Singapore HDB brings forward some projects to help smaller contractors

Singapore HDB brings forward some projects to help smaller contractors

By Valarie Tan,

SINGAPORE: Two public housing upgrading programmes will be brought forward with other government projects in efforts to increase spending and stimulate the Singapore economy.

Singapore previously deferred S$4.7 billion worth of public sector projects due to high construction costs.

The Ministry of National Development said now is a good time to do so with material costs looking to fall further.

Residents in older public housing can also expect refurbishments sooner.

At the launch of two urban design events on Friday, National Development Minister Mah Bow Tan said the Housing and Development Board (HDB) is bringing forward plans for its Home Improvement Programme.

This is one of several ways the government is stimulating the economy.

Under the plan, residents will get items like new doors, gates and toilet-fittings installed for free.

Another HDB project to be brought forward is the Neighbourhood Renewal Programme. This will spruce up the environment around older housing estates like upgrading lift landings and letter boxes.

Mr Mah said: “The primary consideration is to bring back those projects where we’re able to help some of the smaller contractors. In other words, some of the smaller projects. In addition to that, we’re also looking to see whether the different ministries are able to bring some of their projects, to take advantage of the potentially lower costs of construction, going forward.”

The move has been welcomed by the Singapore Contractors’ Association.

As to which government projects will be brought forward, Mr Mah said the details are expected by January when the government announces the 2009 Budget.

Mr Mah added: “Not all of these projects can be brought forward totally because some of the projects are very lumpy projects and some their costs may not have come down sufficiently. But where the costs have come down and where the projects are of a reasonable size, the important thing is to give priority to the smaller projects.

Vishnu Varathan, an economist at Forecast said the latest move will prevent smaller contractors from closing down, give jobs to construction workers and ensure consumption.

Even though it can counter the slowdown in the property market, he said the plan will just minimise the recession in Singapore and not stop it completely.

However, Mr Varathan cautioned against the assumption that construction costs will fall further. He said while it’s not likely to increase to rates during the construction boom, regional demand for big projects from countries like China and India may cause prices to rebound again.

Recession aside, Punggol residents can look forward to having a waterfront town of the 21st century.

This winning design was picked from 11 entries in a waterway landscape competition.

Mr Mah said Punggol’s development is on track despite the poor economy with 17,000 flats completed and 3,000 new ones expected annually till 2011.

The National Development Minister said the target is to have 23,000 flats by 2011, a critical mass for a Town Centre to be built and commercial developers to set up shopping malls.

He added that flats there will be affordable for all income groups with smaller and rental flats for the lower-income.

Of the 5,000 Build-to-Order flats launched, about 550 are two-room and three-room units and about 500 rental units are already under construction. -CNA/vm

Source : Channel NewsAsia - 13 Dec 2008

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Singapore property investment sales fall 70% on-year

Singapore property investment sales fall 70% on-year

By 938 LIVE

SINGAPORE: The fallout from the US sub-prime crisis has filtered down to the property market in Singapore.

Property consultancy CB Richard Ellis (CBRE) says total investment sales in Singapore properties fell 70 per cent from 2007, to S$17.83 billion this year.

CBRE says one year on, the crisis in the US has made investors of Singapore properties more cautious.

But the sharp slowdown in transaction volumes was also because developers and investors had trouble getting financing on favourable terms.

Private investment sales accounted for about three quarters all investment sales in 2008.

Sales in this segment came in at S$13.16 billion or almost 70 per cent lower than in 2007.

Investment sales in the public sector made up the remainder of the total, coming in at S$4.67 billion — down 60 per cent on-year.

CBRE says total investment sales for residential properties, including Good Class Bungalows, fell 81 per cent from last year’s record high to S$6.25 billion.

Investment sales for offices also fell, down 38 per cent to S$5.39 billion.

But investment sales in industrial properties bucked the downtrend and recorded a 66 per cent jump from 2007 to S$3.32 billion.

CBRE’s executive director Jeremy Lake says this uptrend is expected.

“Historically, the industrial market has lagged the office market, as witnessed by the large volume of office transaction last year. A lot of investors have been looking at that sector to gain exposure.”

For 2009, Mr Lake believes the investment sales market will remain quiet in the first six months as buyers adopt a wait-and-see attitude.

- 938 LIVE/yt

Source : Straits Times - 13 Dec 2008

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Singapore HDB loan defaults expected to rise

Singapore HDB loan defaults expected to rise

THE number of defaults on HDB home loans is expected to increase if the economy ‘goes down even further’, said National Development Minister Mah Bow Tan yesterday.
‘As we all expect, if there are further job losses, then inevitably there will be more arrears cases coming up,’ he said at HDB Hub.

Measures to help struggling home owners have been in place since the last downturn. These include deferring payments, downsizing flats or extending loans.

Parliament was told recently that there are about 33,000 flat owners owing the HDB arrears of three months or more. They comprise less than 8 per cent of the 420,000 households with HDB loans.

Mr Mah was responding to a question by The Straits Times about plans to help such home owners in the downturn.

‘We have to look at individual cases to see what is the situation for each particular case. The main criteria is to help them to tide over…to make sure there is a sustainable solution,’ he said.

He said deferring mortgage payments does not help in the longer term as home owners still have to pay and interest builds up.

Owners are encouraged to downgrade if they cannot afford a large flat, and if they have financial difficulties, HDB could extend another loan, he added.

This is an example of a sustainable solution, ‘making sure that their loans are smaller… and they are able to survive this crisis and build up their finances from then on’, said Mr Mah.

JESSICA CHEAM

Source : Straits Times - 13 Dec 2008

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US auto bailout plan dies in Senate

US auto bailout plan dies in Senate

White House may tap US$700b fund to save carmakers

Earlier, a bipartisan group of senators tentatively agreed on Thursday night on an emergency $14 billion (S$20.8 billion) bailout for US automakers, the Senate’s top Democrat said.

WASHINGTON: The proposed US$14 billion (S$21 billion) bailout of US automakers turned into a car wreck yesterday after the Senate killed the Bill and sent share markets across the globe skidding over a cliff.

The stunning refusal to throw General Motors (GM), Ford and Chrysler a lifeline has raised the spectre of the entire industry collapsing and sparked fears that the recession will be even more painful than many expect.

Politicians have admitted defeat after failing to agree on wage cuts for auto workers. ‘It’s over,’ said Senate Majority Leader Harry Reid, at least until President-elect Barack Obama takes office next month.

But it is not clear if GM and Chrysler can last that long. Neither have many survival options and both could be in bankruptcy within weeks.

Millions of jobs are at stake too, with the automakers having said that one in 10 jobs in the US are tied to the industry.

Pressure immediately shifted to the White House, with calls for President George W. Bush to intervene with emergency financing. Yesterday evening, a White House spokesman said it is considering using the Wall Street rescue fund to prevent the automakers from failing.

Hopes were further raised as the Treasury said it is ready to prevent the failure of automakers until Congress reconvenes next month.

But investors and analysts worldwide have turned nervous at the prospect of a growing recession.

‘If one of the big auto companies goes bust in the US, this could see a collapse in the entire supply chain,’ said Mr Heino Ruland, strategist at FrankfurtFinanza.

The impact of the Senate’s no vote was instant and widespread, with oil and metal prices falling, share markets diving and the US dollar sliding against the yen.

Markets across the Asia-Pacific region fell with Japan’s Nikkei average and Hong Kong’s Hang Seng both down more than 5 per cent. Shares of Toyota, No. 2 in the US after GM, lost a tenth of their value.

Oil fell by nearly US$2 to US$46.11 a barrel while the US dollar also fell below 90 yen for the first time in 13 years.

European markets had also opened weaker, with London’s FTSE’s sliding 3.28 per cent and Germany’s DAX down 3.49 per cent as one in five workers is linked to the auto sector.

The Dow opened about 2 per cent weaker at 8,394.8 while GM shares plunged 25 per cent to US$3.05 and Ford shares dived 15 per cent to US$2.45.

The news also sent steelmakers’ shares lower and weighed heavily on commodity stocks like Rio Tinto and BP.

Yet hopes had been high on Thursday in Washington that a deal could finally be struck in the Senate after the House of Representatives backed the Bill.

Senators and their aides had spent more than eight hours trying to reach a last-minute pact but Republicans and Democrats failed to agree on the timing of deep wage cuts for union workers.

The Bill would have provided GM and Chrysler bridging loans to operate until March 31, the date by which they must have crafted a restructuring plan that ensures their long-term survival while repaying government aid.

GM said yesterday: ‘We will assess all of our options…to obtain the means to weather the current economic crisis.’

Chrysler said it would ‘continue to pursue a workable solution to help ensure the future viability of the company’.

GM and Chrysler are the most troubled of the Big Three, with Ford in better financial shape but worried about the knock-on effects if its rivals go down.

The last hope for GM and Chrysler rests with a lifeline from the White House, which has so far refused to draw on the US$700 billion Wall Street bailout fund for the reeling car companies.

But yesterday, President Bush’s press secretary Dana Perino said it would be ‘irresponsible’ to further weaken the economy by letting the Detroit car companies fail. She said the White House will consider other options if necessary to prevent the automakers’ collapse - and that could mean using the US$700 billion fund.

Senator Chris Dodd, chairman of the Senate Banking Committee, said it was possible Congress could take a ’second crack’ at an auto rescue next month when Democrats will have larger majorities in both houses but it is not clear whether GM can last that long.

President-elect Obama had urged passage of a bailout.

BLOOMBERG, REUTERS, AGENCE FRANCE-PRESSE

Source : Straits Times - 13 Dec 2008

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Car wreck - Washington

Car wreck - Washington
US auto bailout fails as unions dig in - but White House hints at money from US$700b fund

(Washington)

SAVING BIG 3
A pastor prays for the future of the US car industry during a special service in Detroit
IN a shocking development, the Senate has killed a US$14 billion package to help struggling US carmakers after a partisan dispute over union wage cuts derailed last-ditch attempts at a rescue before year’s end.

The failure to reach agreement on Capitol Hill on Thursday night raised the spectre of financial collapse for General Motors and Chrysler, which some experts say may not be able to survive until the end of the year.

But as the gloom deepens, the White House said yesterday that it would consider tapping a US$700 billion financial rescue fund to prevent a collapse of the troubled carmakers. ‘Given the current weakened state of the US economy, we will consider other options if necessary - including use of the Tarp programme,’ said White House spokeswoman Dana Perino, referring to the Troubled Asset Relief Program initially geared to help financial services firms.

After Senate Republicans baulked at supporting the US$14 billion car rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a compromise but they deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009.

The failure in Congress to provide a financial lifeline for General Motors and Chrysler was a bruising defeat for President George W Bush in the waning weeks of his term, and also for President-elect Barack Obama, who earlier on Thursday urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy.

‘It’s over with,’ Senate Majority Leader Harry Reid said on the Senate floor, after it was clear that a deal could not be reached. ‘I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.’ Mr Reid added: ‘This is going to be a very, very bad Christmas for a lot of people as a result of what takes place here tonight.’

Wall Street opened lower with the Dow Jones Industrial Average falling 2.4 per cent to 8,365.25 while the S&P 500 was off 2.3 per cent to 853.95 and the Nasdaq slid 1.8 per cent to 1,480.15.

The Republican leader, Senator Mitch McConnell, said: ‘We have had before us this whole question of the viability of the American automobile manufacturers. None of us want to see them go down, but very few of us had anything to do with the dilemma that they have created for themselves.’

Moments later, the Senate failed to win the 60 votes needed to bring up the car rescue plan for consideration. The Senate voted 52-35.

The White House said it would consider alternatives but offered no assurances. While some hoped it would dip into the Treasury’s US$700 billion financial system stabilisation fund to rescue the car industry, a Treasury spokeswoman said the fund was best used in trying to stabilise the nation’s troubled financial sector and this was unlikely to change.

But Mr McConnell also held out slim hope for a compromise suggesting that Republicans could rally around a set of proposals by Senator Bob Corker.

Under his plan, the carmakers would have been required by March 31 to slash their debt obligations by two-thirds - an enormous sum given that General Motors alone has more than US$60 billion in outstanding debt.

The carmakers would also have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees based in the United States, and the companies would have to impose equivalent work rules.

It was over this proposal that the talks ultimately deadlocked. General Motors, Chrysler and industry experts have said that the two companies would likely not survive until the end of this month without government aid.

Several Republicans also blamed the autoworkers union.

‘It sounds like the UAW blew it up,’ said Republican Senatro David Vitter.

Senatro Richard Shelby, the senior Republican on the banking committee and a leading critic of the auto bailout proposal, said: ‘We’re hoping that the Democrats will continue to negotiate, but I think we have reached a point that labour has got to give. If they want a bill they can get one.’ — NYT

Source : Business Times - 13 Dec 2008

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