READY-MIX CONCRETE

READY-MIX CONCRETE:

(Price increase): The following Question stood in the name of Mr Charles Chong -

8. To ask the Minister for National Development, in light of the Indonesian export ban on land sand and the disruption of supply of granite (a) whether the price increase for ready-mix concrete is proportionate to the price of sand and aggregate supplies obtained from Government stockpiles; (b) how many ready-mix concrete suppliers are there in Singapore; and (c) whether there is any evidence of profiteering by ready-mix concrete suppliers and, if so, what immediate and long-term measures will the Ministry take to rectify this situation.

Er Lee Bee Wah: Question No. 8, Sir.

Mr Mah Bow Tan: Sir, the price of concrete is determined by the market. Following the sudden disruption in the supplies of concreting sand and granite from Indonesia in February and March respectively, concrete price rose to about $200 per cubic metre. This was due largely to the significantly higher prices of sand and granite and short term supply uncertainties.

Since then, the industry has adjusted to the market, including the sand and granite prices from alternative sources. There is now greater supply and pricing clarity, and concrete price has fallen to below $175 per cubic metre. I understand that the industry associations, including the Real Estate Developers' Association of

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Singapore (REDAS), the Singapore Contractors Association Limited (SCAL), the Singapore Institute of Surveyors and Valuers (SISV), and the Ready-mix Concrete Association (RMCA) have come together to examine the cost structure of concrete production, and agreed on some principles on the cost-sharing arrangement for the increased costs of sand and granite for on-going projects.

Currently, there are about 10 ready-mix concrete suppliers in the market. I believe there is sufficient competition in the market of concrete. However, the Government has released land for new concrete batching plants and, if necessary, is prepared to release more if there is demand for it.

I assure the House that the Government will continue to monitor the situation closely, and will look at any specific feedback of cases of unjustified increase in concrete prices.

Er Lee Bee Wah: Two supplementary questions, Sir. I understood that the Singapore Contractors Association Limited has submitted a thick file on evidence of profiteering. May I ask whether the Ministry has responded to SCAL's submission? My second question is this. The Ministry has released the land, but what if it is awarded to the current player, will it help the situation?

Mr Mah Bow Tan: Yes, I believe that SCAL has submitted some complaints on profiteering to the Building and Construction Authority (BCA) and BCA is looking into these specific complaints. 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.

As for the land that has been released, I think the intention of the release of more land for batching plants is to increase the

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number of players in the market, not to keep them at the same level or, worse still, to reduce the number of players. So if that is the objective, then I think it would not serve the purpose for us to release such land to the existing players. Having said that, if there are any complaints on profiteering, there are ample opportunities and avenues for the various complainants to bring their cases up, not only to the BCA. I am sure the Competition Commission may want to have a look at it as well. So, let us look at each of these complaints and see whether they are justified or not and, if they are, then I would like to assure the Member that action will be taken.