HOUSING AND DEVELOPMENT BOARD (Building programme and price increase)

Mr Yeo Toon Chia asked the Minister for National Development, in view of the increasing number of applicants for Housing and Development Board flats, (a) what measures will be taken to speed up the building programme to shorten the waiting period; and (b) what stops are being taken to ensure that the applicants, after paying their deposit, will not face a steep increase in the price at the time of allocation of the flat.

Mr Lee Yock Suan (for the Minister for National Development): Sir, owing to the uncertainties prevailing in the construction industry last year, HDB contractors were reluctant to undertake public housing jobs. Consequently, in 1980, HDB awarded 15,053 units, an all-time low. In the first five months of this year, only 1.931 units were awarded. The situation was aggravated by an astronomical increase in the number of new registrants to purchase and rent flats. To resolve the critical problem, HDB entered into direct negotiations with contractors persuading them to accept contracts at negotiated prices. The results of these direct negotiations have been encouraging. In the last four months, 20,751 units were awarded. Another 10,000 units are expected to be contracted out by the end of this year.

To speed up the public housing programme, HDB is also looking into the use of prefabricated methods of construction and the employment of overseas contractors. All these measures, however, will not yield immediate results. The average construction period for a block of high-rise flats is between 2 1/2 and three years. Applicants for public housing must accept the fact that they have to face an average waiting period of 31/2 to four years.

Sale prices of flats depend on the construction cost. The HDB has taken the following measures to minimize increases in construction cost -

(i) to simplify the design of the flats;

(ii) To assist contractors in the recruitment of construction workers from non-traditional sources; and

(iii) To improve contract conditions, such as giving protection to contractors against price fluctuations of building materials and extending interest-free loans to contractors to purchase equipment and machinery.