Mah Bow Tan
Singapore
“The previous generation of Singaporeans overcame huge odds together to create this improbable nation which we call home. Let this generation work as one to define our country for the next lap of our journey. Sir, on this note, I fully support the amended Motion. Page: 143”
“Like all upgrading programmes, there is a certain budget, and a certain pace at which we will build. We have completed the LUP and now we are going on towards the HIP. The Estate Upgrading Programme (EUP) is ongoing.”
“For those who cannot afford home ownership, we will provide rental flats. For the rest where there is hardship involved, that is where the safety net comes in. I do not think we should make the safety net so wide as to bring in everybody.”
“Building a studio apartment is no different from building any other HDB flat. If a person applies now and the building works start now, he can get it in two-and-a-half years to three years. We have stepped up the building of studio apartments over the last couple of years.”
“Mdm Halimah Yacob asked the Minister for Health (a) how many people have signed an Advance Medical Directive (AMD) and how many have revoked them since; and (b) whether there is a need to review the current rules on AMDs which do not require a person who has revoked the AMD to inform the Registrar, thus causing uncertainty for hospitals t…”
“Parents who wish to exert more control over the maximum mobile service charges incurred by their children may consider service options such as mobile pre-paid cards. IDA is aware of the public's concerns on mobile subscriptions, and will continually review policies and look into measures to further protect the interest of consumers.”
The complete record
Every one of 3,030 lines we hold for Mah Bow Tan, in date order, each linked to its source. Free to read, in full, without an account. Page 56 of 61.
“But Dr Wang has raised an interesting alternative, an alternative to the current practice of PTC approving applications which serve a very small niche. And that alternative is to allow Town Councils, as he put it, more flexibility, more responsibility, to run services, plan their own routes, maybe even charge their own fares. In other words, they decide on the level of service that they want to provide to their residents, they decide on how much they feel their residents are prepared to pay. It is like devolving a part of the role and responsibilities of the PTC to the Town Councils. I see pluses and minuses in this proposal. Obviously, on the plus side, I think Town Councils can respond much, much faster than PTC to the changing demand patterns in their estates, changing requirements of their residents. On the other hand, it means removing a chunk of the bus network from the main operators - SBS and TIBS. And if this chunk is a profitable chunk, then the main operators would have less profits to cross-subsidise the essential but money-losing services. I think we need to study this proposal very carefully and I will ask my officials to do so and, perhaps, we could have the benefit of the views and experiences from Members of this House when we do this study. Dr Wang has also cast some doubts about the role of the PTC. He asked whether PTC serves the interest of bus companies or commuters. I took the liberty of asking for a detailed list of the members of the PTC. There is one academic, one large employer (MNC employer), several grassroots leaders, one teacher, one accountant, one transport professional, the three operators - bus, MRT, taxi - and, of course, ROV. So I think he will realise that the PTC actually has a wide cross-section of people.”
“There are many other examples of such services. I have asked for a list of them, and it is quite a long list. I do not think I will go into it at this time. But suffice it to say that while PTC approves these services, they do so with certain conditions attached such as safety standards, service levels, and so on. Fares also must not exceed the maximum set by the PTC. But I think the one condition that is probably of most concern to Dr Wang is that any such proposed service must be integrated with the main public transport system. In other words, it does not duplicate any of the services operated by the main operators - SBS and TIBS. Why this condition? Today, we allow SBS and TIBS to operate the entire bus network in Singapore. In return for this monopoly on bus services, what Dr Wang called a social contract, in return for this social contract, they are obliged to operate the money-losing services, but what we would consider essential services, to ply rural areas, low demand areas, and they do so by using the profits that they make from the money-making services. In other words, they cross-subsidise. They can do this so long as there are more money-making services than there are money-losing services, so that at the end of the day they remain viable. The more unprofitable services they run, the greater the threat to their viability, the greater the pressure to raise fares for all commuters. Conversely, less unprofitable services mean less pressure on fares. So this is the real reason why PTC sets this condition. It does not allow private operators to cream off profits from SBS and TIBS which SBS and TIBS use to fulfil that social contract which Dr Wang is talking about.”
“Another concern is about confusion over the different fares. I think this is easily solved, if we require taxi companies to widely disseminate information, if we ensure that taxi fares are prominently displayed, as Mr Heng suggested, inside and outside the taxi, if we make sure that all fares are metered, and, if necessary, we can also require taxis to install receipt issuing machines. If we have all these measures, if we have this proper mechanism in place, the fear of confusion is not founded. Sir, I want to take this opportunity to assure Members that deregulation of both taxi licences and fares will not result in any reduction in service standards. ROV will continue to ensure that qualified people become taxi drivers, taxis will continue to be inspected for road-worthiness. If there are any cases of over-charging, whether it is tourists or locals, ROV will still investigate. Should we deregulate or not? ROV and PTC are now working out a proposal, taking into consideration the feedback that we have received, addressing the concerns that have been raised by taxi drivers, members of the public and Members of this House. I wish to assure Members that we will study this matter carefully before we make a final decision on this matter. And if Members have any further suggestions or views, I will be very happy to hear them. Sir, I turn to the point made by Dr Wang Kai Yuen regarding the integration of bus routes. First of all, let me say that the PTC which regulates bus services in Singapore is open to the idea of private operators running special bus services. He has mentioned the example of three services in Clementi. They are examples of special services which serve special needs at special times, which the PTC recognises and which the PTC has approved.”
“So, as long as the conditions for a competitive market exist, and they do today, as long as there are alternative modes of transport, and there certainly are today, then the provision of taxi services should not be treated differently from the provision of any other consumer service. Sir, I believe that if taxi companies are allowed to set their own fares, they will be encouraged to be more responsive. If more taxi companies are set up, the taxi service can become more efficient. This belief is as basic as the fundamental tenet by which we have chosen to order our economy today - that the free market is the most efficient form of economic organisation. I have received a lot of feedback since the idea was mooted. I am aware that there are fears and concerns on the part of both commuters and taxi drivers. They like, each of them, part of the proposal. Unfortunately, they like different parts. Commuters like the idea of more taxi companies but they do not like the idea of Government deregulating fares. Taxi drivers want to be free to set their own fares but they do not like the idea of more taxi companies coming in. So while there is an element of fear of change, resistance to change, call it what you like, I can understand some of these concerns. For example, will existing companies get together and form a cartel and raise taxi fares indiscriminately? I do not think so. If more companies can enter the market to provide taxi service, it is not that easy to form a cartel. And, also, Singaporeans are a practical lot. If taxi fares are too high, they simply avoid taking taxis. There are alternatives, as I indicated earlier, and also, as I cited, the experience in 1985 when taxi fares went up beyond what commuters were prepared to pay, there would simply be no business.”
“Because if they say yes to the increase, taxi drivers go away happy, but the PTC has to face the flak from commuters. If they say no, taxi drivers feel aggrieved; perhaps, justifiably so. So the question that we ask ourselves is: Is the PTC in the best position to determine what is the correct fare level? What is the correct taxi fare level to determine how much taxi drivers should earn? As Mr Lew pointed out earlier, there was an experience in 1985 when the Government set fare levels. It was too high. Commuters virtually shunned the taxi service and the taxi companies had to come to the Government and say, "Please, reduce the fares.". What is the rationale for Government to regulate taxi services when we do not regulate providers of other services -barbers, hawkers, fruit sellers? Surely, their numbers and the prices they charge are better left to market forces to determine. Our current regulation of taxi fares and the number of taxi companies may have led to a situation where there is an over-demand for taxis because our taxi fares are lower than what the market is prepared to pay, or an under-supply of taxis because taxi companies want to minimise competition to preserve their profits. The result of this is, on the one hand, there is frustration on the part of commuters who are willing to pay but are unable to get a taxi. And on the other hand, you have taxi vocational licence holders who want to drive but who have no taxis to drive. By regulating the fares, we may also have made it more difficult for taxi companies to differentiate their service, to innovate, to offer new services, to meet new demands.”
“Today, after that increase, the taxes paid are now roughly equal. Since that time, ROV has been more liberal with the issue of taxi licences. Today, we have roughly about 13,000 taxis running on the roads, but ROV tells me that they have issued something like 20,000 licences. So the question that we now ask ourselves is: Should we further liberalise the issue of taxi licences and allow more companies to run taxis? Having more companies providing a taxi service can inject greater competition into the business. It can spur the operators to become more efficient and it can also be the best regulator of taxi fares. I believe we should deregulate, allow more taxi companies to operate. But I would like to add that it is not our intention to let anyone enter this business. I understand the fears of taxi commuters that without some form of control on companies, some minimum standards, we will see a deterioration of service standards. So if we were to deregulate and allow more companies to operate, we should set pre-conditions to ensure that only reliable companies with the relevant expertise can operate this taxi service. Sir, once we have decided that the issue of licences can be deregulated or should be deregulated, the next issue which follows naturally is whether we can deregulate fares as well. Today, if the taxi operators want a fare increase, they get together, they agree on a certain set of fares, then they apply to the PTC for approval. The PTC then has the unenviable task of deciding whether the increase is justified or not. They ask for statistics on taxi drivers' earnings, operating cost, state of the economy, whole host of questions, before they come to a decision. Why do I say that this is an unenviable task?”
“Sir, first of all, let me take the points that have been raised by Mr Heng and Mr Lew about the deregulation of the taxi industry. At this point, I think it is opportune for me to reiterate my Ministry's position on taxi services. Taxis have a place in our public transport system. However, they are not like buses or MRT which carry lots of people, using minimum resources, minimum road space and minimum manpower. That is why we regard buses and MRT as the backbone of our public transport system. On the other hand, taxis provide a personalised door-to-door transport service which is similar to that of a chauffeured limousine. They are more comfortable and more exclusive and, therefore, more expensive. Before the diesel tax increase, taxis paid substantially lower taxes than private cars. For example, the ARF and the import duty for taxis at that time was 50% of the open market value (OMV), whereas for private cars it was 220%. So if you translate this into actual cost of the vehicle, a typical taxi, which is about 2 litres, would cost approximately $60,000 today. Whereas a similar private car would cost about $110,000. Under these circumstances, the ROV had to ensure that taxi licences were regulated, simply because we did not want taxis to proliferate and to end up as cheap substitutes for cars. If you can buy a taxi for $60,000, why not? The Public Transport Council (PTC) had to regulate taxi fares to ensure that the savings in taxes were translated into lower fares for taxi commuters. In 1989, we increased the diesel tax for taxis to equalise the total taxes paid by taxis and private cars. There was no reason why the taxes should be different because, after all, both of them use more or less the same road space, create more or less the same congestion.”
“Sir, there is no reason why the implementation of the new postcode should result in the postage rates going up. In fact, the whole idea of having the new postcode is to maintain cost at the current level for as long as possible. Of course, having said that, I cannot guarantee that postage rates will not go up at all because there will be other variations in costs involved and Singapore Post obviously will have to take this into account. As far as the publicity is concerned, as I indicated in my reply, I have asked Singapore Post to look very carefully at the implementation process to minimise disruption both on the part of business as well as the individual members of the public. BILL INTRODUCED COMPUTER MISUSE BILL "to make provision for securing computer material against unauthorised access or modification and for matters related thereto", presented by the Minister for Home Affairs (Prof. S. Jayakumar); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1993 TO 31ST MARCH, 1994 Order read for consideration in Committee of Supply [7th Allotted Day]. [Mr Speaker in the Chair] Head S (cont.) - Resumption of Debate on Question [17th March, 1993], "That the total sum to be allocated for Head S of the Main Estimates be reduced by $100." - [Mr Goh Chee Wee]. Question again proposed.”
“My Ministry has asked Singapore Post to study various alternatives, the cost implications and to take all necessary steps to ensure the smooth implementation of a new postcode.”
“Mr Speaker, Sir, the present 4-digit postcode has been in use since 1979. At present, mail is sorted mechanically to what are known as delivery centres. From the delivery centres, they are then processed manually by the postman according to the sequence of delivery when he goes on his rounds. The manual sorting of mail is a very labour-intensive and time-consuming process. The Postal Service handles about 1.6 million articles every day. The number of postal articles is increasing year by year. Growth is conservatively estimated at 6% per year. At this rate, the Postal Service will handle about 2.6 million items per day by the year 2000. If we continue to use the same manual sorting process, the Postal Service will need about 600 more postmen to maintain the same level of service. This ultimately means that postage rates must go up. The alternative is that service standards will drop, as the sorting and delivery of mail will be slower. Both alternatives are not acceptable. To maintain the current standard of next day delivery of mail, a better solution would be to automate the mail sorting process. It would be ideal to give each of the 270,000 addresses or group of addresses in the same block a unique code so that we can sort mail automatically right down to the postman's sequence of delivery. This requires a postcode system with a minimum of 6-digits. The current 4-digit code is not enough as it can only generate 10,000 codes. There will be cost incurred and some inconvenience in changing to a new code, but this will be worthwhile if it leads to greater efficiency and substantial savings in future recurrent costs.”
“The government tax on telephone bills was suspended from April 1985. It was reintroduced from 1st April 1989. The amounts of tax collected over the periods of April to December 1989, January to December 1990, January to November 1991, and December 1991 to November 1992, are $6.2 million, $9.2 million, $8.5 million and $8.3 million respectively. UPGRADING OF HOUSING AND DEVELOPMENT BOARD FLATS IN MARINE PARADE GRC 22. Mr Chiam See Tong asked the Minister for National Development (a) how many blocks of Housing and Development Board flats in the Marine Parade GRC will be upgraded; (b) where are these blocks situated; (c) when will they be upgraded; and (d) how much will it cost each flat owner.”
“`Q' plate cars were introducted as a result of the tax shield enjoyed by companies. Car expenses incurred by companies are tax-deductible. Private individuals can thus exploit this by registering cars under a company's name for private use. To discourage this, a ceiling of $35,000 on capital allowance has been imposed, and expenses incurred are only tax-deductible in the ratio of $35,000 to the purchase price of the car. Company cars pay $5,000 for Registration Fee (five times that for private cars) and double the quota premium, road tax and Area Licensing Scheme (ALS) fees payable by private cars. From the land transport point of view, all cars whether privately or company owned should be subject to the same vehicle restraints. My Ministry will consult the Ministry of Finance to review the tax regime to achieve this objective. AMOUNT OF TAX COLLECTED FROM TELEPHONE BILLS 21. Mr Ling How Doong asked the Minister for Communications what was the amount of the 5% tax collected by the Telecommunication Authority of Singapore on telephone bills for the years 1988, 1989 and 1990 and for the periods January to November 1991 and December 1991 to October 1992.”
“Sir, the money from the COEs was derived from a specific purpose. The fact that they are additional revenues is not the issue. As for the purposes for which this money is to be spent, it is up to the Ministry of Communications and the Ministry of National Development to justify any expenditure, whether it be for extra roads or education of motorists, as the Member has suggested, or in defraying the cost of motoring in other ways, or defraying the cost of public transport in other ways, such as has been done in providing infrastructure. MINISTRY OF YOUTH AND SPORTS (Setting up) 10. Mr Chia Shi Teck asked the Prime Minister if it is timely now to set up a Ministry of Youth and Sports with a full Cabinet Minister in charge.”
“Sir, the Government is always willing to spend money to upgrade and improve the public transport infrastructure and also to ensure and enhance safety on the roads, and this has been done all the time. Whether it will use money from COEs to do this is, as I said, not material in this case, because COE monies are collected for a specific purpose, which is to control congestion on the roads. And if money is to be spent on a good cause to enhance safety on the roads, it will be spent.”
“Mr Speaker, Sir, for the record, the amount of $693 million was the total revenue collected from COEs since the inception of the scheme which was in May 1990 until March 1992. For 1991 alone, the total revenue collected was $338 million. Sir, like other Government revenues, this revenue has been credited to the Consolidated Fund from which Government expenditures are financed. The Government has invested heavily on transport infrastructure. Over the last five years, the Government has spent over $1,500 million on building and maintaining roads, and building bus interchanges. The construction of the MRT has cost the Government $5,000 million. Another $1,400 million will be spent on the MRT extension to Woodlands. And if the ring road tunnel project is found feasible, this will mean another $4,000 million to build. To put things in perspective, for this last project alone, the underground ring road tunnel system, it would take more than 10 years of COE revenue, at current rates, to pay for the cost.”
“In 1990, the Registry of Vehicles collected $728.8 million from Additional Registration Fee/Preferential Additional Registration Fee, $579.5 million from road tax and $8 million from composition fines. In 1991, revenue from these three items were $635.2 million, $603.1 million and $7.8 million respectively. In the first four months of 1992, the Registry of Vehicles collected $264.6 million from ARF, $209.5 million from road tax and $2.7 million from composition fines. NEW HOUSING AND DEVELOPMENT BOARD FLATS IN TANJONG PAGAR GRC 21. Dr S. Vasoo asked the Minister for National Development whether he will give some details of the Housing and Development Board's plan to build new purchase flats in Tanjong Pagar GRC.”
“Mr Speaker, Sir, the sinking of the Royal Pacific on the morning of 23rd August 1992 was a great tragedy. A number of persons have died. Others are still missing. Nevertheless, the fact that hundreds of survivors were rescued from a ship which sank in the middle of the night is something that we are thankful for. The survivors have reported various acts of courage that night. The suggestion by the Member for Bukit Timah can be considered, and I will ask my officers to follow up on his suggestion. HOUSING AND DEVELOPMENT BOARD (Limitation period for parking offence) 13. Mr Chiam See Tong asked the Minister for National Development, in relation to a Housing and Development Board parking offence, whether there is a limitation period after which the HDB shall not proceed to take action against the offender or alleged offender, or are members of the public expected to keep all HDB used parking coupons and parking receipts for up to 5 years or more.”
“Sir, the Malaysian search and rescue authorities, who are conducting the search, have informed us that they are currently continuing with the search. However, the extent of the search is obviously not as intense as it was in the early days after the sinking of the "Royal Pacific". The Marine Department of Singapore is in touch with the Malaysian authorities to persuade the Malaysian authorities to continue as far as possible with the search and rescue mission. However, it is quite possible that any such efforts will not lead to much further success. So the Malaysian authorities will probably have to call off their search pretty soon. As far as the Singapore authorities are concerned, we have offered every possible assistance to the Malaysians. And I understand also that the relatives of some of the missing people have also engaged their own divers to conduct their own diving operations. However, I regret to say that so far none of these efforts have borne fruit. SINKING OF ROYAL PACIFIC (Recognition to Singaporeans who displayed heroism) The following Question stood in the name of Dr Wang Kai Yuen - 12. To ask the Minister for Communications whether recognition will be given to the heroism displayed by a number of Singaporeans during the sinking of the Royal Pacific. Mrs Yu-Foo Yee Shoon: Question No. 12, Sir.”
“Mr Speaker, Sir, the jurisdiction for investigation into the sinking of the "Royal Pacific" lies with three parties. First of all, the country in whose territorial waters the incident occurred. From all the evidence so far, the collision occurred in Malaysian waters. Secondly, the party or parties whose flag states are involved. In the case of the "Royal Pacific" it is flagged in Bahamas, so the Bahamian authorities would be involved. And in the case of the "Terfu 51", the Taiwanese authorities would be involved. Singapore Government has been in touch with all these three authorities to enquire whether they are going to conduct an investigation. We have been officially informed by the Bahamian authorities that they have appointed a local investigation authority to look into the sinking. So far, we have not heard officially from the Malaysians or from the Taiwanese. We will be in contact with these two governments to ascertain what is the current position.”
“It will examine, and, if necessary, recommend changes to the existing arrangements, procedures and legislation for ensuring the safety of cruise ships departing from Singapore.”
“Mr Speaker, Sir, safety at sea is governed by the various Safety of Life at Sea (SOLAS) Conventions. These Conventions prescribe the standards of safety for the construction, equipment and operation of ocean-going ships. The International Maritime Organisation (IMO) also prescribes basic standards for the loading of ships as well as regulations for the prevention of collision at sea. Singapore is a party to all these Conventions. The various standards of safety are provided for in our Merchant Shipping Act. PSA is empowered to inspect and verify the validity of a passenger ship's statutory certificates required under the various Conventions before the ship leaves Singapore. The certificates include the Passenger Ship Safety Certificate as well as the Loadline Certificate. These certificates verify that the vessel is fit for service for which it is intended. They also ensure that the vessel is not overloaded. In the case of the "Royal Pacific", all the above procedures were adhered to. Notwithstanding these requirements, a carrier is also expected to exercise due care and diligence and to ensure that their staff and agents keep the ship seaworthy, properly manned and equipped at all times during the voyage to secure the safety of their passengers. My Ministry is very concerned about the recent sinking of the "Royal Pacific". I have set up a Review Committee to look into the possibility of further improving the safety of passengers departing from Singapore. The Committee, chaired by the Marine Department, comprises representatives from the Port of Singapore Authority, National Maritime Board, Immigration Department as well as the various Ship Classification societies.”
“Currently, residents in Simei Estate are served by a postal agency at Block 248, Simei Street 3. In addition, Singapore Post has appointed 3 stamp vendors in the Estate. By the end of this year, the Simei Postal Agency will be upgraded to a sub-post-office, which will provide all the services of a full post-office except for sale of money orders and agency services, like payment of Telecom bills, acceptance of CPF contributions, and renewal of licences, etc. For these other services, residents can make use of the nearby Tampines South Post Office at Block 138, Tampines Street 11. WRITTEN ANSWERS TO QUESTIONS RENTALS OF PAP EDUCATION CENTRES IN HOUGANG AVENUE 3 AND HOUGANG AVENUE 5 1. Mr Low Thia Khiang asked the Minister for National Development (a) what are the areas and monthly rentals of the PAP education centres at the void decks of Block 328 Hougang Avenue 5 and Block 1 Hougang Ave 3 and (b) whether the rentals are at commercial rates and, if not, what will be the commercial rates.”
“The Public Transport Council (PTC) approved the changes to SBS Service 147 as part of a package of changes put up by the bus operators to reduce duplication in their services, to keep their operating costs down, and as a result to keep their fares unchanged for as long as possible. The Member has asked if a Scheme B operator can be allowed to operate in Potong Pasir Estate. The PTC allows Scheme B operators to run supplementary bus services on certain conditions. One condition is that their services do not extensively duplicate existing services provided by the main operators. Other criteria include safety standards, and frequency and reliability of service. If the Member has any specific proposal for a bus route, he may wish to refer it to the Council for its consideration. POST OFFICE IN SIMEI ESTATE 27. Mr Teo Chong Tee asked the Minister for Communications whether a post office will be provided in Simei Estate.”
“Total revenue collection from vehicle quota premium for the period May 1990 to March 1992 is $693.5 million. Like other Government revenues, it is credited to the Consolidated Fund from which Government expenditures are financed. DEVELOPMENT PLANS FOR VACANT LAND FRONTING JURONG EAST STREET 31 22. Mrs Yu-Foo Yee Shoon asked the Minister for National Development what development plans his Ministry has for the piece of vacant land fronting Jurong East Street 31 and when the land will be developed.”
“Mr Speaker, Sir, I find the Member's suggestion on the graduated PARF Scheme an interesting one. My Ministry will look into this. We could take it up together with the ongoing review of the Vehicle Quota System. PUBLIC ASSISTANCE SCHEME (Particulars) 14. Encik Harun bin A. Ghani asked the Minister for Community Development (a) how much was spent by his Ministry on public assistance in 1991 and (b) what is the breakdown of the number of recipients in 1991 according to the following categories: (i) aged destitute persons; (ii) the disabled, the mentally ill and the chronically sick who were unfit to work; (iii) widows or deserted wives with children under 12 years of age; and (iv) orphans.”
“First of all, Sir, the number is actually about 26,000. But this is the overall number. As I have said, the normal deregistrations for that period are around 2,000 to 3,000 a month. So if you take the extraordinary number of vehicles, above and beyond this number, it is something like 16,000 or 17,000. So we really do not have the "37,000" figure that was mentioned by Mr Chiam. But having said that, as I explained in my answer just now, we are currently reviewing this policy of putting back the deregistered COEs 12 months later and try to bring them forward, with the intention of increasing the supply to keep up with the increased demand for COEs. PREFERENTIAL ADDITIONAL REGISTRATION FEE (Incentive to deregister cars earlier than 10 years old) 13. Dr Wang Kai Yuen asked the Minister for Communications whether he will consider graduating the Preferential Additional Registration Fee benefit to provide an incentive to a car owner to deregister his car at an earlier age than ten years in order to enjoy a higher PARF value for his car.”
“Sir, in the first four months of this year, a total of 26,468 vehicles were deregistered. This was higher than normal. According to current practice, the replacement Certificates of Entitlement (COEs) from the deregistered vehicles will be added to the quota 12 months later, in other words, with effect from May 1993. The high number of deregistrations is likely to result in increased demand for COEs in the next few months as some owners seek to replace their vehicles. My Ministry is now studying how best to recycle some of these COEs earlier. The study is being done together with the current review on the Vehicle Quota System, which we have operated for two years already. We also need to resolve the issue of transferability as the non-transferable COE trial will be coming to an end soon. We are now considering various views and suggestions from many different interested parties, particularly from the Feed- back Unit and also from associations, such as the Automobile Association of Singapore and the Motor Traders Association. Sir, the Member's suggestion to prorate the vehicle quota premium to shorter periods in the case of COE renewal and for taxi COEs will be among the issues considered in this review, together with other suggestions that we have received.”
“Sir, may I have your permission to take Questions Nos. 11 and 12 together, as they are related.”
“Mr Speaker, Sir, SBS has a Traffic Safety Unit (TSU) to administer a traffic safety programme which covers all aspects of its bus operations. This incudes requiring all its drivers to undergo a safe driving and road safety training course before they are allowed to drive buses on the road; monitoring the safety records of SBS drivers closely; and deploying traffic safety inspectors at bus interchanges as well as on the roads to check on its drivers to ensure that they drive safely and do not speed. SBS also has a programme to put up reinforced concrete bollards at end-on berths in interchanges as a safety measure. It conducts regular views of such safety measures together with the relevant authorities such as the Registry of Vehicles, Traffic Police and the Public Works Department. The Member has also asked the number of accidents since 1990. There were a total of seven accidents involving SBS buses at bus stops, bus terminals and bus interchanges, of which three were fatal. No one was injured in the other four cases. SCHEDULE FOR RECYCLING OF SCRAPPED VEHICLES 11. Dr Wang Kai Yuen asked the Minister for Communications what is the schedule for the recycling of the 30,000 plus vehicles scrapped recently at the end of the grace period for automobiles older than 10 years and how does this schedule tie in with the overall concept of the vehicle quota system. VEHICLE QUOTA PREMIUM (Payment for older vehicles and taxis) 12. Dr Wang Kai Yuen asked the Minister for Communications whether he will consider allowing partial payment of vehicle quota premium based on the remaining expected life span for vehicles older than 10 years and whether he will allow taxi quota premium to be computed on the legal life span of 7 years for taxis.”
“Sir, I beg to move, In page 84, after line 18, to insert:- "Amendment 6. Section 2 of the Statutory Boards to Statutory (Taxable Services) Act is amended by Boards (Taxable inserting, immediately after the definition Services) Act. of "services", the following definition: Cap. 318. " "statutory board" includes a public telecommunication licensee referred to in the Telecommunication Authority of Singapore Act 1992.".". Sir, this amendment is a consequential amendment. It is to enable Singapore Telecom, notwithstanding that it is a private company, to continue to collect revenue, taxes, on behalf of Government, which may be imposed from time to time. Amendment agreed to. Fourth Schedule, as amended, ordered to stand part of the Bill. Consequential amendment made: To renumber existing paragraph 6 as paragraph 7. Bill reported with an amendment; read a Third time and passed. GOVERNMENT SECURITIES”
“In this respect, the management has also taken great pains to keep the union involved and informed every step of the way, even way back when the first concept of privatisation was mooted. I believe that there has been a very good rapport between the union and the management of Singapore Telecom. They kept each other informed all the way, and there has been a continuous dialogue. This is one of the reasons why the labour-management relations in the company have been very well maintained and preserved. I do not see any difficulty in this area. The particular details that the Member wishes answers to, I would be most happy to answer him or to pass on his requests to the management concerned. Sir, I believe I have answered most of the Members' comments. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. -- [Mr Mah Bow Tan]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses 1 to 132 inclusive ordered to stand part of the Bill. First to Third Schedules ordered to stand part of the Bill. Fourth Schedule --”
“In so far as transfer of employees to companies is concerned, I think the important point really is that this transfer will be done at terms which are no less favourable. I think the operative words are "at terms no less favourable". Whether the terms have been worked out or not, I am not in a position to say. If they have not been worked out, I am sure that they will be adequately protected by this guarantee. Collective agreements can be worked out even after the transfers have been carried out. I do not think there is any problem with this. He has also asked whether there is going to be any choice for employees to transfer from one company to another. I would leave this to the management of the companies to decide, but I would say offhand that where an employee has already been working and performing well, it would be preferable to leave him or her where he or she is currently working. But these are matters which I shall leave to the company to sort out. In so far as pensionable officers are concerned and those who are converting to CPF, I think this problem has arisen because it is now going to be a private company, and it is not usual for private companies to have officers who are pensionable. They may have to convert to CPF, but again I go back and remind Members about this phrase "no less favourable terms". This is something that will have to be worked out between the union and the management concerned. I really want to allay the fears of staff of the current TAS that all necessary steps have been taken by the management and by the Authority to make sure that their welfare is taken care of.”
“Where it benefits consumers, we will certainly go all out to introduce more competition, as we have already done. Even before privatisation, there has been a concerted move towards introducing more competition. But this move will accelerate and with the splitting of TAS into two, Singapore Telecom will be told that it will have to compete and will have to compete in areas where currently it enjoys a monopoly. But in which area specifically, we are now working out, and the Telecommunication Authority and the Ministry will be issuing some guidelines in due course. But the basic guideline is that it must be to the benefit of the consumer. As to when we are going to introduce this competition, I think we will have to phase it in, depending on which area. We will probably allow competition in areas where there is greater benefit to the consumers without any adverse effect to the overall regulated structure of the industry in Singapore. But where the area requires greater capital investment, I presume the Member will agree with me that we will have to be a bit more cautious in that area. Finally, I turn to Encik Othman Haron Eusofe's question regarding the welfare of the staff. I am not in a position to answer completely all his questions, but I will endeavour probably to take the main points. The first point really is to assure him and his union members that the welfare of the staff will be taken care of in this privatisation exercise. The assurance that I gave in this House about retrenchment is an assurance which the management of the Authority as well as the Company has given me and I am passing this on. I believe that this assurance has been well received by the employees.”
“We are not alone, of course, in corporatising or eventually privatising the postal authorities. Other countries have done this, although the track record so far shows that it is done with varying degrees of success. The New Zealanders have done it and the Malaysians have also done it. Finally, Sir, I think Mr Heng made a plea for the condition of the licence to be such that Government will have control over prices and services. I can give him this assurance. It is provided in the Bill. The regulatory authority, when it issues the licence, will issue it with a set of conditions and obligations which it will require the licensee to fulfil. So the public service role will not be neglected. Sir, I was very pleased to hear Mr Heng's quite unsolicited compliments with regard to his dealings with the TAS's staff. I do not see any need for him to feel apprehensive about the attitude of the staff after corporatisation. And indeed, as I have tried to explain, the purpose behind this exercise really is to allow them to be even more innovative, to be even more daring in their approach and, as a result, TAS will have two roles, the regulatory role which it will have to exercise conscientiously, but it will also have a developmental role. In this developmental role, its job is to make sure that it will continue to push for more innovations. So the Member can rest assured on this point. Sir, I turn now to the points that were raised by Dr Wang Kai Yuen. Basically, Dr Wang argues for more competition and, as I have explained in my speech, this will be so. There will be more competition, but I must stress that the competition will be in places and at a speed which the market will allow.”
“Sir, Mr Heng also asked why there are provisions in the Bill for TAS to continue to provide services. The reason is actually quite simple and it is not meant for TAS to expand its empire. It is really a residual power. Basically, what it means is that if the licensee either fails or is unable to discharge his obligations, as spelt out in the licence, then the Telecommunication Authority of Singapore will have this power to step in and take over the services. So it is actually only a residual power. The other condition under which this can be exercised is really in case of an emergency, and I think these are adequately spelt out in the Bill. Sir, I hope he is satisfied with this reaction and does not attribute it to any untoward motives on the part of the Telecommunication Authority. Sir, Mr Heng has also expressed some concern about the need to corporatise the postal part of TAS. He argues that the postal authorities are basically domestic oriented and there is really no need for them to be corporatised. I just want to point out that what I said with regard to the Telecommunication Authority applies equally to the postal authorities, although perhaps not to the same degree. In other words, the need for the postal authorities to innovate and compete to provide new kinds of services in competition with other private commercial organisations applies also in the case of the postal authorities. Postal services have also changed. Today, with electronics and the computer, the nature of postal services is going to change, even more rapidly. So corporatisation of the postal authorities would also allow them to take advantage of these changes and to compete in the same arena, like the courier companies and so on.”
“Mr Speaker, Sir, first of all, let me thank all the Members who, I believe, have no major objections to the Bill. In fact, they wholeheartedly support the objectives of the Bill. I am particularly pleased that Mr Heng has also voiced his support for the Bill, although he has a slight reservation in so far as the timing of this Second Reading is concerned. Sir, I do not believe that there is any reason for him to feel aggrieved. There has been no undue haste in the timing of the Second Reading. It was the first available sitting of the House which you asked, Sir, after the presentation of the Bill on 27th February, during which time some three weeks have elapsed and I think those Members who are interested would have had sufficient time to look at it. But more than that is the fact that this is not a new issue. We have debated this matter in this House at least once before, if not more. The consultants have studied this issue since 1991 and over the last year, I think we have had many opportunities to discuss various aspects of the Bill. The Bill before this House is an amendment to an existing Act. The main provisions that are being amended relate to the reconstitution of TAS into a statutory board. So the major provisions of the Act are still left intact. The point I wish to make really is that there is no compelling reason for us to either move this Second Reading with undue haste, nor is there any compelling reason to wait. Singapore Telecom needs time to operate as a private company before flotation, and TAS, the regulator, also needs time to settle down. So I think the sooner we present this Bill, debate it, and if the House passes it, then the earlier we can move on to the next phase of the exercise which is the final flotation of ST.”
“Sir, I would like an assurance from the Minister that since the new TAS will be a regulator and not an operator, it will continue with this approach and that this will remain the hallmark of the Authority that we are going to set up.”
“Sir, there are two more other areas of concern that I would like to bring up. One is that licences, according to the Bill, granted to companies to operate telecommunication or postal services will contain certain conditions as they should be. Of course, these conditions are not spelt out in the Bill. But I would like the Minister to assure the House that the conditions would be such that the Government has, at all times, formal control over the operations and pricing of these services to be provided by private companies. Sir, it is important that because of their public service role this control should be imposed and firmly in place. The Government has control to ensure that the public service role will not be neglected. My second area is that Singapore has benefitted tremendously from the past 20-odd years from a very flexible and liberal approach towards new ideas and innovations in both telecommunication and postal services. In my former job in the banking sector, I had many times come into touch with the people in Singapore Telecom. Because the nature of the international financial businesses involves a lot of fund transfers where Telecom is very much involved. It also involves speed in sending articles, documents, papers across the oceans, and, again, they are also involved. The attitude of accepting new ideas and innovations to be used in Singapore has, in fact, initially created loss of revenue for Telecom but, fortunately, the farsighted management could see beyond these initial losses and have resulted in very much bigger and better gains for Singapore. Of course, the result is the Singapore Telecom that we know of today.”
“In this respect, I have, in the past, expressed in this House and outside my feelings on this subject. And I am very glad that the Minister has taken the trouble to explain to this House that there will be assistance given to Singaporeans to invest directly in Singapore Telecom when it goes public. Sir, we must not lose sight that the shares of Singapore Telecom are actually national assets and therefore belong to the people of Singapore. And it is important to encourage a direct investment by all Singaporeans in this blue chip company. There is a public role, and like the bus companies, Singapore Telecom, although privatised, will still have to perform a large public role. And here, therefore, the more the direct investment Singaporeans take in this company, the better. However, direct investment in this company means that they must hold on to these shares. Because once sold, the direct investment link is broken. If we want to maintain the direct link as long as possible, we have to establish a system to encourage holding of the shares. For this, I will leave it to the Minister's officials to come up with something, but I am willing to help if called upon. So far, I have spoken only on the telecommunication services. What about the postal services? Sir, unlike the telecommunication services, the postal services are not a growth industry. It is, in fact, a very mature industry and the reasons for corporatising our postal services are not as clear-cut as those for telecommunication services. If we look very briefly at the history of postal services, it was first performed by a Government Department and then by a statutory board, and now we want to corporatise it. Is there a need to corporatise postal services? Could the Minister please clarify on this issue?”
“If the cards are played correctly, I am very sure that in the not too far distant future, we will see Singapore Telecom becoming another SIA, being one of the best in the world. Sir, having said that it is good for the new revamped Telecom to be a regulatory body, I find it somewhat strange that the Bill also retains certain provisions which give the new TAS the right to be an operator at some future date (in fact, immediately after the Bill has become an Act). This is found in clause 6(1)(a) where it says that the provision of services "whether by itself or by any other person authorised by a licence granted under this Act". The question of course is, why? Is the Minister of the view that one fine day in the future, the new TAS will need to become an operator again? Why can't the new TAS be similar to, say, the Monetary Authority of Singapore where it is purely a regulatory authority, and to leave the business operations to the market, because it is a regulator? The new TAS can still work its will through the operators in the market. My apprehension in this area is that some time in the future the new TAS may have an ambitious and aggressive CEO who might want to increase revenues, expand his empire, and since the Act provides for it, it will be very natural for him or her to go into the business of providing services and becoming an operator again. And then, Sir, we are back to square one. I hope that the Minister will explain the reasons for this provision and give an assurance to this House that it is not the intention of the new TAS to be an operator in the future. Sir, as the Minister has said, the more important reason for corporatisation is to prepare the company for public listing.”
“Sir, in this regard, the money needed for the development of this business, especially in research and development, in innovation, in new products and services, will be large, and the subsequent public listing of Singapore Telecom will help it to raise funds when necessary. In this regard, before I go on to the point on Singaporeans having the opportunity to invest in this blue chip company, I must say that I would like to add a third reason for this, and that is, this Bill will leave the new revamped Telecommunication Authority of Singapore (TAS) as a regulatory body. And it will let the other persons or groups, both Government-owned and non-Government-owned, to perform the direct task of providing the necessary telecommunication services and quasi-postal services. Those are being provided, for example, by Federal Express and DHL, to the public. Here, I think you will remove a major bone of contention, because they are private sector companies dealing in telecommunication equipment. One major complaint, Sir, from them is the position that the present TAS finds itself in because of conflicting interests. Because they are both presently a provider of services, which means basically in the commercial area as an operator and, at the same time, a regulator. So very often when telecommunication equipment are not approved by the TAS for sale in Singapore, there is always the question mark raised whether these equipment are not suitable for Singapore or whether they present some form of competition to the equipment being marketed by Singapore Telecom. With the commercial services being ceded to now a privatised or corporatised company, I think we are going to have a slightly better, or what one would call, a more level playing field.”
“We then have the debate on the Budget followed by the Committee of Supply, which just ended early this afternoon. And now we have the Second Reading of this Bill. Sir, this type of scheduling simply gives no time to Members of this House to give this important Bill its due attention. I do not really think it is fair for the Government to present a Bill in this manner, considering that most of us -- in fact, the Backbenchers are all part-timers -- have no professional staff to help us in our work. Whereas Ministers have Ministries and I think sufficient staff to help them. Furthermore, as the Minister has said, Singapore Telecom will not be privatised this year, and so I do not understand the rush for the Second Reading, and subsequently the Third Reading of the Bill. Sir, having said this, I must also add that I fully support the rationale for this Bill. The Bill provides for the corporatisation of two commercial operating or business units of the existing Singapore Telecom (TAS), the telecommunication services and the postal services. Sir, the Minister gives two objectives or two reasons why this is being done. I must say that the first is really very true. Today, telecommunication services are a global business. It is a growth industry, what one would call a "sunrise" industry. In this particular set-up, it is important that Singapore Telecom should be given the opportunity and the flexibility and liberty to respond rapidly to changing market conditions in this business, both internally, since we are a financial centre as well as an international telecommunication centre, and also for it to expand overseas.”
“Upon corporatisation, most of the staff will be transferred to Singapore Telecom and Singapore Post. They will be transferred on terms which are no less favourable than those enjoyed by them prior to their transfer. The rest will be retained in the reconstituted TAS to handle regulatory and licensing functions. The principle here is that the staff should remain wherever they are today, performing largely the same duties prior to corporatisation. I can assure this House that there will be no retrenchment of staff in connection with this privatisation exercise. This Bill provides for the corporatisation of Singapore Telecom and Singapore Post in the first instance. They will operate as wholly Government-owned companies for a certain period of time. The Government will only privatise Singapore Telecom, in other words, sell its shares to the public, some time later. The Bill makes provision for this to take place as and when we are ready to do so. My Ministry would like the corporatised ST and SP to a have period in which to settle down to their new roles as private companies. This will also enable my Ministry to study further the details of the flotation. Sir, this Bill represents the result of more than 12 months of intensive work by officers of Government Ministries and TAS. They have come up with the framework which incorporates the necessary powers and mechanisms for the effective functioning of a corporatised Singapore Telecom and Singapore Post, with sufficient safeguards to protect the interest of the public and the nation. Sir, I beg to move. Question proposed. Mr Heng Chiang Meng: Mr Speaker, Sir, the Bill was first read on 27th February this year when it was presented to Parliament. Since then, we have the Budget statement, followed by a short break.”
“Sir, I now come to the main provisions of the Bill. The Bill provides for the reconstitution of TAS as a statutory board. It also provides for the transfer of certain property, rights, liabilities as well as officers or employees of TAS to the respective successor companies which are nominated by the Minister. It makes financial arrangements for these companies as well as provides for the sale of their shares. The TAS shall perform functions and exercise powers as conferred by or under this Bill. Specifically, I will list only the major functions. Firstly, to ensure that there are provided throughout Singapore good and sufficient domestic and international telecommunications and postal services, at rates which are consistent with efficient service. Secondly, to exercise licensing and regulatory functions. Thirdly, to act internationally as the national body which represents Singapore and at the same time to advise Government in respect of telecommunications and postal matters. And fourthly, to maintain effective competition between telecommunication operators. The Bill will enable TAS to grant licences to operators. These operators will be designated as Public Telecommunication (PTL) as well as Public Postal Licensees (PPL) for the operation of telecommunications and postal services respectively. The first PTL will be Singapore Telecom and the first PPL will be Singapore Post. Singapore Telecom will be held by a Government holding company and Singapore Post will be corporatised as a subsidiary of Singapore Telecom. All the assets, including working capital and manpower resources, that are required for commercial operations will be transferred to Singapore Telecom (ST) and Singapore Post (SP) respectively, on a date to be appointed.”
“These are the broad principles. My Ministry will announce the details in due course. Sir, the second public concern is really whether by privatising Singapore Telecom, Government will be benefitting foreigners more than Singaporeans. Here, I would like to repeat the Prime Minister's assurance that when Singapore Telecom is privatised, all Singaporeans will be given an opportunity to share in the success of the company. As I have mentioned, Singapore Telecom is a national asset. This is a tangible way to reward our citizens who have contributed to the wealth of our nation. It is Government's intention that when we sell the shares of Singapore Telecom, Singaporeans who are CPF account holders, will be allocated shares at an attractive price. My Ministry is working with the CPF Board to study how we can make it possible for as many Singaporeans as possible to own shares in the company. It will be a blue chip stock, a growth stock that is worth holding on to. So Government will encourage Singaporeans to hold on to these shares for a longer period. Suitable incentives will be incorporated in the scheme for this purpose. Telecom shares will also be sold to foreign investors. This is important. If we want Singapore Telecom to be a global player in the telecommunication industry, we must allow for foreign ownership. It will enable other telecommunication companies to have a stake in Singapore Telecom and, vice-versa, for Singapore Telecom to strike up strategic alliances with them. However, priority in the allocation will be given to Singaporeans. As Singapore Telecom is the first statutory board to be floated, the details are being studied carefully and will be announced when they are ready. It is unlikely that the flotation will take place this year.”
“But if and when they do, they must, and they will, be properly justified. TAS, in its capacity as a regulator, will function somewhat like the Public Transport Council. It will ensure an orderly development of the future telecommunication industry in Singapore. In the medium term, TAS together with my Ministry will work out a policy which will aim at increasing consumer choice and stimulating both greater efficiency in the use of resources as well as encouraging growth and innovations. Government will take steps to further liberalise the telecommunication sector in Singapore. Today, for example, the Customer Premises Equipment, things like telephone sets, pagers, fax machines, private automatic branch exchange (PABX), and so on, are already fully liberalised. More liberalisation will be introduced in stages in selective areas, for example, in the area of Value-Added Networks (VANs). In introducing competition in the telecommunication industry, Government will ensure that the interests of the public are protected. Decisions on this will only be taken after careful consideration. Better consumer choice will be weighed against the added cost arising from possible duplication of services and facilities. The small size of Singapore's domestic market and the need to optimise the use of valuable resources, land is one such valuable resource, and in the case of telecommunication, radio frequency spectrum, for example, could be considered as another valuable resource, are factors that must be taken into account. Also, Singapore Telecom will be given sufficient time to adjust to more competition in the domestic market. In the provision of basic telephone services, competition must take place on a fair basis. In other words, competitors must take the good with the bad.”
“It allows Singaporeans to own part of this national asset and to share in its growth and its success in the future. It will be a quality stock, bar none. It has a track record that is the envy of many. Its income and operating surplus grew by 11% per year and 28% per year respectively over the last five years. The listing and flotation of Singapore Telecom on the local stock exchange will provide an opportunity for many Singaporeans to participate in the progress of a well-run local company. Sir, I would like now to address two important concerns that the public have expressed concerning this privatisation exercise. The first concern is a lingering apprehension that privatisation will mean higher rates, and the second is a concern that the exercise will in the end benefit foreigners at the expense of Singaporeans. Let me address the first concern. The Bill before us provides for the current TAS to continue as a reconstituted statutory board with enhanced regulatory powers and functions. TAS, the statutory board, will license Singapore Telecom, the company, to operate and provide telecommunication and postal services. It will impose certain conditions. Firstly, there will be a Universal Service Obligation. What this means is, for example, that Singapore Telecom must continue to provide basic telephone services to anyone in Singapore who requests for such services, either in their homes or in their offices. Secondly, Telecom will be obliged to charge reasonable rates and provide a level of service that will be spelt out by TAS, the regulator. There is really no need to fear that domestic telephone rates, for example, will suddenly go up as a result of privatisation. This does not mean, however, that the rates will never go up.”
“The first is to allow Singapore Telecom greater flexibility to operate as well as to compete globally. The telecommunication industry today is truly a global industry. Driven by technology, and fuelled by economic development worldwide, it is changing and changing rapidly. New challenges and new opportunities present themselves and Singapore Telecom must be in a position to meet the challenges and to seize the opportunities. For example, Singapore Telecom current ly derives a major proportion of its turnover from its International Telephone Service. Although this is still growing, the growth from this service has slowed down considerably. In 1988/89, this accounted for around 28% of growth. In l990/91, the growth has come down to around 10%. International telephone tariffs are being driven down by competition. Telephone companies, whether they are in North America, Europe, Australia, New Zealand, or even those nearer home, are all going global. Singapore Telecom must be given this flexibility to move fast to meet these challenges. At the same time, the liberalisation of the telecommunication industry worldwide has presented new investment opportunities. But the window for these opportunities is limited and the players are many. A privatised Singapore Telecom will have the nimbleness to move quickly to seize these opportunities. Sir, the second important reason for privatising Singapore Telecom is to provide an opportunity for Singaporeans to own quality stocks in a good local company. Singapore Telecom is a national asset. It is an organisation that has been built up over the years by many Singaporeans. Its success is also Singapore's success. Privatising Singapore Telecom is a way for Government to transfer part ownership of Telecom to the people.”
“Sir, I beg to move, "That the Bill be now read a Second time." Sir, Government first announced its intention to privatise some of its statutory boards in 1987. Since then, many careful steps have been taken to bring about the privatisation of the first statutory board under this programme, namely the Telecommunication Authority of Singapore (TAS). In 1988, TAS commissioned an accounting firm to study the feasibility of privatisation. The findings indicated that it was feasible and that there were clear advantages for doing so. In 1989, the Government gave its in-principle approval to TAS to proceed with its privatisation plans. Members of this House will recall that this issue was also debated in the Committee of Supply in 1990. Today, we are ready to take another step, a major step, towards reaching our goal. The Bill before this House seeks to reconstitute the TAS and to allow the privatisation of its commercial divisions, which currently operate under the name of Singapore Telecom. First of all, allow me to explain once again the reasons for privatising TAS. Many people would agree that Singapore Telecom is a highly efficient and well-run organisation. This is borne out by independent surveys which are conducted locally as well as internationally. Singapore Telecom has provided Singapore with a world-class telecommunication infrastructure, at rates which are among the lowest in the world. It is financially well managed and it contributes handsomely to Consolidated Revenue. In fact, it has none of the characteristics which have prompted other telecommunication authorities to privatise. So the question inevitably arises, why are we doing it? Sir, there are two main reasons.”
“Thank you, Mr Speaker, Sir. Otherwise, I was going to refer Mr Teo to previous answers in the Hansard because of time constraint. Since I have been given the luxury of a bit of time, let me take this opportunity to reiterate a principle. I think this principle applies not just to MRT extension to Changi Airport but to many other places as well where Members have consistently made this request. This principle is that Government is prepared to bear the construction cost and other capital cost of any MRT extension, provided the demand can justify such an extension. In other words, there must be sufficient traffic to cover the operating cost, not just construction cost and capital cost. But there must be at least sufficient demand to cover the operating cost. It is very simple. If any line loses money and does not cover the operating cost, the operators will have to subsidise it with revenue from other lines. In the process, if fares go up, all MRT users will have to pay. Sir, as far as the Changi Airport extension is concerned, the studies so far have consistently shown that there is not enough traffic to justify extending the MRT line to Changi Airport, even with the completion of Terminal 2. However, and I think Mr Teo may be interested to know this, we have safeguarded an MRT route to the Airport. We are safeguarding it from encroachment by other developments. So one day, when traffic increases, there may be sufficient demand to justify an MRT extension to Changi Airport and Mr Teo may well be rewarded for his persistence.”