Skip Navigation Links
Get better value from infrastructure spending
21 May 2018 (93 views)

One major challenge faced in Singapore is the large sums that are being spent on infrastructure - a few billion dollars here and there. 

My common sense tells me that we are probably paying much more than necessary, in some cases, several times of what the fair price should be.

In many cases, we are talking about complex systems. But there are ways of dealing with these complexities, without abandoning common sense.

What can be done?

First, we have to look for comparables. How much are other cities paying for similar infrastructure? Take the key figures and translate into cost per km of track or cost per train cabin or any metric.

We can pay experts to do the study. For bigger projects, we can get two experts to study different cities. 

One major difference is the quality. The experts can also give an opinion. Will the higher quality lead to a longer life? Will it reduce the cost of maintenance? 

Another major difference is safety. Do we need to specify zero tolerance for accidents? How much does this zero tolerance cost? Should we accept a certain risk of accidents, perhaps a small one, to reduce the cost?

After the experts have have submitted their report, a committee can discuss the options and make their decision. The discussions can be captured on video and made available for public viewing. The process of the decision making will be transparent.

This will lead to a set of specification for the new project or infrastructure. The actual tender price may be different, but there is a benchmark to compare the actual against the expected price. Quite likely, the expected price will guide the tenderers on what they should aim for.

This process will contribute to reducing the cost of our infrastructure and allow the public to understand how the decision is made and believe that it was taken in the best of public interest. 

Share our views. 

Tan Kin Lian
 


Get better value from infrastructure spending
[Back] [Print]


One major challenge faced in Singapore is the large sums that are being spent on infrastructure - a few billion dollars here and there. 

My common sense tells me that we are probably paying much more than necessary, in some cases, several times of what the fair price should be.

In many cases, we are talking about complex systems. But there are ways of dealing with these complexities, without abandoning common sense.

What can be done?

First, we have to look for comparables. How much are other cities paying for similar infrastructure? Take the key figures and translate into cost per km of track or cost per train cabin or any metric.

We can pay experts to do the study. For bigger projects, we can get two experts to study different cities. 

One major difference is the quality. The experts can also give an opinion. Will the higher quality lead to a longer life? Will it reduce the cost of maintenance? 

Another major difference is safety. Do we need to specify zero tolerance for accidents? How much does this zero tolerance cost? Should we accept a certain risk of accidents, perhaps a small one, to reduce the cost?

After the experts have have submitted their report, a committee can discuss the options and make their decision. The discussions can be captured on video and made available for public viewing. The process of the decision making will be transparent.

This will lead to a set of specification for the new project or infrastructure. The actual tender price may be different, but there is a benchmark to compare the actual against the expected price. Quite likely, the expected price will guide the tenderers on what they should aim for.

This process will contribute to reducing the cost of our infrastructure and allow the public to understand how the decision is made and believe that it was taken in the best of public interest. 

Share our views. 

Tan Kin Lian