New programme to help fund costs of modernising HDB lifts

Romesh NavaratnarajahSeptember 20, 2016

Lift Upgrading Programme-crop

The new Lift Enhancement Programme will support costs of modernisation of HDB lifts. (Photo: mailer_diablo, Wikimedia Commons)

The Housing and Development Board (HDB) has launched a new Lift Enhancement Programme (LEP) to help town councils (TCs) modernise their existing lifts.

The move comes after the Building and Construction Authority (BCA) recommended lift owners to update their older lifts with several features found in newer lift models.

To be rolled out over a 10-year period, the LEP will see the HDB funding around 90 percent of the TCs’ costs to install the recommended enhancement features.

“This is a major programme, which will involve significant government expenditure, estimated at around $450 million,” said National Development Minister Lawrence Wong in a blog post.

“But given the importance of lifts in our daily lives and in our high-rise HDB living environment, the government is prepared to commit to this additional spending and maintain high safety standards.”

The LEP will apply to lifts that are not yet equipped with some or all of the enhancement features, and have been in operation for 18 years or less.

“For the older lifts, it will make more sense for the TCs to replace them with new lifts which will come with these enhanced features,” said Wong.

The HDB noted that around 20,000 lifts requiring varying extents of modernisation are expected to benefit from the new LEP.

However, TCs are responsible for the eventual replacement of all the lifts under their care, which requires significant long-term expenditure, said Wong.

As such, he advises TCs to “plan ahead and build up their Sinking Fund regularly over time to pay for these major expenses”.

To date, the total Sinking Fund balance across all TCs stands at around $1 billion. While this may sound like a healthy amount, it is not sufficient to cover the cost of future lift replacements which is estimated at almost $3 billion from now to 2035 (for some 11,500 lifts across all HDB estates), revealed Wong.

“Besides lifts, there will be other cyclical maintenance and replacement works such as façade repair of HDB blocks, cyclical repainting, and replacement of water pipes/tanks. These expenses will also go up as estate infrastructure ages,” he said.

“This is why every quarter, TCs are required to set aside between 30 to 35 percent of their S&CC (Service and Conservancy Charges) collections and government grants into their Sinking Funds.”

In fact, his ministry will also be asking all TCs to prepare and submit their financial projections for their Sinking Funds over the next 10 to 30 years.

“These projections will enable us to assess the appropriate levels of contribution to the TC Sinking Funds and Lift Replacement Funds,” said Wong.

“All TCs must take a long-term view and start planning now for asset and lift replacements in their estates. This is the basis of Singapore’s success. We do not leave things to chance. But we look over the horizon, plan, and prepare for the future. This is the way to ensure a good and safe HDB living environment for all Singaporeans,” he added.

More details on the implementation of the LEP will be provided to TCs in the coming months, said the HDB.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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