Businesses welcome more time to chart their plans in face of slump
COMPANIES operating at Seletar Camp, which is set to be transformed into an aerospace hub, are to have their leases extended when they expire in December.
The one-year renewal - with an option to extend for an additional year - will be offered to more than 20 mainly aerospace businesses operating in the vicinity of Seletar Airport.
JTC Corporation, which is spearheading the development of the aerospace hub, said the economic downturn had prompted it to work with the current lessor Civil Aviation Authority of Singapore to extend the leases.
A JTC spokesman said: 'We believe that this extension can give the companies more time to chart their business plans.'
The global downturn has meant many companies are reluctant to confirm whether or not they want to invest in the development of Seletar Aerospace Park.
Managing director of Fokker Services Asia Raj Ramanujam said: 'Our current facility at Seletar meets our needs reasonably well, so we are quite happy with the extension because it gives us more breathing space to work out what we want to do next.'
Work has started to transform Seletar Airport and its surroundings into a 300ha aerospace hub.
The project, which will be fully completed by 2018, includes lengthening the existing runway, expanding the airport and building a new air traffic control tower.
But the recession has already put the brakes on Phase I of the development, and delayed the construction of new facilities by engine-makers Rolls Royce and Pratt and Whitney.
Key infrastructure construction, however, has already begun.
Roads are being upgraded and work has also started on a new substation that will supply power to the entire aerospace park and airport.
JTC's spokesman said: 'Despite the challenging times, JTC is forging ahead with the exciting developments at Seletar and working with the companies to ride over this economic situation.'
Mr Aloysius Tay, chief executive of the Association of Aerospace Industries Singapore, said the decision to extend the leases was wise.
Given business uncertainty, it was to be expected that those companies already operating at Seletar, as well as those keen to move in, would be unwilling to commit resources at this time, he said.
He added: 'The initial plan was for the construction of the new facilities and development of infrastructure works to take place concurrently.
'The good thing is that the roads and other works are coming along nicely, so that when companies are ready to move in, everything will be in order.'
Like Fokker, the other tenants at Seletar said they had not finalised their long- term plans.
Mr Prithpal Singh, chief executive of Executive Jets Asia, said: 'In the end, it all depends on costs and we will have to do our sums before we decide on what next. If not Seletar, the alternatives for us are either Senai or Subang in Malaysia.'
Source: Straits Times, 19 May 2009