Rising construction labour costs put Singapore’s infrastructure projects at risk: analysts

Labour shortages and inadequate skills also pose risks.

The city-state may be in danger of losing its status in Asia as the country with the least riskiest infrastructure projects, as analysts say rising construction labour costs are plaguing Singapore, as well as its neighbors.

According to a report by BMI Research, the region, including Singapore, registered the lowest score for construction costs in its risk index.

“Labour shortages and inadequate skills levels in emerging countries also present difficulties to investors,” BMI Research said.

Meanwhile, Singapore clearly outperformed emerging countries in terms of infrastructure risk.

“The region records the highest score for the 'Financing' component, while the overall score is dragged down by low Construction scores in most of the emerging markets suffering from corruption, frequent project delays and often a lack of institutional capacity and transparency of the tendering process,” said BMI Research.

BMI Research added that Asia suffers from a huge infrastructure deficit and infrastructure is commonly a top priority of the governments in order to support the economy.

“As such policy is usually supportive of infrastructure development. In addition, higher political stability across the region together with lower crime and security risks in recent years has created a more stable operational environment and supported the 'Operation-Risk' indicator of the index,” BMI Research said.