Complete Property Market Updates of Singapore

April 30, 2008

Nicoll Highway collapse: Insurance claims settled

Filed under: 1 — Propertymarketupdates @ 2:39 am

Claims amounting to hundreds of millions of dollars arising from the Nicoll Highway collapse have been settled as the tragedy marks its fourth anniversary today.

The main parties involved – the Land Transport Authority (LTA), Japanese contractor Nishimatsu Construction and insurance groups led by Japan’s MSIG – came to ‘an amicable settlement’ recently, a source involved in the saga told The Sunday Times.

The settlement has ’saved all parties concerned hefty legal expenses and many more years of waiting’, he said.

All parties have signed an undertaking to keep details of the settlement private.

The exact sums paid out, and to whom, would not show up on the General Insurance Association’s annual statistics because insurance for massive tunnelling engineering works is usually done offshore as the local outfits are not big enough to underwrite them.

But The Sunday Times understands that both the LTA and Nishimatsu were paid.

Excavation for the Nicoll Highway station – one of 29 on the MRT Circle Line being built now – was almost complete when retaining walls at the worksite collapsed on the afternoon of April 20, 2004.

Four workers were killed and claims from their kin were settled separately last year.

The collapse also caused a section of Nicoll Highway to cave in. There were no casualties here.

A public inquiry found builder Nishimatsu to be largely at fault. It had, among other things, failed to heed warnings from instrumentation set up to measure earth movement. A couple of sub-contractors and 13 professionals – including a number from the LTA – were also named.

Three Nishimatsu executives and one former LTA project director were charged in court and fined between $8,000 and $160,000 each.

The Japanese company was also fined a maximum of $200,000 under the Factories Act. It admitted to design errors which contributed to the collapse.

The incident led to the departure of several senior LTA officers and Nishimatsu replaced some of its executives stationed here.

The latest settlement would defray some costs for Nishimatsu, which is said to have footed a bill of about $300 million for building a new station and realigning part of the Circle Line.

‘If it was any lesser contractor, this would not have been possible,’ an insurance industry source said.

A construction industry source said: ‘It is doing this more for relationship, not so much out of fear that it will be banned in Singapore.

‘Nishimatsu’s worldwide turnover is US$4 billion (S$5.4 billion) to US$5 billion, and Singapore accounts for less than 1 per cent of that.’

The Japanese company, which has been involved in tunnelling works in Singapore since 1984, has not secured any similar civil contracts since the collapse.

Construction of the new Nicoll Highway station – sited about 100m south of the collapsed station – and adjoining tunnels has been completed. French rail systems builder Alstom has already moved in to lay the tracks.

The Sunday Times understands that the LTA is aiming to open the downtown stages of the Circle Line by mid-2010. This 11-station section spanning about 12km links Paya Lebar to Dhoby Ghaut via Mountbatten, Kallang and Nicoll Highway.

The first part of the line to open – in June next year – will be a five-station stage linking Bartley to Marymount. It has interchanges at Bishan and Serangoon.

By the time the Youth Olympics is under way in August 2010, a large part of the Circle Line will be running. Two other stages – linking Thomson to Pasir Panjang via Holland Village – could be ready after 2011.

A spokesman for Japanese insurer MSIG, which inherited the liabilities of the Nicoll Highway station contract when it bought the general insurance business from Britain’s Aviva in late 2004, said: ‘It is not our policy to provide any details relating to any insured or the details of any claim or claimant.”

The LTA and Nishimatsu have also declined to comment.

Source : Sunday Times – 20 Apr 2008


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