Contractor's woes may hit projects

Contractor's woes may hit projects

Several hundred million dollars worth of projects could be delayed after soaring costs forced Poh Lian Construction to seek breathing space from creditors.

The long-established player whose office is near Paya Lebar was granted an interim judicial management order last week.

This is a temporary court-supervised rescue plan that will give the firm more time to sort out its affairs.

Mr Tam Chee Chong and Mr Andrew Grimmett from accounting firm Deloitte & Touche have been appointed the interim judicial managers.

Poh Lian, which is a unit of Singapore-listed United Fiber System (UFS), highlighted the headwinds it was facing when the parent released its financials for the year ended Dec 31.

It pointed to significant cost overruns due to delays in some projects, extensive use of increasingly pricey foreign labour by subcontractors and higher wage costs due to changes in labour policy. Poh Lian's revenue for the year was $235 million.

Poh Lian's website shows that it is the main contractor for several local developments. Based on earlier announcements, the contract values are estimated at several hundred millions.

Among them are H2O Residence being developed by City Developments (CDL), GuocoLand projects Sophia Residence and Goodwood Residence, and two Housing Board Build-to-Order (BTO) projects in Bukit Panjang.

A CDL spokesman said on Tuesday: "CDL is unlikely to be adversely affected... We are taking prompt action and are already finalising the appointment of one of the reputable contractors, which will be able to take over and complete the construction of H2O Residences should the need arise."

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