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Contractors’ complaint against simultaneous act by ready-mix suppliers

CONTRACTORS have submitted a ‘thick file’ of evidence against a number of ready-mix concrete suppliers who have allegedly profiteered from sand price hikes, Ms Lee Bee Wah (Ang Mo Kio GRC) revealed yesterday.

The Singapore Contractors Association Limited (Scal) declined to provide details of their complaint when contacted.

But Ms Lee, who has been advising construction firms, told The Straits Times that four to five suppliers acted simultaneously in cancelling existing contracts and demanding new terms.

While the price of sand went up from $15 to $25 per tonne after the Feb 5 Indonesian ban on land sand exports, she said that concrete suppliers were charging $200 per tonne, nearly three times the original price of $75.

Sand is a key ingredient in making concrete.

‘All the main contractors have been hit,’ said Ms Lee.

Scal submitted the file to the Building and Construction Authority (BCA) in March.

Ms Lee raised the matter in Parliament yesterday, and asked National Development Minister Mah Bow Tan if his ministry had responded to the submission. Mr Mah said the BCA was looking into the specific complaints by Scal.

‘So far, they have not responded,’ he replied. ‘They have not reached the final conclusion on each of these complaints, but as and when they do, I will make sure that the results of these complaints are released to the relevant parties.’

Scal is not the only association to register its unhappiness. Last month, two Japanese trade organisations also complained to the BCA about alleged profiteering by concrete suppliers.

Mr Mah said yesterday that there were ‘ample opportunities and ample avenues for the various complainants to bring their case up, not only to the BCA, but also I’m sure even the Competition Commission may want to have a look at it’.

He said that, following the disruption of supplies, the price of concrete rose to about $200 per cubic metre. But the industry had since adjusted, given, among other things, the supply of sand and granite from other sources.

There is now ‘greater supply and pricing clarity’ and the price of concrete has fallen to below $175 per cubic metre.

He also told MPs that industry associations had come together, examined the cost structure of concrete production, and agreed ‘on some principles on the cost-sharing arrangement’ for sand and granite costs in ongoing projects.

Mr Simon Lee, executive director of Scal, said a Construction Industry Joint Committee, comprising eight associations including the Real Estate Developers’ Association of Singapore, met last week. He declined to reveal more but said that their agreement followed public sector guidelines.

The Government pledged to compensate contractors for up to 75 per cent of the hike in construction costs of public projects. It also encouraged private developers to adopt a similar cost-sharing approach.

Mr Mah also told the House that the Government has released land for new concrete batching plants, ‘and if necessary, is prepared to release more if there is demand for it’.

Source : Straits Times - 22 May 2007