HDB MADE EST S$72 MILLION PROFITS FROM ANCHORVALE HORIZON BTO, YET UNWILLING TO RECTIFY DEFECTS PROPERLY

Yesterday, TRE published an article highlighting that new residents moving into HDB BTO flats in Anchorvale Horizon at Seng Kang were complaining about the defects and poor workmanship found in their newly completed flats (‘Complaints against poor workmanship in new HDB flats‘).

It was so bad that the grassroots leaders at Anchorvale Horizon were themselves complaining about the problem too. The grassroots leaders even roped in Seng Kang West MP Lam Pin Min to visit Anchorvale Horizon just to show him how terrible the defects are.

One new resident was so fed-up with the defects in his HDB unit as well as his dealings with HDB that he wrote a long complaint letter and posted it online to inform Singaporeans. He accused HDB of not taking the problem seriously.

One of the major defects mentioned is the flooring. Even after the resident complained and HDB got the contractor to re-lay the floor tiles, the floor remains uneven. The HDB personnel whom the resident liaised with tried to convince him to accept the uneven flooring.

The resident said:

“And the frustrating part is at every meeting, HDB personnel would use the same excuse to try convince us to accept the flooring. And if we do not accept, he would tell us he will ask the contractors to rework again. I found it weird that no matter how lousy someone’s workmanship is, they will not keep repeating the same mistake unless they are real idiots.”

The resident then investigated the problem himself and found that actually, the tiles themselves already have defects. Some of the tiles are not flat and will wobble. Hence, even with good workmanship, the flooring will remain uneven because the tiles themselves are uneven.

He said:

“The tile itself is uneven with some area popping up and yet that HDB personnel kept trying his luck to tell us off. This is a terrible integrity issue and I became very disappointed with HDB.”

This being the case, it’s not known why HDB didn’t detect the poor quality floor tiles used by the contractor.

The resident escalated the issue to higher authorities in HDB. He also escalated it to his Seng Kang West MP Lam Pin Min. Dr Lam acknowledged that others in Anchorvale Horizon had complained too.

The resident said:

“He (MP) came to meet up with me and some other neighbors who had terrible defects even the blind can see. He witnessed for himself and understood why there are so many complaints. Thus he advised that HDB personnel in front of us to check with his higher authorities if they can work out with some reimbursements for owners.”

“But HDB turned a deaf ear to the issue. No follow-up was done with regard to compensations except HDB going back to their old tricks of rectifications after rectifications, hoping one day, you will give up and accept whatever they provide you. Many owners gave up because they had rented flats outside or are getting married.”

With the MP’s intervention, the problem still remains. The resident then resorted to writing to MND and even to the President. However, everything was referred back to HDB and HDB referred the matter back to the same HDB personnel again to deal with the resident.

The resident mentioned that the contractor is from China, a company by the name of “Jing Ye”.

China Jingye Engineering Corporation Limited

TRE went online to do some research on the matter and found that Anchorvale Horizon (BTO project) was launched by HDB in Oct 2010 [Link]. It is located at the junction of Anchorvale Road and Sengkang East Way. It is also a premium contract with 745 units of new flats, comprising 240 units of Studio Apartments, 357 units of 4-room flats and 148 units of 5-room flats. Facilities provided in this development are a mini-mart, an eating house, shops, a child care centre and a Residents’ Committee Centre.

TRE also found that indeed, the contract (SK-N3-C19) to construct 745 units of HDB flats was awarded to the lowest winning bidder, China Jingye Engineering Corporation Limited (Singapore Branch) [Link]. There were 13 bidders and Jingye’s bid was the lowest at $94,777,075. The tender was closed on 11 May 2011 and the contract was awarded to Jingye on 29 Jun 2011 [Link]:

According to its website [Link], Jingye is a Beijing-headquartered, wholly state-owned company of China. It is a subsidiary of Metallurgical Corporation of China Ltd (MCC), which is listed in Hong Kong and Shanghai.

On 17 Mar this year, after Jingye “smoothly completed” the Anchorvale Horizon project and handed the keys over to the residents, it’s parent company MCC issued the following press statement. MCC deemed the project “has not only guaranteed the engineering quality, but also set up a perfect demonstrative model for the other projects” (Jingye’s previous name wasCRIBC) [Link]:

“The Sengkang Residential Building Project, which was undertaken by MCC Group Central Research Institute of Building & Construction (CRIBC) in Singapore, was smoothly completed, and the last batch of the apartment keys were handed over to the house owners on March 14, 2014.

As a policy-related housing project invested by the Government of Singapore, it is located in the Third Region of Sengkang. The branch of CRIBC was awarded with the contract for 745 houses (including small apartments) in 7 units, as well as the public facilities such as the playground for the kids, the elderly fitness station and the courtyard. For the construction works, precast concrete units are utilized, including pillar, external wall, elevator-shaft wall panel, stair wall panel,, stair, composite precast floor slab, refuse chute and air-raid shelter, etc.

The property developer is Housing and Development Board (HDB), a governmental organization of Singapore. From the very beginning of this project, the quality rating standard of CONQUAS was employed for the construction work and followed up through the whole process. This has not only guaranteed the engineering quality, but also set up a perfect demonstrative model for the other projects.”

It was also found that in the various projects in Singapore, Jingye’s work-sites had been issued with Stop Work Orders (SWO) by the Manpower Ministry (MOM) [Link] 5 times since 2008:

  • Mar 2013
  • Apr 2013
  • Jun 2011
  • Aug 2009
  • Nov 2008

An SWO is issued by MOM in instances where severe lapses in safety and health conditions cause immediate danger to the persons at work. Failure to comply with SWO is considered an offence [Link].

Estimated gross profit for HDB in Anchorvale Horizon project

Based on the selling price of HDB units of Anchorvale Horizon [Link] and the contract value of $94,777,075 for Jingye to build the 745 units, one would be able to estimate the gross profit of HDB for the Anchorvale Horizon project.

Taking the average sale price of each type of HDB units, the revenue generated from each type for HDB is:

  • Studio I: 120 units x [(75,000 + 82,000)/2 – 40,000] = $4,620,000
  • Studio II: 120 units x [(95,000 + 104,000)/2 – 40,000] = $7,140,000
  • 4-room: 357 units x [(227,000 + 344,000) /2 – 10,000]= $98,353,500
  • 5-room: 148 units x [(344,000 + 426,000) /2 – 0] = $56,980,000

(On average, 2-room or studio apt owner can enjoy govt grant of $40K. For 3-room flat owner – $30K and 4-room flat owner – $10K. 5-room flat owner on average does not enjoy any govt grant [Link]. Not that govt grant is only for 1st-time owner. We assume all are first time buyers.)

Hence, total estimated revenue generated from Anchorvale Horizon project for HDB =$167,093,500

Then, estimated gross profit generated from Anchorvale Horizon project for HDB = $167,093,500 – $94,777,075 = $72,316,425

Given that HDB is making a sizeable gross profit from the Anchorvale Horizon project, why can’t HDB accede to the requests from the new residents to pay them some compensations for the defects in their units so that they can get their own contractor to rectify the problems? This is especially so since Jingye is not able to rectify the defects or HDB is unable to supervise its contractor Jingye to do a proper job.

What do you think?

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