I’m not sure if it’s still the same practice, but apparently, construction firms are usually not paid beforehand and so all expenses are borne by the construction firms before they are paid months after the project is completed. I am not even sure if they are paid in between, but I heard not.

So what happens is that they either get a loan or dig into their own capital – which runs into millions or billions. Their budget is as much as the amount that they have bid for when tendering for the project. However, their suppliers will demand payment upfront with very short payment terms. What I am not sure is – if a construction firm goes bust towards the end of the project and another tender is raised, does it mean that the agency who puts up the tender pays very little for the project at the end of the day?

NATURE lovers and fitness buffs may have to wait at least nine more months before they can enjoy some of the new visitor-friendly facilities at the MacRitchie Reservoir.

A $5 million MacRitchie spruce-up, the first phase of which was slated for completion this month, came to a stop when the contractor – Wacon Construction & Trading – went bust.

The project is the brainchild of the National Parks Board and PUB, the national water agency.

According to PUB’s director of best sourcing, Mr Moh Wung Hee, construction work came to a virtual halt two months ago. Mr Moh said the PUB has since terminated its contract with the company for failing ‘to make satisfactory progress on the project’.

The upgrade was part of PUB’s Active, Beautiful, Clean Waters (ABC) programme to spruce up Singapore’s reservoirs and rivers.

It was meant to provide MacRitchie with new features such as shower facilities, a specially designated warm-up area and a two-storey carpark that would double the number of lots.

In the meantime, PUB said it will be calling for a new tender this month to find a replacement contractor. It aims to complete construction of the carpark by the end of this year, while the other new amenities are expected to be up and running by next October.

When contacted by The Straits Times, MrOng Say Kiat, who is managing director of Wacon Construction, declined to talk about the MacRitchie project, but blamed rising operation costs as the main reason for his company’s financial troubles.

He said: ‘My company had to fold because of the price increase in raw materials, especially sand.’

Sighing, Mr Ong added that it was ‘a heartache’ to see the company that he had built collapse.

He declined to reveal how much debt his company was in, or if there were other projects that had also been put on hold.

However, The Straits Times understands that several companies have taken legal action against Wacon Construction this year for slightly over $1 million in money that they said was owed to them.

Three other companies are also taking Wacon Construction to court for alleged debts amounting to more than $83,000.

Back at MacRitchie, some regulars were disappointed when told of the delay.

Mr Bernd Nordhausen, 46, who jogs at MacRitchie regularly, said he was annoyed as the delay would mean that the problem of finding a parking lot, especially on weekends, would continue longer than expected.

‘A bigger carpark is desperately needed. It has already been about 14 months since the upgrading began. That’s just too excessive,’ he said.

Another regular jogger, Mr Surinder Singh, 50, said of the delay: ‘It has caused a lot of inconvenience because everyone was looking forward to the facilities, especially the showers. Now it’s, ‘Oh, suddenly stop!”

But Mr Singh conceded that unforeseen circumstances cannot be helped.

‘Hopefully we can expect quick action from PUB,’ he said.

melk@sph.com.sg

Article obtained from straitstimes.com on 14th March 2008



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