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One Simple Way To Learn More About Public Projects

Construction6,900,000. A number that created fury among many Singaporeans half a year ago. It was then that our Government mooted the idea that Singapore can accommodate up to 6.9 million people by 2030. The Government went on to clarify that this number is not a target but the projections are merely for the “purpose of land use and infrastructure planning”.

Infrastructure planning

With the increase in population, infrastructure like more roads, houses, train stations, train tracks and walkways have to be constructed to cater for the increased masses. This might actually bode well for construction companies such as OKP Holdings Limited (SGX: 5CF), Chip Eng Seng Corporation Limited (SGX: C29), Lian Beng Group Limited (SGX: L03) and Koon Holdings Limited (SGX: 5DL), among others. These companies service public clients like Land Transport Authority (LTA), Public Utilities Board (PUB) and Housing and Development Board (HDB).

Government Electronic Business (GeBIZ) website

Any tenders posted by the government bodies like LTA and won by companies are all visible to the public to scrutinize at the Government Electronic Business (GeBIZ) website.  Anyone with internet can access the website to view the name of the tender, what the competing offers were, the contract value of the tender won and the company that won the contract.

The benefit of such research is that investors can discern if there is too much competition from competitors, driving bidding prices down. Cut-throat competition, amid rising material and labour costs, can drastically affect the profits and margins of a business. The order book can contract due to intense competition as well.

Let’s use an example of an announcement made by OKP to find out how to glean information from the GeBIZ website. It was announced on 10th of April that OKP won a contract by PUB to improve drainage in Joo Chiat. The SGX announcement can be found here. At the website, it can be seen that Eng Lam’s (an OKP subsidiary company) bid was the lowest at $10.237 million.

Potential investors in the construction sector or investors currently invested in this sector can be better informed by keeping track of the tenders in the GeBIZ website. Do be reminded that the website only caters to public contracts and not contracts dished out by private companies.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.