Causes for Expressway Viaduct Collapse and Workplace Safety

Mr Seah Kian Peng asked  the Minister for Transport whether past safety records of construction firms is a consideration in awarding bids for Government construction projects.

Dr Tan Wu Meng asked the Minister for Transport (a) what caused the collapse of the viaduct under construction in Upper Changi Road East; (b) whether there have been previous sentinel events detected which could have raised concerns sooner; and (c) to what extent will prior serious workplace safety lapses affect a contractor's grading in the LTA tender process.

Dr Tan Wu Meng asked the Minister for Transport in the past three years (a) how many tender submissions have been received by LTA from contractors with prior serious workplace safety lapses; (b) how many have been successful in their bids and how many have been the lowest bid, respectively; and (c) of the successful lowest bids from these contractors, what has been the median proportionate difference in the bid amount compared to the second lowest bid.

Mr Ang Wei Neng asked  the Minister for Transport (a) whether the contract for the collapsed viaduct near PIE was awarded to the lowest bidder who participated in the tender as the main contractor; (b) how are safety records of tenderers taken into consideration when evaluating tenders for the construction of transport infrastructure; and (c) in the last five years, how many contracts involving the construction of transport infrastructure have exceeded the planned construction period by three months or more.

Mr Desmond Choo asked the Minister for Transport with regard to the collapse of an uncompleted viaduct on 14 July 2017 (a) whether any extra checks are put in place when a construction company is blacklisted for a past incident while it is fulfilling a current contract for a public project; and (b) how does the Ministry seek to prevent future instances from happening.

Assoc Prof Daniel Goh Pei Siong asked  the Minister for Transport (a) what is the weight given to workplace safety track record relative to bid price and other factors in the awarding of tenders to companies for the construction of the transport infrastructure; and (b) how was the workplace safety track record of the companies that took part in the tender for the construction of the PIE-TPE viaduct that collapsed evaluated relative to their bid prices.

Mdm Speaker, I am deeply saddened by the loss of life and injuries in the collapse of the viaduct. I would like to extend my deepest condolences to the family of Mr Chen Yinchuan, the worker who passed away, and pray for the recovery of the four workers still receiving treatment in the hospital.

LTA is working with MOM and BCA to investigate the cause of the collapse. Preliminary investigations suggest that the corbels, or fork-like structures, supporting the deck slab gave way. However, we will have to wait till the investigations are completed to understand why they gave way.

Members have asked about LTA's procurement process for construction projects. LTA adheres to the guidelines issued by BCA, which consider both the price and quality of bids. BCA's guidelines for the price-quality ratio range from 60:40 for more complex projects, to 80:20 for simpler ones. For the construction of this viaduct, LTA adopted a ratio of 70:30, commonly used for projects of this complexity.

As part of the overall quality score, LTA assesses the safety practices of the bidders, based on their past safety records, such as their demerit points from MOM, the safety performance of their ongoing projects and the robustness of their safety management systems.

Tenderers who have had workplace safety lapses in the past would receive lower quality scores. If a bidder does not meet minimum overall quality requirements, his price envelope will not even be opened, and his bid will be disqualified. Two years ago, LTA further tightened the evaluation process, so that poor safety performance alone can lead to disqualification. Since then, 16 bids from 10 contractors have been disqualified for this reason.

Over the past three years, LTA has called a total of 175 tenders for construction works, which received over 1,100 submissions. Out of these submissions, 69 were from contractors who had serious workplace safety lapses. Of these 69, only two bids were successful. Both these bidders had submitted the lowest price bid and received the highest overall price-quality score. For these two cases, the winning price bids were 27% and 6% lower than the second lowest bids.

As for Mr Ang Wei Neng's query on project delays, out of 67 major rail and road projects that LTA has completed in the past five years, only seven exceeded the project timelines by more than three months.

In this particular case, the main contractor, Or Kim Peow Pte Ltd (OKP) had a fatal workplace incident at Yio Chu Kang Flyover in 2015. MOM's investigations were still ongoing at the time LTA was evaluating OKP's bid for the construction of this viaduct in question and, hence, LTA did not disqualify OKP outright. Nevertheless, LTA gave OKP a low safety performance score in the evaluation of its bid. On the other hand, OKP offered the lowest tender price and also had a good track record in completing many similar infrastructural projects over the past 10 years. Overall, it obtained the highest score and was awarded the project.

Following the incident, LTA conducted a half-day safety timeout for all ongoing road and rail construction projects to review on-site safety practices and measures. MOM inspected all active OKP worksites and other projects with ongoing viaduct works, and will step up inspection of other worksites performing formwork and concreting works. We will undertake all possible measures to prevent similar accidents.

I thank the Senior Minister of State for the reply. I have a few questions for him. It pertains to how the contract was awarded to OKP for the tender. While I recognise that the outcome of the earlier incident was not finalised, the fact is that there was a fatality in the Yio Chu Kang Flyover project and there were three injuries as well. So, my question is − notwithstanding the two-envelope system, notwithstanding that the outcome of the earlier incident was not finalised − I contend and I want the Ministry's view on this, on whether this has to be taken into account, regardless of whether the report is still outstanding.

The fact also is that the winning bid and the next winning bid were a massive 34% apart. I think these are alarm bells. I know we are always smarter with hindsight, but I think these are serious lessons, and serious enough that, going forward, the lessons should be put into practice. It should be documented and it should be instituted, so that future tenders on this two-envelope system adhere to the principle and intention of why we have a two-envelope system.

I would like to thank Mr Seah for the supplementary questions. Let me explain why OKP was actually given the contract, in spite of the Yio Chu Kang Flyover accident. OKP was awarded the contract after emerging with the highest price-quality score amongst the four tenderers. The tender submissions were evaluated objectively and fairly, based on the price-quality weightages and tender specifications made known to all the tenderers.

While I understand that there are concerns with regard to the safety records of companies who are tendering for such projects, and although OKP has one fatality and some injuries at the Yio Chu Kang Flyover in September 2015, at the point in time when the tender was evaluated, like I mentioned in my reply, investigations were still ongoing. We did not really know what the exact cause was and what OKP's liabilities were. This was, in fact, taken into consideration when we evaluated the tender, and, as a result, OKP scored the lowest for quality, which includes safety performance, in the tender submission.

However, we do look at other factors. OKP had a good track record over the past 10 years for completing many similar projects and, prior to the Yio Chu Kang Flyover accident, OKP had achieved an accident-free record of more than 25,000 man-hours. Following the fatal accident at the Yio Chu Kang Flyover, OKP had also improved their safety standards with visible improvements. Since 2015, OKP did not have any work-site accidents, MOM fines or demerit points until the collapse of the current PIE-TPE viaduct.

We hear the Member's concern. We do take into consideration the safety records and safety performances of companies when they bid for projects.

I thank the Senior Minister of State. I have some questions. For design-and-build tenders, I know a good track record is important, but how do we evaluate the technical competency of the project site team and the contractors, such as the one involved in the erection of the working platform and temporary works?

There were also reports of 11 cracks that were discovered after the incident. Can the Senior Minister of State share the investigations that are still ongoing?

The third question is whether there is a process in place to brief the site team for the temporary work, such as the loading, the PE design and the risk assessment for it.

I would like to thank the Member for her supplementary questions. First, allow me to run through with Members our tender evaluation framework with regard to price, as well as the quality.

As I have mentioned in my reply, all public agencies adhere to the price-quality method (PQM) published by BCA, which evaluates both the price as well as the quality attributes for all tenderers. For build-only projects, agencies generally adopt a price-quality weightage of 80:20. In this case, which is a design-and-build project, agencies can consider price-quality ratios between 60:40 and 70:30, depending on the complexity. In this case, for the TPE-PIE project, a 70:30 ratio was considered, similar to other projects of similar complexity and nature.

BCA guidelines make it mandatory for safety performance to make up at least 15% of the quality score. However, LTA, in its internal guidelines, assigned 25%, so they are actually more stringent than BCA. So, 25% of the quality score must be attributed to safety performance.

In addition, LTA evaluates four sub-components for safety performance, namely, the safety records of the past two years, the robustness of the safety management systems, the safety and health performance in ongoing LTA projects and whether the company had won any safety awards.

Other components of the quality evaluation include project-specific proposals which actually form the bulk of the evaluation − project performance, dispute resolution approach and favourable adjudication result.

In this case, LTA had done the due diligence in ensuring that the award had been given to the tenderer who actually performed best in the PQM.

As to the Member's question on the reasons and the cause of the accident, the investigation is ongoing; it is still premature to judge what is the exact cause. I think it is unfair to make any judgement at this point in time. Suffice to say that based on our preliminary investigation, it is the design of the corbels that could have resulted in the accident. LTA, together with BCA and MOM, has already done whatever possible to put proppings around the structure to ensure that the existing structure remains safe for any ongoing investigation and works.

I thank the Senior Minister of State for his answer and I would like to raise a few supplementary questions.

Firstly, the Senior Minister of State mentioned that of the approximately 69 bid submissions over the past three years from contractors with a history of serious safety lapses, he mentioned two were successful. Would the Senior Minister of State happen to have information on whether of these two successful bids from such contractors with such a safety lapse history, were there any subsequent serious safety lapses on these projects after the contractor won the bid in these two cases?

My second supplementary question is: in the event of a serious safety lapse, such as a fatality, to what extent would that shift the quality assessment of the contractor's subsequent bids? The background to this, Mdm Speaker, is I am wondering whether there is a risk that some contractors may already be pricing in the impact of safety compliance and whether this may shape contractor behaviour.

I would like to thank Dr Tan Wu Meng for the two supplementary questions. On the first, where two bidders were eventually successful out of the 69 bidders who had a serious safety lapse, I do not have the details of the kind of projects and works that they have been involved in. I will be able to provide the information separately to him.

As to the impact of safety records on quality performance, yes, I have indicated in my previous reply that safety forms a significant proportion of the quality score. In the case of LTA projects, it forms about 25%. While safety lapses may have happened, we also need to be cognisant of the fact that we need to go into the details of the accident − what caused the accident − before deciding on the score under the quality framework. At the end of the day, we need to look into all different factors and considerations and apply the PQM in determining who the eventual winner of the bid will be.

I thank the Senior Minister of State. I was just wondering whether there is a vicious cycle that is going on here in the sense that contractors, knowing that they will be scoring low for quality due to poor safety record, will be lowering their price bid in the next contract to an unrealistic level and, therefore, risking further safety lapses; and whether, therefore, a review of the PQM framework is on the cards after this accident.

I would like to thank the Member for the question. LTA does not bar contractors which have safety lapses or are blacklisted by MOM from participating in the tenders. In fact, their quality envelopes will still be opened and assessed objectively. Any safety lapses will then be penalised under the safety component accordingly. However, those with very low-quality scores may be disqualified and their price envelopes left unopened. In fact, from 15 July 2015 onwards, LTA has put in place a new policy where the LTA Board can veto bidders on the basis of very poor safety performance alone. For such cases, the price envelopes will be returned unopened. Since then, I would like to inform the Member that LTA Board has vetoed 16 bids from 10 companies for this very reason.

Mdm Speaker, it is important for LTA to have a thorough investigation, so that the root cause of the collapse can be identified and measures taken. On the other hand, I also hope that LTA will not overdo it and have knee-jerk reaction. I have two supplementary questions.

Since the Stop Work Order is already issued, how much of a delay will this cause to the project?

The second question is, will the Ministry work with MOM to let the contractor resume work at other areas except the viaduct construction, because the project is a big project and now the Stop Work Order is for the whole project?

I would like to thank the Member for the comment as well as the two supplementary questions.

LTA is working with MOM as well as BCA to investigate the cause of the collapse. I would like to urge all Members to be patient, not to speculate what the cause is and let the investigation take its due course. Of course, the delay of the project after the issuance of the Stop Work Order will depend on the investigation process and the cause of the accident. Once that has been determined, all necessary precautions, as well as, if there is a need in re-qualifying the design and so on, will be taken into consideration before work can resume.

Thank you, Mdm Speaker. I have two supplementary questions for the Senior Minister of State.

We know that in the construction industry, it is typical for these main contractors to have multiple subsidiary companies. So, how are these taken into account, especially if the subsidiary companies had previous safety lapses, in the overall assessment if the award is being tendered by another company within this whole holdings?

The second question is, because of this complexity or the scale of the project, it is typical to have multiple sub-contractors. How does the main contractor ensure that the sub-contractors actively take measures against all these safety lapses?

I would like to thank Miss Cheryl Chan for the supplementary questions. For all projects, ultimately, the main contractor will be held responsible for any safety lapses that may occur as a result of the work that has been sublet to other smaller subcontractors.

Thank you, Mdm Speaker. I would like to ask the Senior Minister of State two supplementary questions.

One, what measures will be taken to ensure that the project will continue as smoothly and as safely as possible?

The second supplementary question is: is the Senior Minister of State able to give an estimated timeline of when the investigation will be completed and will the report be made public?

I thank the Member for the questions. The investigation is likely to be completed sometime in October. Once the investigation has been completed, we will make public the report as soon as possible.

With regard to how soon we can resume work, we will resume as soon as possible, without compromising safety.

A supplementary question for the Senior Minister of State. The Senior Minister of State mentioned that prior to the award of the tender to OKP, they had a good 10-year track record. The most recent one, unfortunately, the findings were not complete and, therefore, it was not quite taken into account. My question to him is, while it is important to look into the 10-year track record, more weightage should be given to the recency effect, the most recent incident.

I asked this earlier, he did not quite nail it down, I want to ask again. Would such things be instituted in future tender awards? This PQM really needs to be reviewed, taking into account that notwithstanding that most recent incidents have not been finalised, it must be taken as a factor, to be seriously deliberated and considered. I hope this will be factored in, going forward.

I thank Mr Seah for the suggestion and I agree that some of these factors are important to be considered in the evaluation of the bid. Indeed, the PQM guidelines have been dictated by BCA. LTA does review the guidelines and make necessary changes and amendments according to its needs. If we do need to make any significant changes, we will need to get the approval from BCA as well. I thank Mr Seah for those comments and we will take them seriously.