News: Virus outbreak to affect projects using PPVC method

Feb 10, 2020

 

Some builders expect projects using pre-fabricated pre-finished volumetric construction (PPVC) method to be affected by the novel coronavirus (nCoV) outbreak as some Chinese factories remain closed until further notice, reported The Business Times.

PPVC method involves the construction of entire units within factory conditions before they are assembled on-site Lego-style.

The Building & Construction Authority (BCA) has required developers of selected sites offered in government land sales to adopt PPVC method for at least 65% of the residential project’s total superstructural constructed floor area since November 2014.

United Tec Construction’s managing director Allan Tan revealed that part of the challenge in completing PPVC projects is the shortage of PPVC-specific equipment and skilled Chinese workers.

Chinese workers account for around 20 to 30% of the company’s workforce. The construction of module carcass and the fitting-out works within the Singapore factory including on-site installation involve equipment, labour, materials and logistic shipments from China.

Moreover, 70 to 80% of the PPVC construction materials of the company also come from China, together with the lifting cranes and accessories.

“Therefore, any prolonged lockdown in China will have a serious impact on (us) and our PPVC construction in terms of delays and monetary loss. The more serious impact is on the construction materials supply and the availability of the lifting cranes. Without these two supplies, works will have to stop… One of our lifting cranes is already shipped out and another one is stuck in the China factory,” said Tan.

Teambuild Construction Group executive director Johnny Lim noted that issues are starting to surface at some of their projects, “due to delays in delivery of goods as per schedule because of the lockdown and factories shutdown as well as transportation issues”.

But since the virus outbreak can be considered a force majeure event, contractors and builders may be allowed to renegotiate deadlines and prices.

In fact, contractors involved in public sector projects has already been informed by BCA that they could file for an extension of time under the project’s contract provisions if works has been delayed, despite their best efforts to mitigate them, due to the nCov.

With this, government procuring entities has been advised to prepare for such claims.

BCA has also sought the Real Estate Developers’ Association of Singapore’s support for the affected private sector projects.

“Any impact (on the supply chain disruption) is likely to be varied, depending on how diversified the companies’ sources of manpower and materials are,” said BCA.

Companies with projects nearing completion are in better position compared to those that are midway through their projects since they cannot change the supplier of their materials, like tiles, overnight.

Companies that are still on the process of procuring materials can consider alternative sources such as Indonesia, Vietnam, Malaysia and even the United Kingdom. However, those wanting to continue to source from China may have to face higher prices while prolonging the contract duration of their projects.

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Jimmy Lee
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HUTTONS ASIA PTE LTD
propjim@yahoo.com
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