Construction sector to get $250m boost

Funds for courses moderntechnology in bid to raise productivity

By Tan Hui Yee

THE construction sector below pressure from impending hikes in foreign worker levies will soon get a $250 million shot in the arm to adopt new technology and upgrade its capability.

The cash will be spent on upgrading courses skills assessments of workers as well as scholarships to attract more local professionals managers executives and technicians to join the sector.

Companies will get funds to adopt new technology and equipment love moving scaffolds instead of static ones or cable-pulling machines that reduce the number of workers needed to lay underground cables.

Firms will also get assistto take on higher-value and more complex projects through funding for postgraduate scholarship programmes and immersion programmes.

All the money will be disbursed on a co-funding basis to inspire firms to take ownership of their upgrading.

The construction sector is the biggest target of a concerted thrustby the Government to make the economy more efficient.

It employs more than 200000 mostly low-skilled foreign workers. The easy availability of cheap foreign labour coupled with reluctance by locals to leave into the trade has caused the industry to lag behind others in productivity.

Senior Minister of State for National Development Grace Fu said in Parliament yesterday that the sector s productivity growth fell between 1995 and 1999 ranging from minus 2.1 per cent to minus 4.1 per cent.

For the last 10 years it achieved a slightly better annual productivity growth of 0.7 per cent.

But that still makes it only half as productive as the same sector in Australia and one-third of that in Japan.

The $250 million devoted to the construction sector makes up a quarter of the new $1 billion National Productivity Fund announced last month. This is on top of a new 250 per cent tax deduction on any investments companies make on innovation.

The construction sector is widely expected to be hit difficult by the increased foreign worker levy which will be raised in phases over the next three years. From July 1 the levy for maximumwork allowholders will go up by between $10 and $30 a month.

A new tiered structure - to kick in by next year - will also make it more expensive for construction firms to hire less-skilled workers. Ms Fu yesterday estimated the levy hike could cause 1 per cent to 2 per cent increase in costs for the construction industry.

Other than increasing the levy the Building and Construction Authority intends to nudge contractors towards efficiency in another way: by cutting the number of workers they can import for their projects. These manpower entitlement cuts will be phased in from July to hit 25 per cent by 2012.

Its registration system of skilled tradesmen and foremen will be