As was the case across most of the region, the Asian financial crisis hit Brunei Darussalam’s construction industry hard towards the end of the 1990s, thinning out the sector as construction companies folded or exited the local market. Since then there has been a resurgence as the government rolled out large health and education initiatives in the 2000s followed by a shift towards public housing and infrastructure buildings in the past few years.

National Spend

High levels of public spending during the government’s 10th National Development Plan (NDP), which boasts a budget of in excess of BN$$8bn ($6.28bn) for the period 2012-17, have been a huge contributor to the sector. The drive for economic diversification has led to significant expenditure on infrastructure in areas such as industrial parks, irrigation works, telecoms and the national transport network. Other areas of new capital expenditure include social services like health care, education and public housing. As these public works come to fruition, the private sector has taken its cue from government to develop industrial manufacturing by investing billions of dollars in new production facilities across a variety of subsectors, including metal fabrication, petrochemicals production and food processing, in addition to traditional ongoing work in the country’s dominant oil and gas industry.

By The Numbers

Driven by these expenditures, the sector’s contribution to the economy increased from BN$$550.2m ($432m) in 2011 to BN$$614.6m ($482.6m) in 2012 and BN$$690.2m ($541.9m) in 2013 at current prices, according to data from the Department of Economic Planning and Development (JPKE). The sector has similarly recorded annual increases in capital formation, which went from BN$$2.75bn ($2.16bn) in 2011 to BN$$2.9bn ($2.9bn) in 2012 and BN$$3.09bn ($2.43bn) in 2013.

Public spending dominates the construction sector, and around 80-90% of works are carried out by the government. After being listed in the country’s official gazette, government building projects are tendered out by the Tender Board, which then selects the winning offer from among qualified bids. While the tendering process itself is widely considered to be fair and transparent, the government gets slightly lower marks from the industry when it comes to handling some other procedures in a timely fashion.

Of late, however, the private sector seems to be playing a growing role in terms of initiating new projects. “Since the start of 2014, the market has experienced a slowdown in the number of government projects and a concurrent but lesser increase in private development,” Norhana Haji Abdullah, the managing director at Primeart, told OBG.

Transport Infrastructure

One of Brunei Darussalam’s key strategic strengths in attracting investment to the country is its stability as well as its relatively well-developed, modern infrastructure network. In a bid to further enhance logistical efficiency in the country, as Brunei Darussalam moves to establish itself as a regional cargo centre, the government has rolled out a host of new transport upgrades on land, sea and air.

Foremost among these is bolstering its road network via construction of three bridge projects, as well as a host of other roadway projects (see analysis). One of the most significant recent road works is the BN$$138.78m ($109m) Telisai-Lumut Highway, which was wrapping up construction as of mid-2014. Developed with the aim of easing traffic between Bandar Seri Begawan and Kuala Belait as well as in the Sungai Liang area where the Sungai Liang Industrial Park (SPARK) is located, the 18.6-km dual carriageway runs from Telisai to Lumut. Construction was initiated in February 2010 by Surati Construction of Brunei Darussalam and China’s Third Harbor Engineering with an original completion date of early 2013, although repeated delays have pushed back this timeline. Looking to further ease congestion along the national road network, a total of 30 new flyovers and exchanges are currently in varying stages of development across the country. As of March 2014, eight flyovers were under construction along with six in the tendering stage, four undergoing feasibility studies and another dozen in the planning stage, according to the Ministry of Development.

Points Of Entry

Another major infrastructure project funded by the Brunei Economic Development Board (BEDB) is the BN$$130m ($102.1m) Brunei International Airport terminal modernisation project. Construction began in November 2011, and the overhaul of the country’s largest airport is scheduled to take 36 months. The project is currently on pace to be finished by the end of 2014. The BEDB and collaborative partner the Department of Civil Aviation hired a Singaporean and Hong Kong consortium of consultancy Changi Airports International and AECOM Asia to carry out the project, which in turn have contracted Trans Resources and developer Swee to handle the construction works.

Work on the airport itself will entail the modernisation of the arrival and departure halls (including new modern check-in services supported by sophisticated baggage handling system), a closed-circuit television system, new 300-capacity surau (prayer hall), access control system, flight information display system, radio communication system and a public announcement system throughout the airport. Support and infrastructure works will also be significant and will include the building of new entry and exit access roads, a car park with room for up to 1500 vehicles, 11 aerobridges connecting the new and existing facilities, and the expansion of space for aeroplane parking within the airport.

Not to be left out, Brunei Darussalam’s primary sea port located at Muara is also moving forward with expansion plans that will allow the berthing of a second vessel at the container facility by extending the quay by a further 150-200 metres. A consultancy contract to develop a blueprint for the design, engineering consultancy, preparation of the construction tender and construction supervision of the proposed extension of Muara’s container terminal was signed in March 2014 by the Ministry of Communications and a joint venture between KR Kamarulzaman and Associates and Singapore’s Surbana International Consultants. The design works and preparation of the construction tender document is expected to be completed within six months, and the estimated construction of the project is forecast to take about 18 months.

Building A Better Tomorrow

While the massive infrastructure projects signal a shift in priorities for the government, major investments in the health and education sectors continue to act as a significant driver for the construction sector. In 2013 and 2014 a handful of big-ticket greenfield, expansion and refurbishment projects were already under way, including construction of new district health centres, significant expansion of Brunei Darussalam’s largest hospital and university, a new institute of health and science, as well as construction of the country’s dedicated new National Cancer Centre.

In order to keep pace with the growing demand for health care in the country, Brunei Darussalam’s largest hospital, Raja Isteri Pengiran Anak Saleha (RIPAS), began construction on new a mother and children wing in 2011, which is now scheduled for completion before the end of 2014. After altering initial plans to expand the building from eight to 12 storeys, the new block will provide an 353 additional beds and will house services for maternity, neonatal, obstetrics and paediatrics wards, obstetrics and gynaecology, along with logistics and parking facilities on the bottom two floors. The BN$63m ($49.5m) project exceeded its initial budget by roughly BN$3m ($2.36m) due to alterations to the plans during the project in order expand capacity while bringing facilities up to international standards.

New Facilities

Rural health projects are also under way, like a $14m health centre in Kampong Lambak Kanan that is being built by local construction firm Sonnata and consultancy Arkitek Rekajaya. Built as a replacement to the aging Berakas B Health Centre in Kampong Sungai Hanching, construction was initiated at the new three-storey facility on a 4.5-ha site in May 2014 and is expected to be completed within 15 months. In addition to general health services, the project also calls for the building of ancillary infrastructure, including a prayer hall, lecture hall, conference room, lift and parking lots.

Other major health and education projects include two new mega-campuses for technical and vocational education at BN$170m ($133.5m) each, a new Institute of Health Sciences extension at Universiti Brunei Darussalam, a BN$32m ($25.13m) upgrade of the Tunas Jaya PGGMB School in Madang and a new $14m health centre in Kampong Lambak Kanan.

Red Tape

In terms of permitting private construction projects, the primary challenge for firms in Brunei Darussalam is not generally lengthy delays or complicated procedures for each individual permit required, but rather the cooperation and interconnectivity within the various government departments required to complete the permitting process. However, the government has recently taken steps to rectify this issue through its ongoing e-government transformation, which is currently improving the interconnection of various government ministries with the ultimate goal of providing a one-stop shop with representatives from each relevant department as well as e-services.

When compared to other nations, Brunei Darussalam’s construction regulatory environment was in the upper quartile, ranking 46th overall out of 189 countries in the World Bank’s 2014 “Doing Business” survey. A total of 22 permits are required to carry out a construction build in the country ( compared with a regional average for East Asia and the Pacific of 16), and it takes an average of 95 days to complete, significantly less than the regional average of 146 days. Permit costs were far less than the regional average as well, accounting for just 3.5% of per capita income compared to 104.7% for East Asia and the Pacific as a whole.

Labour Force

One of the largest challenges to the growth of the construction industry is the dearth of qualified and experienced local workers. With much of the local population choosing other career paths, around 85-90% of the sector’s labour force is made up of foreign workers. Keen on creating more job opportunities for Bruneians, the government is now turning its attention to the largest nonoil-and-gas industry in the country as a means to put more locals to work. Although no official legislation has been introduced to date, the government has issued statements as late as 2014 indicating that it is looking into the feasibility of implementing new work quotas for the industry. Even if such a requirement were implemented at a relatively low level of 30%, this would still represent a doubling or tripling of the number of locals in the workforce, which could have serious cost and efficiency ramifications for construction companies.

To better prepare Bruneians to compete in this sector, the Ministry of Education has initiated an overhaul of technical and vocational education. A key component of this new strategy involves revising the curriculum and training courses to better match private sector needs. This will be done by inviting the private sector to provide input on curriculum development; offering teachers and trainers relevant business, internship and mentorship opportunities; and even guaranteeing jobs that are conditional upon graduation. Other aspects include building two new, centralised mega-campuses, as well as introducing an outreach programme targeting potential students and their parents, with the aim of altering social perceptions of technical and other skilled labour vocations in society and the market.


While Brunei Darussalam is not generally known for its heavy industrial sector, the BEDB has managed to secure a number of big-ticket industrial projects in recent years, which should provide ample opportunities for the construction sector. One of the largest of these is the BN$20bn ($15.7bn) Zhejiang Hengyi Petrochemicals’ refinery and aromatics cracker complex being built at the industrial park on Pulau Muara Besar (PMB) island. After the Chinese petrochemicals firm signed an original land lease agreement with the BEDB in April 2012, Zhejiang Hengyi signed on Sinopec Engineering to carry out the front-end engineering and design (FEED) for the project and contracted Honeywell United Oil Products to provide aromatics production technologies for the new plant.

The ownership structure expanded in February 2014 when Zhejiang Hengyi announced the formation of a limited joint venture for the project under which it would retain a 70% stake in the project via the wholly owned subsidiary Hong Kong Tianyi International Holding. The remaining 30% will be held by Damai Holdings, a wholly owned subsidiary of the government’s Strategic Development Capital Fund.

A series of delays and ongoing negotiations pushed the project back from its initial start date in 2013 to 2014, though works were expected to be completed in 2016. Construction of the 260-ha site will be carried out in two phases and will entail the installation of an atmospheric and vacuum distillation unit with a capacity of 8m tonnes per annum (tpa), a hydrocracking unit with a capacity of 2.2m tpa, an aromatic complex unit with a capacity of 1.5m tpa, a diesel hydrogenation unit with a capacity of 1.5m tpa and a kerosene hydrogenation unit with a capacity of 1m tpa. Other project activities will involve the construction of docks, a tank field, a power station and a sea water desalination facility. The first phase of construction is preparing a 150-ha parcel by back-filling it with material dredged from the eastern channel of PMB island and construction of the refinery and naphtha cracker. This will be followed by phase two that includes expansion of the refinery and building new units for the production of olefins.

Carbon Steel

A second major industrial project was also inked with a Chinese investor when Huludao City Steel Pipe Industrial singed a land lease agreement with the BEDB in April 2014. Huludao announced plans to construct a $50m carbon steel pipe factory in Salambigar Industrial Park, which will boast a capacity of 100,000 tonnes of welded rounding carbon steel pipes commonly used in the oil and gas industry, as well as in the wider construction sector. The project is to become fully operational in 2017, after which it is expected to generate annual exports of around $100m, according to the firm.

The BEDB’s string of successes continued into June 2014 when South Korean aluminium product manufacturing firm Dongyang Gangchul announced plans to construct a $107m factory in Brunei Darussalam. Located on 30-ha site at the Bukit Panggal Industrial Park in Tutong, the proposed aluminium plant will be built in three phases. When complete, it will have a capacity of 120,000 tpa of aluminium billet casting and 48,000 tpa of aluminium extrusion.


Although the construction sector continues to expand, domestic production of cement has been on the decline. After producing around 320,000 tonnes of cement in 2012, output has declined to 260,000 tonnes in 2013 and 110,000 tonnes in 2014, according to the country’s sole cement producer, Brunei Cement. This represents an increasingly small fraction of the firm’s full capacity of 500,000 tonnes per annum when operating at full steam, which is currently more than enough to supply the entire domestic market. Midway through 2014, Brunei Cement accounted for around 60% of domestic consumption, while importers made up the remainder. Although the government limits the amount of cement that can be imported, large regional cement firms are able to undercut the price of domestically produced materials by capitalising on their greater economies of scale. Instead, Brunei Cement focuses on value-added services, like offering credit and a steady supply of a quality product. Aside from cement, virtually all other construction materials must be imported, which adds to construction costs.

The pipeline of large-scale infrastructure projects and recent private investments should lead to a sustained rebound in demand for building materials over the next three years. Indeed, this is already beginning to happen. David BW Ahn, project manager at Daelim Industrial, told OBG, “I anticipate a material shortage when mega-projects such as Pulau Muara Besar and Temburong Bridge begin construction, as a high level of concrete volume will be needed. It will be more efficient for the government to manage this issue through government-to-government memoranda of understanding for the import of raw materials, rather than leaving private companies to handle the material shortage themselves.”


While there is a national shortage of residential units, construction of new private sector housing units remains slow due largely to regulatory issues. A key component of this is uncertainty over changes in the interpretation and implementation of Brunei Darussalam’s land strata act, which governs who can build and own multi-storey residential units, as well as the limited amount of private land available for development in Brunei Darussalam.

For this reason, many of the current major residential builds are for new public housing projects. One recent example is the new BN$109.5m ($86m) contract awarded to Malaysian developer Bina Puri Holdings in June 2014. The project includes the construction of 1000 homes within the Kampong Lugu National Housing Scheme in 24 months, along with supporting earthworks and infrastructure. Bina Puri Holdings is a familiar figure in Brunei Darussalam’s residential sector, having completed a 520-unit private sector project for Skim Tanah Kurnia Rakyat Jati at Kampong Lugu in 2014. It also constructed a 2000-unit for the National Housing Scheme of Brunei Darussalam in 2011 following its original foray into the market in 2007, when the firm was contracted to carry out earthworks and advance works at SPARK.

Under the NDP for 2007-12, $1.22bn, or 16.4% of the total development budget, was allocated for the construction of public housing, which includes infrastructural works, and the development of new public housing areas. These efforts have continued under the NDP 2013-17, which aims to deliver 10,000 more homes, as well as an additional 1400 land plots of 0.05 ha across seven new residential areas. While these plans remain in place, there are concerns about delays, which can be frequent in the local construction market. “One of the main issues facing the sector is that tender prices come in relatively high, due to the nation’s dependency on imported materials and foreign workers,” Mohammad Hanafi Abdul Rahman, principal at Hanafi Konsaltan, told OBG.


With several large construction projects from the previous NDP now completed or winding down over the next few years the industry has hit a temporary lull, but is poised for another strong growth spurt over the next three to four years fuelled by a wave of large new infrastructure projects. Increased government expenditure will ensure that public projects continued to drive growth in the construction sector, although the announcement of a number of large-scale private industrial projects in 2013 and 2014 should provide more opportunities for construction firms as well. Given the scale of demand for housing, there could be further growth in the private residential market in the future, provided regulations governing ownership are clarified.