Construction Economics

BPM201

Construction Economics

Tutor-Marked Assignment One

July 2021 Presentation

BPM201 Tutor-Marked Assignment

SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 2 of 4

TUTOR-MARKED ASSIGNMENT ONE (TMA01) This assignment is 14% of the final mark for BPM201 Construction Economics. The cut-off date for this assignment is 7 September 2021, 2355 hrs. In undertaking your TMA research and assignment writing, please ensure that you seek reliable information source and give due credit by having proper referencing e.g. APA6 referencing style. Marks will be deducted for inadequate referencing. You may also be investigated for potential plagiarism if you have a high Turnitin score. Question 1 (a) Figure Q1.1 shows the Singapore construction demand curve for building works from

2011 – 2020 in relation to BCA’s Tender Price Index. See also Table Q1.1. According to classical economics, as prices increases demand decreases. However, the Singapore construction demand curve in Figure Q1.1 shows a reverse. Generally, as prices increases, the contract awarded is higher. Explain THREE (3) possible reasons which resulted in Figure Q1.1.

(12 marks)

(b) Figure Q1.2 shows the comparison of Singapore GDP against URA’s Private Property Index and Private Sector Building Works awarded after normalizing. See also Table Q1.2. Discuss FOUR (4) observations you could derive from Figure Q1.2.

(13 marks)

Figure Q1.1

99.799.8

104.6

106.8

104.0

98.0

96.7

98.6

99.9

102.8

96.0

98.0

100.0

102.0

104.0

106.0

108.0

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Tender Price Index vs Both Sector Buildings Works

BPM201 Tutor-Marked Assignment

SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 3 of 4

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Both Sector (Building Works)

28,747 25,951 28,863 28,854 21,560 17,429 15,453 21,071 24,507 15,374

Tender Price Index

99.7 99.8 104.6 106.8 104.0 98.0 96.7 98.6 99.9 102.8

Table Q1.1

Figure Q1.2

Table Q1.2

0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20 1.30 1.40 1.50

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GDP vs Pte Pty Price vs Pte Sector Building Works GDP At Current Market Prices URA Private Pty Index Private Sector (Building Works)

BPM201 Tutor-Marked Assignment

SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 4 of 4

Question 2 (a) According to BCA’s media release in January 2021, ‘‘Public sector construction

demand dropped from S$19.0 billion in 2019 to S$13.2 billion in 2020, as some major infrastructure projects that required more time to assess the pandemic’s impact on resource management and project schedules, were postponed. Meanwhile, private sector construction demand decreased from S$14.5 billion in 2019 to S$8.1 billion in 2020, due to market uncertainties amid the COVID-induced economic recession...’’. Discuss what is ‘pump priming’ in respect of the construction industry and the possible causes why it did not elevate the construction industry for the year 2020. (10 marks)

(b) Outline and discuss the impact of COVID-19 on a contractor’s cost structure for the period 2019-2021.

(15 marks)

Question 3 Refer to Obayashi (Japan) and Lum Chang (Singapore) 2020 annual report. Using these reports and other relevant information sources, carry out the following: (a) Outline in a table the difference between the two construction companies the following:

(i) Financial performance (ii) Geographical coverage of their business (iii) Technological capabilities (iv) Types of projects undertaken or business lines

(12 marks) (b) Evaluate the competitiveness of Lum Chang as compared to Obayashi and propose how

can Lum Chang be more competitive. (13 marks)

Question 4 The Building Construction Authority (BCA) has identified in the Construction Industry Transformation Map (ITM), Integrated Digital Delivery (IDD), as one of its transformation pillars. (a) Identify and discuss FOUR (4) benefits of IDD.

(12 marks)

(b) Identify and discuss FOUR (4) challenges or issues in implementing IDD. (13 marks)

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