MORE TRANSPARENCY FOR GOVERNMENT LAND SALE PROGRAMME

MORE TRANSPARENCY FOR GOVERNMENT LAND SALE PROGRAMME

35.

Mdm Ho Geok Choo asked the Minister for National Development (a) further to the changes announced in March 2010 to enhance the reserve list system for land sales, what other measures can be taken to make the system more transparent; and (b) whether it is possible to announce the Government's reserve bid price for state land so as to ensure a fairer bidding system and market price.

Mr Mah Bow Tan: The Reserve List system is working well. In the first half of 2010, developers have successfully triggered 13 sites(2) for sale from the Reserve List. This is the highest number of sites triggered since the introduction of the Reserve List System in the second half of 2001.

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The Government releases and sells sites on the Reserve List in a fair and transparent manner. When a developer submits a bid price for a Reserve List site that is acceptable to the Government, the site will be released for sale via public tender. This acceptable bid price at which the Government is prepared to award the site is made known to the public prior to the tender for the site. After the tender has closed, all the bid prices submitted by developers and the successful tenderer for the site are also made known to the public.

Mdm Ho asked whether it is possible to announce the Government's reserve bid price for state land. We do not think that making known the Government's Reserve Price for sites will make the system work better. In deciding whether to allow a trigger of a site from the Reserve List or whether to award a site that has been tendered out, the Government uses the Reserve Price as a guide. It is not used as the minimum price. There have been instances in the past when we have both allowed the successful trigger of sites as well as the award of sites at bids below the Reserve Price.

Where there are sufficient bids from developers to indicate the fair market value of a site, we can choose to allow a trigger or award even if the top bid is below the Reserve Price. By not announcing the Reserve Price, we let developers decide the price they are prepared to pay for a site, and their bids thus provide us with a sense of the fair market value for the site. If we were to reveal the Reserve Price for sale sites, then it may influence or distort the developers' independent assessment of land prices and their bids, or deter some developers from bidding.

It is in line with this principle that we announced in March this year that the Government will consider launching a Reserve List site for sale once it has received sufficient market interest for the site. That is, if there is more than one party that submits a minimum bid price that is close to the Government's reserve price for the site, we will consider releasing it for sale immediately. In short, the Reserve Price is not a strict minimum price for either the trigger or award of sites.

(2) The 13 triggered sites in the first half 2010 GLS Programme, comprise seven residential sites, two commercial sites, one white site and three industrial sites. A total of 77 sites (including the 13 sites in first half 2010) have been successfully triggered for sale since the Reserve List system was introduced in second half 2001.

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