HEAD T - MINISTRY OF NATIONAL DEVELOPMENT

**** Head T – Ministry of National Development (cont.)

Resumption of Debate on Question [5th March 2010],

"That the total sum to be allocated for Head T of the Estimates be reduced by $100." – [Mr Cedric Foo].

Question again proposed.

_Residential property prices
_

The Senior Parliamentary Secretary to the Minister for the Environment and Water Resources (Dr Amy Khor Lean Suan): Sir, Minister Mah gave a robust and immaculate defence of HDB’s housing policies last week despite the controversial and divisive nature of the topic. He has also shown flexibility in adjusting those policies to plug gaps that have emerged, such as the HDB concessionary loans for second purchase.

I have one point to add to the cash-over-valuation (COV) issue. COV is "uniquely Singapore". No other jurisdiction has anything like it. As an ex-practising valuer, I am puzzled by it. If there is widespread occurrence of COVs for particular flat types or locations, the COVs should form part of the evidence that constitute the basis of the valuation. In other words, unless the market goes totally ballistic, valuations should move up and reduce the COVs. It would therefore be an anomaly if COV persists. I urge the HDB to review the entire COV issue.

I also have a point to add to the issue of speculation in the HDB market. Based on anecdotal evidence, there are HDB flat owners who sublet their entire flat in contravention of HDB rules. I have come to know of an estate agent who owns five private properties, who bought a resale flat and promptly sublet the entire flat. His daughter and grandmother were also found to have done the same thing. Such "unnatural" demand also helps to fuel price rises. For the rules to be effective, HDB must enforce them vigilantly.

Let me now turn to the subject of private property, though I must add that the public and private housing markets are not distinct but interrelated and interacts with each other.

The complaints aired in recent months – rising property prices, project sell-outs – are symptomatic of short-term dislocations between the housing market and the overall economy. However, if overall economic growth and property prices continue to diverge for a prolonged period, we run the risk of blowing a real estate bubble, just like that in the US.

The Government’s recent interventions to cool the housing market albeit in a calibrated manner to avert a property bubble is thus welcome. Coming down with a sledge hammer could lead to a property market crash which is equally, if not, even more unwelcome as this would also have a domino effect on the rest of the economy. The Government would have to continue to vigilantly monitor the market and act to remove any speculative tendencies.

I would like to highlight one trend which I consider unhealthy – the proliferation of Mickey Mouse housing units. Profit-maximising developers want to push dollars per-square-feet of every unit up. The way to do so without hurting sales is to reduce unit sizes to make them "affordable" on a lump sum basis. Touting such high dollar per-square-feet prices can also influence buyers in the highly sentiment driven market and give the perception that property prices are experiencing steep price rises. The headline screams, "$1,634 per-square-foot for a unit in leafy Siglap."

I would like to ask the Ministry to guard against and/or calibrate the proliferation of such units.

Property prices

Mr Chiam See Tong (Potong Pasir): Sir, I shall talk about more measures to curb property prices.

Sir, in order to curb property prices from escalating further, I would suggest that the three-year minimum observation period for sale of each HDB flat only be imposed on permanent residents (PRs) and foreigners, and not on Singapore citizens. PRs and foreigners should also wait for three years before they are allowed to purchase HDB flats. After all, foreigners and PRs are only allowed to sell their private properties after three years of purchase.

The Chairman: Mr Liang Eng Hwa, you have two consecutive cuts. Take them together.

Property market

Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, Singapore’s private property market is small by both global and regional standards. Coupled with a significant number of foreign buyers and high ownership mobility, our local property market can be quite easily heated up. To complicate matters, we do have en bloc fevers from time to time that cause short-term distortions to the market.

In the last few months, I have heard remarks from friends and in the community such as "just close your eyes and buy, and it would not go wrong!", or at the launches, you hear "no cheque book, no deal", or even some issuing signed blank cheques for property launches. As a result of buoyant activities, prices have moved up sharply.

This was in sharp contrast to last year's COS debate where we were talking about how to help the real estate industry tide through the downturn. Despite a still sluggish economy which is recovering from one of our sharpest recessions, the property market rebounded very strongly in the second half of last year. Once again, our property market has demonstrated its highly volatile nature. Is this a case of a demand-supply mismatch?

Hence, I am glad that the Government has come up with the recent cooling off measures and urge the Government to continue to watch the market closely.

A highly volatile property market is unhealthy for the economy. It may result in more capital and resources being allocated to this sector and thereby depriving long-term investments in other productive sectors.

I would like to ask the Minister to give his thoughts on the state of the current property market. In particular, I hope that the Minister can address the fundamental question as to whether there is sufficient supply to meet the demand in the next one to two years. Are there unusually large numbers of foreign buyers coming to the market and are they one of the causes for the rising prices? Is there evidence of unhealthy speculation in the market?

I would also like to ask the Minister how the Government determines whether the property market is speculative, bubbly or overheating? What are the key indicators and references that the Government uses? Would it be better if the Government adopt a more transparent approach and communicate these to the market? I believe more information and communication will lead to less volatility as well as reduce second-guessing by the market players and participants?

I also hope that Government can look at ways to pre-empt another emergence of the so called " en bloc fever". Excessive en bloc activity could cause distortions to the property market and add volatility in the short term. If too widespread, it is a negative externality to the economy as it adds upward pressure on costs in a tight labour market condition and can contribute to further bottlenecks in the construction industry.

Besides, en bloc related construction activity can be harmful in many other ways. To the environment, it is extremely wasteful to tear down and rebuild buildings in otherwise great condition. We have also read about how en bloc sales at private estates have heightened tensions and stirred up conflict among neighbours, residents and developers. Some of these disputes end up being played up in the courts, costing involved parties more money and stress. This would certainly destroy the social cohesion that we are trying to foster.

I feel strongly that the Government should look into the en bloc rules and look into ways to slow excessive and wasteful en bloc activity.

Limited land resources

Sir, with only about 710 square kilometers and a residing population of almost five million coupled with the aspiration to be one of the leading economic powerhouses in Asia and in the world, land use planning in Singapore is probably the most challenging task of any land planners in the world.

Here, we have to salute the land planners at the Ministry of National development (MND) and Urban Redevelopment Authority (URA) for having done a great job for Singapore since independence. Singapore is now a great place to live, work and play in Asia despite our tight land constraints.

Going forward, our limited land resources will be increasingly squeezed again as we embarked on the next phase of economic growth, to be a distinctive global city. How do we plan even smarter so that the land constraint would not impede our future growth and progress? What are our options – short term and long term?

The Economic Strategies Committee (ESC) has also come up with recommendations. I would like to hear also Government's response to the recommendations, and in particular how would the emphasis of land productivity impact the cost of industrial land.

Concept plan 2011 – Singapore's future

The Senior Parliamentary Secretary to the Minister for Community Development, Youth and Sports and Minister for Transport (Mr Teo Ser Luck): Sir, three years I signed up for a marathon. In all the marathons I have run, there are white strips after white strips on the road. It is a very long road when you think about 42 kilometers of running. But I was actually looking forward to this marathon. It can lead me from one place to another on a pavement, instead of the road. So it led me from the coast, to the lagoon, then to the HDB flats, ran beside the coffee-shops, back to the beach, go into the residential area and finally to the end point. This is what we call pavement running or now popularly-known, park connectors.

I am also very excited that the Ministry of National Development (MND) is talking about building an entire park connector round-island pavement of 150 kilometers. When that is up, you can imagine that families can go trekking for three days two nights – around Singapore, going through industrial areas, residential areas, HDB heartlands, into the city and back to their home.

I have lived in two other cities for a period of time. These cities are filled with a lot of energy and business life, but also a lot of people. However, they have vast land and nature. That is something that Singapore does not have in natural reserves, vast land or nature. But, then, I would say that the credit goes to the Singapore Government and the Ministry of National Development for doing very careful planning to keep our rustic nature. The other day, I signed up for another long distance race of 25 kilometres, that is to run the trails from MacRitchie Reservoir, to Peirce Reservoir, into Bukit Timah, and back. That was only 25 kilometres, but the longest distance is about 100 kilometres. That 100 kilometres takes you round two loops of 50 kilometres. Singapore does have 50 kilometres of trails, and I am not sure if many Singaporeans know that.

We are not just an urban city, we actually have very good reserves and nature to enjoy. I am glad that MND has now launched the Concept Plan 2011 public consultation to plan for the next 50 years. To me, it is a very important project, as a nature-lover and an outdoor-activist. This is not just to plan the infrastructure to contain the population, but it is also to meet the aspirations of citizens like me for quality living, so that they can have the rootedness and sense of belonging.

But we face many challenges, because we have land constraint, a really dense population, changing demographics, an increasingly greying population, a different population mix and environmental changes. I hope that the Concept Plan 2011 has considered all these factors and discussed these issues as well, and how we can overcome these challenges. There will be many trade-offs as you decide how best to position Singapore in land planning, both as a home and as a place for business. There is no easy solution. That is why the Concept Plan 2011 is important as it looks at the next 40, 50 years to answer these questions. I really hope that you would be able to do the forward planning as well as we did 40 years ago and achieve the same success. Singaporeans will continue to find Singapore a place they can identify with, be proud of and make it their home.

Effective land use

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, Singapore's growing population exerts increasing demand on land use for housing. With the increasing demand for housing, more land parcels are being released for both private and public housing development. The people to land ratio is facing an increasing stress on space. Can the Minister share with the House what criteria and planning considerations are taken, with the increase in people density when planning for the optimal use of land for housing, especially in our mature estates?

As we have more people living on the same plot of land, using the same amenities and increasing the load on the same road transport and public transport networks, what efforts are being made to enhance greenery, to preserve a sense of space and well-being in high-density areas?

The increased density of people in our estates will strain public amenities, transportation infrastructure and carpark facilities. When land parcels are released for development, what considerations are given to capacity planning on the increased demand on existing amenities and load on the physical infrastructure?

What measures does the Ministry have to ensure that there continues to be sufficient open spaces like parks and sporting facilities within the estate, for residents to relax, interact and for recreation activities?

As we all know, living in cities and living in high-dense areas can be really very stressful. As we use space more optimally, let us give consideration to at least having some space for people to relax and, hopefully, continue in our journey of gracious living and quality living.

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Planning for long-term growth

Mr Lim Biow Chuan (Marine Parade): Sir, earlier this year, the Urban Development Authority (URA) launched its Concept Plan 2011 public consultation exercise. I am glad to note that our city planners take much effort to plan for the long-term development of Singapore. May I ask the Minister whether the planning authorities have considered the total infrastructure of the area when approving developments?

Do the authorities consider whether the roads, the parks and other social amenities are adequate to cope with the expected increase in the number of residents in an area?

To take an example, URA had previously approved several residential developments in the Katong/Amber Estate area. Thus, we have new condominiums like One Amber, the Aster and the Seaview, all being developed in the area. As the residents started to occupy their apartments, the concern they expressed is whether the roads are able to cope with the expected increase in traffic. Are there sufficient parking places for the residents in the estate? Are there sufficient social amenities like parks, shopping centres, markets and eating outlets to cater to the additional residents? Would there be heavy traffic congestion during peak hours along the roads in the area? There will also be additional developments coming up soon like the Silver Sea and Shore Residences. These condominiums will bring about another few thousand residents. Has URA taken into account these additional residents in the area when they approved the developments? How does URA intend to prevent overcrowding which will add to the social pressure for the residents in the area?

Housing for elderly

Dr Fatimah Lateef (Marine Parade): Sir, in the 2008 COS with the vision of the oncoming silver tsunami, I had brought up this. This year, yet again, a call for reconsideration for a retirement village concept tailored to the needs of Singapore combining elderly capable of independent living, those with assisted living and residential as well as nursing homes, all housed in an area equipped with facilities. Appropriate and relevant staffing will, of course, be required. The well elderly can provide manpower for employment in the retirement village, helping their weaker and immobile counterparts. This integrated concept of dwelling units, nursing homes, stalls, restaurants, etc, which are elderly-friendly and even partly manned by the elderly can certainly cater to their various needs – an extremely wholesome concept for living for our rapidly ageing population. What is MND's take on this retirement village concept this year, this time?

The Chairman: Ms Irene Ng, take your two cuts together.

Giving soul to the city

Ms Irene Ng Phek Hoong (Tampines): Sir, Singapore seems to be sprouting giant shopping malls everywhere. And now, oversized Integrated Resorts. They scream that we are a consumer city – even a copy-cat city.

You see the same offerings at any other large city in the world. They say nothing about our cultural heritage or our distinctive character.

Sir, we need to inject more soul into the city. We should identify more heritage areas and create a buzz around them while preserving their authentic, old-world charm. This should be done in an integrated masterplan, involving not only the hardware of buildings, but also the software to give the area its own personality.

A great example is Haji Lane and Arab Street – pulsing with the energy of our vibrant culture. A not-so-good example is Boat Quay. Visitors walking along the promenade today will not get a sense of its history. They would not know that it was once a major port in Singapore, or one of the most popular sites for Chinese street story-telling, stunts and opera performances. Why not build a maritime museum along the river and also bring back the aura of that history?

We should also be innovative and creative. Why not use our Electronic Road Pricing (ERP) gantries, bus stops, MRT stations, even rubbish bins, to display our heritage and creativity? Work with our local artists to hand paint on them. For example, the bus stops and ERP gantries in Orchard Road can have an orchard theme. Those in Chinatown can have a Chinese theme.

It is by involving people that the city evolves its personality. We should also allow people to adopt benches to commemorate a person or an event. For example, a husband can sponsor a bench in Boat Quay in memory of his wife because they used to date there regularly. Others reading the inscriptions would connect with the gesture.

Sir, it is our unique history, cultural diversity and the human touches which would give the city personality and soul. Then perhaps one day, our slogan can be "Singapore: The City with Soul".

Green spaces and coastal areas

Sir, go to the East Coast Park on any weekend and you can see crowds of people jostling for space – walking, jogging, cycling, roller-blading, camping, fishing, flying kites, and so on.

All over the island, our parks, beaches and other recreational spaces are getting over-crowded. It is good that more people are into outdoor activities. However, the whole idea of being outdoors is to have a sense of freedom and space, and to connect with nature.

We need to provide more areas for our often-stressed Singaporeans to get away from it all. Reports about a man with this big problem of not knowing where to row his own kayak , and the rise in illegal fishing, point to the need to give more thought to this.

The Ministry has done a good job of turning this island into a garden city. I especially commend it for building the park connectors. Like Member Teo Ser Luck, I have also enjoyed it tremendously, cycling from East Coast to Changi Village and marvelling at the natural beauty around us.

I would like to ask for an update of the work to link up the major parks, nature reserves and housing estates throughout the island.

Besides the main island, more should be done to develop our offshore islands into recreational areas, where people can swim, kayak and island-hop. But please do not turn them into another Sentosa, which has an artificial plastic feel about it.

When I was in Koh Samui and Phuket, it was easy to hop from island to island on a boat, and to swim and snorkel. However, the experience was somewhat marred by the hordes of tourists, the pollution of the boat engines and the destruction of corals.

Sir, we should use our own parks and coastal areas to teach Singaporeans, especially the children, to respect the environment and to love nature. Let us have more educational signs to teach them to identify the wildlife species that live under their own noses.

Many Singaporeans did not know that we have rare sambar deers living in the wild until one was recently killed by a car on the Seletar Expressway. This accident raises a red flag – is encroaching development threatening their survival?

I would like an assurance from the Minister that we are doing all we can to protect the habitat of our wildlife.

The Minister for National Development (Mr Mah Bow Tan): Mr Chairman, Sir, I thank Members for their questions on land use planning. First of all, Mr Liang Eng Hwa asked about our land use planning policies. I would like to assure him that the Ministry of National Development's land use policies will be geared towards supporting the economic recovery which has just started and also the ESC's recommendations to build a distinctive global city for all.

First of all, we will continue to maintain a stable property market which will underpin the economic recovery. Mr Liang asked what are the indicators or fundamentals that Government looks at to determine if the property market is bubbly. We do look at several indicators including price increases, transactions, sub-sales, and so on. We do not have a specific set of indicators or trigger points that say that we should do certain things when some things happen. We are not on auto-pilot, in that sense. It is not only looking at indicators but having a sense of judgment as to what is likely to happen in the months going forward.

As a result of that monitoring, we assessed that there was a high risk that a property bubble would be forming. In February, we introduced two measures to temper sentiments in the market. One was the decrease in the Loan to Value (LTV) ratio and the second was the imposition of a seller stamp duty. Why did we do this? Because in January, price increases had been strong and also the transactions were also at a high and the risk of over-heating was high. A property correspondent in Zaobao named Wu Hui Min put it this way: it is far better to take the liang cha (or cooling tea) now rather to take the tui shou yao (or aspirin) later on when the market is over-heated.

Mr Chiam had asked for more measures to curb property prices. I also remember Mr Hri Kumar asking for more severe measures to deter speculation. Let me say that we do not intend to introduce more measures for now but we will monitor the market closely. And if there are signs that the market will over-heat again, we are ready to introduce additional measures to stabilise the market.

Dr Amy Khor asked a specific question about what she calls "Mickey Mouse" units, extra small units. My view is that, beyond ensuring market stability, we should let market forces determine prices and also the type of unit sizes that they want to develop. But I do agree that the headlines about these units' high price per square foot (psf) are indeed misleading. I would suggest that we do more to educate consumers not to take such headlines at face value.

The second area of land use planning I want to emphasise is adequate land supply. We will ensure that there is an adequate supply of land to support economic growth. Mr Liang asked about foreign property buyers and also about whether the Government can provide more property market information. Singapore is a key city in growing Asia. I think it is understandable and natural and, indeed, not a bad thing that there is foreign interest in private residential properties here. But having said that, properties in Singapore will still remain largely in the hands of Singaporeans. Singapore residents last year accounted for close to 90% of all private property housing transactions. In the public housing market, the bulk of it is owned and occupied by Singaporeans. The Government will continue to ensure that there is adequate supply of private housing to meet the needs of both locals and foreigners through the Government Land Sales Programme which we announce twice a year. URA also releases property market information to the public regularly. There is ample supply of private housing in the pipeline to meet demand over the next one to two years. Buyers need not rush into the market.

Mr Liang also asked about further steps to pre-empt en bloc fevers. As he knows, this is under the purview of the Ministry of Law (MinLaw). MinLaw has been reviewing existing en bloc legislation and taken into account the feedback and the suggestions from the public. Any changes to en bloc rules will be made by MinLaw in due course.

We will also continue to ensure that we have an adequate supply of commercial space in terms of both quantity as well as mix to support the ESC's objective which is to nurture a diverse eco-system of enterprises.

In previous years, in the Committee of Supply, I had mentioned that we are planning to develop new growth areas in Jurong Gateway, Paya Lebar Central and also the Kallang Riverside. Despite the downturn, we have pressed on with infrastructure works and more sites at these areas will be progressively released for sale for development from this year onwards. Together with the grade "A" office spaces in the Central Business District (CBD), they will offer commercial firms more choice in business locations.

We will further catalyse growth at Jurong Gateway and Paya Lebar Central by relocating several Government agencies out of the central area to Jurong as well as Paya Lebar. My Ministry, the Ministry of National Development, and our statutory boards, AVA and BCA, will move to Jurong Gateway by 2015. The Ministry of the Environment and Water Resources and its statutory boards, PUB and NEA, are also planning to join us in Jurong.

The Workforce Development Agency (WDA) will move to Paya Lebar Central. Its new Continuing Education and Training (CET) campus that is targeted to complete by the end of 2013 will also be located there. The relocation of Government agencies will free up prime office space in the city to meet private sector demand. By 2015, we expect the current supply of one million square metres of office space in the pipeline would have been taken up. These relocations will be timely and will help to free up more space for the private sector.

12.30 pm

Thirdly, we will make the supply of land more responsive to the market with three improvements to the reserve list system. First, with immediate effect, we will reduce the deposit required from successful applicants of reserve list sites from 5% to 3% of the minimum bid, subject to a cap of $5 million to reduce the cashflow burden to successful applicants. Second, we will henceforth consider releasing a reserve list for sale immediately if there is more than one party that submits a minimum bid that is close to the Government's reserve price for the site within a reasonable period. As Members may know, prior to this, a site is released for sale only if a developer submits a minimum bid which is equal to or higher than the reserve price.

Third, we will make available a larger supply and wider variety of sites in the reserve list in the second half 2010 to give developers more choice. The second half 2010 Government's land sales will be announced somewhere towards the end of June.

Let me now touch on the Concept Plan 2011. Several Members, including Mr Teo Ser Luck, Mr Liang Eng Hwa, Ms Jessica Tan and Mr Lim Biow Chuan asked how we can tackle the land constraints and growth and still make sure that the infrastructure that we provide enables our population to enjoy a good standard of living.

We have an integrated planning system. This is a very holistic system that involves all Government agencies and it guides the staging of land as well as the infrastructure development. MND and URA have embarked on the Concept Plan 2011 Review. We do a Concept Plan Review every 10 years, so the next one is 2010 Concept Plan Review and this Review will chart our land use strategies over the next 40 to 50 years – 2050 and beyond. The developments that we see around us today, whether it is Changi Airport, the MRT network, Marina Bay, all these are developments that we enjoy today because of the work that went into previous Concept Plan Reviews. Similarly, the Concept Plan 2011 Review will highlight certain areas of growth and certain areas for development that we will see in the next 20, 30, 40 years.

Our objectives for Concept Plan 2011 are very simple. We want to support growth but, at the same time, we want to maintain a quality living environment. Under the Review, we will develop strategies to increase land productivity to support future growth. This was one of the recommendations of the ESC. It means intensifying land use as well as rejuvenating existing land, make better, make productive use of existing land for higher values.

In response to ESC's recommendation, we will study the development of a new waterfront city at Tanjong Pagar and Pulau Brani. But this will only take place after 2027 when the lease for the port of land – which PSA currently holds – runs out and PSA moves out. We will then identify opportunities to rejuvenate mature industrial estates as well.

While the Government plans for land use and infrastructure at the macro level, I think Members rightly pointed out that we should also not lose sight of the micro level and so we should leverage on the market to allocate scarce land resources to the most productive uses. We have studied ways to inject greater flexibility into land zoning so that our land use system can be more responsive to the changing needs of our economy. Here, I hasten to add that we have to do so in a very targeted way because land zoning is still relevant and it is still an important aspect of our land use policies because it helps to protect the amenities of the residents and the landowners in the area. It also ensures that we have sufficient and adequate land to meet various needs in the future, including industrial needs.

We will also study new ways to create land and space. We have reclaimed land over the last 40, 50 years. There is still scope to reclaim land. But there is a physical limit to how much land we can reclaim due to the availability of sea space and also to the technical constraints of reclamation. The same consideration applies to floating structures. There have been some suggestions that we should make more use of floating structures. But scarcity of sea space as much as scarcity of land space means that we do not have as much flexibility in this area. What we can do is try to build as much as possible upwards and this we have done. When the last Concept Plan Review was made 10 years ago, there was already a suggestion that we should increase our plot ratios and build more developments upwards. But we will also be studying new ways to build downwards, to use underground space and synergise new underground spaces with the space above ground and the surrounding developments – the underground Science City at Kent Ridge is one example of what we can do.

In parallel, we will examine new strategies under the Concept Plan Review to improve the quality of living in Singapore. This Review will take into account our changing demographic profile and it will ensure that there are adequate social facilities – housing, leisure, healthcare, etc, to support our future population. In this regard, I want to address specifically Dr Fatimah Lateef's question about retirement village. She has asked this several times. I want to point out that we do have our own version of a retirement village. It is not the sprawling retirement villages that we see in USA or Australia but it is our version. HDB has built "studio apartments". Our studio apartments cater to the housing needs of the elderly and there are provisions for social amenities, VWOs, etc, in the vicinity that help to look after the social and medical needs of the elderly. At the same time, in response to requests from some developers, we released the site at Jalan Jurong Kechil which can be triggered for a private retirement housing development. This site has not yet been triggered and there have been proposals to extend the lease of this site from 30 years to 60 years which we are considering.

Let me just add that we are unique in that a large segment of our population own their homes. Eighty per cent own HDB flats and others own private properties. It is not just a hardware response that we should be looking at but also software enhancements, meaning how do we allow the elderly to age in the homes that they already own and this, again, Mr Lim Boon Heng's Committee on Ageing is looking at it, together with the Ministry of National Development, MCYS and MOH.

In response to Ms Irene Ng's comment about safeguarding nature areas, I would like to assure her that we will continue to safeguard nature areas in the Concept Plan. We are not blessed with the crystal blue waters of Koh Samui but we do have nature areas that we want to preserve and what precious little we have, we will look after for our future generations. NParks will step up public education on biodiversity conservation. This year is the International Year of Biodiversity (IYOB) and NParks will be rolling out a series of programmes in conjunction with the IYOB.

Sir, ultimately, quality of living is subjective. As part of the Concept Plan process, we will consult the public on how we can enhance the quality of living in Singapore. We will certainly take note of Ms Irene Ng's suggestions on developing our islands but land constraint is a reality for us. Through innovative land use such as developing eco-links to serve as Park Connectors, animals can move from one part of the reserve to another. It also helps to enhance biodiversity. In this way we can marry recreation as well as conservation objectives. But we will inevitably have to make tradeoffs at each stage of our development between conservation and development among housing needs, leisure needs, industry needs. These are the tradeoffs we need to make to ensure that we develop in a more sustainable way.

Sir, 2010 will be a milestone year in the remaking of our city. Singaporeans can look forward to many improvements in our cityscape and their immediate neighbourhoods. Developments are not just in downtown but also in the heartlands as well.

Let me highlight plans for the downtown. By the middle of this year, the Marina Bay Promenade will be open. Singaporeans will be able to enjoy a 3.5-kilometre stroll, starting from our first Ark Park, next to the Marina Bay floating platform, over the double Helix Bridge and onto the waterfront promenade fronting the Marina Bay Sands Integrated Resort. This stroll will end at the Marina Bay's financial centre where phase one of the project will be completed this year.

We will also invest more in the software programming to activate key areas in our city. I think it is very clear to us that just hardware alone will not do. URA has planned a series of events called the Marina Bay Invitations 2010 to inject buzz and excitement into the Bay. This includes a mass walkathon and carnival, an urban light festival as well as the annual Marina Bay Singapore Countdown.

Besides Marina Bay, concrete improvements will be made to other places in Singapore. Ms Irene Ng asked how we can enhance our heritage areas. For her information, URA has conserved some 7,000 buildings since 1989 and identified 15 areas that are socially significant. Many of these places have been physically enhanced under URA's Active, Liveable and Endearing (ALIVE) community programme which upgrades waterfront areas, enhance community spaces and improve amenities in these familiar places.

Some examples of these projects completed under ALIVE by URA – together with other agencies like PUB – include the Changi Point Coastal Walk, the Southern Ridges, Siglap Village. These are places that have become very popular among Singaporeans and tourists and more such improvement projects are in the pipeline. Over at Upper Serangoon Road, pedestrians also enjoy wider walkways and large landscaping. The Member of Parliament for the area, Ms Cynthia Phua and her grassroots members have suggested installing storyboard markers and sculptures to depict the rich local history in the area and URA would be taking up those suggestions. In Geylang Serai, we will commence works this year on a new pedestrian mall which will provide space for community events like the popular Hari Raya bazaar.

Ms Irene Ng also asked for more parks and recreational areas. We will do just that. Woodlands Waterfront will be completed later this year. Punggol Promenade and the Labrador Nature and Coastal Walk will be completed within the next two years. When the Labrador Nature and Coastal Walk is ready, we can link that up with the Southern Ridges Walk where we cross from the Southern Ridges, go down Alexandra Road, walk along this Labrador Nature Walk and eventually reach Vivo City.

Sir, our vision of Singapore as a city in the garden is also taking shape fast. The 54-hectare Gardens by the Bay at Marina South will offer Singaporeans a new experience of urban greenery. Two cooled conservatories will showcase plants and flowers from the tropical Montane and Mediterranean regions. Super trees that are nine to 16 storeys tall will feature vertical gardens with large foliage and tropical blooms on them. Concerts and shows would be held in the Garden City setting for Singaporeans to enjoy. The construction of the Gardens by the Bay is on track.

It is expected to open by the end of 2011. Key infrastructures such as the drainage, lake system, the land forms, the road works, have been completed. Tree planting has started. In fact, tree nursery has also been established and the two conservatories are being constructed right now.

12.45 pm

Apart from the Gardens by the Bay, residents can also look forward to new and rejuvenated regional parks over the next two years, these include new parks in Punggol, Bishan, Sembawang and Yishun. Our parks will be more accessible as we expand the Park Connector network. This is the Park Connector network that I think many Members have used either for cycling, jogging, roller-blading, etc. And this year we will launch the Northern Explorer Park Connector loop which will serve residents living in Marsiling, Woodlands, Sembawang and Yishun.

Mr Chairman, Sir, allow me to end my remarks with a short video clip to share with Members what a wonderful home we have and what we look forward to in the next few years – a beautiful home in a garden. [ Video clip shown to hon. Members. ]

Constructive productivity

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Sir, I am absolutely excited about the vision of the beautiful home that we are building here in Singapore and how much better if we can do so productively as well.

Sir, the Construction 21 (C21) report of 10 years ago set up the vision for the Singapore construction industry to be world-class builder in an knowledge age. The C21 study steering committee formed four working groups which comprised members from professional bodies, trade associations, regulatory bodies, public agencies, tertiary education and the public. They deliberated on issues that cut across the entire construction value chain, from upstream activities such as design and the tendering of projects to downstream construction activities and to the final stage of maintenance of the finished product. The report contains 39 specific recommendations to uplift productivity and standards in the Singapore construction industry. And there was every reason to be hopeful that such a comprehensive effort will propel the construction industry's productivity forward strongly. Today, the industry's productivity still lacks those of various developed countries significantly, for example, Australia and Japan has been quoted. I would like to ask the Ministry for its assessment of the extent to which the recommendations of the Construction 21 report have been implemented and whether the intended outcome have been achieved. If the recommendations have not been largely implemented, then I would like to know the reasons for that. And if on the other hand, the recommendations have been largely implemented and the outcomes achieved, then I would like to know where the gaps are that had led to the non-transformation of the industry thus far.

I would like to ask what plans are there to speed up the pace of progress over the coming decade in construction methods and productivity, both relative to the past and in comparison with other developed countries. And how does the Ministry of National Development and the Building and Construction Authority intend to enlist the partnership of the related industry bodies and unions in this endeavour?

Construction industry

Mr Cedric Foo Chee Keng (West Coast): Sir, we heard during the Budget debate that when benchmarked with other countries, our construction sector is lagging in productivity to a larger extent than other sectors in our economy.

With the latest $250 million shot in the arm for the construction sector, by the way of the National Productivity Fund, can the Minister elaborate on initiatives that are planned to facilitate the industry's transition to greater use of productive building methods and technologies, a point which my colleague, Mr Heng Chee How, has mentioned? Will measures be in place to incentivise local contractors who embraced more productive building techniques and also how do we support those impacted by the increase in foreign worker levy?

Er Lee Bee Wah (Ang Mo Kio): Sir, the construction industry has of late been in the limelight. Today, because it has kept pace with the times through upgrading, substantial precast system has been used. It is good. However, with the rapid building boom in the last few years, the industry is once again struggling, trying to find its feet as job demand outstripped this capacity to cope. The result: an industry that became somewhat bloated with foreign workforce, including foreign workers, foreign engineers, foreign architects and foreign construction firms.

With imminent revision of foreign workers' levy, will the industry players take a hard look at their manpower needs and invest in training and capability building or will just simply price in the cost?

The construction industry has always been perceived as labour intensive, highly reliant on foreign workers with low productivity. The ESC has recommended that measures are needed to encourage investments in technology and innovation. Can the Ministry share with us what are some of the measures the Government will put in place to help the industry move towards technology adoption and reduce our reliance on foreign workers. Besides precasting and modular design, is there anything else that we can do to improve productivity? Is there any grant to help the designers upgrade their computer software and hardware? I must declare my interest as a design engineer. What else can be done in terms of capability building? Certainly, we hope that the transformation will not be translated to higher costs and more expensive flats.

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, our calibrated policy on employment of foreign workers and our open economy has allowed our economy to grow at a pace and scope that is envy of many countries.

In 1990, 14% of our three million population were foreigners. We now have foreign workforce that make up more than a million of our close to five million people in Singapore. Undoubtedly, their contribution has helped us raised standards of living for all residents. We are dependent on them to fill many jobs for which there are shortage of Singaporeans, especially in construction and marine sectors, in manufacturing and service industries. However, we now need to manage this dependence and ensure a balance proportion of total workforce over the long term. This will enable us to provide employment opportunities for Singaporeans and allow them to develop the skills and gain experience in these sectors. A shift from being dependent on cheap labour will motivate employers to look at ways to work smarter.

With the proposed increase in foreign worker levy, the construction industry will likely be the most impacted by these changes. The construction industry employs almost a quarter of a million work permit holders. Foreigners make up nearly 90% of the workforce in the industry. The levy increase is individually minimal but collectively will have direct impact on construction costs.

In tandem with the proposed increases, Government programmes and schemes must also be introduced over the three years to raise skills, productivity levels to attract Singaporeans to re-enter the construction sector. If the employers react by reducing the workforce as a knee-jerk reaction, then our goal to re-skill Singaporeans will not be achieved.

Can the Ministry of National Development share its strategies to address these issues? How does the Ministry of National Development intend to assist local contractors to increase and sustain productivity? Within a short timeframe, what will be the measures to improve and enhance the image of the construction industry to attract more Singaporeans into the workforce?

Mr Liang Eng Hwa: Sir, the construction sector, despite accounting for only 6.2% share of the GDP value-add, has helped underpin the overall economy with its double digit growth in the last few years.

More often than not, the concern for the construction sector is whether the industry has the capacity to meet the ever increasing construction needs of the economy. There are a number of mega infrastructural projects ongoing and there are also many in the pipeline. Coupled with the increasingly buoyant property market and the recovering economy, I would like to ask the Minister for his thoughts on the state of the construction industry and whether the industry is now better able to cope with increased demand of construction activities.

In particular, also how was the level of activity for the construction sector last year compare to the peak and what is the level of activity expected in the next one to two years? How would the completion of the two Integrated Resorts impact the industry?

In one of my first parliamentary questions in 2006, I asked about the likelihood of a construction industry bubble forming in view of the many ambitious mega projects in the pipeline then. I would like to ask again whether we would again be seeing construction bottlenecks coming back like what we saw in 2007 and 2008 which resulted in sharply increasing construction costs.

With the new foreign worker levy structure, the average foreign worker levy is expected to rise by $100 by 2012, how would the increase in foreign worker levy impact the industry? Have the industry made progress in the area of technology enhancements and productivity?

With the new Budget measures and an infusion of $250 million from the productivity fund, would this be sufficient to uplift productivity and reduce the dependence on foreign workers? What are the possible initiatives and the timeline be like?

"Green" buildings

Mr Cedric Foo Chee Keng: Sir, we are encouraged by the prospects of greener building. The pilot case in Punggol, dubbed the "Eco-town", is a good example. The use of solar panels, rain water recycling, modern energy and waste management methods, are developments that would be welcomed at HDB estates nationwide. Could the Minister share with us some of the measures taken to use modern building technologies for HDB estates under construction to create more sustainable communities? As quick wins, for example, have we mandated energy efficient fittings and recycling chutes for HDB new projects?

It would seem timely for the Government to put out a plan for Sustainable Green Buildings in general, both HDB or otherwise. Following the launch of the Sustainable Singapore Blueprint in April last year, could the Minister provide an update of the measures to improve energy efficiency in the building sector, especially with the large stock of the existing buildings?

The Senior Minister of State for National Development (Ms Grace Fu Hai Yien): Mr Chairman, the construction sector is a key economic growth sector and is of strategic importance in supporting the future development of Singapore. As Members have rightly said, it is thus important that we sustain and grow the construction sector by enhancing its productivity and capabilities.

Mr Heng Chee How has asked for an update on the Construction 21 (C21) report and our plans moving forward. The industry has made progress since the release of the C21 report in 1999. Between 1995 and 1999, that is the few years before the report, the industry saw negative productivity growth ranging from -2.1% to -4.1%. For the last 10 years, which is the next 10 years after the report was released, the industry has experienced an annual productivity growth of 0.7%, a positive although low productivity growth. We have increased the proportion of skilled workers as recommended by C21 and also implemented the Construction Registration of Tradesmen (CoreTrade) scheme last year to nurture a pool of localised workers in the high-value adding trades. Today, there are about 7,000 registered CoreTrade personnel earning monthly wages ranging from $1,200 to $2,400. For some higher value added trades, such as crane operators, wages are even higher – up to $3,000 per month.

Mr Chairman, over the last 10 years, we have plucked the low hanging fruits in growing our construction industry and for the next 10 years, as many Members have rightly said, we need to do more to achieve a sustainable long-term growth. First, we need to increase the productivity of our workers and, second, we need to build up key competencies and capabilities in complex civil engineering and building projects locally.

1.00 pm

Mr Cedric Foo, Mr Heng Chee How, Er Lee Bee Wah, Mr Zainudin Nordin and Mr Liang Eng Hwa have all asked about the measures to help the industry move towards technology adoption and manpower development to improve productivity. I will now elaborate on them. In line with the Economic Strategies Committee's (ESC) recommendations to shift towards productivity-driven economic growth, we will increase the quality of both the local and foreign workforce through a new levy framework that recognises skills and experience.

As announced by the Minister for Finance in his Budget speech, up to $250 million from the National Productivity Fund will be used to support productivity enhancement and capability building in the construction sector over the next five years.

First, at the workers' level, we will set aside funds to defray the upgrading costs for workers to be trained and certified in CoreTrade. We will expand the CoreTrade scheme to include additional trades, such as drywall installation, fire protection system, lift installation and others, which will be eligible for this training incentive. We will also co-fund the cost of specialised skills training and certification for workers taking on greater responsibilities and expanded work scope. The aim is to build up a larger pool of skilled and experienced workers to help boost productivity.

Mr Zainudin Nordin asked how we can attract more Singaporeans into this industry. The Building and Construction Authority (BCA), together with the National Trades Union Congress (NTUC), has actively worked with firms to recruit locals through the Job Recreation Programme (JRP) into selected higher value trades. BCA will step up its JRP to publicise subsidised training opportunities at the BCA Academy. We will also explore new classes of CoreTrade personnel, such as construction supervisors, which can cater more for locals. BCA is enhancing its outreach to students who form the potential pipeline of new local construction personnel in higher value trades or in supervisory positions.

Next, at the firm level, we will help finance firms' efforts to adopt the technology, to innovate and to re-engineer their construction processes. For smaller firms which specialise in more labour intensive trades, we will provide support for the purchase and leasing of equipment. We recognise that the cost of technology adoption can be an impediment to firms which want to switch to a greater use of machines and technology. For example, a trained worker using spray machines for painting can reduce the time needed to complete a paint job by at least 20% compared to the use of rollers and brushes. The Straits Times wrote a very interesting article about how a company can, through the use of equipment such as a spray machine, reduce the number of workers and manage to get much better and higher value added jobs for the company. These are the examples that we hope to encourage. But we recognise that the spray machines can cost about $6,000-$10,000. So, with the Government helping to co-fund such equipment, we hope to help small builders switch to a greater use of machinery to improve their productivity.

For firms that are seeking to upgrade their productivity levels, we will provide funding support for the adoption of technology and re-engineering of workflow. For example, the use of precast facade with coloured finishes done in a factory is more productive than the conventional way of constructing walls, followed by plastering and painting works. Such works on-site and the use of scaffoldings can be eliminated. There is scope for the main builder, the precast suppliers and installers to collaborate, and to seek Government's support to improve their workflow. In addition to financing part of their equipment cost, firms can also use the funds to cover the training cost of workers to operate the equipment, as well as the engagement of specialist consultants to enhance productivity level.

Next, for the industry. For the industry as a whole, we will provide financing to help build capabilities through the use of new construction methods, and improve productivity among different firms across the value chain. For instance, firms can adopt the 3D Building Information Modelling (BIM), which is an IT solution that enhances collaboration and streamline the sharing of information across the construction value chain – from the architects to the engineers and the builders. BCA will collaborate with industry partners to test-bed and adapt new construction technology to our local context for industry-wide adoption.

Further upstream, developers and architects will have to design for greater buildability. Since 2001, BCA's Buildability Score Framework has improved the efficiency in designs, requiring the wider use of prefabrication and precast technology. As Er Lee Bee Wah has pointed out, the use of buildable structural systems has doubled from 31% before 2001 to 65% today, and the use of prefabricated wall components has increased from 22% to 45%. We have done a lot but I think we can do more, and we will do more.

Mr Cedric Foo asked about our efforts to raise buildability. BCA will require more buildable designs, including the regulation of more labour efficient construction technologies. The industry can seek Government funding to build capability in areas such as prefabrication, precast technology and other construction technology to meet the new buildability requirements. For example, builders can utilise integrated system formwork which has proven to be labour efficient and is widely used in countries like Germany.

Mr Heng Chee How asked how we would be partnering with the industry in this productivity drive. BCA will set up the construction productivity centre to champion innovative solutions and technologies in the construction sector. We recognise thatthe challenges faced by small firms can be quite different from the larger ones. I have asked BCA to set up dedicated teams to look into the specific needs of firms of different sizes.

Er Lee Bee Wah has enquired about the measures to improve the capability of the industry. BCA will work with progressive builders to build new capabilities in complex civil engineering and building works. With the strong pipeline of projects in underground expressways and rail projects, firms can tap on the fund to build up their in-house technical competency for such complex projects. Funds can be used to defray the procurement costs of performance bonds to facilitate cash flow as well as to engage external specialists. We will also introduce a new post-graduate scholarship programme and an immersion programme to develop engineering expertise to undertake these complex projects.

Mr Liang Eng Hwa has asked how the levy increases will impact the industry and whether we would see further construction bottlenecks as a result of the economic recovery and market buoyancy. In general, we estimate that the higher levies could result in 1%-2% rise in construction cost for the industry, although the actual cost impact will vary from firm to firm. The $250 million fund will support the construction firms, be they large or small, to adopt a wide spectrum of productivity improvement measures that I have just alluded to. In 2008, we saw a peak construction demand of $36 billion, which dropped to $21 billion in 2009 as a result of the economic recession. With a projected construction demand of between $18 billion and $27 billion for the next three years, there is an urgent need to improve productivity so that our construction capacity can raise its output without having to increase its workforce significantly.

Mr Cedric Foo has asked how HDB estates can be more sustainable as well as our sustainable building plan. Our existing HDB estates have designs which facilitate cross ventilation and natural lighting. For new estates, we will continue to incorporate environmentally friendly features and green technologies. For example, HDB is pushing forward the installation of solar photovoltaic panels at four precincts at Tampines, Bukit Panjang, Tanjong Pagar and Marine Parade.

HDB, together with Town Councils, also aims to reduce the energy consumption of common areas in new and existing HDB estates by 20% and 30% respectively. This is done by introducing features such as energy efficient light fittings and lift systems.

In addition, HDB has piloted centralised recycling chute systems in our existing estates. This is in Blocks 297C and 297D Chua Chu Kang. The results of the pilot study were encouraging, with about three times more recyclables collected as compared to conventional door-to-door collection method. With the plan to position Punggol as an Eco-Town for the tropics, such technologies will be explored for testing on a larger scale in Punggol.

Our sustainable development efforts must extend beyond our public housing estates. In April 2009, the Government released Sustainable Singapore Blueprint which outlined our efforts to improve our overall energy efficiency by 35% from the reference point of 2005 levels by 2030. All sectors, including the building sector, will need to play their part towards meeting this target.

By the end of this year, we will raise the mandatory minimum energy efficiency standard for Green Mark certified level for new buildings by 10% from today’s standard. Correspondingly, the energy efficiency standards for other Green Mark levels, ie, Gold, GoldPlus, and Platinum, will similarly be raised. Building owners can enjoy cost savings in the long run by being more energy efficient.

To better understand energy consumption patterns, and to monitor the effectiveness of our energy efficiency measures, BCA will require building owners and utilities companies to submit energy and other building related data, such as Gross Floor Area (GFA) and specifications of building systems, on an annual basis starting from 2011. Building owners can also use the information to proactively improve their buildings’ energy efficiency.

Going forward, BCA will consult the industry on the possibility of mandating a minimum energy efficiency standard for existing buildings.

Mr Chairman, the Government will work closely with the industry stakeholders to support the growth of a capable and productive construction industry. While foreign workers will still form the bulk of the industry’s workforce, we will work towards building a pool of skilled and experienced local and foreign workers, and a group of competent builders who can lead the industry and support Singapore’s growth and development in the future.

Barrier-free access for private estates

Er Lee Bee Wah: Sir, we have done well in transforming our country into a handicap-friendly nation. Facilities that encourage barrier-free accessibility in public infrastructure and housing are becoming more commonplace, but I feel that we can do more for those living in the private estates, eg, Yio Chu Kang Gardens which is in my ward. This private estate was built on elevated ground. Hence, the need for residents to climb 28 steps to get down to the bus stop along Ang Mo Kio Avenue 4 and the wet market at Block 628. It is a challenge for the senior citizens and residents on wheelchairs as well as parents with babies in prams and residents who use trolleys for their daily marketing at the wet market. As a result, some even turn to driving their cars even for what would have been walking distance errands. This is not only wasteful and an environmentally unfriendly act, but it has become a necessity by default under the circumstances.

To further underscore the need for barrier-free access (BFA) in one of the most severe accidents, an elderly pedestrian lost her balance and fell while climbing the steps and suffered a few broken bones. I hope BFA facilities can be implemented sooner than later before worse accidents happen. The CIPC funding given to private estates is not sufficient to construct this BFA, even if I use the funding for all my private estates just for this BFA. I urge the Ministry to extend barrier-free access to the private estates in Singapore, just like what we have done for all HDB residents.

1.15 pm

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Sir, I thank Er Lee for raising the issue of barrier-free access for residents of private estates. The Building and Construction Authority (BCA) is the agency which oversees the development of barrier-free accessibility (BFA), in Singapore. For private estates, BCA plays an active role during the design stage of the Estate Upgrading Programme (EUP) to incorporate barrier-free features, as requested by residents, eg, ramps, tactile markings in bright colours on pavements.

Some barrier-free features like the long ramp over steep terrain, as Er Lee has mentioned, can be very costly. For estates that have been selected for EUP, we often advise residents on the need to plan carefully to make the best use of their upgrading budget.

The Chairman: Any clarifications? Mr Foo.

Mr Cedric Foo Chee Keng: Sir, it is interesting to listen to the Minister talking about the Concept Plan 2010. I would like to ask the Minister about the planning norm that has been used for the Concept Plan, as regards the end-state population for Singapore and also the pace at which this population growth was assumed.

Mr Mah Bow Tan: Sir, in any concept planning, except Concept Plan Review Exercise, one of the key parameters is what are we planning for and how many people are we planning for. In 2006, for the first time, we held a mid-term review of the Concept Plan. We adopted a planning parameter, in other words, we started off with the question: "What if we had to plan for so many people in this year, what would the outcome be?" So, in the case of the 2006 planning exercise, we used the population figure of 6.5 million people for year "X" – 50 years hence – which in that case would have been 2056.

In this case, we have kept to the same planning parameter of 6.5 million. But now we are becoming more aware of the demographics, in other words, within the 6.5 million, the number of elderly, the breakdown between citizens and non-citizens, etc. These are some of the new considerations. But the population planning parameter remains unchanged.

Mr Zainudin Nordin: Sir, I am very happy by the answer given by the Senior Minister of State just now. I have some clarifications to make. The image of the construction industry for many years has always been an issue. Parents do not want their children to join the construction industry. The impression is that it is very hard work and not paying well. And I think that work needs to be done on this issue of image for the construction industry – the pay and the professionalism of the workers who are in the construction industry. Are there efforts that the Ministry is thinking about to really improve this image over time?

Ms Grace Fu Hai Yien: Thank you, Mr Chairman. I totally agree with the Member's views about image. When we look at improving the image of the construction industry, it is not just about glossy pamphlets and exciting portals. I think what we want to do, first and foremost, is to make sure that in the work environment, sufficient attention is paid to safety as well as to have proper equipment and training, so that potential employees know that when they work in the construction industry, it is not hazardous, they are not putting their lives at risk.

Secondly, I think it is also about raising the career prospects and this is where we have to put in a lot of attention to look at how we can build a career path for our Singaporean workers that if you enter the industry, there is a training roadmap for you and that with the better training and certification; at the end of it, there is a licensing scheme which you can be licensed as a tradesman, as well as a supervisor, and that ultimately will put you in a very good position for better paying jobs.

In addition to that, I think the industry is reaching a very exciting phase, because of concerns over environment as well as a new focus on green building technology. I think this is a very attractive area for young Singaporeans. They find that there is a mission, there is a calling, to improve the environment for Singaporeans as well as for the world as a whole. The ability to add value in making our buildings more efficient, in terms of energy and resources, or making our buildings more appealing, for example, in this whole area of urban design, has now attracted a lot of attention from our younger prospective employees. So, thank you for the question. We are going to continue with our effort to increase the profile of the industry.

Mr Heng Chee How: Sir, I thank the Senior Minister of State, Ms Grace Fu, for her answers on construction productivity. I would like to ask her, aside from the efforts aimed at upgrading the skills and capability of the workforce within the sector, would efforts also be put in to retaining the skills and capabilities already acquired by the workforce, both local as well as foreign. And I say so because the construction sector by its nature goes through cycles, and we have seen cycles where they actually shed significant numbers of workers, local and especially foreign. And many of these workers would have picked up skills in the meantime, and it would not be easy to get them all back too quickly when the upturn comes. So as we go forward, would this be part of the plan to retain them?

Ms Grace Fu Hai Yien: Mr Chairman, we are keen to build up a local core group of experienced as well as skilled workers in the industry. We have done so, not just through a training framework but also through the CoreTrade Scheme. We have made it mandatory for projects of certain size to have licensed tradesmen to do the job. By doing so, as I mentioned earlier, it is really our intention to make it more attractive to view construction as a career. And that is not just for locals alone, but also for foreign workers, because we must admit that this industry is not one that we can depend entirely on locals to fill the jobs that are available. So we need to now look at the group of foreign workers that are working in the industry. I think Mr Heng also earlier asked about the areas in the C21 that we have not adopted. I think one key area is the training of foreign workers.

In the past, we had always viewed foreign workers in the construction industry as transient in nature and we had not put emphasis on training foreign workers. I think this will change with what we are doing now. We will look at improving the experience and skills of foreign workers as well. We are not saying that we are going to have all of them staying in Singapore for the long run, but we are looking at building a core group that perhaps will provide guidance as well as necessary supervision in the industry. And the changes that we are making in the foreign worker levy framework will help us reach this goal. We are, for example, having another tier of foreign worker levy that is a lower amount, targeting at foreign workers with experience and certification. So, if you have been here for four years and you have accumulated certain certifiable skills, you will qualify for a lower foreign worker levy.

So, these are the changes that we are making to basically steer the construction industry towards one that has greater skills content and of a higher productivity level.

Mr Lim Biow Chuan: Mr Chairman, the Minister has just said that Government buildings will be relocated to Jurong Gateway as well as to the Paya Lebar area. Can I just ask whether the Government has plans to ensure that the roads, parks and other social amenities in that area would be sufficient to cope with the expected increase in the commercial activities in that area? On the same point, for the Amber and Katong area, what are URA's plans to prevent overcrowding which would add to the social pressure for the residents in that area?

Mr Mah Bow Tan: Yes, the relocation of the Government buildings to Paya Lebar and Jurong will obviously mean that there will be increased requirement for adequate infrastructure, not only transport infrastructure, but also social amenities, etc. This is part and parcel of the overall Concept Plan and the Master Plan that we draw up. From the Concept Plan review that I talked about earlier, we actually derive a detailed and specific Master Plan. This Master Plan will then look in a more detailed manner, what kind of road infrastructure is needed, what kind of transport infrastructure is needed, what kind of other facilities such as schools, jobs, parks, shops, commercial areas, etc, are needed. This level of planning is conducted at the master planning level. I want to assure the Member that when we do make these changes, they will be taken as a whole and not just development for its own sake. I think this is one of the strengths of the Singapore planning system. When we plan, we plan it on a holistic level, taking everything into consideration.

The Member is worried, justifiably so, about the increased developments in the East Coast area, particularly in the Amber-Katong area. This has traditionally been a very low density area, but it has become much more high density as a result of the changes in the Master Plan. But the Master Plan does not just talk about re-zoning to higher density, it also takes into account and discusses with the relevant Government agencies, eg, LTA, what will these additional increased densities mean for traffic.

Specifically, to answer his question about Amber and Katong, the transportation infrastructure has taken into account these new developments. It is still being planned, so it is not in place yet. For example, the MRT system in the East Coast area will reach that particular area. The Circle Line will serve part of the Paya Lebar developments. The roads will also be expanded. There will be a new Marina Coastal Expressway that will be built, in addition to the current East Coast Parkway, which will help to take additional traffic volumes.

So, in a nutshell, when such development plans take place, whether it is further expansion of Jurong or Paya Lebar, or whether it is intensification of land use in the Katong area, it is done on a total basis. Of course, there will be specific pockets of congestion that will take place, and this has to be resolved at a local level. If there are such problems taking place, LTA and URA, will collectively look at these problems together with the MP for the area. I am aware that there are such localised congestion problems in that vicinity and I will be happy to look at those specific areas in greater detail. But, overall, the whole planning process takes into account a whole gamut of requirements, ranging from housing to roads to schools to nature areas, even right down to things like markets and places of worship, etc.

Mdm Cynthia Phua (Aljunied): Sir, my clarification is regarding the issue of limited land resources. Currently, for building of multi-storey carparks, you have this planned under the Main Upgrading Programme (MUP). But because now the Main Upgrading Programme is no longer popular, you are doing away with it. So, currently, there is no programme to build multi-storey carparks in mature estates where there are a lot of surface carparks. This issue of insufficient car park lots is a daily problem currently faced by residents. Can we know the Ministry's long-term plan of providing carpark lots for our residents, especially in Aljunied GRC, where we are facing daily requests for additional lots?

1.30 pm

Mr Mah Bow Tan: I recall that there was an answer to a parliamentary question just a couple of days ago on this subject. Let me just reiterate the main points. First of all, yes, there is an increasing pressure on carpark spaces in HDB estates. This is as a result of the increase in the car population where planning norms used to indicate a certain number for HDB estates. We did not count on the fact that many families actually have more than one car today. Some have even three or more cars. As a result of that, we do face a pressure on carpark space.

Overall, there are enough carparks but in localised areas you have a shortage. HDB tells us, when they did the last survey, that about 10% of the carparks in Singapore are over-subscribed; in other words, there is a need for expansion. So we will look at this 10% as a priority to see how we can alleviate that shortage. We can do that in several ways. One, we can simply expand the surface carpark if there is space and there are no other competing uses for land or, two, we could increase the number of floors on an existing MSCP (Multi-Storey Carpark). That is also possible. But if those two measures are not sufficient, then we will be looking at building MSCPs. These are the three ways we can alleviate that problem.

Specifically, the problem is that there is an increase in the car population in our HDB estates. The Ministry of Transport (MOT) is looking at the control of car population. On our part, we would have to provide sufficient carpark space. But I want to add that some of the problems cannot be solved just by MSCPs alone. Sometimes, when we look at the carparks, we group several carparks together into one. And when we look at the number, we find that actually there is sufficient carpark space. The problem is that there is insufficient carpark space in one particular carpark, even though there may be available lots elsewhere. Here, we will have to look at some demand management measures as well, eg, we may have to look into giving more priority to the first car of each family as opposed to the second or even the third car. Together with the increase in the supply of carpark spaces, we will have to look at demand management measures as well.

Er Lee Bee Wah: Sir, I would like to ask the Parliamentary Secretary how many private estates were selected for estate upgrading per year during the last few years and how many private estates are there in Singapore. At the rate that we go, I am afraid some of the residents may have to wait as long as 30 years before their estates are selected for the estate upgrading project. In view of the ageing population, I would like to urge the Ministry to set aside a sum for carrying out Barrier-Free Accessibility (BFA) for private estates.

Dr Mohamad Maliki Bin Osman: Sir, we understand Er Lee Bee Wah's concern for her residents and many other residents in the private estates. As Members are aware, we have two programmes for upgrading of private estates. The main programme is the Estate Upgrading Programme. For estate upgrading, the target is really for the older estates. We know that basically the criterion is the age of the estates because these are the estates that require a lot more upgrading works. At the same time, it is the magnitude of the work that could be done because we want to make sure that the funds put in are made available for the Estate Upgrading Programme, and to effectively try to do a lot more of the works that are required. Even in private estates, as we know, when works start, the disruption that is created would create a lot of inconvenience to the residents. When we do Estate Upgrading Programme, there is a lot of planning that goes into it. The funds that we put in are quite substantial. That is the reason why we do not have unlimited upgrading works as the resources are limited. We select a few estates at that point in time based on the assessment of the Estate Upgrading Programme Committee. We select those estates that are older which have got better opportunities for upgrading in terms of the works that can be done, and we work with all the different agencies to try and make the work as comprehensive as possible with limited disruption to the residents.

Of course, the other programme which was introduced last year was the Interim Estate Upgrading Programme that Members are aware of. This includes opportunities for the younger estates. As Er Lee said, it would take sometime for the older estates to be eligible for upgrading and sometimes the works within the estate may not be as extensive but may require immediate attention. So we do provide funding for Interim Estate Upgrading. Having said that, on the question of how long and when we are able to provide for upgrading of those estates, the approach of both I-EUP and EUP is to assess the local situation. Every estate is different and unique. I think the current programme that we have allows the residents as well as the committee to make decisions and prioritise. On the example that Er Lee highlighted, she is aware that it is a very extensive investment as we need to consider the width of the proposed ramp as well as the height that is required. Sometimes, the budget that we have is really not unlimited. Therefore, we need to prioritise what we can do.

On the suggestion that we provide barrier-free access programme for all, I think we can review that. We have to take a look at the resources that we have. But for now, I think we have to look at what we can do with the budget that we have for the Estate Upgrading Programme as well as the Interim Estate Upgrading Programme.

Mr Ang Mong Seng (Hong Kah): Could the Minister comment on my proposal on whether HDB will consider selling some of the 3-room or 4-room flats on a 60-year lease, instead of 99 years, to provide another choice for those people in the low-income group?

Mr Mah Bow Tan: Sir, if the idea of having a shorter lease of 60 years is to make the HDB flat more affordable to the low-income group, then I submit that there might be a better way of doing it, and indeed that is what we are doing. We provide additional grants to the lower-income group. We build smaller flats, priced more affordably for the lower-income group. So if you take the 2- or 3-room flats that we are building for the low-income group, with the additional housing grants that we have in place, these 2- or 3-room flats are actually very affordable. In fact, they are below or close to the debt service ratio (DSR) of 22% that I talked about last Friday. I think that is a much better way of providing them with a roof over their heads, with a 99-year lease which they can stay in comfortably and with a great piece of mind for as long as possible.

If you are talking about providing a 60-year lease for a young couple, I think we are going to run into trouble especially when that particular family grows old because our life expectancy is increasing. So a 60-year lease may not be that attractive for them. We do have shorter leases, as the Member knows. For studio apartments, we have a 30-year lease. But that is really meant for the elderly – the senior citizens. That is the reason why we have a shorter lease. But I am not keen on the idea of a 60-year lease for a young family or young couple starting up. We want to make flats affordable for them. Let us find other ways of doing so. Give them more additional housing grant, build smaller flats for them and also tweak the policy such that higher income applicants do not compete with them for the same flats. So for the 3-room flats, we have a $3,000 household income ceiling, that means, if you earn more than $3,000, you will not be able to compete for the 3-room flat. Similarly, if you want to buy a 2-room flat, your income cannot be more than $2,000. With all these in place, we do not see any problem in making HDB flats affordable for first-time low-income families.

The Chairman: Last clarification, Dr Lim.

Dr Lim Wee Kiak (Sembawang): Sir, the Minister mentioned that the current measures are enough to cool the property market and say that the Ministry will consider more measures. Can the Minister clarify what are the other measures that the Ministry is thinking of now if the market is not cooled by his cool tea?

Mr Mah Bow Tan: If we tell you what other measures there are, then there is no point in having these other measure in our pockets.

The Chairman: Mr Foo, last question.

Mr Cedric Foo Chee Keng: Sir, can I just ask a couple more short questions?

The Chairman: We have only four minutes.

Mr Cedric Foo Chee Keng: The Minister was talking about how to make HDB flats affordable last Friday and also in reply to Mr Ang Mong Seng's question. I would like to ask if it is possible to make the DSR progressive for 3-room, 4-room, 5-room, etc. In other words, the DSR for a 3-roomer should be lower than a 4-roomer and 5-roomer. What is the Minister's view on that?

Mr Mah Bow Tan: I think that is a very relevant point because if we talk about Debt Service Ratio (DSR), obviously the amount of money that a low-income family needs as a proportion of his total household income for his other necessities would be higher than, say, for a higher-income family. So, strictly speaking, the ideal DSR for a low-income family for a 2-room flat should be smaller than the DSR for a higher-income family for a bigger flat. I do agree with the point that the Member is making. Indeed, the evidence suggests that this is so. Over the last 10 years or so, I have been looking at the numbers and the Debt Service Ratio for the smaller flats, ie, the 2-room flats, is indeed smaller than for the 3-room, 4-room and 5-room flats. That is a result of a deliberate pricing policy that we have plus, of course, the additional grants that we give to the low-income families. Just to recap, for a low-income family of, say, $1,500, that family can get as much as another $40,000 more in grant.

Mr Cedric Foo Chee Keng: $80,000 in total?

Mr Mah Bow Tan: $80,000 in total. In other words, if they buy a resale flat, they have got $40,000 from the CPF grant, another $40,000 from the additional housing grant. If they buy a new 2-room flat, they can get, on top of the subsidised price, additional discount of $40,000. With these things in place, the Debt Service Ratio for that family buying a 2-room flat is below 20%.

The Chairman: Mr Foo, are you withdrawing your amendment?

Mr Cedric Foo Chee Keng: Sir, can I use up the entire four minutes?

The Chairman: Otherwise, the Ministry will not have any money to do projects. It is true. So you have got to withdraw your amendment.

Mr Cedric Foo Chee Keng: Sir, one very quick question. The Minister has lamented the fact that a lot of prospective buyers like to choose flats that are in the right location, near a MRT station, with the right view, and so forth, and those flats with poorer attributes are not selling as well. Is it a question of pricing? Are we not pricing them correctly which is why flats with poorer location and attributes are not selling?

Mr Mah Bow Tan: The quick answer to that is that we do price these "less attractive" flats cheaper than the other flats. Is it cheap enough? I do not know how cheap is cheap enough. But the evidence shows that some of these people who reject these flats do not even look at the price when they reject them. So it is not just a matter of pricing.

The Chairman: Mr Foo.

Mr Cedric Foo Chee Keng: Sir, thank you for your indulgence. Indeed, the Minister, the Senior Minister of State and his team have given us comprehensive replies. I would like to thank them on behalf of the GPC. Also, I totally agree with the Minister when he shared with us that Singapore's entire skyline has been transformed. Every time, I pass the city, I can see the new skyline emerging – you have the Marina Barrage, the Sail Condominiums, the Promenade and soon the Gardens by the Bay, my two beloved "durians" of the Esplanade, you have the Marina float, the Helix Bridge, the Flyer. These, I think, would not be possible without the passion and the dedication of the fine men and women at MND. They have made us proud.

With that, Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $1,066,357,600 for Head T ordered to stand part of the Main Estimates.

The sum of $6,077,864,200 for Head T ordered to stand part of the Development Estimates.

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