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Singapore Infrastructure Report Q4 2011
Business Monitor International, Aug 2011, Pages: 84
Business Monitor International's Singapore Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Singapore's infrastructure industry.
BMI View: Singapore's construction industry looks ever more likely to revert back to more moderate growth levels, with latest estimates released by the Singaporean statistical board showing real growth for the construction industry in Q211 reaching a lower than expected 1.6% year-on-year (y-o-y). This brought construction real growth for the first half of 2011 to 2.0% y-o-y, a strong indication that stimulus measures launched during the global economic crisis have run their course. Consequently, we have revised down our full-year forecasts for the construction industry, with real growth for the sector reaching 3.7% y-o-y in 2011. However, we BMI believe that the government's plans to continue spending on infrastructure to boost Singapore's productivity, plus the signing of several large-scale residential and commercial developments with Malaysia, will ensure decent growth figures over the medium term. BMI are forecasting that the construction sector will average growth of 4.2% per annum between 2011 and 2015, with the infrastructure sector averaging real growth of 6.9% per annum over the same period.
Key drivers affecting infrastructure growth include:
- In May 2011, Singapore-based electricity transmission and distribution (T&D) services provider SP PowerGrid started the tendering process for the construction of two multibillion dollar underground cable tunnels, the second-phase development of the country's extra-high voltage electricity grid network. Bids for their engineering, procurement and construction (EPC) contracts are scheduled to be called in Q311, and the two tunnels are expected to be completed in 2016 and 2017, respectively.
- In early July 2011, Sembcorp started construction work on a US$40mn integrated wastewater treatment plant in Jurong Island, the petrochemical hub of Singapore. The new plant will have the capacity to treat 9,600 cubic metres per day (m3/d) of complex industrial wastewater.
- The Singapore Land Transport Authority has started awarding contracts for the 21km Downtown Line Stage 3 (DTL3). Between April and July of 2011, eight contracts with a combined value of US$1.0bn were awarded to seven companies: China State Construction Engineering Corporation (CSCEC), Japan's Sato Kogyo, Italy's Cooperativa Muratori & Cementisti- C.M.C di Ravenna, Australian companies Leighton Asia and John Holland as well as South Korea's Samsung C&T Corporation and SK Engineering.
This quarter, Singapore has fallen to second place in BMIs Asia Pacific Infrastructure Business Environment ratings, achieving a score of 66.8. The country's score in Industry Rewards has fallen to 42.5, highlighting the limited opportunities for greenfield projects. However, Singapore's commitment to a low-tax regime and highly efficient regulatory framework ensures that the country has the potential to facilitate the realisation of rewards in the Asia-Pacific region. Along with Hong Kong and Taiwan, the country is fast approaching developed nation status.
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