Is HDB profiting from the sale of optional components like doors when selling new flats?
Buyers of new HDB Build-to-Order (BTO) flats are presented with an Optional Component Scheme (OCS), which provides them the choice of whether to have internal doors, sanitary fittings, and floor finishes in the flats they select. This scheme was put in place to reduce wastage, as HDB had observed that some flat owners may replace the components with their preferred products, after moving into the flat.
HDB ensures that products offered under the OCS meet stringent quality standards. All products and works, from manufacturing to installation, are required to comply with local and international standards. In particular, the doors offered under the OCS are of quality standards which cannot be visually assessed externally. For instance, the inner core of these doors is constructed to HDB's specifications, in terms of its thickness and the detailing of timber rails. This contributes to its solidness and sturdiness, and they are put through a series of tests to ensure that quality is not compromised. In addition, the designs also minimise chipping and seepage of water into the timber frames and levers are provided for elderly friendliness. HDB also provides a one-year Defects Liability Period, during which all defective items, if any, will be rectified.
The higher quality factor has been verified by external contractors and consultants. These are good practices which HDB adopts, to ensure the quality of the products.
The items offered to buyers under the OCS are priced based on quotes obtained from the suppliers according to HDB's specifications and requirements, which are regularly reviewed. As the same prices are used to pay the contractor, HDB does not profit from the sale of items under the OCS.
There is a large variety of doors, sanitary fittings and floor tiles in the market of varying quality. While some renovation contractors claim that they can sell and install a similar product as HDB at a cheaper price, buyers would need to establish that they are indeed getting products of similar quality, when they buy it on their own in the market and are comfortable with the installation quality.
Details of HDB's OCS offerings are presented in an open and transparent manner. As its name suggests, the OCS is offered entirely on an opt-in basis. If you are a flat buyer, you can choose to take it up or appoint a contractor of your choice to carry out the job, where you will have the flexibility to decide on the type and range of products you want. However, the OCS is available as a convenient option, so that there would be no need to engage a contractor to install the items for you. Additionally, if you go for the OCS, you would be able to pay for the items with your CPF funds as part of the overall flat price.