Hi mummys & daddys,
I read that the contractor for 2 BTO project in bt panjang (Senja Gateway & Senja Grove) is gg bust and work has stop for a few weeks now, anyone bought a unit there? I have got a unit and was told TOP in Sep 2014, anyone knows if there will be delay?
Contractor's woes may hit projects
Poh Lian Construction buys more time to sort out its problems. -ST
Rachel Scully
Fri, Mar 15, 2013
The Straits Times
Several hundred million dollars worth of projects could be delayed after soaring costs forced Poh Lian Construction to seek breathing space from creditors.
The long-established player whose office is near Paya Lebar was granted an interim judicial management order last week.
This is a temporary court-supervised rescue plan that will give the firm more time to sort out its affairs.
Mr Tam Chee Chong and Mr Andrew Grimmett from accounting firm Deloitte & Touche have been appointed the interim judicial managers.
Poh Lian, which is a unit of Singapore-listed United Fiber System (UFS), highlighted the headwinds it was facing when the parent released its financials for the year ended Dec 31.
It pointed to significant cost overruns due to delays in some projects, extensive use of increasingly pricey foreign labour by subcontractors and higher wage costs due to changes in labour policy. Poh Lian's revenue for the year was $235 million.
Poh Lian's website shows that it is the main contractor for several local developments. Based on earlier announcements, the contract values are estimated at several hundred millions.
Among them are H2O Residence being developed by City Developments (CDL), GuocoLand projects Sophia Residence and Goodwood Residence, and two Housing Board Build-to-Order (BTO) projects in Bukit Panjang.
A CDL spokesman said on Tuesday: "CDL is unlikely to be adversely affected... We are taking prompt action and are already finalising the appointment of one of the reputable contractors, which will be able to take over and complete the construction of H2O Residences should the need arise."
CDL added that the project is about 20 per cent complete and should be ready on schedule in the second quarter of 2015. About 85 per cent of the units are sold.GuocoLand said it is working closely with consultants and considering various options to resume work on its Sophia Residence and Goodwood Residence sites as soon as possible.
"(We) are currently in talks with several main contractors and will reserve all rights against Poh Lian," a spokesman said.
The Housing Board said it is working with Poh Lian and the judicial managers on arrangements to ensure that construction on the BTO projects Senja Grove and Senja Gateway can be completed with minimal delay. "Flat buyers will be informed should there be any delay to the completion timeframe that was earlier communicated to them."
Poh Lian's parent firm UFS requested a trading halt a day after the construction firm applied for its interim judicial management last week. Trading has yet to resume.
UFS has recorded pre-tax losses for three consecutive years. Construction and property make up over 95 per cent of its revenue.
Acting UFS chief executive Pauline Lee could not be contacted despite repeated calls to the office.
Late Tuesday night, the company confirmed that it had applied for judicial management.
Poh Lian's troubles could be an isolated case in the industry although Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, noted that with costs rising, it will be crucial to see how firms draw up their contracts to address this issue.
rjscully@sph.com.sg
The Straits Times
www.straitstimes.comPublished on Mar 16, 2013
Poh Lian $60m in the red 'due to mismanagement'
Director outlines building firm's plight in court filing
By Rachel Scully
BUILDING company Poh Lian Construction is in a $60 million black hole because it mismanaged funds and entered poor contractual deals, according to one of its directors.
Mr Peh Pit Tat outlined the company's plight in a 127-page document submitted as part of Poh Lian's application for a judicial management order earlier this month.
A hearing on this will be held on April 5, but an interim judicial management order was granted on March 7, which protects the assets of Poh Lian - a wholly owned subsidiary of United Fiber System (UFS) - until the court rules next month.
Mr Peh joined the board in September 2011. Two directors - executive chairman Wisanggeni Lauw and chief operating officer Leong Chee Keng - told him then that the company was in a "healthy financial position".
The two men ran the company's day-to-day operations, but no longer sit on the board now.
Mr Lauw resigned on Jan 22. Mr Leong remains as chief operating officer, but his role is to focus on project managing the incomplete developments.
In the court filings, Mr Peh said: "It came as a shock therefore when I was informed by the previous management that some time in October 2012, (three property developments) were incurring substantial losses due to cost overruns."
The developments were the condominiums Sophia Residence, Goodwood Residence and Bishopsgate Residences.
Poh Lian's financial situation plummeted further when it realised the cost overruns for the three developments amounted to $29 million in January.
It estimates that a further $37 million is needed to pay subcontractors to complete these projects.
Mr Peh noted that Poh Lian had submitted tenders at uncompetitive prices. The former management team failed to factor in additional costs in the light of project delays for the Sophia and Goodwood projects, which are being developed by GuocoLand.
Poh Lian also incurred substantial losses due to a change in payouts for subcontractors on the Goodwood project.
"In March 2012, the senior manager for operations, Mr Thomas Ng, decided to replace subcontractors who were paid on a 'job done' basis with others whose employees were paid per hour," wrote Mr Peh.
This is usually done only when a development is close to completion and requires minor works, but that was not the case for the Goodwood project.
From April to December last year, up to 600 workers were paid on an hourly rate, leading to massive cost overruns, wrote Mr Peh. Mr Ng was asked to leave Poh Lian earlier this year.
As of Jan 31, Poh Lian owed subcontractors almost $41 million for seven ongoing projects. The company also has contingent liabilities of another $136 million if it is late in completing developments.
Work on all seven developments came to a halt after the application for interim judicial management was lodged last week.
Four of these are still profitable: St Anthony's School, H2O Residences in Sengkang West and two HDB Build-to-Order projects in Bukit Panjang - Segar Grove and Senja Gateway.
Parent company UFS is unable to extend financial support to its construction arm due to contractual obligations struck in July last year. Poh Lian's management hopes the appointed interim judicial managers Tam Chee Chong and Andrew Grimmett from audit firm Deloitte & Touche can come to a resolution to minimise losses.
The judicial managers have the authority to source for new investors, distribute the assets and hold negotiations with the various stakeholders and creditors. They also have a say in determining which projects Poh Lian should continue working on or give up.
Mr Peh's court papers also include a detailed explanation on why it is not in the best interests of creditors to let the construction company go belly-up.
He cites further delays on its seven projects, unfair preference to creditors if its assets are distributed and the declining value of those assets if sold separately rather than in their entirety.
At least five lawsuits have been filed against Poh Lian, one from an individual who is claiming $250,000, and four from Kao Lee Aluminium Industrial, which is asking for more than $1.15 million.
rjscully@sph.com.sg
Copyright © 2013 Singapore Press Holdings. All rights reserved.
__________________
I read that the contractor for 2 BTO project in bt panjang (Senja Gateway & Senja Grove) is gg bust and work has stop for a few weeks now, anyone bought a unit there? I have got a unit and was told TOP in Sep 2014, anyone knows if there will be delay?
Contractor's woes may hit projects
Poh Lian Construction buys more time to sort out its problems. -ST
Rachel Scully
Fri, Mar 15, 2013
The Straits Times
Several hundred million dollars worth of projects could be delayed after soaring costs forced Poh Lian Construction to seek breathing space from creditors.
The long-established player whose office is near Paya Lebar was granted an interim judicial management order last week.
This is a temporary court-supervised rescue plan that will give the firm more time to sort out its affairs.
Mr Tam Chee Chong and Mr Andrew Grimmett from accounting firm Deloitte & Touche have been appointed the interim judicial managers.
Poh Lian, which is a unit of Singapore-listed United Fiber System (UFS), highlighted the headwinds it was facing when the parent released its financials for the year ended Dec 31.
It pointed to significant cost overruns due to delays in some projects, extensive use of increasingly pricey foreign labour by subcontractors and higher wage costs due to changes in labour policy. Poh Lian's revenue for the year was $235 million.
Poh Lian's website shows that it is the main contractor for several local developments. Based on earlier announcements, the contract values are estimated at several hundred millions.
Among them are H2O Residence being developed by City Developments (CDL), GuocoLand projects Sophia Residence and Goodwood Residence, and two Housing Board Build-to-Order (BTO) projects in Bukit Panjang.
A CDL spokesman said on Tuesday: "CDL is unlikely to be adversely affected... We are taking prompt action and are already finalising the appointment of one of the reputable contractors, which will be able to take over and complete the construction of H2O Residences should the need arise."
CDL added that the project is about 20 per cent complete and should be ready on schedule in the second quarter of 2015. About 85 per cent of the units are sold.GuocoLand said it is working closely with consultants and considering various options to resume work on its Sophia Residence and Goodwood Residence sites as soon as possible.
"(We) are currently in talks with several main contractors and will reserve all rights against Poh Lian," a spokesman said.
The Housing Board said it is working with Poh Lian and the judicial managers on arrangements to ensure that construction on the BTO projects Senja Grove and Senja Gateway can be completed with minimal delay. "Flat buyers will be informed should there be any delay to the completion timeframe that was earlier communicated to them."
Poh Lian's parent firm UFS requested a trading halt a day after the construction firm applied for its interim judicial management last week. Trading has yet to resume.
UFS has recorded pre-tax losses for three consecutive years. Construction and property make up over 95 per cent of its revenue.
Acting UFS chief executive Pauline Lee could not be contacted despite repeated calls to the office.
Late Tuesday night, the company confirmed that it had applied for judicial management.
Poh Lian's troubles could be an isolated case in the industry although Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, noted that with costs rising, it will be crucial to see how firms draw up their contracts to address this issue.
rjscully@sph.com.sg
The Straits Times
www.straitstimes.comPublished on Mar 16, 2013
Poh Lian $60m in the red 'due to mismanagement'
Director outlines building firm's plight in court filing
By Rachel Scully
BUILDING company Poh Lian Construction is in a $60 million black hole because it mismanaged funds and entered poor contractual deals, according to one of its directors.
Mr Peh Pit Tat outlined the company's plight in a 127-page document submitted as part of Poh Lian's application for a judicial management order earlier this month.
A hearing on this will be held on April 5, but an interim judicial management order was granted on March 7, which protects the assets of Poh Lian - a wholly owned subsidiary of United Fiber System (UFS) - until the court rules next month.
Mr Peh joined the board in September 2011. Two directors - executive chairman Wisanggeni Lauw and chief operating officer Leong Chee Keng - told him then that the company was in a "healthy financial position".
The two men ran the company's day-to-day operations, but no longer sit on the board now.
Mr Lauw resigned on Jan 22. Mr Leong remains as chief operating officer, but his role is to focus on project managing the incomplete developments.
In the court filings, Mr Peh said: "It came as a shock therefore when I was informed by the previous management that some time in October 2012, (three property developments) were incurring substantial losses due to cost overruns."
The developments were the condominiums Sophia Residence, Goodwood Residence and Bishopsgate Residences.
Poh Lian's financial situation plummeted further when it realised the cost overruns for the three developments amounted to $29 million in January.
It estimates that a further $37 million is needed to pay subcontractors to complete these projects.
Mr Peh noted that Poh Lian had submitted tenders at uncompetitive prices. The former management team failed to factor in additional costs in the light of project delays for the Sophia and Goodwood projects, which are being developed by GuocoLand.
Poh Lian also incurred substantial losses due to a change in payouts for subcontractors on the Goodwood project.
"In March 2012, the senior manager for operations, Mr Thomas Ng, decided to replace subcontractors who were paid on a 'job done' basis with others whose employees were paid per hour," wrote Mr Peh.
This is usually done only when a development is close to completion and requires minor works, but that was not the case for the Goodwood project.
From April to December last year, up to 600 workers were paid on an hourly rate, leading to massive cost overruns, wrote Mr Peh. Mr Ng was asked to leave Poh Lian earlier this year.
As of Jan 31, Poh Lian owed subcontractors almost $41 million for seven ongoing projects. The company also has contingent liabilities of another $136 million if it is late in completing developments.
Work on all seven developments came to a halt after the application for interim judicial management was lodged last week.
Four of these are still profitable: St Anthony's School, H2O Residences in Sengkang West and two HDB Build-to-Order projects in Bukit Panjang - Segar Grove and Senja Gateway.
Parent company UFS is unable to extend financial support to its construction arm due to contractual obligations struck in July last year. Poh Lian's management hopes the appointed interim judicial managers Tam Chee Chong and Andrew Grimmett from audit firm Deloitte & Touche can come to a resolution to minimise losses.
The judicial managers have the authority to source for new investors, distribute the assets and hold negotiations with the various stakeholders and creditors. They also have a say in determining which projects Poh Lian should continue working on or give up.
Mr Peh's court papers also include a detailed explanation on why it is not in the best interests of creditors to let the construction company go belly-up.
He cites further delays on its seven projects, unfair preference to creditors if its assets are distributed and the declining value of those assets if sold separately rather than in their entirety.
At least five lawsuits have been filed against Poh Lian, one from an individual who is claiming $250,000, and four from Kao Lee Aluminium Industrial, which is asking for more than $1.15 million.
rjscully@sph.com.sg
Copyright © 2013 Singapore Press Holdings. All rights reserved.
__________________