Consultancy Services for Construction of Bin Centre at Victoria Theatre and Victoria Concert Hall

2 Mr Kok Heng Leun asked the Minister for Culture, Community and Youth with regard to the Report of the Auditor-General for FY2015/2016 on the redevelopment of the Victoria Theatre and Victoria Concert Hall (a) how were the consultancy services for construction of the bin centre procured; (b) how many consultancy sessions were made and what is the number of man-hours spent; (c) whether the construction difficulty was anticipated and whether the cost was within the initial budget; (d) what were the various consultancies done during the refurbishment of Victoria Theatre and how much did they cost; and (e) what contributed to the lack of "robustness" in assessing the consultancy fees.

The Minister for National Development (Mr Lawrence Wong) (for the Minister for Culture, Community and Youth): Madam, I am taking this question on behalf of Minister Grace Fu who is away on overseas duties and I am covering for her.

Madam, open tender for the redevelopment for Victoria Theatre and Victoria Concert Hall (VTVCH) was called in 2009. The original plan was to have a standalone bin centre for VTVCH. However, after extensive consultation with the planning authorities, it was decided that it would be better to have a centralised refuse collection centre that would serve not only VTVCH, but also the Asian Civilisations Museum (ACM), the Old Parliament House and the Parliament House.

So, we should be very clear that the scope of the consultancy rendered was much more than a typical consultancy for a bin centre. The task assigned to the consultant was to work out and implement an effective refuse collection solution for the Civic District that would meet the operational needs of the various institutions, optimise space for the precinct and preserve the aesthetics and integrity of historical buildings in the vicinity which included several national monuments.

The consultancy services were procured as a contract variation to the consultancy for the redevelopment of VTVCH. As it was not clear what form the final refuse collection solution would take and how much it would cost to construct, the National Arts Council (NAC) decided then that it would be better to contract the consultancy services as a lump sum fee. This was to limit any potential cost escalation for the project, which faced numerous challenges, given the site constraints and the need to meet the needs of multiple institutions. The consultancy quotation was assessed and found to be within the range of consultancy fees for other complex projects in the vicinity. The total consultancy cost of the VTVCH redevelopment project, including this variation order, was also assessed to be within the industry benchmark of 10%. It was, in fact, 8.7% of total development costs.

The consultant carried out an extensive technical feasibility study, which included the preparation of proposals for five different sites for the Urban Redevelopment Authority's (URA's) planning approval, before the final site was identified. The work done by the consultant included the following.

First, studying the operational needs of the different stakeholders and identifying an optimal location for the refuse collection centre. This was eventually located within the boundaries of ACM. So, it was outside of VTVCH but within the boundaries of ACM, on top of a basement that was being used for mechanical and electrical services for the museum, and next to the loading bay where artefacts are being brought in and out of the museum on a regular basis.

Second, studying the structural, mechanical and engineering requirements and conducting soil bearing and loading tests of the site, given its location at the ACM, which is also a national monument.

Third, studying pedestrian and traffic flows and working out solutions to manage any potential conflicts. For example, there was a need to take into account the movement of visitors and tour buses, as well as to accommodate work access to the ACM basement and the loading bay.

Fourth, studying airflow and implementing odour control measures around the area to minimise disamenities to ACM staff and visitors.

Fifth, providing technical solutions for the construction of the centre so that it would be sensitive to the character of the Civic District and meet the requirements of the relevant authorities.

Consequently, the solution required structural and reinforcement works to ACM, the construction of a new access to the basement, tearing down of existing structures on site and relocation of existing services, as well as resolving vehicular access issues for the adjacent ACM loading bay, which I mentioned earlier. All these had to be carried out without disruptions to the museum and its tenants. Based on the design worked out by the consultant, the contractors, in fact, quoted a construction cost of $890,000. The consultant also did extensive value engineering which brought the final cost down to $470,000. So, it was a savings of $420,000 through the work of the consultant.

Based on the work done by the consultant, we have assessed that the project was delivered satisfactorily and at acceptable cost. I should highlight that Auditor-General's Office (AGO) did not conclude that the consultant was overpaid, but was concerned about the process by which the consultancy fees were assessed. In this regard, the Ministry of Culture, Community and Youth (MCCY) acknowledges that there should have been more detailed documentation to explain clearly the scope and complexity of the consultancy services. The Ministry will ensure that such justifications are set out fully in future.

Mdm Speaker: Er Dr Lee Bee Wah.

Er Dr Lee Bee Wah (Nee Soon): Mdm Speaker, I would like to thank the Minister for his comprehensive reply. I would like to declare my interest as a professional engineer who, from time to time, will have to deal with similar issues of claiming fees from the clients. Very often, we are being bullied by the clients. I would like to applaud the Ministry for honouring the conditions of contract. My supplementary questions are: how would the Ministry do it differently if the work were to be done now? Second, will the fee payable be still the same?

Mr Lawrence Wong: Madam, I thank the Member for highlighting the important work done by our consultants, architects and engineers. And now, wearing my Ministry of National Development hat in the built environment sector and dealing with this group of consultants, I would say they put in a lot of hard work to do the job well, to ensure that we have safe and well-built infrastructure in Singapore and they all do their job with a high level of commitment and professionalism, including this team of consultants who were working on the VTVCH project.

As to the Member's second question, with the benefit of hindsight, it is easy to make many reflections and say that I would do things differently with new information. But remember, as I mentioned earlier at the time when the project was called, it was unclear what the solution would be. The consultancy was not a construction consultancy. So, construction cost is not relevant. You could have gone by hourly wage, that means, you pay according to hours, billing by hours, but then you could be exposed to much higher cost in the end because it was a complex project, the consultants may take a lot more time and, in the end, you might have ended up paying a lot more.

So, overall, if we have to do this again, I would say we would still have gone for a fixed lump-sum contract, as was done in this case. As I have explained, the project was delivered satisfactorily and at an acceptable cost. So, we would probably have done it again.

Mdm Speaker: Mr Leon Perera.

Mr Leon Perera (Non-Constituency Member): I thank the Minister for his reply. Just two supplementary questions. Firstly, on the issue of facade designs. One of the statements that was made in connection with this issue was that the facade design for the bin centre presented some issues in terms of complexity and synchronising with the aesthetics of the surrounding areas. Could the Minister help us to understand what extraordinary measures were taken in respect of the facade design? Were historians engaged, for example? Were consultants, who have the knowledge of the history and the aesthetics of the surrounding area, engaged to justify an extraordinary expense on facade design?

Secondly, in relation to the AGO's finding on the procurement process, would the Minister say that the rule that was used by AGO, which is to highlight the percentage of consultancy out of total construction cost, is actually an inappropriate rule to use to comment on the validity of the cost of those expenses?

Mr Lawrence Wong: Madam, I should, first, clarify the Member's comment that there were, as he said, extraordinary expenses incurred in facade design. As I mentioned earlier, the expenses incurred were for the broader scope of consultancy and not specifically facade design, in particular. Of course, facade design is part of the overall consultancy. As I mentioned, the consultancy needed to come up with a solution that would take into account the aesthetics, the integrity of the entire Civic District, which comprises many historical and national monuments. Indeed, there were consultants who are architects, who were experts; they were doing the redevelopment of VTVCH and they are professionals in this area. They took that into consideration and thinking about what the final solution would be and how that overall refuse centre can be put together on ACM premises without affecting or changing the character of that area. That was all taken into consideration. If you look at the overall cost and the wide range of work that they did, aside from facade design, we believe that the consultancy fees were at an acceptable cost.

On the AGO rule, the rule is actually a very reasonable rule for all construction projects. So long as the consultancy is for a construction, then it makes sense to say consultancy in relation to construction costs. As I have explained just now, this was quite a unique consultancy project, it was not solely for construction per se. It was looking at a broader range of issues, bringing together different stakeholders to put together a combined refuse collection solution, taking into account the unique factors of this Civic District precinct. In this instance, it would be reasonable to have a deviation from the rule of consultancy fee norm that is based on construction cost. The issue, as I mentioned, was about having detailed documentation, about the deviation, and the Ministry has acknowledged this.