MANAGEMENT OF PUBLIC ASSETS

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MANAGEMENT OF PUBLIC ASSETS:

(Actions to ensure more accountability): 5.

Mr Gautam Banerjee asked the Minister for Finance given that the Auditor-General's Report has highlighted the under-utilisation of land and buildings by certain Ministries and statutory boards for the second consecutive year, what specific actions will the Government take to ensure that land and buildings are managed more effectively to ensure more accountability in the management of public assets.

Mrs Lim Hwee Hua (for the Minister for Finance): Sir, land and buildings like other resources have to be managed

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effectively by Ministries and agencies who have been allocated those resources. All Ministries and agencies are charged with this responsibility. The non-office properties that were reported by the Auditor-General's office as under-utilised were built for certain purposes that had now been overtaken by events. There were also some constraints on their alternative use. Nonetheless, the Ministries and agencies concerned should have exercised greater consciousness in managing these properties.

My Ministry has recently introduced a framework to encourage better management of office space in the public sector. Firstly, MOF has reviewed and reduced office space norms. We will be imposing surcharges on agencies which exceed the stipulated norms, as well as imputing rental charges to highlight the opportunity cost. We will also be looking to extend this framework for office space to other types of uses such as staff apartments, chalets, and institutional buildings. The framework will also strengthen the monitoring of vacant space.

Secondly, vacant properties that are not required for the use of public agencies will be put out to the market for lease where possible. We have in fact done this in the past two years to meet the growing demand for office space. However, as regards the quantum and pace, we will need to take into account the market situation. Non-core Government properties, such as the Atrium@Orchard, have also been divested.

Thirdly, to instill greater discipline in the reservation and holding of Government properties pending development, the Ministry of Law will be introducing a reservation framework applicable to public sector agencies. Under this framework, a charge would be imposed on agencies for reservations of State properties for planning and feasibility studies. This would encourage

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agencies to make land reservations only when necessary and for the optimal period of time.

MOF and MinLaw will continue to review and enhance our systems and policies to raise the effectiveness and accountability of public sector agencies in the management of land and buildings.

Mr Gautam Banerjee (Nominated Member): Thank you for the very comprehensive answer, Senior Minister of State. I notice from the Auditor-General's Report this year and the previous years that whenever he looks at the value for money areas, whether it is land and buildings, surplus cash, he has always got many recommendations. I just wonder whether there is enough of a culture of looking at value for money within statutory boards and Ministries and perhaps the Auditor-General should focus more on this sort of engagement across various Ministries. One example is surplus cash that many Ministries and statutory boards hold. Perhaps we should have a policy of sweeping up all the cash and keeping and investing it through other means, rather than just leaving it on the balance sheets of statutory boards who are not able to do very much with it.

Mrs Lim Hwee Hua: Sir, I wish to inform the Member that, over the past few years, the Ministry of Finance has been working closely with all the different Ministries, precisely in the areas that he has raised concerns in. As I mentioned in my reply, apart from raising the awareness and encouraging Ministries to optimise the use of resources, my Ministry has also introduced a framework where we would actually, first of all, for example, in the area of office space, impose space norms as well as to impute a rental charge, so that there is a real cost to the decision.

As regards the holding of surplus cash at statutory boards, the system has

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already been in place where statutory boards are actually charged the cost of capital and there will be the net economic value that will be computed and for which there is a real charge to the budget for the respective years. In other words, if they continue to hold on to surplus cash, this will exact a certain carrying charge.

Mr Gautam Banerjee: One further question on economic charge. This levy on cash is not consistently done. For example, in the same report of the Auditor-General, the Health Services Authority had something like $50 million or so cash which was sitting in its balance sheet and the Auditor-General raised a point on it. I think it is when statutory boards have to do some new activities, that is when –

Mr Speaker: Mr Banerjee, please ask your question.

Mr Gautam Banerjee: May I just finish this point?

Mr Speaker: No need to elaborate the question. Ask your question.

Mr Gautam Banerjee: Is it being consistently done for both past cash as well as new funds?

Mrs Lim Hwee Hua: Sir, I wish to assure the Member that this is applied consistently for all equivalent of the shareholders' funds that are being held in the statutory boards. What the Member might be referring to could be on the deposits that statutory boards might be holding, which do not technically belong to them. There are also moves to ensure that these are returned promptly to the rightful owners.