Public Utilities (Amendment) Bill

Order for Second Reading read.

3.01 pm

The Minister for the Environment and Water Resources (Dr Vivian Balakrishnan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill is closely related to the next Bill on our Order Paper, the Sewerage and Drainage (Amendment) Bill. Sir, may I therefore suggest, with your permission, that the debate on both Bills take place now as both these Bills are closely related. Members are welcome to raise questions or express their views on both Bills during this debate.

Mr Speaker: Yes, we can do that, except that we will need to pass both Bills separately.

Dr Vivian Balakrishnan: Yes, of course. Water has always been of paramount importance for Singapore. With the limited land for both water catchment and storage, Singapore has been acutely aware of the need to provide a safe and reliable supply of water for its people since independence. In the early days, we faced and overcame drought, floods and water pollution as the city grew. These challenges have inspired us to innovate and develop capabilities in water, turning our weakness into strength.

Today, we have a diversified and sustainable water supply through the Four National Taps, namely, the local catchments, imported water, NEWater and desalination. We have also reduced our domestic water consumption over the past decade from 165 litres per person per day down to 153 litres per person per day through a multi-pronged approach which includes pricing, mandatory requirements, and voluntary measures.

We can all turn on our taps today and receive clean, safe drinking water at any time of the day, any day of the year. We often take this for granted, but behind each tap lies an integrated system comprising over 7,000 km of drains, 17 reservoirs, water catchment area which constitutes two-thirds of Singapore's total land area, seven water treatment plants, 5,400 km of water mains, 3,400 km of sewers, four water reclamation plants, and four NEWater factories. I cited a lot of numbers to give Members an idea of the amount of investment that has gone on over the past five decades.

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Going forward, the challenge of meeting the water needs of our population and economy will be even more complex. We have to protect the quality of local catchment water in an increasingly urbanised Singapore. We have to build the buffers to accommodate greater climate uncertainties. We have to manage the cost of water against scenarios of even higher energy prices in the future. And by the expiry of the remaining water agreement in 2061, we have to be ready to be self-sufficient in water if no new agreement is struck before that date.

Consequently, we have been progressively building up our water production capabilities and will continue to do so – we will expand our local water catchments, our NEWater and desalination capacities and will further improve the energy efficiency of our water system.

These developments in our water resources need to be supported with corresponding legislation. The Public Utilities Act and the Sewerage and Drainage Act provide PUB the power to regulate matters relating to water supply, the treatment of used water and drainage. These two Acts were last amended in 2001 and 1999 respectively.

The proposed amendments to both these Acts will put in place safeguards to enable the expansion of our local water catchments, to protect our NEWater production, and to protect key infrastructure across our entire water loop. I will elaborate on each of these themes in turn.

With the completion of the Marina, Punggol and Serangoon reservoirs, we now have 17 reservoirs. In other words, two-thirds of Singapore has now become a water catchment area. We intend to continue expanding the water catchment area to cover more of the island. To enable this, we must keep our land, waterways and reservoirs clean. Any pollution of the sources, the pathways or the receptacles of water in any of our water catchment area will make the water more difficult and costly to treat. As such, a pre-emptive approach to controlling pollution is necessary.

One common source of pollution is silt which gets washed down into our waterways and reservoirs. Silt reduces the capacities of our drains and reservoirs, impeding the effectiveness of flood prevention measures. And silt also affects the quality and aesthetics of our water bodies.

While there are existing standards which specify the amount of silt discharges permitted, these can only be enforced after the silt discharge has already taken place. The proposed amendments to the Sewerage and Drainage Act take a pre-emptive approach to controlling silt discharge. Adequate silt control measures must be installed at worksites before any work takes place, and an order may be issued to stop the work if the control measures are inadequate. For effective deterrence, the penalties for offences related to silt discharge will be raised to be commensurate with the cost of installing adequate silt control measures.

Let me move on to used water pollution. Another potential source of pollution of our water catchment areas is used water which is not treated sufficiently or which leaks from our used water system.

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Over the years, PUB has put in place an extensive and effective used water management system by expanding the national sewage system and by rehabilitating older sections of our public sewers. There remain some sewage treatment plants (STPs) in a few remote areas, some of which were built and maintained by private owners. These STPs are small biological treatment plants which treat used water before discharging it into the watercourses. These areas will eventually be served by sewers, in tandem with future land development plans.

In improving used water management, PUB will take responsibility for the operation, maintenance, and repair of all sewage treatment plants with effect from June this year. This approach minimises the risk of used water polluting our water catchment areas and paves the way for future expansion of our water catchment areas.

Apart from Government funding for public sewers, the used water system is funded through the Sanitary Appliance Fee, as well as the Waterborne Fee which is charged based on the amount of water supplied, regardless of location and the end use of the water. The proposed amendments to the Public Utilities Act will more properly reflect these charges as a tax contribution to our national used water system, which is an essential part of securing our national water supply. In this regard, past impositions of the Waterborne Fee are also validated as impositions of a tax. Speeches made in this House at the time when the Waterborne Fee was introduced show the Government's intention had always been that the Waterborne Fee was to be in the nature of a tax and this is now being put beyond any doubt.

However, let me assure the House that this is not a change in the current rates or the structure of our water charges.

Alongside the expansion of water catchments, we will continue to increase the other water sources of NEWater and desalination, which are independent of rainfall. In particular, NEWater is expected to ultimately meet half of our water needs in the long run.

NEWater production depends on a well functioning used water system to provide a feedstock of treated used water. Part of the treatment of used water is a biological process which can be disrupted by high concentrations of illegally discharged chemical substances. The presence of such prohibited substances can also lead to an accumulation of dangerous volatile gases in the used water system.

The proposed amendments to the SDA will tighten the regulation of discharges to the used water system by strengthening enforcement powers and imposing a significantly higher penalty for damage which disrupts the used water system or the NEWater production processes.

PUB's water treatment facilities are complemented by the many thousand kilometres of water mains and sewers to convey potable water, NEWater and used water. These networks require substantial investments, as exemplified by the Deep Tunnel Sewerage System, which was completed in 2008. This 48-km long used water superhighway costs more than $3 billion to develop.

To better protect our water infrastructure against damage, the proposed amendments to both Acts will introduce higher penalties commensurate with the severity of the damage. For example, the penalty for causing damage to the water mains of 300 mm or greater in diameter, or to sewers 900 mm or greater in diameter, is higher than that for the smaller water mains or sewers.

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Let me give you a sense of the consequences of such damage: a 900-mm diameter sewer typically serves a population of some 100,000 persons − that is equivalent to a Clementi or a Bishan town. Should it be damaged, a considerable amount of used water overflow will result until diversion or repair works can be completed. This will have serious consequences on the environment and public health.

Higher penalties will also apply to damage caused to any of the water installations, for example, waterworks and desalination plants.

Consistent with this pre-emptive approach to preventing damage, the proposed amendments to both Acts will make clear the extent of site investigations required of any person who intends to do any excavation, piling, or similar works, before starting such work. Not only must the person obtain the relevant site plans from PUB, trial trenches must also be carried out to physically ascertain the location of any water mains or sewers in order to avoid damaging them.

Sir, it is essential that Singapore continues to secure a sustainable and resilient water supply to meet the long-term needs of a growing economy and a growing population and to cope with the long-term dangers of climate uncertainty.

To achieve this, our water catchments will be progressively expanded. This will be complemented by expanding NEWater and desalination capabilities. It is, therefore, crucial to ensure the quality of catchment water and adequately protect our water infrastructure.

The proposed amendments to both the Public Utilities Act and the Sewerage and Drainage Act will reinforce our current safeguards to enhance the management of Singapore's water resources and ensure the reliability of our water supply for the long term. Sir, I beg to move.

Question proposed.

3.13 pm

Ms Sylvia Lim (Aljunied): Sir, I wish to seek three clarifications on the Bill. In the Minister's earlier Second Reading speech, he elaborated on how our water supply system is going to become increasingly more sophisticated. And I am concerned about clause 5 of the Bill regarding the water tariff. This introduces some new provisions concerning the pricing of water which arouse suspicions that water prices are going to rise.

The new section 20(1A) ominously states that when the PUB is pricing water, it may take into consideration "all costs incurred in enabling it to supply the water, including but not limited to collection and purchase of water, storage, treatment of water and maintenance and security of the water supply system." In the current Public Utilities Act, the factors taken into account in pricing water are not spelt out. However, I recall that in the recent Committee of Supply debates for the Ministry of Environment and Water Resources, the Minister has responded to the Member for Aljunied Mr Low Thia Khiang's cut on Water Tariff by mentioning some of the items now in section 20(1A) as going into water pricing.

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The insertion of section 20(1A) is particularly worrying as it is stated to be "subject to section 14" of the Act, which in turn provides that the PUB must ensure that its total revenues are sufficient to meet its total outgoings as well as a reasonable proportion of the cost of developing the Board's services.

Will Minister clarify whether this amendment is meant to signal any change in the way water is priced? More specifically, is the PUB intending to apportion more of the cost-sharing to consumers? What assurances do Singaporeans have that water will still be priced affordably in the future?

Sir, my next point concerns maintenance of water service installation. Under section 45(2) of the Act, a person responsible to maintain a water service installation which has a master meter and cisterns is to engage a professional engineer to inspect and maintain the system once in 60 months (or five years). This is to ensure that such systems on residential, commercial and industrial properties are fit and safe for use, and free from contamination and leakage.

Under clause 15, the frequency of once in five years will now be removed, giving the PUB discretion as to when to require the inspections. Though the explanatory note says that this removal is to give flexibility to the PUB on the frequency of inspections, what is the intention behind the amendment? Will there be installations where inspections will now be carried out less frequently, and would there be an increased risk to public health?

Sir, my final point involves other statutory boards and other persons to be engaged in implementing duties under the Act. Under clause 4 of the Bill, the PUB will be able to appoint and authorise officers and employees of "any other statutory board" to be authorised officers, giving them duties and powers under the Act. It can also appoint "any other person" to perform duties or tasks under the Act. Under clause 21, new sections 55A and 55B give authorised officers or persons vast powers of investigation, including compelling witnesses to attend, taking statements, and entry into premises to search and seize evidence.

Sir, tasks such as forced entry into premises, conducting searches and doing investigation work are confrontational by nature and have a lot of grey areas and decision points where discretion needs to be exercised in a lawful manner. I would like to ask which other statutory boards or persons will be involved in performing such functions. In addition, what assurances will the public have that they are properly trained and accountable for the exercise of such powers?

3.17 pm

Mrs Lina Chiam (Non-Constituency Member): Mr Speaker, Sir, during a Parliament sitting back in November, I had raised my concerns about the water quality from our reservoirs in light of the bodies found in Bedok Reservoir last year. The Minister for Environment and Water Resources reassured me and the public on the safety of our drinking water. Clause 3 of this Bill increases the functions and duties of the PUB in collection and treatment of water and the management of activities around the reservoirs. So, I am happy to note that the Ministry takes the matter of water quality seriously.

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Could the Minister share some more details on the other new functions of the PUB in the management and regulation of activities around reservoirs, aside from that of boat transfer facilities and on barrages, as already mentioned in this Bill? And how would these constitute an improvement on the current arrangements?

Under clause 28(a) of the Amendment of the Second Schedule, what percentage is the water-borne tax imposed in place of certain fees imposed under the Sewerage and Drainage Act (Chapter 294)?

3.18 pm

Dr Vivian Balakrishnan: I thank the two Members for their queries on this issue. Let me first reassure the House and members of the public that there will be no change to the structure or to the rates of the pricing of our water charges. The insertion of the new subsection 4 to section 20 of the Public Utilities Act simply clarifies that the Government's intention has always been that the Water-borne Fee was to be in the nature of a tax and that this has now been put beyond any doubt. This is not a new charge. I am not making any announcements for new rates or new charges. So that is not on the cards at this point in time.

Having said that, I also need to remind the House that used water that flows from our sinks, toilets and bathrooms cannot simply be discharged into the sea for environmental and public health reasons. The used water has to be collected properly through public sewers which are not leaking and then treated at PUB plants before they can be safely discharged. The current revenue collected does not fully recover the costs of treating used water and the operating costs of the public sewerage network, and I have not yet even included the capital costs incurred.

The costs of running the entire water system: this was a query that I think Mr Low made to me during COS debate. In order to provide a safe, secure and resilient supply of water for Singapore, right now, it costs PUB about $1.3 billion a year. In the same year, that is, for the year ending March 2011, PUB collected $674 million from water tariffs and $327 million from its used water fee. This includes both the Water-borne Fee and the Sanitary Appliance Fee. Even if you include the amount collected under the Water Conservation Tax, which does not accrue to PUB but goes into the Consolidated Fund, the total amount that has been collected is still less than the total amount necessary to maintain, operate and upgrade our water system in Singapore. If you extrapolate for the long term, every additional drop that we are going to have to get either from expanding our water catchment area and having to make sure that that water is clean or from recycling water through NEWater or from desalination, every additional drop is going to be more difficult and costly.

The key change that has occurred because of the technological availability of membranes in reverse osmosis is that, in the long term, a key determinant of the price or the cost of water is the cost of energy. So, no Minister for the Environment and Water Resources in Singapore can ever give you a warranty that water prices will not change in the future. It is dependent on so many factors which are beyond our control and are, in a sense, because of our uniquely water-constrained circumstances.

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Sir, I want to put all these out in the public domain so that we understand that this is a complex and difficult issue. But I also want to assure the House that we are very mindful that by running a most efficient-possible water system, we can maintain water at an affordable rate for all our people. For even those low-income families, through U-Save, we ensure that everyone has access to water that they need. Let me reassure Ms Sylvia Lim and, indeed, members of the public, that we are not changing water rates this year.

The other point that Ms Lim raised was about removing the prescribed frequency for inspecting water storage tanks by professional engineers. First, I would say that being overly prescriptive in legislation in general is not a good idea, and it is better to let this be a professional decision to be made by professionals as to the optimal frequency of these inspections. But having said that, let me also clarify that the proposed amendment is to remove the fixed frequency for inspecting water tanks by professional engineers. Water storage tanks will continue to be inspected by licensed plumbers on an annual basis, and licensed plumbers will inspect every water storage tank and the associated pipes to check for proper maintenance, cleanliness and to prevent any leaks. So I want to assure you that we are not slackening our vigilance and the need for meticulous maintenance of our water tanks and the pipes therefrom.

The proposed amendment is meant to give sufficient flexibility with the possible objective of reducing the cost burden on owners for inspecting water storage tanks. Let me give you an example. The cost for inspecting and certification by a professional engineer is estimated to be between $300 and $500 per HDB block. For an average Town Council with 500 blocks − I presume yours would be in that range − the average cost savings could amount to somewhere between $30,000 and $50,000 per year. So I am trying to find an optimal balance to save you money at the same time without compromising the safety and integrity of our water system. So, allow the legislation to provide flexibility and the professionals to make appropriate decisions.

I also want to respond to your point about the amendments to section 10 of the Public Utilities Act which will allow PUB to authorise other parties, other persons, to perform any function or duty under the Public Utilities Act, subject to such conditions and limitations as the Board may specify in writing. For a start, PUB is considering engaging agents for catchment surveillance and for the enforcement of minor offences, such as littering or causing nuisance at reservoir parks and water ways. As we open up more reservoirs and waterways for recreational activities, these authorised agents will complement PUB's own team of officers and help maintain our reservoirs and waterways in a clean and safe condition for the public's use.

Let me assure you, whichever way this evolves, PUB and, ultimately, the Minister, remain responsible for the conduct, recruitment, training and the impact that these officers have on the maintenance and integrity of our public water system and, indeed, their impact on members of the public. I give that assurance to you and to others.

Ms Sylvia Lim: Mr Speaker, Sir, I have a few clarifications. First, I would like to clarify with the Minister that my concern about the water tariff was not about the water-borne tax but about the main tariff itself which has been elaborated upon in the new proposed section 20(1A), and my question was on whether the enumeration of those various factors that can be taken into account is a signal we can expect some change in the water pricing formula.

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Secondly, he mentioned that there will be no change this year, but I am wondering whether he is suggesting that there could be changes next year. Is that what he is saying?

Last of all, regarding the other persons to assist PUB in its functions, he did not answer my question about which statutory boards he foresees, for example, to be engaged in this process to assist PUB.

Dr Vivian Balakrishnan: I do not want to jump to next year's Budget Debate. The purpose of enumerating these factors is just for greater clarity and transparency. We are not enumerating this as a prelude to increasing water charges. But I also want to transparently and openly tell you that, based on the current trajectory, the cost of producing safe water will be under great pressure in the future and it is not possible at this point in time to give you an assurance that it will never be raised in the future. At the appropriate time, if we need to do so, we will do so, and we will explain it fully. But for this year, we are not making any changes.

You have asked about other agencies. For a start, within our own Ministry, NEA officers would also have an interest in littering and in the maintenance of cleanliness and, certainly, with respect to our reservoirs, there is an obvious group of people we will reach out to. But I am considering other people. We may have to outsource some of this routine work which could be outsourced to other people. But the point that I am trying to make is that it is our duty to make sure whoever we recruit to do this is properly trained and is held accountable and performs to the level that you would expect of any other public servant.

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. − [ Dr Vivian Balakrishnan ].

Bill considered in Committee; reported without amendment; read a Third time and passed.