MARINA COASTAL EXPRESSWAY

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MARINA COASTAL EXPRESSWAY:

(Clarification on exceeded budget):

13\. Mdm Ho Geok Choo asked the Minister for Transport whether he will clarify on the exceeded budget of the Marina Coastal Expressway which is currently under construction.

The Minister for Transport (Mr Raymond Lim Siang Keat): Sir, The Marina Coastal Expressway (MCE) is a new strategic east-west transport link between Kallang-Paya Lebar Expressway (KPE) and East Coast Parkway (ECP) at Fort Road and Ayer Rajah Expressway (AYE), with connections to Marina South and Straits View areas. The MCE is required to support the projected increase in traffic volume generated by the high-density developments in the Marina Bay (MB) area. The Government is committed to complete the project by 2013.

In 2007, the Government gave the approval to construct MCE at a budget of $2.5 billion. The budget was based on

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preliminary engineering design and construction prices estimated in 2006. There has since been a substantial increase in the project cost, primarily for three reasons.

First, construction costs in general have gone up. The construction industry has seen steep increases in the prices of materials and resources due to shortages locally and internationally. To mitigate this, LTA has put in place measures such as full price fluctuation clauses for concrete and steel reinforcement. This reduces the risk that contractors face and consequently, helps lower their tender bids. It will also allow LTA to take advantage of any subsequent fall in construction prices without compromising project timelines.

Second, LTA's further investigation of soil conditions have revealed that certain stretches of the MCE have weaker soil conditions than originally thought. This will require the contractor to put in more robust and deeper temporary structures during construction and carry out additional works to improve the soil. These measures are necessary to ensure safety during construction.

Third, there have been additional safety requirements put in by the relevant authorities. The Building and Construction Authority (BCA) has required tighter specifications for temporary works such as earth retaining systems during excavation. The Singapore Civil Defence Force (SCDF) has also required LTA to comply with the latest international fire safety standards.

Notwithstanding the cost increases, the Government will ensure that essential infrastructure projects such as the MCE are completed in time to support Singapore's long-term growth.

Mdm Ho Geok Choo: Thank you, Minister, for the clarifications. I would like

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to ask the Minister whether there are any contractors, at the moment, undertaking these projects, who are being assisted by the Government? To what extent, is this assistance rendered?

Mr Raymond Lim Siang Keat: To my knowledge, we are not assisting any contractors in their tender bids. They have submitted their tenders and we evaluated them and we have awarded it accordingly to their tender offers.

Mr Speaker: Mr Ong, last question.

Mr Ong Kian Min (Tampines): Thank you, Mr Speaker, I would like to ask the Minister – before deciding to build this MCE underground and underwater, whether his Ministry has considered any lower-cost options.

Mr Raymond Lim Siang Keat: Yes, we did consider other possibilities: One, of course, is at grade, it should be cheaper because it is on the surface. But, in terms of the benefits foregone, it will be much higher because you forego the developments on the surface. So, I would like to assure the House, that when it comes to infrastructure projects such as the MCE, the Government takes a stringent financial approach. The transport agencies would evaluate the cost and match that against the benefits from that particular infrastructure project. And only when the benefits outweigh the costs, in this case, including the cost increases, would the transport agencies proceed. But that is not the end of the matter. After that, it goes up to the finance ministry, which is another layer, they will look into it, they will conduct their own detailed studies to ensure that the benefits outweigh the costs, before giving the go-ahead to the transport agencies to proceed with the project. So, I would like to assure Members that the Government exercises prudence and discipline when managing scarce physical resources.