Bigger DTL budget due to surge in construction costs: Minister Lui

Downtown Line’s (DTL’s) budget ballooned from $12 billion to $20.7 billion because of the rise in construction costs and prices of materials, Transport Minister Lui Tuck Yew said.

Speaking in Parliament on Wednesday in response to a question by Member of Parliament for Hougang GRC Png Eng Huat, the minister pointed out that market prices for key materials such as steel bars and concrete spiralled by as much as 60 per cent and 14 per cent, respectively, from late 2007 to mid-2008.

That and the increase in construction costs from late 2007 due to sharp growth in construction demand in Singapore accounted for about half of the $8.7 billion increase in the budget, he said.

"Actual tender prices were therefore higher than what we had originally envisaged in early 2007, when we planned the $12 billion budget, and we had to revise the budget upwards," he said.

The increase in budget was also to allow the Ministry of Transport (MOT) to make enhancements to the line, such as extending the line and adding another station, Jalan Besar Station, to the line.

Lui explained that while price fluctuations clauses are included in all major construction tenders and that Land Transport Authority (LTA) would bear the downside risk for any increase in the cost of key materials from the tender price, the LTA would also enjoy the upside savings should the cost of the materials come down.