54 Ms Ng Ling Ling asked the Minister for National Development in light of further delays in the completion of three HDB Build-to-Order projects, whether HDB will give priority to affected families who need interim rental flats under the Parenthood Provisional Housing Scheme.
55 Mr Chua Kheng Wee Louis asked the Minister for National Development for Rivervale Shores and other HDB BTO projects which have seen further delays recently, beyond the COVID-19 induced delays as earlier communicated to flat buyers (a) whether the HDB has and will compensate flat buyers for the delays; and (b) what is the number of interim rental flats that have been made available and allotted for such buyers.
Mr Desmond Lee: The construction industry has been hit hard by the COVID-19 pandemic with unprecedented global supply chain disruptions and tightened border controls over the past two years.
In 2020, the progress of construction projects was impacted by the Circuit Breaker, the stringent safe management measures put in place to enable a controlled resumption of work. In 2021, the situation was further exacerbated by the Movement Control Order in Malaysia, and the tightening of border controls for workers from South Asia. These developments have caused significant delays to many construction projects, in both the public and private sectors. Nonetheless, all these measures were necessary to safeguard the health and safety of Singaporeans through the COVID-19 pandemic.
We recognise that delays to the completion of flats have caused inconvenience to flat buyers and affected their plans. To minimise the impact of the delays on flat buyers, HDB has been providing extensive assistance to help contractors complete ongoing BTO projects in a timely manner, without affecting safety and quality. For instance:
(a) To help with the higher cost of materials, HDB has extended the period of protection against steel price fluctuations, and supplied contractors with more concreting materials at protected prices.
(b) To tackle manpower shortages, HDB has worked with firms to safely recruit workers from various countries and co-shared the cost of bringing in these migrant workers.
(c) To strengthen the resilience of our public housing programme, HDB has worked with its contractors to enhance their existing stockpiles of building materials by procuring them in advance to mitigate potential disruptions. HDB is also closely monitoring the prices of construction materials and will extend further support to contractors where required.
(d) HDB has also helped contractors prioritise work areas, expedite regulatory clearances, and gotten exemptions to allow less noisy construction activities to be carried out on Sundays and public holidays where possible.
Through the various measures HDB has managed to keep delays for most projects to between six to 12 months. It is not possible to fully mitigate the unprecedented disruptions over the last two years. The extent of delay varies from project to project and depends on the on-site technical challenges, as well as the available supply of materials and manpower for the various stages of works.
Through the tremendous effort put in by HDB, of the 98 BTO projects currently under construction, only two projects, Waterway Sunrise II and Anchorvale Village, have incurred a delay of more than one year, and are expected to exceed the Delivery Possession Date (DPD), or the contractual date that HDB is required to deliver possession of the new flat. Anchorvale Village is now expected to be completed between May and July 2023, which is a delay of about four to six months beyond the DPD. HDB has reached out to affected flat buyers to update them of this latest development, and provide them with the relevant support and assistance.
Under the COVID-19 (Temporary Measures) Act (COTMA), flat buyers whose flats are delayed beyond DPD can seek reimbursement for qualifying costs incurred for the period of delay, by submitting proof of out-of-pocket expenses incurred. The reimbursement amount is subject to the prescribed formula and capped at 70% of 10% of 60% of the new flat price for each year of delay. To minimise inconvenience to flat buyers, HDB will reimburse all flat buyers whose BTO flats are delayed beyond their DPD, the equivalent of the maximum reimbursement sum under COTMA in a lump sum one-off payment. They will not need to submit any claims for out-of-pocket qualifying costs.
About 14,500 flats were delivered in 2021 despite the disruptions due to the COVID-19 pandemic. This is higher than the 13,500 flats delivered pre-pandemic in 2019. Looking ahead, with the improving COVID-19 situation and more positive outlook in the construction industry, HDB will strive to make further progress to minimise delays and deliver new BTO flats to buyers as soon as possible. There are still some uncertainties ahead, such as the ongoing geo-political situation and the worsening COVID-19 situation in China, which may impact global supply chains. We are watching these developments closely and will keep BTO flat buyers updated on the construction progress of their projects.
With regard to the Member’s query on progress of works for Rivervale Shores, I would like to report that at this juncture, Rivervale Shores is scheduled to complete in 1Q to 3Q 2023, or about nine to 11 months later than the original Estimated Completion Date conveyed to flat buyers at launch. The revised completion date is still within the DPD. We will continue to keep flat buyers updated periodically as construction progresses and arrange for them to collect the keys to their flat as soon as it is ready.
Meanwhile, to better support flat buyers in need of interim housing, HDB has increased the stock of flats for rental under the Parenthood Provisional Housing Scheme (PPHS). In August 2021, we announced that we would double the PPHS supply from about 800 to 1,600 units over the next two years. Since then, we have added 200 units, and are on track to add another 800 units by 2023. This will bring the total PPHS supply to 1,800 units.
We have also revised the PPHS eligibility criteria and allocation process to prioritise couples with children and those who are less able to afford renting on the open market. Applicants who are prepared to share a PPHS flat with another eligible family will also be given priority. Since August 2021, the PPHS application rate has fallen significantly to about half the earlier rate. Around 45% of PPHS applicants invited to select a flat decided not to do so, suggesting that many of them have other options.
Even as HDB increases its supply of interim flats, supply remains limited, and HDB will not be able to offer an interim flat to every family. We encourage families to seek other interim housing arrangements where possible, such as staying with their family or renting on the open market.
For low-income households with no family support and no other housing option, HDB will consider offering Interim Rental Housing (IRH) on a case-by-case basis. HDB has assisted about 350 households affected by BTO completion delays with IRH. As IRH flats are intended primarily for people with urgent housing need, it is also important to balance the use of these flats across different rental schemes to meet the needs of different groups, prioritising the most needy.
Ministry of National Development
9 May 2022