One of Singapore’s largest lenders, OCBC, has deployed a next-generation blockchain-based conditional payments solution on its business banking platform to digitally transform the Land Transport Authority of Singapore (LTA)’s disbursement of mobilization advance payments to contractors.

This straight-through payment solution will enable the LTA to disburse mobilization advance payments efficiently with greater transparency to its main contractors, allowing for real-time overview of the transactions and bank balances.

This mobilization advance payment, often amounting to millions due to the scale of the construction projects, helps the main contractors to defray heavy upfront capital outlays at the start of their construction project, the bank notes, and is usually a percentage of the total project value. 

With the bank’s solution, the mobilization advance payments are automatically disbursed to the intended contractor once the smart contracts verify that the conditions are met.  

The pilot involves three main contractors for the Cross Island Line projects. To date, over S$22 million (US$16.7 million) has been disbursed to the main contractors and sub-contractors with this solution. 

The bank – having actively participated since 2022 in the Monetary Authority of Singapore’s multi-year, -phase Project Orchid to develop the technology infrastructure and technical competencies necessary for a digital Singapore dollar –  has concurrently developed, it points out, its own capabilities in blockchain-based conditional payments.

“This blockchain-based conditional payment solution will improve the governance and transparency of utilization of the mobilization advance payments that the LTA extends to its contractors,” says Melvyn Low, the bank’s head of global transaction banking. “There is much more that can be done in this area. We look forward to developing more such solutions to help our customers transform their businesses and reduce reliance on manual processes.”