S. Dhanabalan
Singapore
“Mr Speaker, Sir, on a point of clarification. I said in my intervention on Tuesday that the general election is the right forum to determine the electorate's support because it puts the issue in a total and correct context.”
“Mr Speaker, Sir, with hindsight, of course, we can be very wise. But since one of the three islands was excluded, it was a substantial reduction in the scope of works. The assessment then, which I agreed with, was that if you called for a re-tender, you would get a substantially reduced tender.”
“To the extent that we can, we should work with countries that have a common interest, to come together and form economic groupings targeted at trade liberalisation. We have started this process within ASEAN under the AFTA Scheme. Economic linkages in groupings like APEC are also growing in significance.”
“Mr Speaker, all these questions make a lot of sense when the events are finished, and you look back. But the officer looking at the case at that time had to deal with the facts as they were at that time.”
“ASEAN countries agreed to publish all the Inclusions and Exclusions lists, as well as the full list of actual tariff reductions. The ASEAN Secretariat had since followed up and released, as scheduled, on 1st November 1993, the publications showing these lists.”
“Kallang Theatre was closed for five months in 1992 for cyclical maintenance and upgrading costing $3 million. This included a major upgrading of the toilets, recarpeting the auditorium, rewiring and repainting.”
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“As they go to Batam or Johor or anywhere else, we are encouraging them to take along with them the Singapore suppliers of parts and services that they are familiar with and suppliers who know the quality and the standards and specifications required by the MNCs. So this again will offer another area of growth for local companies. I think this would partly answer the question of how to equalise the local enterprise with MNCs. But I do not think the Government can really equalise the position in the sense that MNCs come here with their own markets and with their own technology. For the Government to try and enter this field and to try and help local industries to capture the same kind of market or to have access to the same kind of technology will not be easy. But where we can use the MNCs to help the local companies to latch themselves on to the operations of MNCs, of course, we will do so. To the extent possible, we are already doing. Mr Chia asked whether we could give various types of preferences to local companies. I think if he has got specific ideas, we are prepared to explore them. But at the end of the day, we must be quite clear about certain things. An operation must be viable with some technical and other assistance. We cannot make an operation that is basically not viable into a viable one by trying to prop it up with all kinds of subsidized services and funds. That is not a proper use of public funds and resources and will not pay us in the long term. He has also made a suggestion that perhaps tax for small companies should be on dividends and not on profits. It is a rather new idea.”
“They have their office here, sourcing the products from Singapore and from the region, and they bought about $6 billion worth of products. So the MNCs have opened up, whether they are manufacturing here or just merely purchasing here, a lot of opportunities. But we have tried to go beyond just MNCs buying local products. We have tried to see how the presence and operation of MNCs in Singapore can be used to leverage and help local industries. We have introduced the Local Industry Upgrading Scheme. Under this scheme, EDB, together with MNCs, helps local industries to improve their overall efficiency, production planning, inventory control and all the other aspects of manufacturing that go to make up a successful, efficient manufacturer. In the second phase, we will introduce and transfer technology, whether it is new products or processes, from the MNCs to the local companies. In the third phase, to actually jointly produce products with the MNC partners. It is a fairly ambitious scheme and I am very encouraged by the response from the various MNCs. So far, we have 30 MNCs participating in the programme and more than 140 local companies that are part of this Local Industry Upgrading Scheme. Some of them have already progressed to the third phase, which is actually jointly producing products with the MNCs, by a transfer of technology from the MNCs to the local companies. I think there is much more scope in this area which we shall continue to explore and take advantage of. Similarly, there are MNCs who are going to invest in countries around the region because some of their more labour-intensive operations are not viable in Singapore any more.”
“Sir, let me first take up the query by Dr Wong on the progress of the various schemes to help local industries. First of all, the Local Enterprise Finance Scheme. So far, under this scheme, which was started in 1976, more than $2.5 billion has been extended in the form of loans to about 11,600 projects. Last year, 1992, 1,539 projects were approved for a total sum of $339 million. So this is a fairly successful scheme. This scheme has been extended to local companies which venture overseas. This new feature to the scheme was introduced only in November last year. So it has just got going and I am informed that so far only one project has been approved for $1 million. But I am sure this will also pick up steam as more and more local firms venture overseas. The other important scheme is the Local Industry Upgrading Programme. This is related also to the position of MNCs in Singapore. I think sometimes we tend to look at the MNCs as taking away something from local industries, or sometimes there is a tendency to think that because MNCs are so well represented in Singapore, they have somehow retarded the growth of local enterprises. I think that is not at all true. In fact, the type of products that MNCs make and the markets to which they sell are such that I do not think that local companies would have been able to break into so easily. But the presence of MNCs has opened up a whole host of opportunities for local companies, because the MNCs do buy both products, parts and services, from local companies. In 1991 alone, local sourcing by MNCs amounted to over $10 billion. Of course, we also have foreign companies which have their international purchasing organisations in Singapore.”
“Sir, there is, in fact, already a Committee on Inflation and Profiteering. It was set up in 1973 during the height of the oil shock and the very high increase in commodity prices. We will resurface this Committee. Yes, the Permanent Secretary of MTI is a member of the Committee. When it was set up, there was no Ministry of Trade and Industry. But I suppose today, the responsibility will fall within the Ministry of Trade and Industry. The Ministry at least will track all the various measures to ensure that they are coordinated and that everybody is pulling in the same direction.”
“A lot of things can happen in five years. So I think this needs to be looked into in some detail before I can give a specific response. Mr Robert Chua Teck Chew: Sir, I thank the Minister for his response. I have just two suggestions. I met some top civil servants who have actually moved from the civil service to the private sector. He was heading one of the largest Government departments. And he said that after the stint in the private sector, if he were to go back to the Government department, he would run it differently. So there is a suggestion to maybe second some of the top people to work in the private sector for a short while. That would be one way of letting them learn the ropes of the private sector. The other point is the council on international competitiveness. I hope the Minister will look into that because it would be useful for us to work together and make sure that the manufacturing sector will not go down.”
“And until we actually begin to work together in concrete projects and meet the difficulties that will arise in working together, we will really not be able to even identify what are the problems. But there is a deep mindset problem now and I have talked to the heads of quite a few technical departments as well as the Chief Executive Officers of these statutory boards to get them to come up with specific ideas on how they can work with the local enterprises. Many of them, over the years, have had experience working with local sub-contractors, suppliers, fabricators, and so on. I am sure that there must be quite a few of these local operations that, with the help of the Government, can go overseas to bid for jobs and with the backing of the Government organisation have the credibility to win the contracts. So they will be looking into this and we hope that we will be able to set in train at least some demonstration projects, maybe not big projects that can change the picture overnight, but at least something that will get the process started. Mr Chua also suggested that we should consider a council for international competitiveness. I will be prepared to give this consideration. We are, of course, all the time tracking our international competitive position. But whether a formal council together with the businessmen in Singapore and academicians will help, I do not know. But, certainly, I think it is an idea worth exploring further. He also asked whether the notices for leases before they are expired could be extended from three to five years. I thought three years is quite reasonable. But if he wants five years, maybe I can ask JTC to look at it. But he must realise that to give five years' notice means also committing yourself to a new rental.”
“Sir, can I just answer two or three points that were raised by Mr Robert Chua which I did not answer just now? First of all, he suggested that we have more ministerial-led missions overseas. We will certainly look into that. But Ithink Ministers should not be overtaxed. They have to stay home and do work and not be all the time on the move overseas. But certainly, we will try to do all that is possible. He also made the point that Government and private sector should cooperate more, especially in the area of investing overseas. I agree with him entirely. Over the years, Government departments and statutory boards have built up a lot of experience and we are well-known in certain areas of operations, for example, traffic management, port operation, airport operation, garbage disposal, and so on. We have actually invested billions of dollars in these operations over the years and we have, within the public sector, a lot of expertise in design, in drawing up specifications, in contract supervision and in the actual operation of these types of activities. The weakness, of course, in the public sector is that, by its very nature, it is not good at identifying good deals, or in making a commercial risk assessment, or actually negotiating a commercial deal. But this weakness of the public sector is where the private sector can make a contribution because it is precisely in these areas that they are strong. I think there is a lot of scope for the private and public sectors to get together. We are looking into specific areas of programmes where they can work together. We have to try and systematize it. But, of course, there are some problems to overcome. One is the deep-set suspicion of the public sector against the private sector and vice versa.”
“As far as the length of lease is concerned, the Government does not intend to sell industrial land freehold or on leases beyond 60 years. Leases of 60 years are long and, in fact, long enough for developers and industrialists to make adequate returns from their investments. Unlike housing use, for example, the nature of industries changes very considerably over 60 years. We have found the need to upgrade and rejuvenate our older industrial estates which are not even 30 years yet. Thus, we expect that 60 years is a reasonably long cycle before the land lease should revert to the state for redevelopment to meet the needs of future industries. BUSINESSES VENTURING OVERSEAS (Provision of financing and political risk insurance facilities) 17. Mr Robert Chua Teck Chew asked the Minister for Finance (a) what support, in terms of low interest rate financing, substantial political risk insurance and reinsurance facilities, the Government intends to provide to local manufacturers, companies and businesses venturing overseas and (b) whether the Government is considering the setting up of an export and import bank (EXIMBANK) to provide such financing and political risk insurance facilities.”
“Mr Speaker, Sir, the recent tenders of industrial land were intended to increase private sector participation in industrial land development. They were not intended to provide land for individual manufacturers for their own use. Currently, only 14% of industrial space in Singapore is held by the private sector. The Government's intention is to increase this proportion by tendering out up to one-third of the annual release of industrial land. Such tenders will also provide a more accurate indication of industrial land prices. The land parcels tendered out in the recent exercise were similar in size to those sold by Land Office to JTC. This was intended to provide a benchmark for the prices of land sold by the state to JTC. In the recent exercise, six hectares in Kaki Bukit and two adjacent lots of 10.2 hectares each in Tuas were tendered out. The results of the tender are being evaluated. As part of the evaluation, we will consider whether the land parcels offered for sale in the tender were too large. Smaller parcels may be popular with developers since the risk element in holding the land is smaller. However, parcels of land tendered out should be large enough to allow for optimal land use and permit developers to enjoy economies of scale in infrastructural provisions such as drainage and utilities. If manufacturers want smaller industrial facilities for their own use, they can either buy or rent standard factories from JTC, as I mentioned in my previous answer. JTC provides a wide range of standard factories ranging from 910 square metres to 4,000 square metres for sale. Manufacturers can buy, in addition to these standard factories, land on 60-year leases from JTC to put up their own buildings.”
“Mr Speaker, Sir, JTC develops and manages four categories of industrial facilities, ie, standard factories, flatted factories, terrace workshops and prepared industrial land. The standard factories and terrace workshops are offered for sale on long-leases. At present, 84.8% of standard factory tenants and 36.7% of terrace workshop occupants own their facilities. In fact, they are not tenants, they are owners. The remaining who are sitting tenants and wish to purchase the facilities can apply to JTC to do so. JTC is prepared to sell complete blocks of flatted factories and has done so. JTC will not, however, sell individual units within a multi-tenanted block of flatted factories because of the difficulties of managing both sold and rented units in the same block. Moreover, tenants wishing to expand their operations will have less flexibility to do so as they may not be able to buy contiguous space from existing owners. JTC's share of the flatted factory market is 22% compared with 60% for the private sector. Therefore, the private sector can more than meet any demand for flatted factory space both for sale as well as for rental. JTC leases out prepared industrial land on an annual rental basis for 30 years, extendable to 60 years. JTC does offer, in response to requests by companies, the option to buy 60-year leases by paying an upfront premium instead of annual rental payments. Since the payment of an upfront premium ties up large amounts of capital for long periods, only a few companies have chosen this option. TENDERS FOR INDUSTRIAL LAND 16. Mr Chia Shi Teck asked the Minister for Trade and Industry if future tenders for industrial land can be in smaller plots and on a 99-year lease to enable smaller manufacturing companies to invest in their own premises.”
“Mr Speaker, Sir, to remain competitive, Singaporean workers must continually learn new skills and upgrade themselves. Female workers form 40% of our workforce, and are no exception. A wide range of courses such as BEST (Basic Education for Skills Training), WISE (Work Improvement through Secondary Education) and MOST (Modular Skills Training) are available to train workers at the Institute of Technical Education, the National Productivity Board as well as in many private sector schools. These courses meet the training needs of our female workers. A recent survey by the National Productivity Board shows that the participation rate of female workers in training programmes is higher than that for male workers. In 1991, 44% of our female workers participated in on-the-job training, and 32% undertook off-the-job training, as compared to 40% and 30% respectively for males. We will continue to provide more training opportunities and in greater varieties for all workers. This is because workers face different demands on their time, such as commitment to their families and also work schedules. We have introduced the Fast Forward Programme, a video-based training programme by NPB, which provides the flexibility for workers to learn at home. VOID DECK AT BLOCK 143, POTONG PASIR AVENUE 2 (Use for political purposes) 14. Mr Chiam See Tong asked the Minister for National Development whether planning permission has been granted to the People's Action Party Community Foundation to utilise part of its premises at the void deck of Block 143, Potong Pasir Avenue 2 for political purposes and, if so, if he will specify the rationale for allowing such change of use.”
“That depends on where and when it was acquired. I am sure the lands that were acquired in the 1960s were very, very cheap. They were swamp lands and they had to be reclaimed, and infrastructure had to be put in. So if he has a specific point to make, I suggest he puts it in the form of a proper Question. FEMALE WORKERS (Plans to upgrade skills) 13. Dr Kanwaljit Soin asked the Minister for Trade and Industry what plans are being implemented to upgrade the skills of female workers.”
“Mr Speaker, Sir, I have already stated that the cost of acquisition is one of the factors. Because the cost of acquisition lately has gone up, therefore, rentals have gone up.”
“Excluding petroleum, Singapore's manufacturing sector has the highest rate of return at 28%, compared to around 6-16% for the ASEAN countries and the other NIEs.”
“In addition, existing lessees of industrial land have had their rental revisions capped and the majority of leases will continue to pay at below market prices, especially those on the 5-year rental revision scheme. The increase in rental payments must be considered in the context of the profitability and competitiveness of our manufacturing sector. Although our land rentals are higher than our neighbouring countries, they are comparable, for example, to those in the Tai Po Industrial Estate in Hong Kong. Since we do not have an advantage of cheap industrial land, we need to be competitive in other factors of production and ensure that we remain competitive on an overall basis. The Unit Business Cost (UBC) index for manufacturing measures the total business cost per unit of real output in the manufacturing sector. In the UBC basket, rentals form only about 4%. Other major cost components are wages which form about 47% and services costs which constitute the remaining 49%. The increase in the UBC index has moderated. It rose by 6.7% in 1990 and 4.8% in 1991. For 1992, the increase has moderated even more to 1.3%. Our manufacturing firms continue to be internationally competitive and earn a high rate of return. According to the Survey of Current Business by the US Department of Commerce, US investments in Singapore have consistently earned one of the highest returns. For 1991, the overall rate of return for US investments in all sectors stood at 29% in Singapore, compared to 22% for Hong Kong and 19% for Taiwan. Indonesia and Malaysia registered higher returns at 49% and 31% respectively. This was largely due to the returns on petroleum investment.”
“Mr Speaker, Sir, Singapore has limited land resources compared to our neighbouring countries. We have therefore to ensure that industrial land is used efficiently by industries. JTC's land prices are therefore based on prevailing market rates. But JTC's rates are lower than the market because it recognizes that it has a developmental role to play in ensuring that land costs do not erode the competitiveness of our industries. JTC takes into account current economic conditions, infrastructure provided, performance of the manufacturing sector and the state of the property market when reviewing annual rentals. JTC's land lease prices are determined by the costs of acquiring land. In the past, the price of industrial land was very low, hence land lease prices set by JTC were lower. Over the past few years, JTC has had to pay higher prices for acquiring new land. Lease prices have therefore increased. To ensure that industrial land prices reflect market prices more accurately, we have implemented a programme of tendering out industrial land sites. Two parcels of industrial land at Kaki Bukit and Tuas have been tendered out for private development of fairly large industrial parks. This will reduce JTC's monopoly of industrial land development. As far as rented factory buildings are concerned, JTC has decided to freeze rentals for 1993 because the rental market has softened. JTC's rentals are currently 10%-15% lower than market rates. Regarding new land leases, prices have been increased by about 5% to reflect the rising costs of land acquired by JTC, but this is still 9% lower than JTC's assessed market values.”
“The amount of fines and composition fines collected by HDB for the Financial Years 1990/1991, 1991/1992 and 1992/1993 (up to June) are as follows: FY 90/91 $23,031,678 FY 91/92 $31,010,901 FY 92/93 $ 8,219,891 (up to June 92) FINES COLLECTED BY THE MINISTRY OF THE ENVIRONMENT 3. Mr Ling How Doong asked the Minister for the Environment what was the total amount of fines and composition fines collected by his Ministry for the years 1990, 1991 and 1992 (up to June).”
“(a) The floor areas and rentals of the Education Centres at Block 328, Hougang Avenue 5 and Block 1, Hougang Avenue 3 are as follows:- Rental Education Centres Floor Area Per Month i) Block 328 577.1 sq m $717.25 Hougang Ave 5 ii) Block 1 246.0 sq m $304.00 Hougang Ave 3 The Education Centres are run by an approved non-profit Foundation, and thus are charged rent at a concessionary rate . (b) The estimated market rents are as follows:- Rental Education Centres Per Month Block 328 $7,416 Hougang Ave 5 Block 1 $2,681 Hougang Ave 3 FINES COLLECTED BY THE HOUSING AND DEVELOPMENT BOARD 2. Mr Ling How Doong asked the Minister for National Development what was the total amount of fines and composition fines collected by the Housing and Development Board for the years 1990, 1991 and 1992 (up to June).”
“The land next to the Simei MRT Station is intended for the development of shophouses and a wet market. HDB will tender the site for sale to private developers next month. The successful tenderer will be given up to four years to complete the development. NEIGHBOURHOOD POLICE POST IN BISHAN NORTH ESTATE 24. Encik Ibrahim Othman asked the Minister for Home Affairs whether his Ministry intends to set up a Neighbourhood Police Post in Bishan North Estate and, if so, when it will be completed.”
“Based on the Master Plan, the vacant land fronting Jurong East Street 31 is earmarked for two uses. It will be used partly for an educational institution and partly for residential development. The timing for the development of the sites will depend on demand. CONSTRUCTION OF COMMERCIAL SHOPHOUSES AND A WET MARKET NEXT TO SIMEI MRT STATION 23. Mr Teo Chong Tee asked the Minister for National Development whether the construction of additional commercial shophouses and a wet market next to the Simei MRT Station will be expedited.”
“Mr Speaker, Sir, that is obviously one of the main considerations - whatever we build, whatever improvements and designs we provide in HDB flats should be within the affordability of Singaporeans. We constantly keep track of this and if the Member had looked at an article in the Business Times of 16th July, which is based on some facts given by the HDB, he would have noted that in spite of the increased price, the monthly income required to afford these flats - calculated on the basis of their CPF contributions - is, in fact, still much less than the average monthly household income. So affordability is an important criterion. We try to make sure that flats are built and priced in such a way that they continue to be affordable to Singaporeans. But what we cannot do is to build flats and price them in such a way that everybody can afford an Executive flat. That is not possible. There are 3-room, 4-room, 5-room and Executive flats. We provide the whole range. People must choose the flat that they can afford. We cannot promise to build the biggest flats in the best area and make them affordable to all Singaporeans. WET MARKETS (Selling of stalls to existing stallholders) 3. Dr Wong Kwei Cheong asked the Minister for the Environment whether the Government has any plans to sell the stalls in some selected wet markets to the existing stallholders.”
“Just as people would not compare developments in the private sector over different periods and in different places, I think people must get used to the idea that HDB is now building flats which are different. Every contract is virtually different because it takes into account location and builds in improvements that the HDB has tried out. In spite of the increased prices, it is very clear from the applications that people do value location and design and are prepared to pay for it. When we compare the general increase in prices, we tend to lump together all the flats offered in a quarter. Many of the flats offered may be in the city area and the prices here are high. They can be as much as one-third more than similar size flats in the outlying new towns. In spite of that, applications are also high. In the mature estates, for example, in Queenstown and Geylang, for every flat there are almost seven applicants. In other words, the total number of applications was seven times the number of flats that we offered in spite of the fact that the prices were about one-third more than elsewhere. As regards design, Members are aware that in the last quarter, we offered, for the first time, flats designed by private architects and built by contractors for the HDB. These prices were about 15% higher than the HDB-designed flats. Yet the applications were 18 1/2 times more than the number of flats offered. So people are prepared to pay for design. But if we get the feedback that people do not want better design or good locations, then of course HDB can go back to smaller flats, cheaper designs and poorer finishes. If people want that and that is the kind of feedback we get from the demand pattern, then we will go down to building such flats.”
“Mr Speaker, Sir, I do not want to go into all the advantages of the new booking system over the old waiting list system. The system is working well and people know at the time of application whether they are going to get a flat within a very specific period. Under the old system, they just put their names there and they did not know when they were going to be offered, where they were going to be offered, and what price they were going to be offered. All these uncertainties are removed in the new booking system. My view is that it is a better system, both from the point of view of the buyer as well as from the point of view of HDB which has to build these flats. It has got a better idea as to what to build and where to build these flats. Increasing prices of HDB flats, yes, some concern has been expressed. But I think it is very important for Members to inform their constituents and the general public that when we talk of changes in the prices of HDB flats over a period of time, and when people talk of a 4-room flat going up by 20-30% in price, we are not talking about the same product or the same type of flat. HDB is not like McDonald's. You can go to any McDonald in Singapore, it is the same Big Mac that you are going to get, the price is the same and I assume that what you buy today will be the same as what you buy a month or a year from now. Each HDB development is different It is in a different location, it has got a different orientation and it has got a different design. So you cannot compare, say, a 4-room flat built one year ago in Chua Chu Kang with a 4-room flat offered now in Tampines. They are not the same thing.”
“As demand for flats in Tampines New Town is relatively high, those who apply for 5-room and Executive flats in Tampines may have to wait a little longer. Generally, they should be able to book a flat after three to four ballots. As the Revised Balloting Scheme was implemented only recently and is working satisfactorily, it would be premature to modify it further. HDB will continue to monitor demand for HDB flats and will step up its Construction Programme for new flats as much as possible, to further reduce the waiting period for applicants.”
“Mr Speaker, Sir, demand for all categories of HDB flats has increased in recent years. In 1989, HDB received a total of 32,800 new applications for 4-room and larger flats. The number of applications increased to 35,100 in 1990 and 48,200 in 1991, an increase of 47% over the three-year period. This increase is due to the increasing number of applicants who are upgrading to bigger flats. Demand for 5-room flats was especially buoyant, with the number of applications for 5-room flats nearly doubling over the last three years, from 10,100 in 1989, to 11,300 in 1990, and 19,200 in 1991. Over the same period, demand for Executive flats also rose but at a lower rate of about 26%. There were 7,400 applications in 1989 for Executive flats, 8,200 in 1990, and 9,300 in 1991. HDB has therefore stepped up its Construction Programme for new flats over the past three years. But such increase in construction is constrained by the capacity of the construction industry as a whole. It has to be done gradually so as to maintain quality and not overheat the construction industry and push up building costs. To reduce the waiting period for certain groups of flat applicants, the balloting system for allocation of flats was modified at the beginning of this year to give priority in the allocation of flats to: (i) new households, in preference to upgraders; and (ii) repeatedly unsuccessful applicants, in preference to first-time applicants. Following this change, new households who apply for 5-room and Executive flats in new towns under development such as Woodlands, Chua Chu Kang and Jurong West, are generally able to book a flat after two to three ballots, ie, about six to nine months from first application.”
“Mr Speaker, Sir, I cannot recollect the name of the person who has been engaged by the PUB. There are two studies going on. One is the PUB study on the impact of the proposed golf course and, I mentioned the other study that is being done by the National Parks Board. I cannot tell the Member the name but obviously before they were selected we went through their qualifications. If the Member wants, I can supply him the name later.”
“Mr Speaker, Sir, the hon. Member is probably referring to the Public Utilities Board's (PUB) proposal to develop a golf course at the Lower Peirce Reservoir. This is still at a very preliminary stage as PUB has not submitted it to the Chief Planner for planning approval. The PUB has commissioned an "environmental impact study" to determine the impact of the project on the ecology of the area. If the study shows that the golf course will cause extensive damage to the nature reserves, it is unlikely that the Chief Planner will approve it. I would like to assure the House that my Ministry is as aware as anybody else of the need to protect our nature reserves. Despite our limited land resource, we have set aside some 2,000 hectares of land in the Central Catchment and Bukit Timah areas as gazetted Nature Reserves. Currently, the National Parks Board is conducting a physical and biological survey of the nature reserves. This survey will provide National Parks Board with a comprehensive data base on the reserves' physical features and animal and plant life. The survey findings will be used to identify and preserve core areas with the richest concentration of animal and plant life. Through proper planning, National Parks Board can tap the full potential of our nature reserves for educational and recreational use with minimal impact on areas of greatest ecological value.”
“Sir, I did answer. It is not the flat. The flats are subject to levy. I am talking about shops. For shops, I have made it clear that there will be no levy. 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 S. Dhanabalan]. Bill considered in Committee; reported without amendment; read a Third time and passed. TOWN COUNCILS (AMENDMENT) BILL Order for Second Reading read. 1.44 pm”
“So the necessary changes will be made in the memorandum of lease. Dr Vasoo has once again raised the plight of the old estates. All I can say is that in the scheduling of the upgrading in the different precincts, the age of the estate or the precinct will definitely be an important factor. It does not make sense for us to go and upgrade something that was completed five or six years ago. This will be a very important factor. As to whether we will increase the tempo, yes, if the programme goes well and the construction industry can cope with the increased tempo, we will increase the tempo. I have just given a rough idea of 10 to 15 years. It does not mean that Tiong Bahru will be upgraded only at the end of the 15 years. It could very well be next year. Dr Vasoo asked whether there are any other plans or package programmes which can run parallel to the general upgrading programmes. Yes, in fact, Town Councils can put up proposals so that some of the items that we have in mind for upgrading can be done quite separate from the general upgrading programme, and we will consider them. I think I did mention this also in the House sometime ago in answer to a question that some of the items in the Upgrading Programme can be done much earlier in the precinct than are scheduled under the general upgrading programme. So Town Councils can put up their proposals and we will certainly look at them. Sir, I think I have answered all the points.”
“We have a suggested list, but that can be changed, and this would be done in full consultation with the Town Council. He also asked whether it is proper for HDB to execute instruments on behalf of the purchaser. I was myself very surprised to hear from the HDB that there are so many thousands of people who have not executed their leases and their mortgages. The trouble is that once they have collected the keys, they think everything is over and they just do not turn up, and they have got a thousand and one reasons why they are not free to come and sign the documents. It would not happen anymore. For all the new flats that are being sold, the keys will not be given until they sign the documents. But for the older flats, we need this clause in the Bill to go ahead and execute the mortgages and also register the titles. Very often the lender, for example, a bank in the private sector, would ask the borrower to sign a document giving the bank the authority to execute the mortgage. So that is not unusual. I think where probably it is a little more unusual is where HDB will have to execute the title part of it. But we have to do it because these people just do not want to come. I think they have got such a lot of trust and faith in HDB that their flats will not be re-possessed that they just do not bother. So we want to regularise it, but this is a one-time process. For all the new flats, we have a system which will make sure that this does not happen again. Mr Lau Ping Sum asked about proceeds of fire insurance and some of the conditions relating to re-possession of shops. I have already asked HDB to look into this. I agree with him entirely that the HDB, having sold the shop, should not feel that it is entitled to the proceeds of any fire insurance payments.”
“We are trying to restrict the number of coffeeshops on the ground floors of HDB flats because coffeeshops operate late, they create a lot of noise and heat, and they affect the quality of life of residents in the block. That will be one of the considerations that planners will have when a change of use is applied for. But the change of use applications will apply not only to the HDB shops but also the shops in the private sector. HDB itself would not control the type of business they can conduct. A sitting tenant can rent out the shop. In other words, he can just treat it as an investment. He can sell it to anyone without restriction. There will be no levy on any profit that he makes and there is no minimum time that he has to retain the shop before he can sell. If he wants to do certain things to the shop such as renovation and so on, he would have to apply for permission just like any owner of any shop in any private building would have to. It is not something special. We would want to know what kind of renovation he wants to do, what kind of changes he intends to do, because it might have an implication on the structure of the building. So those things are no different between the HDB shops and those in the private sector. I think I have answered all the questions that Mr Chiam has raised. Mr Low said the cost was not clearly spelt out. When we declare a precinct for upgrading, we will discuss with the Town Council what are the items that we propose, and the cost of the items. The Town Council can have full discussion with the HDB, together with the residents and the grassroots leaders. As I have said, we do not have any pre-conceived notion as to what should be there and what should not be there.”
“Dr Tan suggested an alternative form of upgrading. I think he really meant not so much an alternative, but something that can run parallel to the proposed upgrading. The idea and principle is acceptable. In fact, we are doing it. In the older areas where there are many 1-room blocks, we have cleared the 1-room blocks, demolished the buildings, and we will be building new flats there. That is one kind of upgrading that we are doing. In fact, in the older HDB estates where the people who are living there have also got older, we are trying to renew their estates by redeveloping parcels that are available, or as a result of demolition of old 1-room blocks, to bring younger people into their estate. We have not yet thought about acquiring and demolishing sold blocks. So far, we have confined this programme to rental blocks. But I would not rule it out. There may be instances where either the land may be so valuable or it may not be worth upgrading an old block, where it may be better to pay off the owners and then knock the place down and redevelop. And of course, his idea of trying to give them some sort of priority for allocation of flats within the vicinity is something that we will consider. Mr Chiam raised a number of points, all of them, I think, relating to sale of shops. All the points were in fact covered in the press briefing that we had when we announced the sale of shops. But I would repeat the points. The shops will in almost all features be like shops in any commercial centre. The type of business is not controlled. They can do any type of business, provided it is something that the planners would approve, which also applies to private commercial developments. For example, we would not normally allow, say, a provision shop to be converted into a coffeeshop.”
“The other list of items where residents want something extra for which they are prepared to pay 100% of the cost, that again is an item that is generated by the residents. And that again is subject to the poll. So if a balcony or an additional bathroom or some other improvement is not needed or not felt as being of value by the residents, then we would not include them. This is the whole purpose of sharing the cost. If we do not share the cost, the HDB can then just do anything and people will say, "Well, you do what you like, because we do not have to pay." But when they share the cost, they are very concerned that the items are items of value to them. So there is long discussion, and there will be long discussions. And no list of items will be just foisted on the residents without discussion. I agree entirely that we must only do what the flat owners want and not what the HDB or anybody else think that they should want. Barrier-free environment, yes. In the upgrading, we will as far as possible include the latest standards of barrier-free provisions so that old people and disabled people can move freely. And in fact in some of the blocks where we are installing new lifts stopping on every floor, this is a very important barrier-free feature. Property tax - when the value of the property goes up, the property tax must go up. I do not know how much it will go up. HDB owners in fact pay very little property tax. And if it goes up at all, I expect it to be marginal. Whether the lease can be extended by another 99 years - I think when I first spoke on this in 1989, I explained why it could not be done. Seventy-odd years, which is about the minimum that most of the HDB lessees have, is more than enough to last two generations.”
“Specific items are those items which I have mentioned which are considered as items required for various purposes like fire fighting or change of lift car cages and so on, and the cost will be paid for by the HDB. And because HDB will pay the full cost, there is no need to conduct a poll. But these items will be done at the same time as far as possible with the general upgrading. This is, as I said, to minimise disruption and inconvenience to residents. Dr Tan made the point that it is important for HDB to tell Town Councils in advance, of the programme and to itemise the programme. I agree with that entirely. In fact, this is exactly what we have done with the 2demonstration precinct. What happens is that the HDB or, if a precinct wants to use a private sector architect they can also do so, the architect would prepare a list of suggested upgrading items within the budget. In the case of the demonstration precinct, we have discussed these items with grassroots leaders and residents for about a year. And they know exactly what the different items are and what they will cost. And they made many suggestions which is part of the reason why in the demonstration precincts the programme has been a little delayed. Having taken the suggestions into account, we prepare a final general upgrading package which is subject to the 75% poll of the residents in the area. The list that is submitted to residents for them to decide is not something that is decided by the HDB. It is something that is worked out after very long discussion between the grassroots leaders, residents and the HDB. And then it is subject again to the poll where 75% must support.”
“Sir, I thank the Members who have made various comments and supported the Bill, and who also raised questions which now give me an opportunity to clarify for Members of the House as well as for Singaporeans as a whole what this Upgrading Programme and sale of shops are all about. I will take the points in the order in which they were raised. First of all, Dr Tan Cheng Bock's points. He asked whether the precincts, which I said in my speech will be between five and seven blocks, can vary in size and whether single blocks can be upgraded. The precincts can be of various sizes. In fact, in the demonstration precincts, they range from three blocks up to eight or nine blocks. I do not think it is likely that there will be a single block which will be so distinct and separate from the rest that it can be upgraded on its own. But the size of the precinct is flexible. It will depend on the physical features on the ground because what we are trying to achieve is to create a precinct which will have a distinct identity so that the residents in the precinct can have a sense of belonging to that area. In order to create a sense of belonging, there must be certain physical boundaries which also will serve as psychological boundaries creating this sense of belonging to the area. So we would take into account the particular factors in the estates and be very flexible. This number of five to seven blocks is just a broad indication. But we would want to avoid doing block by block for the reasons that I have stated. I think I ought to correct a point made by Dr Tan. If I heard Dr Tan right, he said that specific upgrading cost will have to be borne by the owners. The general upgrading is subject to contribution from both the owners as well as the Town Council.”
“To enable the sale of these 5,300 units of shops to sitting tenants, a new section 48A is proposed. This will discharge HDB from such a restrictive covenant in so far as the shop units are concerned. A substantial number of HDB lessees and mortgagors fail to come forward to sign the necessary lease and mortgage instruments despite many reminders. At present, HDB has nearly 11,900 unexecuted leases, some dating as far back as 1978. Of these unexecuted leases, about 10,700 also have unexecuted mortgage instruments. HDB has to spend a great deal of time, effort and money every year to remind these lessees and mortgagors to come forward to execute the necessary legal instruments. This is unproductive and a waste of public funds. The new section 48B empowers HDB to execute a lease or mortgage instrument on behalf of a purchaser of an HDB flat should the purchaser fail to do so. Sir, I beg to move, Question proposed.”
“They will also minimise disruptions to the daily life of residents in a precinct. HDB will have to work out very carefully and adhere strictly to the implementation schedule for upgrading works. Each flat owner will be informed in advance of the exact date and duration that works will be carried out within his flat. A flat owner can then arrange for someone to be present in the flat when work is being carried out within the flat. Any delay in carrying out upgrading works in one flat will upset the schedule for the remaining flats to be upgraded. It is therefore necessary to have this section to give HDB officers the authority to enter flats where the owners refuse entry or for some reason are not prepared to allow the works to carry on. The Minister is also empowered under the new section 65K to make rules to give effect to the various provisions in the new Part IVA of the Housing and Development Act. The new section 65L specifies that the provisions under Part IVA do not in any way prejudice HDB's existing right under the Housing and Development Act to enforce breaches of tenancy, mortgage instruments, etc. In addition to the provisions relating to the Upgrading Programme, the Bill includes an amendment to facilitate the sale of tenanted shops to sitting tenants, and an amendment to expedite execution of lease and mortgage instruments. These are covered by clause 2 of the Bill. Leases of HDB flats sold before November 1983 contain a restrictive covenant prohibiting the use of any unit in the block for commercial purposes. Of the total 12,000 existing tenanted shops earmarked for sale to sitting tenants, about 5,300 are located in blocks with flat leases containing this restrictive covenant.”
“Lessees who are 55 years of age or older and have no employment, investment income or CPF savings, may be allowed to defer the instalment payments with interest until they sell or transfer their flat. There may, however, be some lessees who, despite being able to pay, deliberately delay or simply refuse to pay up. The new section 65F empowers HDB to impose interest and a penalty for late payment on such lessees. HDB is also empowered under the new section 65H to sell off a flat to recover the improvement contributions if they remain unpaid by such lessees. New section 65I enables HDB to recover any unpaid improvement contributions in any court of competent authority or in any Small Claims Tribunal. "Space-adding" items, such as an utility room, bathroom or service balcony, will result in an increase in the floor area of the flats. The flat owner must be given proper title to the additional space created. Normal conveyancing practice requires flat owners to sign a number of legal documents and pay the necessary stamp and legal fees to vest the title. The new section 65G simplifies this procedure to involve only HDB and the Registry of Titles. HDB will lodge the necessary legal documents with the Registrar of Titles. The flat owners will not be required to sign any legal documents, or pay any stamp or legal fees. The new section 65J empowers any officer or person authorised by HDB to enter any flat or building within a precinct to carry out upgrading works within the flat or building. Those who wilfully obstruct the authorised officer or person will be guilty of an offence, and will be liable to a fine on conviction. The powers of entry into a flat provided by new section 65J are necessary for the smooth implementation of upgrading works.”
“We want to make sure that only improvement works that are valued by flat owners and Town Councils will be carried out under the Upgrading Programme. Affected flat owners and their respective Town Councils will therefore be required to share in the upgrading cost. The new section 65D allows HDB to recover from flat owners and Town Councils their share of the cost of upgrading works. I want to assure Members that flat owners and Town Councils will be well informed of their financial obligations, viz, the percentage and dollar share of upgrading costs before polling begins. The amount to be paid, termed as the "improvement contribution", by each flat owner and Town Council will be determined by HDB. From time to time, it might be necessary for HDB to carry out certain improvements in a precinct which are in the public interest, such as the installation of dry risers for fire fighting, upgrading of electrical load and replacement of lift car cage. Such improvement works should be carried out, wherever possible, together with upgrading works that require the majority support of flat owners. This will minimise disruptions to residents. The new section 65E empowers the Minister to direct HDB to carry out such improvement works in a precinct, without conducting a poll. HDB will bear the full cost of such works. To help flat owners pay their share of upgrading cost, HDB will provide loans repayable in instalments, by cash or from CPF savings, over a 5- or 10-year period. Arrangements have also been made to help lessees in genuine financial hardship, eg, those who are unemployed. Based on the merits of each case, HDB will consider allowing such lessees to defer their instalment payments with interest for a certain period of time.”
“In particular, the new section 65A defines the key terms relevant to the Upgrading Programme such as "precinct" and the various types of "upgrading works". A distinction is made between "specified upgrading works" which affect only specific blocks in a precinct, and "general upgrading works" which cover improvements to all the blocks and the common property in a precinct. The new section 65B empowers the Minister, after consulting HDB, to declare any HDB housing estate, or any part of it, to be a precinct for the purpose of carrying out upgrading works. We will not impose the Upgrading Programme on flat owners. We will be guided by their views. Flat owners in the precinct will decide whether or not to proceed with the upgrading works. The new section 65C requires HDB to conduct a poll of eligible flat owners within the precinct to find out whether or not they want the proposed upgrading. HDB may, with the approval of the Minister, proceed to carry out the proposed package of "general" upgrading works for the precinct if the poll shows that 75% or more of eligible flat owners in the precinct agree to the carrying out of such works. HDB may also carry out "specified" upgrading works affecting a specific block if 75% or more of eligible flat owners in that block are in favour. As Members are aware, HDB has conducted polls in Marine Parade and Kim Keat, and an overwhelming majority of flat owners there have supported upgrading. The new section 65C also regularises such polls conducted prior to the coming into force of the amendments proposed in this Bill. The new section 65D authorises HDB to carry out upgrading works in a precinct6, after approval has been given by the Minister, in such a manner as HDB thinks fit.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The main aim of this Bill is to enable the Housing and Development Board (HDB) to implement the Upgrading Programme for public housing estates. The Bill also includes amendments to enable HDB to sell its tenanted shops to sitting tenants, as well as to expedite the execution of lease and mortgage instruments. Mr Speaker, Sir, on 11th July 1989, I informed the House that HDB will implement a major programme, spread over 10 to 15 years, to upgrade the quality of older HDB flats and improve the common areas and open spaces within HDB estates. The Upgrading Programme will be carried out precinct by precinct. Each precinct will be a small area, comprising between five and seven blocks, which residents can identify with, and relate to, as their own. The first phase of the Upgrading Programme involves six "demonstration" precincts in Marine Parade, Kim Keat, Telok Blangah, Ang Mo Kio, Clementi and Lorong Lew Lian. By the end of next month, residents in all six precincts would have confirmed whether or not they want their precinct to be upgraded. HDB expects to commence upgrading works in the demonstration precincts starting from the end of this year. The Upgrading Programme will be extended to other precincts in phases over the next 10-15 years. The Housing and Development (Amendment) Bill sets out the legislative framework necessary for the smooth implementation of the Upgrading Programme. Clause 3 of the Bill introduces a new Part IVA, with new sections 65A to 65L, in the Housing and Development Act dealing with the implementation of the upgrading works in HDB housing estates.”
“Mr Speaker, Sir, I do not know whether it is my job to advise the MP how he should go about his work.”
“Mr Speaker, Sir, I assume the shops in Hougang are occupied already. But they are all rented and, as in other HDB estates, tenants do give up space and space does become available from time to time. Also, under the sales programme, I do not know whether all the shopkeepers will buy the shops. So, as in other places, there is a turnover of tenancy and when there is a turnover, the shop is put up for tender, the MP can make his bid.”
“Mr Speaker, Sir, I expect that in Hougang, as in other constituencies, social welfare organisations will be making applications and they will be considered. If there are no such organisations using the space in Hougang, I am sure, over time, applications will come. But we cannot make decisions based on the conditions prevailing in a particular constituency. We need a general policy that applies to all constituencies and if there is space in Hougang that is not yet used by social and welfare organisations, that will be the present case, but I am sure that it will not be the case in the future. Mr Low Thia Khiang: Sir, may I refer to the Minister's statement just now about tender. Is the Minister aware that there are no shops available in Hougang for tender as an MP's office and 90% of Hougang constituency are HDB properties.”
“Mr Speaker, Sir, I am not aware of what is happening in his constituency. I have stated the general policy and it must apply to all constituencies. Under the general policy, no space will be allocated for MPs or political parties.”
“Political parties will be treated the same as trade and clan organisations. No void deck space will be allocated to them. MPs or political parties may tender for commercial premises to be used as their offices, subject to Planning approval for change of use.”
“Mr Speaker, Sir, an MP's office in Hougang would take up about 1% of the available void deck space. The question, however, is not how much of void deck space would be taken up as an MP's office, but what kind of uses should be allowed in void decks. Not all HDB blocks have void decks. For example, in the older estates, the ground floor is occupied by flats and shops. In newer estates, the void deck space is segmented by staircases, lift lobbies and other architectural features that help enhance the privacy of the flats. These design considerations necessarily limit the amount of void deck space. Void decks are provided for two purposes. Firstly, they create a sense of openness at the ground level as HDB blocks are built fairly close to each other. Secondly, void decks are provided as important communal space for residents. They are used for social interaction as well as for other practical purposes, such as space for family members to wait for children who are being sent off or received from school. HDB would therefore keep enclosure of void decks to the minimum. There is constant demand for void deck space from community service and charitable organisations for use as family service centres, day care centres, kindergartens and other welfare uses. There is also demand from organisations such as clan groups, merchants' associations, and so on who also claim to serve the community. At the same time, we have to set aside some void decks for the construction of civil defence shelters as part of the long-term civil defence plan. We cannot accommodate all such demands, and it is a matter of judgment where we should draw the line. HDB has decided to only allow education and social services needed either by the residents in the area or the community at large.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply has made progress on the Estimates for the financial year 1992/93, and ask leave to sit again tomorrow.”
“If the Member can just be a little patient, he will know where the funds come from. The funds, of course, are allocated to the Ministry and I am trying to explain to him what the funds are for. Where the funds come from, of course, all the funds allocated under the Budget come from the taxpayers as well as earnings from various investments. So the CIPC funds are for the constituency as a whole. And how the funds are to be allocated for various projects in a constituency has to be decided by some body which has responsibility for the constituency as a whole. Under the old URSC system, it was the Citizens Consultative Committee (CCC) that decided what kind of projects should be carried out in the constituency. So we are carrying on with the system and if Town Councils have projects for which they want funding from the CIPC, they have to go through the Citizens Consultative Committee; and the Citizens Consultative Committee will decide what are the priority items, what items it wants to support and what it does not want to support. That is the system we have and that is the system we intend to continue to practise. As to the particulars of the projects in Hougang that were submitted by the CCC and withdrawn, he should address those questions to the CCC in Hougang, because I do not know what priority they set for themselves, what are the more important projects, and how they want to use the money. So I cannot give him an answer why the CCC withdrew the application. The CIPC fund is a block vote. We have, of course, internal guidelines but this really need not concern Members. So far, no Member has complained that reasonable projects have been refused funding. I think I have answered all the questions. 4.00 pm”
“This is very reasonable if you take into account the fact that the average couple gets married at the age of 27 or 28, they will have far more than 2 1/2 years of working life by the time they get married, and they should be more than able to afford the 20% down-payment to buy the flat. So we do not intend to relax this. The 5% down-payment is for those earning less than $1,000. Since they can pay this out of their CPF, it is not an onerous requirement. I would like to take the points raised by Mr Low Thia Khiang. Since he is a new Member, he needs some explanation about what the Community Improvement Projects Committee (CIPC) fund is all about. He may be aware that there used to be a fund called the Urban and Rural Services Committee (URSC) fund. This was really meant to build roads and put up street lights in the urban areas as well as the rural areas. The CIPC is something that developed out of that, and the funds administered by the CIPC are not for Town Councils. I would like to underline that they are not for Town Councils. They are for the constituency as a whole. The constituency has HDB areas administered by Town Councils as well as non-HDB areas which are not administered by Town Councils.”