HOUSING AND DEVELOPMENT BOARD FLATS (Building programme)

Dr Teo Ho Pin asked the Minister for National Development (a) how many new Housing and Development Board (HDB) flats will be built in FY 2001/2002; (b) how many existing HDB contracts have been tendered but not awarded; and (c) how many of these flats are tendered or will be tendered using Design and Build procurement method.

The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, HDB plans its building programme according to the demand for new flats. It has yet to finalise the building programme for FY 2001/2002 because part of it will involve flats to be offered under the pilot Build-to-Order system. For this pilot project, the number of flats to be built will depend on the number of flats selected by the applicants.

On the status of HDB tenders, tenders for four contracts consisting of 2,800 flats were closed in February and March 2001. HDB is evaluating the tenders and intends to award them in the next few months. Three tenders for another 1,600 flats are currently in progress. Of these, about 500 flats are tendered using the Design and Build procurement method.

Dr Teo Ho Pin (Sembawang): Sir, may I ask the Minister whether HDB will consider building more flats now when construction costs are at rock-bottom?

Mr Mah Bow Tan: Sir, HDB's building programme must be based upon demand. As the Member may know, demand was at its peak in 1996-1997. The waiting list then was over 100,000. If you compare that to today's situation, the waiting list is slightly less than 30,000. The demand has fallen sharply.

Under the circumstances, the building programme must also necessarily fall sharply. It does not make sense to build flats because the construction costs are low as it is only one of the costs involved. There are many other holding costs involved. To build flats and keep them in cold storage because nobody is queuing up for the flats does not make economic sense.