Builder OKP not aware of ban on government projects post-PIE viaduct mishap

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This photo from July 14, 2017, shows a collapsed section of the viaduct adjacent to a slip road from Upper Changi Road East to the Pan-Island Expressway.

Tay Peck Gek

SINGAPORE (THE BUSINESS TIMES) – Builder OKP Holdings said the group is not aware that it has been banned from or penalised when tendering for government contracts after its involvement in a viaduct collapse accident in 2017.

It was addressing questions received from shareholders ahead of the mainboard-listed firm’s annual general meeting by electronic means on April 26.

A shareholder observed the “quite small” contracts it has clinched from the public sector, and that it has not participated in the “biggest” road building project North South Corridor since the worksite mishap.

The shareholder questioned if this has to do with OKP’s involvement in the Pan-Island Expressway viaduct collapse that left one worker dead and 10 injured, and resulted in its reputational damage and a dent on its turnover, profitability and share price.

OKP’s wholly-owned unit Or Kim Peow Contractors was found guilty of failing to take reasonable measures to ensure the safety of its employees in the accident, and the prosecution has recently urged the court to impose the maximum fine of S$1 million.

However, OKP denied that the group is facing any ban from the government, and attributed the lower revenue from the construction and maintenance segments mainly to the pandemic-induced disruption in construction activities in compliance with the government’s measures.

OKP reported net earnings of S$3.3 million for 2020, compared to a net loss of S$378,000 the year before, while its revenue dipped to S$69.6 million from S$81.4 million. Its share price has been on a decline since the accident when it was trading at S$0.42; it closed at 20 Singapore cents on Friday, up 1.1 cents.

It assures its shareholders that it will be strengthening capabilities in its core civil engineering business in order to maintain its status as a “leading” civil engineering contractor across various industries.

Furthermore, regular checks have been made to ensure that processes adhere to industry standards as well as engaging experts to improve its control systems after the accident, OKP said in a regulatory filing on Saturday.

It also noted the residential projects Essence at Chong Kuo Road (near Sembawang Road) and Phoenix Residences at Phoenix Road in Bukit Batok were launched one year apart, and therefore shareholders should consider this when comparing one had sold over 90 per cent with another that is “not moving much”.

Nonetheless, OKP said, it will step up marketing efforts to engage homebuyers through both physical and virtual channels for its projects.

 

 

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