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Singapore productivity - 1 blangah working 4 blangahs watching

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http://www.straitstimes.com/STI/STIMEDIA/image/20100313/a34-1.jpg
At a roadworks site in Chinatown, one foreign worker cuts metal bars while four others stand around and watch. Other workers at the site are tasked with directing traffic. Such unproductive work practices are common at construction sites around Singapore. -- ST

What ails Singapore's building industry?
It's a statistic repeated over and over again in recent weeks: Productivity in Singapore's construction industry is one-third that of Japan's and half that of Australia's.

In the first of a two-part feature, Insight finds out why the sector has fallen so far behind and what it can do to surge ahead.
AT A construction site along a busy road in Chinatown, a solitary worker welds a piece of steel. Four of his colleagues stand around watching him.

Meanwhile, scattered around the site are workers whose task is to direct the flow of traffic.

It is a scene many motorists encounter at roadworks around the island.

But if all goes to plan, such a glaring example of unproductive work will soon be a thing of the past.

The men directing traffic will be replaced by automatic signals, and there will be no more stand-and-stare workers.

During the Budget speech two weeks ago, the Government unveiled the country's new productivity-based growth strategy. As the Finance Minister laid out the plan, he gave the building sector a good hammering.

It was singled out as the industry with the poorest productivity record in Singapore - with levels half of that in Australia and a third of that in Japan.

Much of the blame was pinned on companies being over-reliant on cheap foreign labour and reluctant to invest in innovation.

A basket of measures was uncovered aimed at raising productivity growth in the sector from below 1 per cent to somewhere between 2 and 3 per cent. The measures include subsidies for labour-saving technologies and a gradual rise in foreign worker levies.

The Government's sudden focus on construction has made people sit up and take notice of what has been a traditionally low-profile sector.

Given that Singapore has been enjoying a building bonanza in recent years - think integrated resorts, new Mass Rapid Transit lines, Housing Board flats and condominiums - how did the sector fall so far behind?

Is there something fundamentally wrong with how it has been operating? And if so, are levies and grants the right tools to give it a lift?

Why Singapore lags behind

TWO years ago, Ginlee Construction director Tommy Lim thought he had scored something of a coup - he hired a young local foreman.

'He was a young guy, 20, just after national service. He had only secondary school qualifications but it was okay, we were willing to train him,' says Mr Lim.

However, it would be a short-lived coup. Two days into the job, the foreman stopped showing up for work.

'It turns out he couldn't take the heat and didn't want to do the work any more,' recalls Mr Lim, who has close to 100 workers, nearly all of whom are foreigners.

The story is symptomatic of a larger problem plaguing the construction industry, in that it requires an inordinate amount of labour to get a job done, and much of this labour is poorly skilled and transient.

Though an over-reliance on cheap, low-skilled foreign workers may have been identified as a cause of the low productivity, construction bosses are quick to point out that finding local workers here is a fool's errand.

The work is seen as low-paying, dirty, and unrespected - hardly the pick of a local with choices.

'You accidentally hit someone on the road, chances are that person will have a degree or a diploma. These people won't want to do this job,' says Mr Lim.

Not that this should surprise anyone.

Even as far back as the 19th century, Singapore's buildings were already being put together by foreigners - Indian convict labourers and samsui women from China.

So what's the problem with foreigners?

While no one has any illusions that Singaporeans can take over the building work here, observers point out that relying heavily on foreigners puts a cap on growth. The country is said to be nearing the limit of the number of foreigners it can accommodate.

A too-large presence of transient foreign workers exacts social costs that go unmeasured in these economic indicators. And the fact that many move on after a few years means the skill level of these builders never goes up.

Mr Lim Yew Soon, a director at construction firm Evan Lim and Co, describes the typical life cycle of a foreign worker: 'He comes from a developing country where he is trained only in the traditional methods. He is new to the environment and the work but he learns slowly.

'After two years when he has picked up some skills, he leaves for a place where the pay is better and the weather is better.'

Labour, though, forms only part of the equation. Industry experts say there are two other roadblocks.

The first is the business culture, especially when it comes to how the main contractors and sub-contractors work together.

Explains Dr George Ofori from the National University of Singapore's (NUS) department of building: 'In Japan, the main contractor is very interested in how the sub-contractor does the work, the relationship between them is very tight.

'Together they will be exploring better methods, how to minimise resources, improve areas where they don't do so well.'

In Singapore, he says, partnerships tend to be formed purely on who puts in the best bid. A contractor may be changing sub-contractors with every project, and 'just wants the sub-contractor to finish the work, he's not interested in whether the guy brings 10 foreign workers or 100'.

The second, bigger problem is the highly cyclical nature of the industry. In the past, the local construction scene had jumped unpredictably from terrible lows to great highs in very short timeframes.

For instance, between 1998 and 2006 as Singapore was hit by one economic crisis after another, the construction sector went through a sustained period of negative growth.

When the sector bounced back in 2006, it did so with a vengeance. Construction demand shot up 40 per cent every year for the next three years.

The upshot of this unpredictability is a preference for foreign workers on short-term contracts, rather than expensive machines.

Says Professor Chan Weng Tat of the department of civil engineering at NUS: 'It has sometimes been suggested that having a large pool of foreign workers is the most pragmatic way for the industry to ride the economic cycles.'

Is Australia a model?

WHILE Japan and Australia have better productivity numbers, the two countries might not provide the best models for Singapore. They have certain inherent advantages that make work far more efficient than in Singapore.

For instance, the temperate weather in both countries gives builders a more comfortable outdoor work environment.

Both also have a largely homogenous, all-local labour force. There is no need to translate between different languages unlike on construction sites here.

Australia even has a size advantage - a large Australian man can carry something that might otherwise require two Bangladeshis.

Perhaps more significantly, the culture in both Japan and Australia accords some recognition to builders and tradesmen. In Singapore, the trade carries a certain stigma.

Given all the constraints, Mr Andrew Khng, president of the Singapore Contractors Association Limited (Scal), thinks local builders have not fared as badly as they have been portrayed.

He finds it unbelievable that Singapore could be so far behind Australia. 'An Australian bricklayer makes $4,000 and a Bangladeshi makes $1,000 a month. Bricks are all the same size. He cannot be that much more productive,' he counters.

What can be done?

FOR most, the lowest hanging fruit that firms can reach for to become more productive is automation.

Many construction bosses can rattle off a laundry list of new innovations that could, in theory, be deployed in Singapore.

There are fancy machines that can replace the work of a handful of workers, and techniques that can save time and labour on any site.

Yet, only a handful of the over 10,000 construction firms here use them.

 
continue ..
Even then, the use of technology is spotty and ad hoc, says Dr John Keung, chief executive officer of the Building and Construction Authority (BCA), which oversees the industry's development.

'We want them to sustain this, rather than doing it for one project and then not doing it for the next. It is not very good for the industry,' he adds.

At the heart of the problem, builders say, is the uniqueness of each project. Automation techniques, which rely on standardisation, may not be a good fit for certain types of construction.

Take pre-casting, for instance. While building the components of a tower block in a factory and simply assembling it on site seems productive, it does not always make business sense.

Says Straits Construction director Kenneth Loo: 'I am a fan of pre-cast, but it won't work for everything. In a large building with a lot of repeated elements, it makes sense, but it is not cost-effective for a low-rise building.'

Mr Lim of Evan Lim estimates that building with pre-cast blocks can raise building costs by anywhere from 5 to 20 per cent. This is because a company must pay to transport the large pieces, and rent more tower cranes for the site.

'Unless it's a project where the developer has specified that it must be pre-cast, then everyone will bid a pre-cast price. Otherwise, we may avoid it.'

At other times, it is not down to cost, but the lack of skills to operate cutting-edge equipment.

Take the electric concrete crushers that Mr Tommy Lim uses to demolish walls. At $300,000, an electric crusher may cost up to three times more than a hydraulic one, but it is smaller and safer and can let one man do the job of six.

'The problem is there are not many people who know how to repair it here and not many workers who know how to operate it.' Foreign workers need to be trained to use it properly, he says.

Then there is a whole cluster of labour-intensive construction jobs like bricklaying, tiling and concrete pouring that have little or no scope for automation.

But raising productivity is not just about improving construction methods. Significant improvements will also be gained from changes at the management level, points out Mr Khng of Scal.

'This will come through changing the chain of thought. Have people design differently, and think differently,' he says.

This includes getting more of the interested parties involved at the design phase, to produce designs that are easier and require less labour to build.

It is in the face of such complex problems dogging the industry that the Government has developed its multi-pronged approach.

To discourage companies from depending heavily on foreign workers, entitlements have been cut and unskilled workers phased out.

More importantly, foreign worker levies will be raised gradually over the next three years.

From July 1, the levy for most work permit holders 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.

And, to encourage innovation, the Government is setting aside $250 million to help companies fund new and more productive equipment as well as train workers.

Design requirements for buildings will be tightened to make them easier to build. A one-stop centre will be set up by BCA for firms to share and learn about new technologies.

While industry players welcome most of the changes, many have questioned if an across-the-board levy hike is appropriate for such a diverse industry.

Small-time contractors, like Mr Vincent Koh, are especially worried. His firm, C.H. Koh Private Limited, which does small home renovations, has a staff of just 10.

'As it is, our profit margin is not very good because of the competition. I'm not sure what to do about the levy. There is no machine that can replace my workers,' says the 43-year-old company director.

Some academics and construction bosses suggest that instead of throwing new rules at the industry, the authorities should set specific productivity targets and reward those who try to meet them, while leaving market forces to penalise those who lag behind.

Mr Desmond Hill, deputy general manager of a large foreign construction firm, suggests taking a leaf out of the Government's 10-year experience in improving work safety on construction sites.

'They set a target, rolled out programmes and it worked. Fatalities in the workplace have come down. Developers also started going with contractors with good safety records. All this without regulation,' he says.

Dr Keung's response is that the authorities have already been trying the 'soft' approach for many years, but with minimal results.

From negative productivity growth in the late 1990s, productivity has risen annually by about 0.7 per cent in the last 10 years.

'After trying for a decade with only a small improvement - which is good - we've got to do more,' he says.

Bitter medicine, but necessary

AMID the cacophony of views and concerns, industry insiders agree on one thing: Change will not come easily.

Architects will have to change the way they design. Builders will have to radically change almost everything about their operations, from the number of workers they need, down to what building me-thods to use.

And if the combination of carrots and sticks fails to strike the delicate balance it is aiming for, ordinary Singaporeans could find their buildings becoming costlier, or taking longer to complete.

But as painful as it could be, it is a transformation the sector must undergo, say industry watchers.

Says Dr Keung of BCA: 'We've got to decide what we want to do in the future. Do we want to carry on with what we are doing today, or do we want to see an industry which is productive and technologically advanced?

'We believe that after doing all these, we have got a good chance to move the industry forward.'
 
Half of the time these ah nehs are think of how to be productive, (Work less, get more pay) but Over Time is their only way to get more $$$ so why work hard and fast if they can work slowly and get more pay?
 
A bit like the old SAF. Private does, corporal oversees, sergeant supervises, PC ensures, and RSM makes sure everyone complies.
 
Half of the time these ah nehs are think of how to be productive,

Ah Nehs aren't ideal but they're still better than Sinkies who would faint in the heat and die of heart attacks from the physical effort. :rolleyes:
 
RWS will soon have one pinoy performs and the rest of pinoys watching too. Did I hear they recruited 5000 pinoys.
 
Why pick on foreign "talent" when you can see the same thing going on in Parliament :D

The foreigners aren't being paid world class salaries, what.

When parliament can talk cock about beauty tips, LKY , GCT,.. are missing in action.

Someone tell me who is looking after the shop :confused: :confused:
 
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