Peter Chen
Singapore
“Mr Thomas Thomas asked the Minister for Manpower if he will, in line with the national objective of promoting lifelong learning, allow Central Provident Fund account holders to use their balances to pay for degree courses at the Singapore Open University and for distance learning courses from reputable overseas universities.”
“Sir, I beg to move, In page 2, line 26, after "commodity", to insert ", and other indices, rights or interests of any nature that the Minister may, by notification in the Gazette, prescribe to be a commodity".”
“Sir, I beg to move, In page 11, after line 30, to insert - "(g) by deleting the words "subsection (1)(b) or (d)" in subsection (6)(a) and substituting the words "subsection (1)(b), (d), (g) or (i)"; and (h) by deleting the words "subsection (1)(a), (c) or (e)" in subsection (6)(b) and substituting the words "subsection (1)(a), (c), (e), (…”
“Again, I will give him the same answer that no amount of legislation can guarantee low cost or low price. But what is important is that competition and privatisation will bring about the financial and commercial discipline, so that everybody knows what the true cost is.”
“The pricing formula, therefore, allows changes in fuel prices to pass through but, as we mentioned several times, in order to alleviate hardship for those who may not be able to afford, the Government has already given a number of assistance schemes.”
“Sir, transitional arrangements are provided for under section 73(6) of the Public Utilities Bill for the provisions regulating the electricity and gas industries in the current Public Utilities Act to remain in force until the changes to these industries are implemented later this year.”
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“Mr Thomas Thomas asked the Minister for Manpower if he will, in line with the national objective of promoting lifelong learning, allow Central Provident Fund account holders to use their balances to pay for degree courses at the Singapore Open University and for distance learning courses from reputable overseas universities.”
“TDB is also looking at ways to provide more and better services to help companies in their initial foray and subsequent expansion in China. Details will be announced at a later stage when finalised. Last year, TDB led 10 missions to China to explore trade and investment opportunities, and TDB will continue to spearhead business missions to China. These missions are useful for SMEs that are less likely to explore overseas markets by themselves. To achieve greater synergy and results, the missions will take on a stronger industry focus leveraging on Singapore's strengths, or a market exploration focus to help Singapore companies explore new emerging areas in China. Some of these have been, and will continue to be, jointly organised with Chambers of Commerce and Industry associations. It is good that in most business delegations, there is now a good mix of veterans and freshies. China is growing by leaps and bounds. Singapore needs to focus on industry clusters where we have strengths, and penetrate regions where these strengths are valued. Our companies will need to constantly upgrade their technology and management skills, or risk being left behind by the Chinese, or by foreign competitors in China. However, we must also recognise that China is a difficult market with a complex operating environment and, unless one understands this fact, it is easier to lose money there than to make money. Question put, and agreed to. Resolved, That Parliament do now adjourn. Adjourned accordingly at Three Minutes to Three o'clock pm to a date to be fixed. WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 2.00 PM SINGAPORE OPEN UNIVERSITY (Use of CPF balances for degree courses) 18.”
“The Ministry of Education strongly encourages students to study their mother tongue for as long as possible and to as high a level as they are capable of. We currently have 10 Special Assistance Plan (SAP) schools offering Higher Chinese at the secondary level and three Junior Colleges offering the Chinese language elective programme. At the university level, NUS and NTU will introduce a bonus points scheme for admission to selected courses of the Chinese language and Chinese Studies Course from academic year 2002/2003. The Ministry of Education also offers teaching scholarships tenable in China, and our local universities already have exchange programmes for Singaporeans to spend some time in a Chinese university. Besides, Singaporeans have the opportunity to interact with many Chinese students pursuing their MBAs here in Singapore. Beyond a better grasp of the Chinese language, as has been emphasised repeatedly, it is also necessary to understand China better. For a start, seven officers from the economic agencies under the Firefly programme will be sent to Tsinghua University and Fudan University this October. They will pursue an International MBA. An immersion into China and in understanding the business culture will equip our economic officials to better formulate policies to deepen economic linkages with China. In due course, we hope we can also create a corps of officers who are steeped in both the language and culture. Beyond knowing China better, we also need to facilitate Singapore companies' entry into, and subsequent expansion in the Chinese market. To do so, TDB is looking into expanding its network of offices in China.”
“Headquartered in Beijing, the Chamber will also have extensions in key cities such as Shanghai, Guangzhou, Chengdu and Dalian later on. I am confident that this private sector driven effort will provide a useful platform to sieve on-the-ground market intelligence for dissemination back to Singapore through Network China. Such a grouping also creates opportunities for Singapore businessmen based in China to network with one another. In this way, they can learn from one another, and assimilate more easily into the new environment, both business-wise and socially. To help raise Singaporeans' awareness about business opportunities in China, TDB will set up a China Business Information Centre (CBIC) in Singapore. Besides serving as a first-stop centre to handle China business information inquiry services, the Centre will conduct market studies, collect market information and disseminate the information to Singapore companies. Mdm Chiang made a very good suggestion of providing information on the web. TDB will follow up on this and to add depth to its existing portal to reach a large audience in a timely fashion. But information by itself is not enough. Converting it into knowledge is much more difficult. Singaporeans have a reputation in China as straight dealers, but that also means that we get taken advantage of sometimes. In a different way, some too may have lost a little of their innocence. We must make sure that our good reputation translates into an asset, and not a liability. We note Mdm Chiang's suggestion that we have to create a conducive environment for Singapore students to learn Chinese, and also to improve the facility for the language.”
“However, recognising that our engagement of China requires a concerted effort by many different Government agencies, MTI will set up an International Business Division (IBD) next month. For a start, IBD will focus on China alone, and play the important role of coordinating efforts and reviewing progress across the various agencies. It is important for our businessmen operating in China to do so on the basis of deep knowledge. Let me address Mdm Chiang's suggestions, which can be broadly classified into two categories: first, disseminating of information and, second, facilitating companies' efforts to tap on the many opportunities in China. On the first point, Singapore needs to be aware of the tremendous changes that have taken place, and continue to take place in China. It is important for us to deepen our knowledge of China and understand the opportunities and also the pitfalls. To facilitate the sharing of good and bad experiences among Singapore businesses, TDB will set up Network China. As the name implies, this will serve as a platform for networking among businessmen. The aim is to encourage businessmen to share their experiences and knowledge on China, and shorten the learning curve for other Singapore companies. In addition, this platform will also create opportunities for collaboration among Singapore businessmen entering China as well as for partnering Chinese companies for other markets. Apart from Singapore companies, Network China will also involve MNCs and the various Chambers of Commerce and Industries, including the Malay and Indian Chambers. Mdm Chiang's point is well taken. The Singapore Chamber of Commerce and Industry in China will be set up by our businessmen who are now in China by the end of this year.”
“Mr Speaker, Sir, I thank Mdm Chiang for raising some very pertinent issues about China and her urgent call. I agree that we need to raise awareness among Singaporean business leaders, the younger generation and also the students about the many opportunities and the importance of China, and also provide avenues for information exchange and networking to facilitate our companies' ventures in China. China is emerging as a major economic power. In the last 20 years, its GDP grew 9.7% per annum and in the 1990s alone, at 10% per annum. Few other countries in the world have achieved such impressive growth over this period. While there are potential risks that may slow down China's growth, analysts forecast that China's real GDP will continue to grow at about 8% for the next 10 years. Singapore already enjoys strong and growing bilateral economic relations with China. Bilateral trade grew at a robust rate of 15% per annum in the last decade, and China is currently Singapore's seventh largest trading partner. In 1997, China became Singapore's top investment destination in cumulative terms. Today, Singapore is also China's fifth largest foreign investor. But let me add, however, that the experiences of our businessmen in China have been mixed. In the early days, not a few were cheated. Even now, not everyone actually makes money. It is therefore important that Singapore investors go into the China market with their eyes wide open and learn both from the happy and unhappy experiences of others. The Trade Development Board (TDB) is the lead agency promoting external trade and investments, including companies' market expansion efforts into China.”
“Sir, I beg to move, In page 11, after line 30, to insert - "(g) by deleting the words "subsection (1)(b) or (d)" in subsection (6)(a) and substituting the words "subsection (1)(b), (d), (g) or (i)"; and (h) by deleting the words "subsection (1)(a), (c) or (e)" in subsection (6)(b) and substituting the words "subsection (1)(a), (c), (e), (f), (h) or (j)".". This amendment will ensure that the increased penalties for traders who operate without licences would consequently be extended to cover all the new categories of licensees. Amendment agreed to.”
“Sir, I beg to move, In page 2, line 26, after "commodity", to insert ", and other indices, rights or interests of any nature that the Minister may, by notification in the Gazette, prescribe to be a commodity". Sir, the proposed additional amendment to clause 4 widens the definition of "commodity" to include intangible commodities, like bandwidth. These intangibles are already traded in the market. The purpose of this wider definition is to remove any scope for bucket shops to circumvent our law. Amendment agreed to. Clause 4, as amended, ordered to stand part of the Bill. Clauses 5 to 8 inclusive ordered to stand part of the Bill. Clause 9 -”
“Sir, the Bill will provide safeguards to protect the interests of consumers in the pilot district cooling project in Marina South. The mandatory requirement is necessary to get the pilot project off the ground. As the benefits of district cooling become better known to Singapore consumers, we hope to lift such mandatory requirement. The experience in Marina South will also help us decide if there is any need at all in future to extend such a mandatory requirement to other new developments in Singapore in order to promote the greater use of district cooling systems. Sir, I beg to move. Question proposed.”
“Under clauses 14 to 16, the district cooling licensee is required to comply with the codes of practice and performance standards issued or approved by the regulator. The regulator may also give direction to its licensee to observe the code of practice and keep to the performance standards. Clause 18 specifies the general duties of a licensee, which are to: (a) maintain a reliable, efficient and economical district cooling system; (b) ensure public safety with respect to the provision of district cooling services; (c) ensure that it will not do or not omit to do any act which will adversely affect the reliability and stability of the services provided to consumers. Clause 19 ensures that the prices to be charged by a licensee and which are to be paid by its customers must be in accordance with the conditions of its licence. Therefore, prices will be regulated and can be reviewed by the EMA. This clause also disallows the licensee, in fixing prices for its service, to give undue preference to or discriminate amongst its customers. Special Power The provisions under clauses 21 to 23 empower the Minister to make a special administration order upon application by the regulator. The order would direct that the affairs, business and property of the licensee be managed by any person appointed by the Minister if the Minister considers it necessary in the interest of security and reliability of the provision of district cooling services, or in the public interest, among other circumstances. Appeal Process Clause 42 outlines the appeal process. Any person aggrieved by any decision of the regulator in the exercise of its powers under the Bill may appeal to the Minister whose decision is final.”
“Clauses 3 and 4 spell out the functions and duties of EMA as the regulator of the district cooling industry. These include, inter alia, the: (a) granting of licences, monitoring licensees' performance and enforcing compliance with licences and the relevant provisions provided in the Bill; (b) regulating prices of the operator within its service area; and (c) establishing, monitoring and enforcing technical and performance standards and codes of practice. Mandatory Use of District Cooling Services Clause 7 provides for the Minister to declare, by notification in the Government Gazette, an area to be a service area wherein district cooling services are to be provided and consumers have to subscribe to the service. Clauses 8 and 9 outline the Minister's authority in connection with making changes to the service areas. Control Mechanism and Protection of Consumers' Interest Clauses 10 to 13 stipulate that any person who provides district cooling in the designated area must be authorised by a licence granted by the EMA. The provisions also provide for the circumstances where the EMA may suspend or cancel the licence. If the regulator is satisfied that a district cooling licensee has contravened any condition of its licence, any provision of the Bill or any direction issued, the regulator is empowered to: (a) require a licensee to provide a performance bond; (b) impose a financial penalty not exceeding 10% of the annual turnover derived from the district cooling services of the licensee in Singapore; (c) require the licensee to replace its management with appointees approved by the Regulator; and (d) cancel the licence.”
“The remainder of the New Downtown can be parceled out into four zones of similar size for future District Cooling Systems, if the pilot proves successful. Given the high capital and operating cost, the district cooling system will be viable only if all buildings in the service area subscribe to it. As some building owners may be unfamiliar with this new centralised service, they may choose to stick to the conventional air-conditioning plant. This would increase the operating cost of a district cooling system. To reap the full benefits of economy of scale of such a system, it is necessary to require all building owners in this zone to subscribe to it. We have made the use of this service mandatory by specifying this in the Government land sale condition for the designated land parcels in Marina South. In Japan, the use of District Cooling System in designated areas is also mandated. Since we have made the use of the district cooling system mandatory for this pilot phase in Marina South, we must use Government regulation to safeguard the interests of building owners and users. The users of this cooling system must not be subject to high charges or poor service by the monopoly operator. EMA will regulate this service provided by an operator. The operator will be price regulated to ensure that the cost of cooling using this centralised system would be lower than that using conventional methods. This is to ensure a passing-through to consumers of some of the savings from using a centralised cooling system. Price regulation will also encourage it to improve its efficiency and productivity. Key Features of the Bill Sir, I shall now touch on the main provisions of the Bill.”
“Bill considered in Committee; reported without amendment; read a Third time and passed. DISTRICT COOLING BILL Order for Second Reading read. The Acting Minister for Trade and Industry (Mr Peter Chen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the District Cooling Bill is another industry-specific legislation that will be administered by the Energy Market Authority of Singapore (EMA). The main objective of the Bill is to designate the EMA as the regulator for the provision of a pilot district cooling service in an area at the New Downtown at Marina South. A district cooling system supplies chilled water through a network of pipes for the air-conditioning of buildings located within the service area. The conventional method is to have individual buildings put up their own stand-alone air-conditioning plants. A centralised district cooling system has two major benefits. First, it takes up less land space, an important consideration in land-scarce Singapore. Second, it significantly reduces water and energy consumption through economies of scale. There is also an aesthetic advantage, as the roof-tops of individual buildings can now be better designed, besides being put to better use. District Cooling Systems have been successfully implemented in certain parts of Yokohama and Osaka of Japan. Based on such experience, the advice is that a District Cooling System should serve a total gross floor area of about 1.25 million square metres for optimal efficiency. URA has therefore parceled out a section of the New Downtown at Marina South for a pilot District Cooling System to be tried out. The projected saving in gross floor area in the pilot area is about 7,000 square metres.”
“Mr Inderjit Singh has raised the concern and question of separating generation and retail. Both generation and retail can indeed be performed by the same company, as Mr Inderjit Singh has quite rightly said. But there is nothing to stop a company from doing both. And the fact is that there will be companies that will choose to do generation without retailing or vice-versa. The transporter is the owner of the gas pipelines and can potentially influence the competition in the generation and retail sectors. Hence, the transporter would not be allowed to take part in the generation or retail. The transporter has to be licensed, as it is a monopoly. There is also concern expressed by Mr Inderjit Singh concerning the security of supply. Sir, I would like to thank Mr Inderjit Singh for speaking in support of the Bill and also raising this concern. The key is to diversify our sources. Not all electricity will be generated by natural gas. Oil will continue to be a significant source for power generation. In any case, our natural gas agreements are commercial agreements and international companies and organisations like the World Bank are involved. They will help to ensure that they are able to discharge their contractual obligations. In the longer term, we will eventually go to LNG as I have said. Land has already been set aside in Tuas for the LNG terminal. There is a global market for LNG and this will allow us to tap natural gas supply from global sources much further afield, as I have mentioned, Australia and the Middle East. 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 Peter Chen].”
“If the parties cannot achieve a satisfactory commercial settlement, clause 98 of the Bill empowers the Minister to intervene and ensure that the transfer takes place. This provision will not be invoked unless absolutely necessary. Conclusion Sir, the Gas Bill is to give effect to the restructured piped gas industry. With this, we hope that big and small consumers will benefit from higher efficiency, more choice and better service of piped gas supply. As the regulator, the EMA will be responsible to safeguard the interests of the consumers and ensure a level playing field for the players in the industry. Sir, I beg to move. Question proposed.”
“Clauses 62 to 68 empower the regulator to issue or approve codes of practice and performance standards for the regulation of activities and conduct in the piped gas industry. They also deal with safety requirements in relation to gas. Duties of Gas Licensees The Bill lays out the duties of licensees. Licensees are required to carry out their licensed business in such a manner so as not to prevent, restrict or hinder the development of competition in any gas market in Singapore. Special Power As with the Electricity Bill, the Gas Bill also provides for situations in which public interests are put at risk. Clauses 33 to 35 empower the Minister to make a special administration order, upon application by the EMA, directing that the affairs, business and property of an electricity licensee be managed directly or indirectly by the EMA. Anti-competition Provisions Like the Electricity Bill, the Gas Bill has similar provisions to control anti-competitive behaviour. These are listed in Part IX of the Bill. Appeal Process The Bill also provides for appeals. Appeals relating to market regulation will be heard by an Appeal Panel appointed by the Minister. These will include matters on modification of licence conditions and application of the anti-competition provisions as stipulated under clause 17 and Part IX of the Bill. The decision of the Panel shall be final. Other types of appeals, eg, refusal to grant a licence and matters relating to technical regulation, will go to the Minister whose decision is final. Transitional Provisions The natural gas pipelines in Jurong which are owned by SembGas will have to be transferred to PowerGas on commercial terms.”
“Key Features of the Bill Mr Speaker, Sir, I shall now deal with the main provisions of the Gas Bill. The Bill is to create a competitive market framework for the gas industry, make provisions for the safety, technical and economic regulation of the transportation and retail of gas and for other matters connected therewith. Like the Electricity Bill, the Gas Bill designates the Energy Market Authority of Singapore (EMA) as the regulator of the gas industry. The functions and duties of the EMA under the Bill includes protecting the interests of the consumers, promoting competition in the supply of natural gas, regulating prices, as well as establishing and monitoring technical, performance and safety standards. Control Mechanism and Protection of Consumers' Interests Clauses 6 to 19 of the Gas Bill allow the EMA to issue licences and administer the controls related to the licensing. The conveying of gas through a gas pipeline and the retailing of gas will be licensed. A person who carries out any work on any gas installation or gas appliance will also need to be licensed as a gas service worker. If a gas licensee contravenes any conditions of its licence, any provisions of the relevant legislation, or any directions issued by the EMA, the EMA is empowered to require the licensee to provide a performance bond; and impose a financial penalty not exceeding 10% of the annual turnover of the licensee's licensed business, or an amount not exceeding $1 million, whichever is higher. The EMA may also revoke or suspend the licence if the licensee fails to comply with its direction to rectify any contravention.”
“Singapore Power will exit from importing and retailing of natural gas to industrial customers and power plants. We also have a pipe network which supplies town gas to domestic and industry consumers. Town gas, which is supplied by PowerGas, will not be competitive, compared to natural gas. PowerGas plans to convert the town gas network over the next five years to convey natural gas, so that domestic and small consumers will also benefit from it. Other consumers not using piped gas will still have the option of using commercially available LPG. After converting the town gas network to natural gas, PowerGas will also exit from retailing gas to domestic and small customers. There is currently a natural gas pipe network in Jurong, which was developed and owned by SembGas. As SembGas is an importer and retailer of natural gas, it would have to exit from the business of transporting natural gas and transfer its pipeline assets to PowerGas. When these various measures are implemented, there will then be competition in natural gas import and retailing. Diversifying Sources of Gas Supply We will have three sources of fuel for power generation. The primary fuels will be oil and natural gas. All the generation plants using natural gas are required to be able to be operated with diesel. Diesel will serve as a back up fuel in case of disruption to the gas supply. Looking ahead, we plan to further diversify our sources of fuel. Land has been set aside in Tuas for a Liquefied Natural Gas (LNG) terminal to allow import of LNG by LNG tankers to Singapore. With this terminal, we would be able to tap natural gas supplies from further sources such as Australia and the Middle East. A joint study by PUB, MTI and EDB is currently underway.”
“As I mentioned earlier, natural gas will increasingly become an important source of fuel for power generation. Currently, a small amount of natural gas is imported from Malaysia for power generation only. In January this year, SembGas took delivery of natural gas from the West Natuna gas fields in the South China Sea under a 22-year agreement with Pertamina, for the purchase of up to 325 million standard cubic feet per day (mmscfd) of natural gas. Last month, Singapore Power signed a gas sales agreement with Pertamina, to import up to 350 mmscfd of natural gas over 20 years from the Asamera gas fields in Sumatra. The Asamera gas is scheduled for delivery in 2003. While natural gas can be used for different purposes, its main use will be for power generation. The natural gas industry has to be structured such that no company can commercially advantage or disadvantage other competing companies. If this happens, it will be detrimental to competition in the electricity industry. Gas importing is a competitive business. Natural gas can only be transported from importers to end-consumers through on-shore gas pipelines. The company that owns this transport network connecting the gas importers to the end-customers is a monopoly, and can potentially wield considerable advantage over competitors, if it has competing interests elsewhere. To avoid this, we are setting up a market structure where the monopoly transporter of gas does not engage in the competitive sectors of the industry. Singapore Power will remain in the monopoly business of transporting gas within Singapore. To do this it will, through PowerGas, own, maintain and develop the on-shore pipelines that form the gas grid.”
“Sir, I beg to move, In page 10, line 14, to leave out "or ancillary services.", and insert ", ancillary services or any other electricity related products or services.". The Electricity Bill defines the "wholesale electricity market" as an electricity market established by the market rules for the trading of electricity or ancillary services. We anticipate that there will be new electricity-related products and services created over time, which will add value to our market and which we would like to encourage. In some cases, we may need to set the framework to nurture the growth of such products. To ensure the EMA is empowered to promote such new products and services as our market evolves, we need to expand the definition of the "wholesale electricity market" to include such electricity-related products and services. Amendment agreed to. Clause 2, as amended, ordered to stand part of the Bill. Clauses 3 to 104 inclusive ordered to stand part of the Bill. Clause 105 - Amendment made: In page 83, after line 23, to insert - "(3) The Electrical Workers and Contractors Licensing Act (Cap. 89) and any subsidiary legislation made thereunder shall be administered by the Energy Market Authority of Singapore, and any references to the Board in that Act and its subsidiary legislation shall be read as references to that Authority.". - [Mr Peter Chen]. Clause 105, as amended, ordered to stand part of the Bill. Bill reported with amendments; read a Third time and passed. GAS BILL Order for Second Reading read. 4.25 pm The Acting Minister for Trade and Industry (Mr Peter Chen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Gas Bill is the second industry-specific legislation, which I propose to move before the House this afternoon.”
“The pricing formula, therefore, allows changes in fuel prices to pass through but, as we mentioned several times, in order to alleviate hardship for those who may not be able to afford, the Government has already given a number of assistance schemes. Mr Inderjit Singh also refers to clause 5(2) of the Bill and suggests that consent of suppliers be obtained before any information is released. The Bill does allow EMA to disclose information of suppliers of electricity to third parties, if EMA feels that the information would not cause detriment to the suppliers. In fact, this will require EMA to check with the suppliers before divulging the information. 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 Peter Chen]. Bill considered in Committee. [Mr Speaker in the Chair] Clause 1 ordered to stand part of the Bill. Clause 2 -”
“For this to occur, EMA will have to ensure a level playing field and prevent anti-competitive behaviour, such as collusion, which the Member has mentioned. Like other markets that have liberalised, we will allow electricity to be imported or exported, so long as the system's security is not compromised. It has also been asked how the licence fees are determined. The licence fees will be set to enable EMA to recover its costs of administering this industry legislation. There was also concern expressed about quality. Will the restructuring exacerbate the problem of power dips, and should Singapore Power not be made liable for causing the dips? Mr Inderjit Singh again expressed concern about this problem, as he has done so in the Committee of Supply on 8th March. We had explained the slew of measures that have been taken to reduce power dips. As for liability, it is a commercial matter between Singapore Power and the affected companies. There is also concern about how prices would be fixed and what the formula is. The current tariffs comprise a fuel component and a non-fuel component. At the moment, we allow Singapore Power to set the non-fuel tariff component at levels which allow them to earn a 7%-8% return on total assets. A price cap is applied to subsequent adjustments to this non-fuel tariff component. The price cap depends on the rate of inflation and productivity improvements, ie, the consumer price index minus a factor of "X". In other words, the non-fuel tariff component cannot be increased by more than the inflation rate minus an imposed productivity improvement factor which Singapore Power has to deliver and pass through to consumers. As to the fuel component, of course we buy our fuel from global markets, with no control over fuel prices.”
“We have received feedback from several MNCs, such as Shell and Sumitomo, that peak and off-peak tariffs have a wider spread in liberalised markets overseas than there are here. This allows users, especially large users, to plan their work schedules to benefit from the reduced off-peak prices. We expect competition to create this type of benefits. Mrs Lim also wanted to know how would consumers enjoy different service packages and products. This is really up to the ingenuity of the retailers. Experience, again, from other countries, shows that electricity can be bundled with other products, such as appliances. Retailers could also offer electricity packages that are customised to the customers' needs at different levels of pricing. This includes lower off-peak rates, power management schemes, bundling of electricity with other services like telecommunications, and shielding its customers from fluctuations in electricity prices with financial hedging instruments. The competitive market will drive such innovations. Questions and concerns have also been asked and expressed whether there would be enough players in the market, and how are we to ensure that there is no collusion as our market may be too small. I have already explained that our market is not too small. Are we prepared to import and export electricity? Our generation capacity is 6.6 gigawatts today. Demand is growing by 4%-6% per annum. In 10 years, our system will reach 10 gigawatts. This is not a small system. New Zealand and the State of Victoria in Australia liberalised when their capacity was about 7 gigawatts each. Our market is thus of a sufficient size to allow for competition and attract more players, local and foreign.”
“Sir, allow me to thank the two Members, Mr Inderjit Singh and Mrs Lim Hwee Hua, for their support of the Bill. There are again a number of issues raised and some of them have to do with the continuing role of Singapore Power for the distribution as well as the retail of electricity in the initial phase. Opening retail to competition is a complicated process and it would take time. This has to be done in phases as the system has to be prepared. For example, meters that are able to register the consumption every half hourly will first have to be installed. About 100 large customers are already contestable and, later this year, we will open up in phases up to 70% or 80% of the electricity market to retail competition. This will number about 10,000 customers who are mainly the large industrial and commercial customers. Power Grid will indeed not be retailing to these contestable customers. The remaining customers, mainly households, will be opened up by 2003, after which, Power Grid will completely exit from retailing. Remarks have also been made whether or not there are truly private companies involved, and are they involved and also interested in entering our energy market. There are already two non-GLC private companies issued with generation licences, viz, ExxonMobil and Island Power Company. In the retail sector, Tractabel was granted a retail licence. A common refrain on this subject in this House has been how would electricity consumers benefit from the electricity industry's restructuring, and how would the liberalisation of the market lead to cheaper electricity. We must say that the benefits would be the benefits brought about through competition - choice of supply, competitive pricing, including, most importantly, innovative pricing.”
“Again, I will give him the same answer that no amount of legislation can guarantee low cost or low price. But what is important is that competition and privatisation will bring about the financial and commercial discipline, so that everybody knows what the true cost is. If there are people who, in fact, experience hardship, then this Government has, on many occasions already, and in the most recent occasion, provided the help that is needed. It is only for those who need this help. There are perhaps other points which I may not have answered at this stage, but which perhaps will become more apparent as we move on to the Electricity Bill, because many of them are a follow through. 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 Peter Chen]. Bill considered in Committee; reported without amendment; read a Third time and passed.”
“Nobody can guarantee lower prices. What competition can bring about is to ensure a framework where there is competition, where there is enough competitiveness, so that it will bring about the prices that we would otherwise not be able to obtain under other conditions. There is also concern that whatever the number of players, there could well be a situation, like some Members have referred to, a situation in retail petrol, where it is seen that despite the number of players, there appears to be some sort of arrangement. I think we cannot provide for everything but, as we have said, the EMA will have to be vigilant. As in the case of the unhappiness over what appears to be collusion among the petrol companies - this is not necessarily so, but it appears to be so - my Minister has already mentioned in the Committee of Supply debate that this is being looked at. I think one of the strong points of Singapore is that we are not rigid, and we are not governed by ideology. And where something appears not working, we will step in. And, of course, privatisation is not a panacea for everything. But where there is a need to put matters right, they will be put right. I also thank Mr Simon Tay for pointing out some of the clauses that may require some looking at. He raised the point about who may appeal, and raised concerns of a grievance. There is no restriction there. But if, in practice, when we find that it is inadequate, then of course we will take a look at it again. There is no restriction of who may or may not raise issues, and make appeals. Mr Low Thia Khiang, of course, has made his usual point concerning the cost of utilities. He made the same point that we must ensure that utilities do not become unaffordable.”
“It has no intention of leaving the mass market and service, and it is facing teething problems. DBS perhaps may have been able to manage these transitional problems better, but we could not avoid the most basic imperative to rationalise retail banking services and make them economically viable. Mr Inderjit Singh has questioned why do we not let EMA own and manage the electricity and gas distribution grids. He felt that the EMA should manage the electricity and gas infrastructure as well. This matter has been debated extensively when we corporatised the electricity and gas functions in 1995. There were two options. One, as indeed suggested by Mr Inderjit Singh, and the other being for the grids to be privatised. The experience in other countries shows that this infrastructure can be privately owned, but has to be tightly regulated. As private companies, they can operate more flexibly and efficiently, so that they can be as efficient as the private counterparts and be subject to a certain amount of commercial and financial discipline. And EMA will regulate this infrastructure companies. Mr Inderjit Singh also mentioned the risk of infrastructure companies who deal with generators, retailers and so on. Indeed, this is why the EMA will be empowered to prevent the infrastructure companies from participating in generation and retail, and to prevent anti-competitive behaviours. I will say more of that when we explain the Electricity Bill. To ensure security, I mentioned in my speech that the EMA will take over control of the operations of the electricity network from Singapore Power. One refrain that we have heard among several speakers is: will competition bring about lower prices? I think we have to be careful not to confuse lower prices with competitive prices.”
“There have been many issues raised, and they are very complex issues. I would like to thank all Members, but one, who spoke in support of the Bill. From the issues raised, one basic question was: is our market too small to really support competition and how many players can there be to ensure there is real competition? I think our market is not too small. We are about the same size as New Zealand where privatisation there has been successful. We are also about the same size as a number of Australian states, so do not get away with the idea that we are too small for that. Secondly, how many players can there be, and will there be a limit to the number of players? The answer is no. There could be as many players as they could come on. Another point that has been made is a caution on the speed. Speakers have expressed concern that we may be moving too fast. We are taking this step by step. What we would like to point out, first of all, is that although we do not want to move too fast and fall on our face, there is one very important sector of our market which will be opened up soon, ie, the industrial sector which already uses 70-80% of the electricity. There is already plenty of room for competition. With regard to the consumers side, which occupies 20-30%, this would take a bit more time, because they will also need education on their choices, and there are a million accounts out there. We have also been warned of some of the pitfalls of privatisation, and reference has been made to the DBS-POSBank merger. With regard to that reference, this has already been discussed in the House on other occasions. And DBS has reiterated its commitment to continue providing banking services that are accessible at affordable prices. I think it is not a very fair point to make.”
“Sir, I beg to move, In page 38, line 35, after "Minister", to insert "charged with the responsibility for the environment". Sir, this is a consequential amendment to provide clarity to the authority empowered to make regulations for any transitional matters relating to the functions and duties of the reconstituted PUB, arising from the repeal of the Public Utilities Act. Amendment agreed to.”
“Sir, transitional arrangements are provided for under section 73(6) of the Public Utilities Bill for the provisions regulating the electricity and gas industries in the current Public Utilities Act to remain in force until the changes to these industries are implemented later this year. The provisions governing the current market will therefore also continue to apply. Although the provisions governing the current market continue to apply, the EMA, which will be the regulator from 1st April 2001, will need to be empowered so as to continue to administer the current market and issue new licences during the transition period, until the new industry structure is put in place. Amendment agreed to.”
“Sir, I beg to move, In page 38, to leave out line 6 to the end of line 18, and insert - "(6) Notwithstanding the repeal of the Public Utilities Act, as from the appointed day and for such period as the Minister for Trade and Industry may determine - (a) section 2, Parts IV, V, VII, VIII, IX and X of that Act and the subsidiary legislation made under section 130 of that Act for or in relation to the supply or use of electricity and gas shall, with the necessary modifications, continue in force as if that Act has not been repealed; (b) all licences granted before the appointed day under section 38 and Part VIII of that Act shall continue to be valid and in force; (c) for the purposes of this subsection, the references to the Minister and the Board in - (i) section 2, Parts IV, V, VII, VIII, IX and X of that Act and the subsidiary legislation made under section 130 of that Act for or in relation to the supply or use of electricity and gas; and (ii) the licences granted before the appointed day under section 38 and Part VIII of that Act, shall be read as references to the Minister for Trade and Industry and the Energy Market Authority of Singapore respectively; and (d) for the purposes of this subsection, the Minister for Trade and Industry may make regulations to provide for any other transitional, incidental and consequential matters arising from the repeal of the Public Utilities Act. (7) Notwithstanding the repeal of the Public Utilities Act, as from the appointed day, sections 62 to 65 of that Act shall continue in force and to apply to the successor companies mentioned in those sections as if that Act has not been repealed.".”
“As far as I know, the bills would still be consolidated, unless I am advised otherwise. I could not give him a definitive answer. 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 Peter Chen]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses 1 to 72 ordered to stand part of the Bill. Clause 73 -”
“Sir, I thank Mr Ahmad Magad for supporting the Bill. At yesterday's Committee of Supply debate on the Ministry of the Environment, the Acting Minister for the Environment had spoken at length about water, its security, and so on. So I would not touch on that now. But let me address the reason why the name "PUB" is retained. As Mr Magad has said, this is a household name today. It has got international repute and accolades from many countries as well. In fact, we have considered the alternative of, perhaps, calling it the "Water Authority of Singapore". But it would seem a great pity to consign a household name, a very well-known and familiar name, to the archives. In any case, water is a public utility and it is by no means a misnomer. I would also say that proper management of water, whether it is rainfall, used water or drinking water, is very, very much a matter for the protection of public health. This is one of the reasons why we would have also put it under the Ministry of the Environment. But although we say that water is an important resource not only for domestic use and it affects public health, the Ministry of Trade and Industry (MTI) would still continue to have a very, very strong interest in that because water is also a factor of production in the economy. We would be keeping a very close watch, as the whole of Singapore would. A question was also asked on whether the restructuring of PUB will affect the employees working in Johor now. The answer is that the Water Department of PUB would be kept intact and all the employees would not be affected.”
“Sir, every polytechnic indeed has got personnel who will help students and deal with student affairs. If these problems are brought up to the polytechnics, the students will definitely receive help and advice. But at the end of the day, it may well be something that they have to be careful about, and the remedy may have to be sought outside the polytechnic system, eg, CASE.”
“Sir, Mr Thomas Thomas has said that the polytechnics, in particular, should not use private agents. Yes, I agree with him. They should not, and they do not use private agents. I think the point made here is really not private agents, but the concern is that some students may be taken advantage of by certain individuals, and it goes beyond just recruitment. Mr Thomas also referred to what they might charge for bringing them in and so on. I think it is extremely difficult for the polytechnics really to police this. It may well be a case for CASE really. It could well be that. But beyond making very clear to all potential students that the polytechnics do not use any agents or do not take account of any lobbying by anybody for admission, and admission is based strictly on merit, there is not much that we can do beyond that. However, if Mr Thomas has some suggestions, we will be very glad to see how publicity in this matter may be followed up.”
“It will be a degree, as Dr Tan Boon Wan has said, different from an NUS or NTU degree, but it must be a degree of quality. These are some of the issues the committee (chaired by me) that has been asked to look into the set up of the degree programme, will consider carefully. We will study models in the US, UK and Germany for relevant lessons, and we will make our recommendations in the second half of the year. There have also been some calls for continuing education and training, especially that we may make the best use of our educational institutions, that we should align the existing facilities there, to enable them to play their role in the provision of continuing education and training. I would like to assure the House that those plans are in hand, and both the ITE and the polytechnics will be expanding their capacity, from the point of view of the provision of continuing education and training opportunities for Singaporeans.”
“Sir, I would like, first of all, to thank the many MPs and members of the public who have come out loudly in support of the proposal to start a degree programme which is industry and practice-oriented, often now referred to as the "Fourth University". Points have been made concerning the quality of the degree, especially on the recognition of the graduates who come out from such a university, or who undertake such a programme. Some Members have asked whom the university is targeting to recruit, if such a university were started. The answer must be students who are more at home in the practice-oriented culture than otherwise. They are likely to be the hands-on type, probably with a polytechnic diploma in a relevant field, an "A" level qualification, or someone who has considerable work experience in an appropriate field. The most important quality that the person must have is the capacity to be able to benefit from a degree-level education. He could be a full-time or part-time student. If anything, for what we have in mind, a part-time programme lends itself rather well to an industry and practice-oriented university where real-life problems, from the student's workplace, become a learning experience. Concern has also been expressed as to the quality of the degree, and how the public will view such a degree. I think the concern is understandable. Many of us will recall similar concerns when NTU came into being as a second university. In Singapore, the authority to award degrees is a jealously-guarded, almost sacred privilege, and I want to assure the House that a degree programme, or the fourth university, will have rigorous admission standards and criteria appropriate for an industry and practice-oriented degree. It must have the support and acceptance of industry.”
“If he will file a separate Question, that will be answered.”
“I think the cost of electricity generation has been explained here several times; something like half the cost is the fuel cost.”
“On the question of other sources of energy for the generation of electricity, it is not the Government's policy to use nuclear power, and solar power is not something that is commercially feasible on a large scale at the moment. There are other sources such as coal, which seems to be too pollutive. We do not have any hydroelectric power. So, at the moment, fossil fuel remains to be the only viable source as far as electricity is concerned. With regard to what measures do we have to ensure that the cost of electricity will be kept low, it is hard to say as that depends on fuel cost. But we want to create an environment where there is competition, and in the new structure, which you will hear later, we want to ensure that there is contestability; in other words, on the supply side and even on the retailing side. At both ends of the whole supply chain, there will be competition where there will be several players. The only thing we could do would be to ensure that there is an environment of competition.”
“Thirdly, we are also exploring the development of water resources in Bintan. We are also exploring development of water resources by harnessing technology to augment these supplies. We will build sea water desalination plants. We are putting in place infrastructure to recycle used water into ultra-clean water, which we have called NEWater, for supply to those industries which require large quantities of high-grade water, such as wafer fabrication plants. For new sources of water, we will encourage private sector's participation by leaving the choice of technology to the market and for the companies to supply water to PUB on commercial terms. Together, this three-pronged strategy will ensure that Singapore's water needs will be adequately and securely met in the 21st century.”
“We have also introduced several measures to control companies that cause power dips. Construction contractors face stiff penalties should they damage electrical cables. Licences for both the customers' electrical installations and their licensed electrical engineers will be suspended should they repeatedly cause voltage dips. Generation companies and the grid owner will also be fined if they cause dips. These series of measures emphasise that we will not tolerate acts that would undermine the reliability of our electricity supply. Mr Low Thia Khiang referred to the high cost of electricity. Electricity tariffs are set to reflect the economic cost of power generation. Fuel oil makes up about half the cost of producing electricity. We are totally dependent on imported fuel to generate electricity. When world fuel oil prices increase, electricity prices have to follow. However, Singapore Power has tried to moderate the impact by spreading the tariff increase over a longer period. We cannot subsidise the consumption of electricity as this would lead to over-consumption and mask the real cost. The best way to assist low-income families is to provide some income support through rebates and the Utilities Save Scheme which the Government has just announced. Mr Simon Tay and Mr Chiam spoke on the need to secure our water supply through a combination of sources. This is indeed the strategy that we are taking. We ensure that our water strategy is robust by diversifying our sources. First, we will continue to maximise local supply. Already 50% of our land is used for water catchment, and we have implemented stringent pollution control measures to protect these catchments. Secondly, we will try to expand our regional supply. We have a long-term agreement with Malaysia.”
“This will take place in the second half of the year, after the new electricity market begins operating. Work on the new electricity market is in progress and should be ready in the second half of this year. The Energy Market Authority of Singapore to be set up in April will take over the system and market operations of the electricity system from Singapore Power. It will be responsible for the security and reliability of the energy supply. 2.45 pm We will allow consumers to buy electricity from competing retailers in stages, starting with the big customers. Initially, some 11,000 customers who take up 70% of our total electricity demand will be able to do this. By the year 2003, households will also be able to buy electricity from competing retailers. Since the announcement of the liberalisation last year, five new retailers have been licensed and are preparing to enter the market. Mr Leong asked about the import of electricity from our neighbours. This is already allowed, but so far it has only been used for emergencies. However, for system security reasons, the import of electricity from overseas is limited to a maximum of 600 megawatts. We are prepared to allow more import under our new market structure, if these are economic. However, it must not affect our system security and reliability. Mr Inderjit Singh commented on power dips and the need to ensure a reliable supply of electricity. I agree with him that this is an area where more improvements can still be done. Last year, there were a total of 34 dips, two fewer than in 1999. Recent dips have been due to recurrent faults in cable joints in two types of cables. PowerGrid will take all these faulty cables out of service by the end of the year.”
“However, we should always be mindful that consumer protection legislation that is too onerous would increase business costs for both retailers and consumers. And if CASE is agreeable, I would suggest that MTI and CASE jointly lead a task force to discuss ways to strengthen our consumer protection laws, including the possibility of enacting a Fair Trading Act and the means to empower CASE to carry out its role more effectively. Representatives of the task force can come from the Government, CASE and the private sector. Dr Teo has also suggested setting up a new consumer education fund. In 1996, we actually started a funding mechanism where the Government contributed dollar-for-dollar donations made to the CASE Endowment Fund. And I would encourage CASE to seek greater contributions from the community, so as to ensure that CASE continues to remain relevant to the people it serves. On electricity, Mr Leong Horn Kee has asked about the liberalisation of our energy market. This is progressing well. The energy sector is an important component of our economy. Within the broader framework of keeping our business costs competitive, we have to keep our energy market internationally competitive. On 1st April, Singapore Power will divest its two generation companies - Power Senoko and Power Seraya - to Temasek Holdings and reposition itself as the owner of the transmission and distribution system, which is a natural monopoly. Singapore Power will be regulated and will not be allowed to participate in the competitive parts of the electricity business. Temasek, in turn, will divest all its three generation companies - Power Senoko, Power Seraya and Tuas Power - with no limit on foreign ownership.”
“Sir, let me deal first with the Fair Trading Act. I can understand Dr Teo Ho Pin's concern about consumer protection but, truly, the best advice anyone can give to the buyer is still the legal maxim caveat emptor or "let the buyer beware". We should do well to remember the meaning of the cliche "There's no free lunch." Ultimately, if a buyer is not careful or succumbs to a moment of greed, it is very difficult to save him from being cheated or overcharged. And therefore consumer education must continue to be the main pillar or our policy on consumer protection. In this particular area of consumer education, I want to place on record MTI's appreciation of the good work that has been done by CASE. Moving forward, I would encourage CASE to take on an even more influential role. As the natural focal point for consumers to raise their concerns, CASE would be able to sift through all the complaints, and help deserving cases to seek redress through the Small Claims Tribunal and the courts. CASE could then, in fact, be the de facto fair trading office, but separate from Government, so that the work is not politicised. But it would allow CASE to perform many of the watchdog functions of safeguarding and protecting the consumers. These are two important points which Dr Teo and Dr Lily Neo are proposing. I agree that CASE would need more teeth, and sharper teeth, in order to carry out its work. CASE, as well as several Members of the House, has for some time already, sought MTI's support for a Fair Trading Act. The purpose is to prohibit deceptive and unconscionable sales tactics like bait advertising, misrepresentation, as described by Dr Lily Neo, or hard selling, which seems not uncommon among time-share marketeers.”
“There are some countries which are better established. China is in a sense new. Our second largest number of students is from Malaysia. So it is quite well established. In fact, applications are available on the Net, and there are a lot of applications as well. HOUSING AND DEVELOPMENT BOARD FLATS (Cancellation of applications to purchase) 5. Mr Ong Kian Min asked the Minister for National Development (a) from July to December 2000, how many applications for new Housing and Development (HDB) flats have been cancelled by the HDB due to the applicants declining to proceed with their applications; (b) whether there has been any increase in such cases compared to that for January to June 2000; and (c) what are the main reasons for the applicants' decision not to proceed with the purchase. The Minister of State for National Development (Dr John Chen Seow Phun) (for the Minister for National Development): Sir, under the Registration for Flats System (RFS), applicants for new flats are queued based on a first-come-first-served basis to select flats. RFS applicants may request HDB to cancel their applications at any time from application to before taking possession of the flat. The reasons for not proceeding with the flat purchase are varied. It could be that some are now not in urgent need of a flat or that some may have chosen to buy resale flats. The HDB does not require RFS applicants to give the reasons for cancellation of their applications. Between July and December 2000, there was an average of 1,100 cancellations of RFS applications per month. This represents a fall of 45% when compared to the average of 2,000 cancellations per month for the period between January and June 2000.”
“We cannot prevent people from paying what they wish to pay. But our understanding is that the fees charged by this particular body are in the region of 2,100 renminbi, which is about $400, and they are charged only for the successful applications. I wish to remind once more that success depends entirely on merit and any tests taken by these students and candidates are brought back to Singapore and assessed overall. They are not done on the spot.”
“Probably, the best example of such agents is a Government body called the China Service Centre for Scholarly Exchange. This body would put up advertisements on polytechnic education opportunities. These are dissemination of information, and all polytechnics have used this in connection with their recruitment, but they do not employ the agents. The fees are not paid by the polytechnics. And I wish to reiterate the point that the admission to our polytechnics, like many things else in Singapore, is purely by merit.”
“Dr Teo Ho Pin has suggested during the Budget debate last week that we boost the number of construction projects by building new schools and upgrading old ones. The Ministry of Education builds and upgrades schools to meet educational objectives. If these activities provide a welcome stimulus to the construction industry, it will be an added bonus. In the last two years, we have been constructing new school buildings at the rate of about 12 per year. Members would also be aware that in May last year, my Ministry launched the Programme for Rebuilding and IMproving Existing schools (PRIME). Under PRIME, a total of 290 schools will either be rebuilt or upgraded over a period of seven years at an estimated cost of $4.5 billion. Thereafter, we will upgrade schools to the prevailing standard once every 5 years. PRIME will be implemented in 5 phases. There are 96 schools in Phase 1. To date, the construction for 9 of these schools has been completed and construction for most of the other schools is scheduled to complete by the end of 2001. Sir, putting in place the necessary hardware and infrastructure has great influence on total education and children's achievement in school. The Ministry will continue to strive to provide the best school facilities and environment to afford students a broad range of educational activities and programmes.”
“Singapore is also widely acknowledged internationally to be a leader in the use of IT in education. In the recent Second Information Technology in Education Study (SITES), an international study involving 26 other participating countries and economies, including Japan and Hong Kong, Singapore was ranked top in having a clearly articulated policy on the use of IT, the provision of some of the world's best computers and peripherals to schools, and IT training for its teachers. Our students have also won top awards in international website design competitions like Thinkquest Internet Challenge. I now move on to Single Session Programme for secondary schools. Dr Wang Kai Yuen has asked about the Single Session Programme for secondary schools and how these schools are adapting to the single-session system. The implementation of the Single Session Programme is a significant step forward for our secondary schools. It has allowed schools to benefit from greater flexibility in the use of curriculum time and resources, a wider range of enrichment programmes to cater to students of different abilities and family backgrounds, and a more vibrant school culture. The single-session system is still relatively new for many of our schools and MOE has been monitoring its implementation. So far, we are generally pleased with the ways schools have made use of the single-session system to enrich the learning experiences of their pupils. We will continue to provide advice and guidance to the schools in their implementation, and help them to strike a balance between optimising the use of their resources and not overloading our teachers and students.”