(AFP) – Jul 22, 2008

SINGAPORE (AFP) — Singapore announced deferments Tuesday on more public construction projects worth 1.7 billion Singapore dollars (1.26 billion US) in a bid to ease cost pressures within the industry.

This will bring the overall value of public projects being delayed to 4.7 billion dollars, Minister for National Development Mah Bow Tan said in a statement received Tuesday.

Construction costs shot up by 20 to 30 percent in 2007, pushed up by higher material cost and robust demand for building materials, the minister said in a written reply to a question in parliament.

In the first quarter, building costs rose by 3.0-5.0 percent in the first quarter, he said.

"Singapore, like other fast growing countries in the world, is facing rising construction costs," Mah said.

"This month, public agencies have identified another 1.7 billion (dollars) worth of projects for deferment.

"We will continue to monitor the situation closely and work with the key industry stakeholders such as developers, builders and quantity surveyors to mitigate the cost increase as much as possible."

Projects vital to Singapore's economic and social needs will however go ahead as planned, the minister said.

Singapore is in the midst of a building boom, sparked by the revival in the property sector and ongoing construction of two massive integrated gaming complexes.

Besides deferring public projects, the government has also implemented other measures to help ease cost pressures and these include the relaxation of policies on employment of foreign labour.

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