Three months ago, our Minister of the multi-ministry taskforce on Covid mentioned he had no doubt that construction costs in Singapore will be higher because of new regulatory requirements. I was keeping my arms crossed (instead of fingers).
Earlier our condo MCST had agreed on carrying out renovation and repair works to the common areas and landscaping. This was in the beginning of 2020 but the tender was delayed due to the coronavirus. The list of works are as follows.
- Rewiring of some electrical cables (150m)
- Demolition of old BBQ pits and 1m low walls
- Replacement of paver stones approximately 1.2m along 120m trail
- Removal of debris
Our committee was expecting the full cost to be less than $6K, even after factoring labor constrains with the safety distancing measures. To our surprise, the quotes received this month were between $12K- $16K. I wonder how the figures are higher than 100%.
Somehow it reminds me of Pricing elasticity. Assume a huge inventory of Coffee Mugs that were written off previously, whether you sell 100 Mugs at $1, or 50 Mugs at $2 makes no difference to the underlying profits. Could the contractors be pricing Q3 works at double the price to make-up for zero projects in Q2?
Anyway we are not prepared to accept sky-high prices. Prefer to wait out and see. Meanwhile, I hear numerous small contractors are facing cashflow problems. Perhaps they fancy smaller projects with timely payments?