Cope With Ban By Sharing Costs: Bca

1 feb 2007 (TODAY)

AFTER a week of rising sand prices and project disruptions for
contractors, the Government will release concreting sand from its
stockpile from today to make up for any immediate shortfall in the supply
of sand.

However, the construction industry will have to make long-term adjustments
following Indonesia's sudden ban on sand exports, the Building and
Construction Authority (BCA) said yesterday.

Land sand from new, more distant sources will cost more due to the higher
shipping costs.

Hence, the authority is urging developers to work out cost-sharing
arrangements with contractors and concrete suppliers, both of whom "may
not be contractually protected against this sudden increase in price", it
said in a statement yesterday.

The Government, which in recent years has accounted for 30 to 40 per cent
of construction projects, hopes to set the example for private developers.

"Government agencies will take the lead to bear part of the increase in
the cost of sand for its existing projects," said the BCA.

Industry sources told Today that the Government would shoulder as much as
75 per cent of the cost increase.

The BCA met yesterday with the various industry groups from the
construction, developer and concreting fields, among others, as well as
key government procurement agencies to discuss and work out the necessary
measures following Indonesia's decision.

The Real Estate Developers Association of Singapore told Today it
supported a cost-sharing arrangement, but said that all parties, including
its members, should "work toward solutions on a case-by-case basis". -
Derrick A Paulo