Yeo Cheow Tong
Singapore
“Mdm Ho Geok Choo asked the Minister for Health in light of the recent report on fungal corneal infections (a) whether those who contracted the contact lens related fungal corneal infections will suffer permanent damage to their eyes; and (b) how long will his Ministry take to conclude its investigations into the causes of these contact le…”
“My Ministry performs a regulatory role and what we do is that we try to ensure that we have a conducive regulatory environment for the growth of this industry in Singapore. Let me tell him what we are doing in some areas.”
“Sir, on her two questions, whether we are satisfied that the school buses are collecting fares during the school holidays, as I mentioned just now, the school bus service is a contractual service between the parents and the service provider. It is therefore up to them to work out the terms and to abide by the terms.”
“Sir, on the first question, whether there is any abuse by owners of buses while using the 50% rebate, the answer is no, because LTA monitors very closely.”
“Sir, I have to repeat my answer. We are not responsible for regulating school buses and therefore will not be involved. SCHOOL BUSES (Installation of seat belts) 5. Assoc. Prof.”
“Ong Soh Khim asked the Minister for Community Development, Youth and Sports (a) if his Ministry will increase the cap of $10,000 per disabled person over their lifetime for the Assistive Technology Fund scheme; and (b) if not, whether there will be a flexibility to adjust the funding cap for this scheme based on the applicant's need, as j…”
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“Sir, negotiations between PSA and its shipping lines' clients are commercial issues which the Government does not get involved in. I believe PSA has been in close contact with all the shipping lines and it is dedicated and committed to giving cost competitive services, not just in terms of the charges for lifting the containers, but also through the provision of other value added services as well. Sir, with regard to PSA taking a stake in PTP, I think this is an issue for PSA to decide upon, and I believe this issue has now been settled by Maersk taking up a 30% stake.”
“Toh See Kiat: Sir, I have two supplementary questions for the Minister. First, it was common knowledge, before the move, that both Maersk and NOL were looking at the PTP. Would the Minister explain whether the move was because PSA did not act fast enough, eg, cutting prices before Maersk moved? Second, it is trite wisdom that if you cannot beat them, you join them. Since PTP is looking for investments, would PSA consider buying a stake in PTP?”
“PSA has, through its high levels of efficiency and service, built an unrivalled shipping network of 120 container shipping lines that connects Singapore to over 500 ports. This has enabled PSA to move 15.9 million TEUs last year. For this year, it expects to move over 17 million TEUs. Many of the major shipping lines are increasing their throughput through PSA by double-digit growth. This is a strong reaffirmation in PSA's value-for-money services by its customers. On its part, the Maritime and Port Authority (MPA) has adopted various measures to enhance the competitiveness of the Port of Singapore over the years. Since May 1996, it has granted concessions of 20% on port dues for container ships using our port. It has also fully deregulated tug boat services within our port waters, to give shipping lines more choices that offer more competitive rates. MPA has developed electronic services such as the MARINET and the Singapore Maritime Portal to speed up various statutory clearance processes. Combined with a strong commitment to high standards, these and other measures have helped to ensure that the Port of Singapore is able to offer cost-competitive services of the highest quality. MPA is also working closely with other relevant Government agencies such as TDB and MAS to develop Singapore into an International Maritime Centre (IMC). These agencies work in close consultation with the shipping community to develop our expertise and build up our critical market mass in the areas of ship financing, marine insurance, maritime arbitration, ship management and repairing, and shipbuilding. The agencies will continually assess, evaluate and re-examine our policies to align them to the emerging industry trends and ensure that we remain competitive. Assoc. Prof.”
“Sir, Maersk Sealand is reported to have taken up a 30% equity stake in the Port of Tanjung Pelepas (PTP). As such, it has indicated that it will move its hubbing operations to PTP by the end of the year. In 1999, the shipping line accounted for about 11% of PSA's throughput or 1.7 million TEUs. Maersk's move to PTP is a commercial decision on its part. Apart from being a major global shipping line, Maersk runs many dedicated shipping terminals around the world. This move by Maersk must, therefore, be viewed in that context. It does not reflect a lack of competitiveness on the part of PSA. All over the world, whenever new ports come on stream, they take market share from existing players. One such example was when the South China ports of Yantian, Shekou and Chiwan were developed a few years ago. However, as trade volume grew, a new equilibrium was soon established, and Hong Kong terminals continue to grow. With charges at about a third to a half of those for ports in Hong Kong, Japan, Europe and the United States, PSA remains the world's leading port in terms of competitiveness and the value that it provides to its customers. PSA does not compete on price alone. It intends to retain its premier position through even better services and greater efficiency to meet the needs of its customers. For example, PSA is helping its customers enter the world of e-commerce, through its Portnet system. This system enables all players in the global shipping community to make paperless and seamless integrated transactions with each other effortlessly, and at the lowest costs. To be a premier port, one must have superb shipping connectivity and frequency.”
“For instance, in the food manufacturing industry, feedback from the Singapore Food Manufacturers Association indicates that while business has improved by about 10% after the crisis, profitability has declined. This is due to higher operating costs and more intense competition from lower cost food manufacturers in neighbouring countries. Our SMEs will have to find ways to increase efficiency and develop higher value products that can command higher price premiums. Fewer and fewer of them can escape the challenge of globalization and the New Economy. They have to leverage on technology, create attractive brands and packaging, and actively pursue alternative markets for growth. The Government has developed many programmes to help SMEs do this. In fact, there are 60 such programmes altogether. The Singapore Productivity Board (PSB), in partnership with the private sector, has developed SME 21, a new plan to accelerate SMEs' development for the next 10 years. Strategies addressing the needs of SMEs at the enterprise, industry and broad-based levels would be rolled out within the next two years. Mr Tay has also asked about the indicators for SMEs and the local economy. Currently, although we have some annual and quarterly data of SMEs and local enterprises for selected sectors like commerce and services, we do not have comprehensive indicators. This is partly due to the resources needed to gather statistics from SMEs, which number more than 100,000. These small companies also have greater difficulties than the larger firms in providing timely and accurate data. However, PSB will work with DOS and EDB to see how more and better indicators can be developed to monitor the performance of SMEs. The Singapore Business Federation, when it is formed, can also help to gather data.”
“Sir, I have answered just now in my main answer that IDA has already, in the short period of time since I announced the move to liberalise, issued a total of 150 new telecoms licences, and these would comprise 11 facilities-based service providers and 130 service-based operators. SMALL AND MEDIUM ENTERPRISES (Performance) 13. Mr Simon S C Tay asked the Minister for Trade and Industry how the small and medium enterprises are faring in the present economic recovery and whether there will be indicators for the SME and local economy, in addition to the gross national economic indicators. The Senior Parliamentary Secretary to the Minister for Trade and Industry (Mr Tang Guan Seng) (for the Minister for Trade and Industry): Mr Speaker, Sir, on the whole, SMEs are enjoying better business growth in line with the overall economic recovery from the Asian crisis. For instance, the turnover of SMEs in the services sector has rebounded by 12.4% in 1999 from the decline of 7.9% in 1998. Growth has remained strong at 9.6% in the first half of this year. However, the performance of SMEs is uneven and varies across industries. In wholesale trade, SMEs as a group are enjoying buoyant business, while in construction and real estate, performance is still weak, reflecting the different pace of recovery among sectors. Similarly, within the manufacturing sector, SMEs in fast-growing industries like electronics are enjoying better business than those in slow growing ones like ship-repair and furniture. Even for industries that are recovering, some SMEs continue to face strong competitive pressures. SMEs are also more dependent on the domestic and regional markets compared to the MNCs.”
“In reply to his first question, no, StarHub will not be reneging on its investment commitment. It is still required to roll out the local network and we are in discussion now with Starhub on their plan and the schedule. Sir, on the second part, that with such a dominant player, how can self-regulation work, there is still a need for a regulator, which is why we have IDA. IDA will remain as the telecoms regulator to ensure that there is no anti-competitive behaviour by the dominant player and to facilitate the smooth development of the entire industry.”
“Sir, the reason for having to compensate SingTel too is that we have made a public commitment that there will be a duopoly for two years, which means that SingTel would have also gone ahead to make its investments on that basis. So, therefore, the commitment, although not explicit to SingTel, is an implicit one. With regard to the duopoly of newspaper and television media, I would suggest that he raise the question with my colleague. Assoc. Prof. Toh See Kiat: Sir, two supplementary questions for the Minister. One, is to follow up on the StarHub payment. The Minister says that StarHub will be committing more than $2 billion into infrastructure. Shortly after the announcement that the Minister would liberalise telecommunications, they announced that they would withdraw their investments. So are they now committed again to putting in that investment for the more than $2 billion they originally were committed to? My second question, Sir, is about the monopoly. If the Minister is stepping back by liberalising and by emphasising self-regulation in all these public announcements, how is it going to be possible for self-regulation in a market which is so dominated by one player still?”
“Sir, global practice, prior to this time, has been for national telecoms monopolies and, in fact, in most countries of the world, the norm is still a national telecoms monopoly. Of course, because we are part of the global network and we want to be a knowledge-based economy and we also want to be a telecoms and business hub for the region, we have no choice but to open up the telecoms market as rapidly as possible in order to ensure that the new investments that are being considered for the region will now come to Singapore or, at least, much of those investments in the pipeline, will come to Singapore. Therefore, the price of $2 billion, in the context of the overall economic development, is a small price to pay.”
“Sir, the figure would appear staggering and, I am sure, to many people, it is staggering. But then, one must also consider that SingTel's profit each year exceeds a billion dollars.”
“Sir, it is very easy at this point in time, having seen all the rapid liberalisations taking place around the world, to say that the decision in 1997 was perhaps faulty. We have to bring ourselves back to 1995-6 when most of the global telecoms market was still not fully liberalised and, therefore, setting a timeframe of 2002 at that point in time was already a very aggressive timetable. So it is not that we did not have the foresight. We knew that there was liberalisation taking place, which was why we moved up the date for liberalisation or the introduction of competition by seven years for SingTel from 2007 to 2000. But in order to attract a new serious player into this market of public basic telecoms services, which involves such a huge investment, companies would want to ensure that there are certain safeguards in order to build their market share before prices start collapsing with the introduction of full competition.”
“Sir, in the first place, IDA has already informed StarHub that it is obliged to roll out its network, as committed. Secondly, having invested so much money, $2.6 billion in the system eventually, I do not think any company would want to just offer a perfunctory service and collect very minimal revenue.”
“Sir, the reason is very simple. The establishment of a second fixed line network involves a huge investment. In the case of StarHub, the commitment is $2.6 billion. To ensure that we have a viable business model and to ensure that there are enough interested companies, the Government therefore made a commitment that the investor would have a two-year grace period in which to build up market share and to ensure that they can derive an economic return from this huge investment. Assoc. Prof. Toh See Kiat (Aljunied): Sir, I would like to ask the Minister, with this payment to StarHub, what assurance is there that the fixed line operators would still be more than one, in other words, that StarHub would not perform its role in a perfunctory way by offering a token service?”
“Sir, that was part of the commitment given by the Government when we invited tenders for the establishment of the second public basic telecoms service in 1996.”
“Sir, the figure of $1.94 billion is net of tax, that means, if it was liable for tax, you would have to gross it up further. So this is the figure that is net of tax.”
“As is evident, earlier liberalisation and keener competition have indeed reaped benefits not just for our economy as a whole, but also for individual businesses and consumers.”
“Forecasts made by Deloitte Consulting were based upon both the historical growth in Singapore and in consideration of overseas experience based on information available from research organisations, regulators, and investment analysts. It is with such detailed analysis that the final compensation figures of $859 million for SingTel and $1,082 billion for StarHub were derived. The Government has accepted that these figures were derived objectively and are fair and reasonable. The long-term benefits brought about by full liberalisation will far exceed the compensations paid to these two companies. Some of the benefits are already evident today. Within a few months of liberalisation, IDA has issued more than 150 new telecoms licences. These new entrants are expected to invest a total of $3 billion in Singapore by the year 2003. These investments would strengthen the capacity and quality of our national information infrastructure, as well as our connectivity to the regional and global information infrastructures. Let me illustrate. Singapore's global connectivity is set to increase to 15 Terabits per second over the next 18 to 36 months. This is a huge increase of 300 times compared to only 50 Gbps early this year. Competition has also benefited businesses and consumers, by bringing about lower prices, faster pace of innovation, and better quality of service. As an example, IDD rates have fallen by an average of 20% and up to as much as 60%. Sir, put in perspective, the payments of $1.94 billion as compensations to SingTel and StarHub are essential to the strengthening of Singapore's economic competitiveness in the era of the New Economy, while preserving the credibility of Singapore as a leading investment location for global leaders.”
“Sir, the Government is committed to introducing full market competition in the telecoms sector. Competition spurs innovation, raises efficiency, improves services and lowers prices to the benefit of the people, public and businesses. Advancing full market competition is necessary because the openness of the telecoms regulatory environment has become a key factor in attracting new investments. We must therefore have a globally competitive telecoms market, with many players offering a wide range of innovative, high quality and cost effective services. This is the rationale for the accelerated liberalisation of the telecoms market. However, as a serious and responsible Government, we also recognise our earlier commitment to SingTel and StarHub to maintain a duopoly until 1st April 2002. Our decision to bring forward full liberalisation would have a significant impact on their business, investment and rollout plans. We must thus be fair to both SingTel and StarHub, and compensate them accordingly for any potential loss of net revenue from the earlier introduction of competition. To ensure transparency and objectivity in deriving the compensation figures, IDA hired a third party consultant, Deloitte Consulting. Deloitte Consulting took a discounted cash flow approach to determine the net revenue positions of SingTel and StarHub, under the two scenarios of a two-year duopoly and accelerated liberalisation. Specifically, the analysis is restricted to public basic telecoms services, or PBTS, and excludes other services such as mobile communications and Internet access services because these are already open to full competition.”
“Sir, may I have your permission to take Question Nos. 11 and 12 together?”
“Where it is cost effective to do so, the Land Transport Authority (LTA) will provide underground linkages from MRT stations to nearby major developments. When City Hall MRT station was built, it was linked to Raffles City. An underground pedestrian walkway was also constructed under Stamford Road to connect the station to the St. Andrew's Cathedral side of North Bridge Road. More recently, a private developer has constructed an underground shopping mall, City Link, that connects Suntec City to the City Hall MRT station. These walkways take care of the major pedestrian movements to and from the MRT station. LTA has no plans to provide an underground walkway from City Hall MRT station to the North Bridge Road/High Street area. The commercial developments in this area are less intensive and hence attract a lower pedestrian traffic. There are already adequate pedestrian crossings at the signalised junctions and good walkways along North Bridge Road for pedestrians' use.”
“Many motorists travelling along the Central Expressway (CTE) towards Ang Mo Kio exit at Braddell Road during the evening peak hours. The Braddell Road exit leads into the junction of Braddell Road/CTE under the CTE flyover. This junction experiences very heavy traffic flow both along Braddell Road as well as along the CTE Braddell Road exit. The traffic flow along Braddell Road and the Braddell Road exit of the CTE will improve when the interchange at Braddell Road/CTE junction is expanded. The Land Transport Authority is currently constructing a 3-level interchange at this junction. A vehicular underpass is being built to take the main Braddell Road traffic under this junction, thus avoiding the traffic signals. Work, which is in progress, will be completed by end of 2002. Once this main traffic is taken away from this signalised junction, more green time can be given to the CTE Braddell Road exit. The traffic flow along the Braddell Road exit will then be smoother. UNDERGROUND PEDESTRIAN WALKWAYS 17. Mr Tay Beng Chuan asked the Minister for Communications and Information Technology whether his Ministry will consider building underground pedestrian walkways to link up City Hall MRT station to the major commercial buildings in North Bridge Road/High Street area to improve the road safety and ease the traffic congestion there.”
“The decision to bring in fewer small car models is a reflection of the shrinking demand for smaller cars, even though such cars are still, as I have said earlier, generally cheaper and hence more affordable than the bigger cars. Owning a car is not a basic need. There is no reason why Government should intervene and arbitrarily decide on the market mix of the car population in Singapore. We should not influence the type of cars buyers should choose. It is best left to car buyers how much they are willing to pay for a COE and what type of cars they want to purchase. From the land transport point of view, all cars, regardless of the size of their engine capacity, occupy the same amount of road space when moving. Hence, traffic engineers have assigned all cars the same Passenger Car Unit (PCU) rating of 1. It is not the intent of the COE scheme to address the social issue of price progressivity. This issue is addressed through the Additional Registration Fee (ARF) and customs duty which are pegged to the Open Market Value (OMV) of the vehicle, and the road tax structure which is based on the engine capacity. Looking at the current COE trends, some have expressed the view that Government should move towards merging all car categories into one broad category. The COE categories were restructured just over a year ago. We will be introducing open bidding for COEs later this year. It is best that we let the system stabilise and observe the price trends of COEs and consumer preferences. Hence, the Government has no plans at this stage to merge the two car categories into a single category.”
“The COE price of Category A is close to and sometimes higher than that of Category B. This is in spite of the fact that the monthly quota for Category A, as it stands now, is 2,617, which is more than twice the size of the quota for Category B, which is 1,153. Sir, combining the former COE Categories 1 and 2 into one category for all cars with engine capacity up to 1,600 cc has given car buyers greater flexibility to decide what cars to buy based on affordability. The fact that more choose to buy at the higher cc end of this category reflects consumer preference for such cars. This is notwithstanding the fact that there are other cheaper, smaller cc models in the category which are more affordable. As a matter of fact, the prices of some small cars have not changed much, compared to the first quarter of 1999 before the two COE categories were merged. I have distributed to Members some data to show the comparison of car prices to illustrate what I mean. If you look at Table 1, generally, the prices for small cars are lower than prices for medium-sized cars. When you look at Table 3, comparing the car prices, say, for small cars before and after the merger, you can see that the changes are not much. Some have gone up, some have come down. The reality is that car buyers have been able to benefit from the merger of the two categories and they are exercising their preferred decision. More of them appear to be opting for the bigger, though slightly more expensive models, rather than the cheapest models within the same COE category. On the part of motor dealers, they have responded to the change in demand pattern by adjusting the range and numbers of car models they import for the Singapore market.”
“We can expect that, to retain drivers in this highly competitive and tight labour market, taxi companies will have to enable their drivers to earn a decent income. CERTIFICATE OF ENTITLEMENTS (Review of categorisation) 3. Dr Jennifer Lee asked the Minister for Communications and Information Technology, in view of the trend that has emerged from the converging of Certificate of Entitlement prices, if his Ministry will reconsider and review the categorisation of COEs, in order to preserve and support a system in which car buyers will have more choices and the ability to opt for smaller capacity cars. The Minister of State for Communications and Information Technology (Dr John Chen Seow Phun) (for the Minister for Communications and Information Technology): Mr Speaker, Sir, can I ask the Clerk of Parliament to distribute the handout? [Copies of handout distributed to hon. Members]. Sir, the Certificate of Entitlement (COE) categories for small and medium-sized cars were merged into one category, Category A, in May 1999, following a review by the Government Parliamentary Committee. The Committee had noted that ideally, there should only be one category of COEs, and recommended the merger of the two COE categories to also address the concern that the COE quota for small cars was declining while their COE prices were not greatly different from those for medium-sized cars. The merger of the two categories to form a larger quota has helped to stabilise COE prices. This does not however mean that the COE for smaller cars will be cheaper than that for bigger cars, because price is a function of demand and supply. Latest prices for Category B COEs for cars more than 1,600 cc against that for Category A COEs for cars up to 1,600 cc bear this out.”
“Sir, Members of this House will recall that the Public Transport Council (PTC) deregulated taxi fares in September 1998. This means that taxi companies now have autonomy to set taxi fares without needing to seek approval from the PTC. They now have more flexibility to introduce differentiated and niche services and to respond more quickly to changes in the environment through differential pricing strategies. The aim was to allow the forces of demand and supply to determine the pricing of taxi services that would optimise the utilisation of the taxi fleet. With deregulation, taxi companies have to consider carefully and individually decide on fare revisions based on their pricing strategy and supply-demand considerations. Taxi companies have to price their services at a fair level, taking into consideration, among other factors, the demand for their services, cost of providing the services, earnings of taxi drivers, competition from other taxi companies and other modes of transport, the need to generate adequate returns to pay for vehicle replacement, and to invest in expansion and upgrading. Commuters are in the best position to decide whether taxi fares are set too high or too low. If taxi fares are set too high, the demand will drop and taxi companies will not be able to operate their business profitably. Conversely, if fares are set too low, supply will not be able to match demand and service standards will drop. The deregulation of taxi fares therefore serves to optimise the utilisation of resources in meeting the demand for taxi services. Commuters stand to gain as it ensures that the pricing of taxi services is competitive. With fare deregulation, how each dollar of the taxi fare is distributed is determined by the taxi companies.”
“Sir, may I have your permission to take Question Nos. 1 and 2 together?”
“These charge a premium according to the service level offered, including response time and the certainty in obtaining a taxi.”
“The demand for taxi service varies according to location and time of day. There is no shortage of taxis in the CBD during the morning peak period, as many taxis carry commuters into the CBD. The waiting time for taxis in the CBD is, however, longer during the evening peak period as fewer commuters enter the CBD. Taxi drivers are also less willing to drive an empty cab into the CBD incurring ERP charges. According to LTA's data, the average waiting time for taxis at taxi stands within the CBD is 0.5 minutes during the morning peak and 16 minutes during the evening peak. During off-peak periods, the supply of taxis usually outstrips demand. Given this situation, the question is how does one meet the demand for taxi service at different times of the day and at different locations in the most optimal and efficient manner. From a business angle, it is not optimal for taxi companies to size their fleet based on peak-period demand, as they would be having excess capacity during off-peak periods. The solution lies in differential pricing to balance supply and demand. The Government has deregulated the setting of taxi fares in September 1998 for this purpose. With deregulated taxi fares, taxi companies are given the full flexibility to adjust their fares in response to demand patterns and changes in ERP pricing. The problem of taxi shortage in the CBD is best addressed by the taxi companies, through fare adjustments so that taxi drivers will have the necessary incentives to enter the CBD during the evening peak period. Market pricing of taxi services is the most effective way to balance supply and demand throughout the day. If commuters in the CBD find the wait for a taxi during peak periods to be too long, they can choose from a range of taxi booking services.”
“The LTA is currently undertaking a number of feasibility studies for further expansion of our rapid transit system (RTS) network. One of the RTS lines being looked into is a medium capacity system along the Bukit Timah corridor. Such a system would serve the upcoming residential developments and schools in the area. However, a detailed study will have to be carried out to determine whether the line is physically and economically viable, given the site constraints such as the existence of the Bukit Timah Canal and many multi-tier interchanges along Bukit Timah Road. WRITTEN ANSWERS TO QUESTIONS STAKEHOLDING BY LAW FIRMS 1. Dr Ker Sin Tze asked the Minister for Law whether the existing law allowing law firms acting as stakeholders to retain the interest on the stakeholding fund will be amended so that the interest will be paid to the owner of the fund.”
“Another example is the Securities Investors Association of Singapore (SIAS), which has identified investor education as a key activity and is working closely with several brokerages. The CPF Board will continue with its retirement planning programme called "Take Charge. Plan Early. Secure Your Financial Independence Now". It will dovetail this with other Government agencies such as the Ministry of Community Development and Sports, to reach out to different target groups. EMPLOYEE STOCK OPTIONS 37. Mrs Lim Hwee Hua asked the Minister for Finance if he will explain how the issue of options under Employee Stock Options will be treated for tax purposes for companies, especially in view of the anticipated increase in proportion of compensation, and whether any limits will be imposed.”
“However, many Singaporeans have higher expectations, especially if they wish to maintain their present lifestyles after they retire. Then their CPF savings alone may not be enough, and they would need to manage their personal savings properly, to supplement their CPF balances. As retail investors, they must learn to look out for themselves, and be discerning in choosing from a growing range of service providers and products. Greater efforts at investor education will be useful. The aim is to equip investors with the basic tools to carry out informed financial investment decisions. An NUS survey commissioned by a bank last year showed that Singaporeans believe they have enough knowledge to manage their money, but most of those surveyed lacked understanding of basic financial concepts. From the point of view of the financial system as a whole, an informed investing public exerts market discipline on financial institutions. This supports our long-term objective of developing a more open and transparent financial sector, driven by fundamentals. MAS has a role in promoting public understanding of the benefits and risks of financial products, but we do not think that the regulator can carry the full burden of educating investors. We will use the Internet to disseminate information to enhance consumer awareness, and will also continue to support initiatives by trade bodies in public education. For example, the Investment Management Association of Singapore (IMAS), as the representative body of investment managers, has established an Education Sub-Committee to promote greater public awareness about the fund management industry, through public seminars, talks and forums, and publications.”
“The Ministry of Communications and Information Technology is working closely with the Ministry of the Environment (ENV) on the issue of traffic noise. There is an on-going study to look at the noise impact from road traffic and MRT trains. This will review existing noise standards, recommend noise abatement measures and land-use designs to mitigate noise impact on residents. The issue of whether sound barriers should be erected along expressways will hence be covered in the study. Mr Lew has mentioned two residential developments at Hillcrest Arcadia and Arcadia Gardens, which will be affected by the widening of the Pan Island Expressway (PIE). Even after the widening, the residential blocks in these developments will be about 50 to 100 metres away from the expressway. This setback is well within the recommended building setback of 30 metres imposed by Urban Redevelopment Authority (URA). The Land Transport Authority expects that the noise level in these two developments would remain within the level prescribed by the Pollution Control Department from the Ministry of the Environment. INVESTOR PUBLIC EDUCATION 36. Mrs Lim Hwee Hua asked the Deputy Prime Minister if he will state the Government's philosophy on and role in investor public education, and if it will drive or at least coordinate efforts of Government-related agencies, such as the Central Provident Fund Board. BG Lee Hsien Loong: The Government recognises the importance of personal financial planning, in view of the individual's responsibility to ensure his or her own financial security at old age. CPF members who have contributed to CPF throughout their working life should accumulate enough savings to meet their basic retirement, healthcare and housing needs commensurate with their incomes.”
“Whenever roads are affected by construction works, the Land Transport Authority will try to minimise disruption to traffic flow by providing diversion roads or by covering up the road surface while the work goes on underneath. The covering has to be of sufficient strength to carry the traffic loads over the excavation and the most suitable material, which is also used universally in other countries, is metal decking. The metal decking used is designed and supplied by specialist manufacturers. The metal decking is safe for the motorists. It has a special anti-slip corrugated surface that provides a better grip between the tyre and the metal surface. The metal decking used on our roads is inspected regularly to ensure the safety of the motorists. In addition, the LTA also puts up cautionary signs to alert motorists and pedestrians of the works. SOUND BARRIERS AT EXPRESSWAYS 35. Mr Lew Syn Pau asked the Minister for Communications and Information Technology whether the Government will consider erecting sound barriers at expressways to shield off the traffic noise from residents living nearby, especially in areas where the expressways have been recently widened such as those near the Hillcrest Arcadia and Arcadia Gardens.”
“Taxi companies are required to bid for COEs only for the registration of new taxis which are additions to their fleet. For replacement taxis, ie, taxis that are registered to replace those that have been de-registered, they are only required to pay Category A Prevailing Quota Premium (PQP). This is a concession given to taxis in view of their public transport role. For the period between May 1999 to February 2000, a total of 160 new taxis were registered. During the same period, 1,234 replacement taxis were also registered. MAIN UPGRADING PROGRAMME 35. Dr S Vasoo asked the Minister for National Development whether the Housing and Development Board will include the changing of front windows in the precincts where tenders for the Main Upgrading Programme have already been awarded.”
“I understand that many companies are prepared to provide transport allowance to their staff to make it more attractive for them to work on Jurong Island. This is a common practice for workers in remote locations, and I encourage employers and workers to work together for a mutually beneficial solution. TAXIS 34. Mr Chiam See Tong asked the Minister for Communications and Information Technology how many taxis were successful in securing COEs each month from May 1999 to February 2000.”
“Jurong Island is a public area. This means that the public has access. The roads on Jurong Island will be declared as public streets when the Jurong Town Corporation completes all the road works and hands over management of the roads to the Land Transport Authority. Before the causeway was constructed in April 1999, workers had to travel to Jurong Pier, board a ferry to the island, and then take a shuttle bus within the island. Ferries and shuttle buses were provided by employers. Since the completion of the causeway, JTC has been providing a bus service between Jurong East Interchange and the island. This is a public bus service for Jurong Island workers as well as members of the public. The bus service is heavily subsidised by JTC. This is because Jurong Island is a huge sprawling industrial estate with very low ridership density. To compare, the island is about two times the size of Ang Mo Kio town, but the daily bus ridership is only about 1.5% of the ridership in Ang Mo Kio. The island serves mainly workers which means that transport demand is very peakish. It is difficult for any bus operator to run a viable bus service on the island unless the correct level of fares is charged. The Public Transport Council has called for a tender to operate a public bus service on the island after the contract with the current bus operator ends. This will ensure that the operator that wins the tender offers the most competitive fares and gives the best value for money. Tender proposals are being evaluated and will be awarded by early May 2000. The new operator will start operations from 1st June 2000. JTC has been in contact with employers on Jurong Island to brief them on developments.”
“As a result, most of the major developments next to MRT stations in the city have direct underground access to the stations, eg, developments around the Raffles City and Orchard Stations. Such underground linkages are planned when the stations are designed and if a station is built before adjacent development takes place, knock-out panels will be provided within the station box so as to facilitate easy linkage in the future. At the ground level, many streets are lined with arcaded walkway, traditionally called 'five-foot way'. Such walkways are provided by developers when they construct their commercial buildings. These walkways already provide good shelter for pedestrians and commuters making their way to the bus stops. JURONG ISLAND 33. Mr Seng Han Thong asked the Minister for Communications and Information Technology (a) whether Jurong Island will be gazetted as a public area and all roads on the island are public roads; (b) when can public bus services be provided to the island; and (c) whether the approved bus fare structure will increase the cost of transport of workers on the island.”
“The building of sheltered walkways to commuter facilities such as MRT stations, bus interchanges and bus shelters is a shared national responsibility between the Government, town councils and private developers. Since 1998, the Land Transport Authority (LTA) has spent $18.6 million constructing covered walkways to provide better linkages to the MRT stations and bus interchanges. This is intended to encourage commuters to use our public transport system. Through these projects, LTA has demonstrated the attractiveness of such an infrastructure provision. LTA will continue to focus on providing sheltered walkways at the major transport nodes, namely MRT/LRT stations and bus interchanges. For this financial year (FY2000), it will be spending about $6 million on these projects. Town Councils will continue with their efforts to build more sheltered walkways in the residential estates. We understand that the Ministry of National Development is also exploring the provision of sheltered walkways to link private estates to commuter facilities in the proposed upgrading programme for private estates. In the city area, LTA works closely with the Urban Redevelopment Authority and other authorities on the planning and provision of commuter facilities, taking into consideration motorists' and pedestrians' needs, site constraints and the need to preserve the city landscape. The MRT stations in the city area are usually underground to optimise land use. Where possible, LTA will ensure that underground linkages are provided to link the MRT stations to the key developments in the vicinity of the stations.”
“I think I should answer the Member. The studies by LTA show that the successful bids actually cluster very closely to the lowest successful bid. Using the example of $30,000, actually most of the successful bids are within that $10,000 band that the Member was talking about. This is the vast majority. This is already taking place. 3.55 pm”
“We expect that while today, many of the Internet subscribers are opting for narrow band, more will migrate to broadband because the contents will be better and prices should be coming down. It is for this reason that we supported the roll-out of cables to HDB flats and private residential estates. The Government, through the HDB, actually contributed $16 million towards the cabling of HDB estates, bringing broadband to all HDB households. HDB flat dwellers do not have to pay any upfront charges at all for the cable infrastructure. In addition, the Government has, through IDA, helped to lower the overall costs of broadband subscription by subsidising 70% of the cost of the head-end equipment and the cable modems required for broadband services. For the private homes, the cable infrastructure has been rolled out to the kerb. Because of the high costs of laying the cables to low density private housing, SCV has decided to charge individual house owners for the last mile of cable to their homes. I would like to assure Members that my Ministry will continue to strongly promote growth and development of broadband in Singapore and we expect the introduction of full and open competition in the telecommunications sector to help us achieve our objective of growing this important sector. Sir, I will ask my Minister of State to answer the other questions.”
“The second initiative, and this is very crucial, is that we are working very closely with SCV, SingTel and, later on, StarHub to reduce consumer prices. In fact, SCV, arising from our discussions with them, has already gone ahead to reduce their prices. I understand that they are quite competitive compared to the regional service providers. With full liberalisation of the telecommunication sector, I can assure Members that we should expect to see broadband prices coming down in Singapore in the months ahead. The third initiative is that IDA intends to open access to the infrastructure to other Internet service providers. By opening access, I think it will make the broadband sector more competitive and attractive and we should be able to see more subscribers arising from that. We also expect to see new technology being introduced, wireless transmission of broadband. That is definitely in the works. And we hope to see the wireless broadband transmissions coming in later this year or early next year. Mr Yeo asked why the Government does not subsidise the development of the cable infrastructure since it is so important. Sir, let me first clarify that the Government does not subsidise and pay for the telephone infrastructure. The telephone company actually makes the investments and they expect to make a commercial return on those investments. Similarly, the cable infrastructure is an investment made by SCV and they use it for both their cables and broadband transmissions. I would think that SCV and its shareholders would expect to have some returns on their investment as well. Nonetheless, the Government recognises the importance of the broadband infrastructure in our development into a regional infocomm hub.”
“We were one of the first countries to spot the tremendous potential for broadband and as early as 1996, we put in place the Singapore One network which is the backbone of the broadband network. We want to have a large and vibrant broadband industry in Singapore because this would contribute very greatly to our goal of becoming an infocomm hub in the Asia-Pacific. Because of its importance, the development of broadband is in fact one of the key elements in my Ministry's Infocomm 21 Masterplan. To grow the broadband industry, as mentioned by both Mr Chay and Mr Yeo, we need attractive content and also a large subscriber base. Both feed on one another. It is like a chicken-and-egg challenge. Which one comes first, broadband content or subscribers. We feel both are important. We can attract more content providers if we can get a large subscriber base. On the other hand, as mentioned by Prof. Toh, the subscribers find that the content is not attractive and not very exciting. Therefore, they do not want to subscribe or they are reluctant to subscribe. Another factor holding back subscribers is the high cost. Compared to USA, our broadband access is more expensive. IDA is working on three initiatives to develop our broadband sector. Firstly, it is wooing new content providers to come into Singapore and provide content and hub from Singapore. Secondly, we are also assisting the existing ones to upgrade their services. In fact, yesterday, I mentioned about the three marketing trips by IDA and EDB. Recently, my Minister of State also went on a trip to the US and the objective of the trip is also to reach out to broadband content providers to get them to come and locate in Singapore. So, in effect, we are actually marketing very aggressively.”
“1 port, in terms of container throughput, last year. This year, we have fallen to No. 2. But it still shows that PSA has a very dominant and successful business. The high volume of cargo allows PSA huge economies of scale. And as a result, this makes it attractive for shipping companies to use our port to transship to other ports. So in a way, this becomes a virtuous cycle. The more they use us, the greater the economies of scale, and there will be more feeder lines serving us, and the business builds up. When charting the course of the future, we must continue to understand what are the reasons for a common user port to be successful and what are the reasons that shipping lines want to have their own dedicated terminals. For the present moment, we do not intend to have dedicated terminals, but we will keep an open mind. We will have to watch the dynamics of the business and the changes in the shipping business. If good reasons exist, we will definitely look seriously into having dedicated terminals in Singapore. Mr Chay Wai Chuen, Dr Toh See Kiat, Mr Yeo Guat Kwang and, yesterday, Dr Michael Lim talked about broadband multimedia. They commented that they are not very competitive. This is a very important industry and service. And we should make all efforts to make broadband multimedia a success in Singapore. Sir, let me first explain that the broadband multimedia market is still in its infancy in all parts of the world. In the USA, broadband adoption is only 6%. In Singapore, we have about 30,000 subscribers, or about 100,000 users, and the 100,000 users comprise about 14% of all Internet users. So in terms of penetration rate, broadband penetration in Singapore is actually higher than in the US. From what I hear, we are one of the highest in the world.”
“So, for example, the cart services have already been fully liberalised and port users now have a choice of six cart operators to choose from. In the area of container terminal operations, PSA is currently the only operator for main lines in Singapore. As I said just now, it does not mean that PSA is a monopoly because PSA has to compete for transshipment business with both regional ports as well as ports in the South Asian and Middle East regions. 3.00 pm Transshipments make up more than 80% of PSA's business. As Members would be aware, transshipment cargo does not have to use PSA. They are not meant for us, as final destinations, and they do not originate from us. Therefore, the fact that they use Singapore must be because we are able to add value to their business. What about dedicated terminals? For those Members who are not familiar, dedicated terminals refer to port terminals that are managed or owned by shipping companies to handle their own cargo. Because of the heavy investments required in some ports, some countries do invite shipping lines to come in and set up their own terminals. But quite often, those dedicated terminals are present in what we call "gateway ports", that means, the bulk of the business from the shipping line is with that country where the port is sited. So if there is a lot of outward and inward shipment of containers to that country, it may be worth while for the shipping line, if the shipping line has a lot of business, to operate its own port rather than use another port. On the other hand, PSA is known as a common user terminal for our operator which shall serve all ships calling at our port. PSA has done a very good job, as I mentioned just now. As a result, Singapore is now the key transshipment hub in the region. We were No.”
“They transship in Malta or they can transship in Colombo when it comes to shipping containers into our region. So the competition is not just from neighbours but it is really from further afield as well. I can assure you that PSA does take all this competition very seriously. They have embarked on a lot of activities to improve on their competitiveness. PSA and both MPA monitor very closely several indicators, for example, port connectivity. How many ports is PSA connected to? Because the more ports we are connected to, the more we will be used as a transshipment centre. They monitor productivity, how many containers are moved, loaded, unloaded. And they also monitor what is the value for money that users get from our port. Members will be happy to know that we are connected to more ports in the world by more shipping lines than any other regional ports. PSA also currently holds the world's record of moving 234 containers per hour from one ship. The competition is not really just on price alone. Many commentators comment quite wrongly on just basing on price. Because we know that you can pay a very low price for some goods but you get no value. Whereas if you pay a higher price for other goods and the value is there, it is still worth the while paying the higher price. And that is what PSA sets out to do. It does not compete to be the lowest price provided. They strive very hard to provide the highest value for your money. And this has resulted in growing business for PSA and our port even during the recent financial crisis. On the question of dedicated terminals, both Mr Chay and Mr Yeo asked whether we will allow dedicated terminals. Sir, the Government will introduce competition to the port as and when that competition proves necessary and beneficial.”
“When completed in the year 2006, Terminal 3 will increase Changi Airport's capacity to 64 million passengers from its current 44 million. So CAAS is looking into the future, and it will continue to take the necessary steps to maintain our competitiveness. Nevertheless, I can assure Prof. Toh that we do revisit the question every so often, because we need to be clear in our minds as to whether the time has come to separate those two roles. So we will continue to revisit that question. Mr Yeo Guat Kwang and Mr Chay Wai Chuen spoke on the port. They asked about competition from other regional ports and how do we fare against the other ports, and whether we have benchmarks. Both Mr Yeo and Mr Chay also asked about the possibility of allowing dedicated terminals to operate in our port. Sir, competition from regional ports has indeed intensified in recent years. I am sure Members would have read about the efforts to improve Port Klang, the opening of the new Tanjong Pelapas port, which is right next to us, and efforts by ports elsewhere - Sri Lanka, Indonesia - to upgrade and to improve. In fact, some of these new ports or upgraded ports have publicly stated that their intent is to not just emulate PSA but to take business away from PSA. Tanjong Pelapas, our new neighbour, has publicly stated that it is targeting taking away 10% of PSA's business. So the competition is going to be hotting up. Port competition is not new to Singapore. It is something that we have faced all through the years. But more importantly, port competition is not just from regional ports. Because today the concept of hubbing and treating the whole world as one huge network means that shipping companies can hub as far away as, for example, Malta, for the region.”
“Sir, I would like to thank all the Members for their suggestions. Prof. Toh See Kiat asked about CAAS and why, in contrast to what we have done in other areas, CAAS is still both an operator and a regulator. Sir, CAAS has actually managed to serve both roles very well, and that has served Singapore well. In the process, it has made Changi Airport into the premier air hub in the region. We did look into the necessity to privatise CAAS. That was done in the early 1990s. We had a firm of consultants to help us look into it, and the conclusion was that there was no really compelling need to corporatise or privatise CAAS at that time. As an airport operator, CAAS has actually done a wonderful job. The commercial operations in the airport are actually farmed out to private sector operators. For example, the airport ground operations, such as passenger check-ins, baggage handling, cargo handling, and the in-flight catering, are all done by private sector companies such as SATS and CIAS. As a result of all the efforts to improve the airport, Changi Airport has consistently been rated as the best airport in the world for many, many years. Despite the fact that CAAS is a statutory board, it has not rested on its laurels. It has continued to introduce new concepts and new facilities to the airport, because competition at the airport level is not just regional but international as well. And with more long haul aircraft coming in, I think the competition is going to be even tougher. So we need CAAS to remain on its toes. One of the key projects that CAAS is now embarking on is the development of our Terminal 3. The construction of Terminal 3 would start shortly.”
“I will remember that in the future. In any case, as regards price fluctuations, as I mentioned just now, under the old scheme, the fluctuations were actually quite significant, going up to 160% at one stage, month to month. I do not think that is really in the interest of the consumers, because I understand that most of the car companies take a buyer's order with the provision that the final price would depend very much on the COE price. If a car buyer works with a limited budget and the COE price is jumping like crazy and is going upwards, I think he is going to be on tenterhooks. So, it is better that we have a system, as proposed by the committee, that still allows the market to decide what is the final price for the COE, and yet having a big enough quota number so that while the market can decide, the fluctuation tends to be a little bit less. That does not mean that there is no fluctuation. If the stock market is going to triple tomorrow, I am sure the COE prices will likewise go up quite significantly, maybe not triple but definitely not in the current range of up to 11% or so.”
“I shall close the debate by having the last word. Sir, if we follow what Mr Singh has said, I think we are going to be in for a lot of trouble. His closing remarks were to let the market decide on the distribution. If we take it to the ultimate, we will only have one category. Is that what Mr Singh is proposing?”
“Sir, I have tried to simplify it for the Member. Basically, when a person buys a car, first, he does not even bid for the COE, which is why the Committee came out with this proposal to have open bidding so that we can encourage more Singaporeans to bid and therefore be in better control. But the decision is made based on what is the COE price and, ultimately, what is the total price of the car, which is why I said it depends on what is his budget and what he can afford from his pocket. And that is the ultimate cost all roped in - COE, OMV, taxes, the whole works, which is the price of the car on the road.”