phase 1) and Phase 2 of the Deep Tunnel Sewerage System.  


4. While these bring opportunities to our members, a major challenge is the ability to manage the projects at each level of the value chain. One key issue is cash flow. From a quarterly report by the Singapore Commercial Credit Bureau (SCCB), statistics shows that payment delays within the construction sector continued to worsen. In the first quarter of 2016, the construction sector accounted for the highest proportion, as well as the largest increase in payment delays among all sectors. It was reported that slow payments in the sector increased from about 40% in the fourth quarter of 2015 to about 53% in the first quarter of 2016. The report attributed the increase was largely to the tapering of both private and public building activities. I would like to urge all members to be prudent when tendering and to bid wisely. In particular for big and complex projects, it is essential to consider various aspects of the requirements and proposed work before submitting your bid.  


5. SCAL is currently reviewing the Public Sector Standard Conditions of Contract, or PSSCOC, to recommend a more equitable allocation of risks to contractors. We are also reviewing the Security of Payment, or SOP Act with a view of aligning the existing practices with the original intent of the Act so that adjudication is focus on payment disputes. We have set up two working groups comprising industry leaders to advocate and propose the above to the relevant authorities for their consideration. I would like to take this opportunity to thank all those involved for their hard work and dedication.  


6. Today, we are privileged to have with us speakers who are legal experts and practitioners to share on the specific risks to the various stakeholders in the design and build projects, as well as on the pros and cons for contractors to undertake the Conventional Building Arrangements and Design-Build Arrangements. The speakers will also provide practical tips to guard against disputes, dispute resolution methods if one is needed, and recent developments in adjudications under the SOP Act.   

7. Before I close, I would like to express my gratitude to our invited speakers and panelists who have made themselves available for this seminar. I would also like to give a special word of thanks to our Guest-of-Honour Dr Jimmy Koh, and to Mr Desmond Hill, advisor to SCAL’s Contracts and Practice Sub-committee for moderating the Q&A sessions later. Last but not least, I would like to thank the organising committee, as well as the secretariat staff who have spent time and effort to see this seminar through. I wish you all an informative and fruitful day ahead.   


8. Thank you. 

 


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