Tan Hui Leng Today Online 8 Oct 09;
SINGAPORE - It was deja vu for the building industry here, as Vietnam suspended sand exports to Singapore on worries that the pace of extraction would damage the Mekong Delta.
The move comes just months after Cambodia banned overseas sales of sand in May on environmental concerns - a development that, according to Bloomberg, sent Vietnam's sand exports to Singapore surging.
But this source, too, ran dry when the export paperwork was stopped on Tuesday, according to the head of the Ministry of Construction's Department for Construction Materials, Le Van Toi.
The construction industry here has been anticipating this since news heralding the move broke in mid-September.
With most sand imports previously coming from Cambodia, Myanmar and Vietnam according to suppliers, this caused some worries.
Still, no impact has been felt yet, and players do not expect as drastic a hit as that Singapore took in 2007 when Indonesia banned sand exports, increasing construction costs by 1 per cent and creating a bottleneck in building timelines.
"If no sand is coming through from Vietnam, then surely there will be some shortage - but it would not be as acute as (in 2007) as we now have alternative sources and materials like quarry dust," said Dr Sujit Ghosh, president of the Ready Mixed Concrete Association.
Back then, the supply crunch created by the Indonesian ban had seen concrete and sand prices roughly triple, as Singapore sought out alternative, distant sources.
Another difference between 2007 and now: "In 2007, the market was hit quite substantially as there were big ticket tenders out in the marketplace like the Integrated Resorts," noted Cushman and Wakefield Singapore managing director Donald Han.
"Now, there are hardly any billion-dollar projects, even the construction of the Sports Hub has been deferred; residential projects are not big ticket items and will not create competition for the sand." Construction costs have come down by some 20 to 25 per cent since the peak in mid-2008, he added.
A sand supplier whom MediaCorp spoke to, nonetheless, reckons "there will be an impact" - he estimated that about 25 per cent of sand supply comes from Vietnam each month.
Issue of motives
As for the motivations behind the sand export bans in Vietnam and Cambodia, analysts do not see the same political undercurrents that were present in 2007. Then, Indonesian minister Maritime and Fisheries Minister Freddy Numberi had been quoted in the media as saying the ban was partly because "we also want to settle our border disputes with Singapore".
Vietnam analyst Ben Wilkinson said: "For all sort of reasons, there was some tension between Singapore and Indonesia then. Those tensions do not exist with the Vietnam-Singapore relations. I did not pick up any hint of nationalism at work here at all."
Rather, Vietnam's move is hinged on environmental degradation to the Mekong River and dubious industrial practices such as illegal excavation in Vietnam and neighbouring Cambodia that have caused major landslips along rivers. These are issues that have been debated for some time in its Parliament and media, said the associate director of the Vietnam program at the Kennedy School of Government at Harvard.
Cambodia's ban on sand exports in May came three months after a London-based environmental group issued a report criticising Cambodia for a sand dredging operation.
Diversity of sources
For Singapore's construction industry, the lessons of the 2007 Indonesian ban seem to have paid off, with greater source diversification and use of alternatives to sand.
The recent restrictions on sand exports, said the Building and Construction Authority (BCA), have not affected the supply of construction sand as the industry has been importing "from various countries in the region".
As for sand used in land reclamation projects, BCA said the Government buys it through private contractors "who in turn obtain the sand from diverse sources in various countries, so as to enhance the reliability of supply".
On sand substitutes, Dr Ghosh, who is also the chief executive of cement firm Holcim Singapore, said that while quarry dust and recycled materials can be used, these are not a complete replacement.
"There are limits on the use of recycled material … and while the Government has allowed the use of 100-per-cent quarry dust to replace sand, there are certain quality limitations and other factors involved, so typically we just use 40 to 50 per cent of quarry dust in a project," he said.
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