Speeding up construction finance

In large civil engineering projects, payment delays can ripple through the project chain, underscoring the need for banking partners like OCBC to support cash flow continuity

- 

Through close dialogue with industry players, OCBC is strengthening its support for the civil engineering ecosystem with tailored financing solutions designed to address sector-specific challenges.

(HWA SENG BUILDER)

From new MRT lines to the upcoming Changi Airport Terminal 5, billions of dollars' worth of civil engineering projects are reshaping Singapore's skyline.

According to the Building and Construction Authority, up to $53 billion in construction contracts across the private and public sector is expected to be awarded this year.

Yet what remains largely unseen is the complex financing required to get each project off the ground and delivered on time, often involving dozens of contractors operating under tight timelines.

This is a reality that is well understood by institutions such as OCBC, which works closely with players across the civil engineering (CE) ecosystem, supporting projects ranging from the construction of expressways and MRT stations to underground tunnels and sewerage systems.

For every project they undertake, main contractors are required to furnish guarantees issued by financial institutions, assuring project owners that contractual obligations will be met. Any delay in putting these guarantees in place can disrupt cash flow and derail project timelines.

The pressure intensifies on major projects, where a single main contractor may work with 20 to 30 subcontractors, many of whom face similar financing challenges.

"Subcontractors require substantial funds upfront to mobilise resources, including workforce deployment, site preparation and securing necessary permits," says Ms Jacqueline Ng, finance director of main contractor Hwa Seng Builder.