HEAD W - MINISTRY OF TRANSPORT

ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR:

1ST APRIL, 2008 TO 31ST MARCH, 2009:

(Paper Cmd. 2 of 2008): Order read for consideration in Committee of Supply [7th Allotted Day].

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[Mr Speaker in the Chair]: Head W – Ministry of Transport

The Chairman: Head W – Ministry of Transport. Amendment No. (1).

Contestability for the Bus and Rail Sectors

Mr Cedric Foo Chee Keng (West Coast): Sir, I beg to move,

That the total sum to be allocated for Head W of the Estimates be reduced by $100.

Sir, Singapore distinguishes itself from other nations in many ways. We have been successful in attracting and retaining foreign direct investments and talents partly because we have an efficient transport infrastructure. Our air and sea ports consistently rank among the best and are held as benchmarks by others. Yet, we plan ahead and constantly improve our air and sea infrastructure. Geographically, Bangkok is closer to the world's major cities by air and Thailand has more tourist traffic. As seaports,

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Tanjong Pelapas and Batam are just short detours from Singapore for long-ocean voyages. As a small economy without a sizeable origin and destination traffic, Singapore's success as a transport hub does not come naturally. We need always to be a 'few steps ahead' to capture the transit passengers and the transshipment cargoes. So, even as we opened Changi Terminal 3, T4 is already on the cards. We have also been adding berths at Pasir Panjang Terminals, always a 'few steps ahead'.

Moving on to land transport, we do have a reasonably good land transport infrastructure today but we need to plan ahead as our land transport infrastructure is clearly under strain and our challenges are plenty.

The Government has projected that the population in Singapore would increase from 4.5 million today to 5.5 million to 6.5 million in the near future. Add to that, Singapore is competing to be a major MICE destination. So tourist arrival is expected to increase from 10.2 million last year to 15 million by 2012, a 50% increase, and the target is also to get these tourists to stay longer in Singapore. This is achievable, given our two integrated resorts, F1, Youth Olympics, Arts and Sports Hub ambitions, and so forth. MOT's recent land transport review is therefore very timely but the question is whether or not our Land Transport Masterplan is up to the task. Are these measures effective, and do they go far enough?

The Masterplan has three main thrusts: firstly, to make public transport the choice mode; secondly, to manage road usage; and thirdly, to meet the diverse needs of the public.

Sir, let me focus on the first thrust, which is to make public transport the choice mode. I believe this is an imperative for Singapore. We are but 700 sq km

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and already 12% of our island is used for roads. There are three main ways to move around in Singapore - by rail, by bus or by private cars and taxis. Some of my parliamentary colleagues will say that bicycles or walking is also a way. But, really, these are not mass transport movers. Cars and taxis are the least efficient ways to move large number of commuters. It takes three or four passengers. Buses are better, but they compete for road space with other motorists.

The vehicle growth rate, in terms of new COEs to be issued, will be reduced from 3% to1.5% per year. Contrast that with the forecasted supply in terms of road lane-kilometre of 0.5% per year. So, if you do the mathematics, it is clear that we cannot afford to have more vehicles on the road and we must increase the share of commuters on public transport. Indeed, we should encourage motorists to say "my other car is a bus". But, I think, better still, if they would say "my other car is a train".

Rail – Sir, I believe is the best mass people mover. Compared to bus, it is faster, it is safer, it is more comfortable, it is more time-definite, it is more reliable, and it is more environmentally-friendly.

Currently, our buses carry twice as many passengers or passenger trips compared to our rail system. For every passenger trip made on the rail, we have two passenger trips on the bus. In New York, it is the reverse - twice as many passenger trips are made on the New York subway compared to buses. In Tokyo, the ratio of rail passenger trips to bus passenger trips is about 15 rail trips to one bus trip.

The Masterplan calls for rail capacity to triple by 2020. This is good news but the ratio of rail-bus trips would only improve from 0.5 to 1.5, still below the ratio for New York and well below the ratio for Tokyo. Moreover, the bulk of the

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capacity increase will occur only in the latter part of the 2008-2020 period. The DTL Stage 2 will be ready only in seven years' time, and that is in 2015; DTL Stage 3 in 2016. The Thomson Line or TSL in 2018, and the Eastern Region Line or ERL only in 2020.

The $40 billion MRT investment announced recently is commendable and certainly in the right direction, but is it enough? Yes, initial investments in rail infrastructure are high, but so are the returns. It is heartening to note that MOT will now evaluate rail investments on a network basis and not on a line-by-line basis, as they did in the past. The externalities that come with rail investments are massive – better connectivity (which improves exponentially every time you add a node to the rail infrastructure), enhancement in land and property prices around MRT stations, relieve road congestion, boost to the construction sector, job creation, and so forth.

Sir, I would urge the Ministry to re-examine the size and the pace of rail investments, and to advise if the scope of the recent land transport review includes the study on the optimum mix between rail and bus for Singapore. And if so, what is this optimum mix?

Next, contestability. I fully agree that "competition for the market" every few years is the right model for Singapore. I understand that MOT is studying how to go about it. I would urge MOT to open the tender to all experienced operators, both local and foreign, and also to adopt a two-envelope system. With the two-envelope bidding system, the bidder will submit a price proposal separately from the technical proposal. Technical proposal is always opened and assessed first before the price envelope is opened. If the first envelope does not meet the requirements, there is no point going on to consider the

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second envelope as the service standards will not be met. Such a system ensures that the price proposal will not influence the assessment of the technical proposal.

In structuring the bids, we could adopt either a 'gross cost method' or a 'net cost method'. Under the 'gross cost method', the PTO will not assume any transport fare risks. It bids only on the basis of meeting prescribed standards and its costs of operating the service. Under this system, the Government agencies will set fares and collect all transport fares to pay for capital investments and to the successful PTOs for operating costs. Sir, this system is better because it forces the PTOs to bid aggressively. And it has been shown that some 20% to 30% cost savings can be achieved if fare risks are removed from the PTOs. The converse method of 'net cost method' requiring the PTOs to assume fare risks would result, I believe, in higher operating cost.

Incentives for Motorists to Switch to Public Transport

Sir, other than supply management which we discussed earlier, demand management is equally important. Both measures are necessary and each measure on its own is not sufficient. Road usage is one such form of demand management. ERP rates are likely to rise, given that we will soon adopt the 85th percentile speed benchmark in lieu of the average speed benchmark. For expressways, the optimal speed is set at 45 kilometres per hour, and for arterial roads 20 kilometres per hour. If we are successful, some motorists may wish to switch to public transport during peak hours but still retain their cars for off-peak use. LTA introduced the Off-Peak Car (or OPC) Scheme in 1994. For newly registered cars, a combined reduction of $17,000 in COE and ARF has been offered. In addition, there is a reduction in annual road tax of $800, subject to a minimum of $50. For conversion of normal cars to

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OPC Scheme, a proportionate reduction in COE and ARF is currently disallowed. Instead, a back-end additional PARF is granted when the car is de-registered.

The Chairman: Please finish your speech, Mr Foo.

Mr Cedric Foo Chee Keng: Sir, I would like to ask the Minister if he could consider enhancing the benefits for OPC Scheme so that more motorists will switch to the OPC Scheme.

Land Transport System

Mr Low Thia Khiang (Hougang): I welcome the Minister's announcement on the new philosophy to put the commuters at the centre of our land transport system. His announcement reflects an attitude which was not embraced in the past by the Government. The centralised planning of bus routes is a sign that the Government is now willing to undertake direct responsibility of public transport efficiency and to answer directly to the public on service standards.

In the quest for a people-centred transport system, I am concerned about the price that commuters and taxpayers have to pay for the system to be centred on them. Will the Minister tell us if the new initiatives, which include making our hub-and-spoke system seamless as well as building more air-conditioned bus interchanges, result in a higher cost of transport for Singaporeans?

There are also plans to enhance contestability of bus services by introducing competition for the market where operators compete periodically for the right to provide a package of bus services designed by LTA. Will such plans result in real market competition with different operators bidding down prices that will benefit consumers? My concern is whether the requirement of the level of capital and track record will be so onerous

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as to preclude smaller players who could give the incumbent players serious competition.

The Ministry's earlier approach in introducing competition has resulted in the present duopoly of bus services between SMRT-TIBS and SBS-Transit. Will the same fate fall on these new initiatives? I would like the Minister to clarify the principle upon which the contestability of bus services would be implemented. How would the Minister facilitate innovation and entrepreneurship for smaller players to compete effectively against Temasek-linked incumbents?

Lastly, the Minister, in answering a question filed by Ms Sylvia Lim, the Party Chairman, said that the LTA's foreign consultant report would be released as part of the report on the Land Transport Review. I would like to know if the said report has been released to the public.

The Chairman: Mr Siew Kum Hong is not here. Mr Lim Biow Chuan.

Land Transport Review

Mr Lim Biow Chuan (Marine Parade): Sir, I am a regular user of the CTE. Last year, on the average, I paid $9.50 a day in ERP charges, just travelling up and down the CTE. This amounts to about $190 per month, just on ERP charges. Like many users of the expressways, I grumbled about having to pay ERP charges and yet see no improvement in traffic flow.

In January, when I heard about the Land Transport Review, I groaned in anticipation that ERP charges would go up again. I was also frustrated by the increasing number of ERP gantries. But, Sir, having thought over this problem, I have come to conclude, perhaps reluctantly, that LTA is correct. There is simply too much vehicle traffic on Singapore roads. Perhaps when we allow

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3% new COEs every year, when we relax the car financing rules that allow too many Singaporeans to buy cars, whether they can afford it or not, it is not realistic to expect Singaporeans having bought expensive cars that they would not want to use them and simply leave them at home.

The depreciation costs of not using a car will be too high to bear.

12.15 pm

With more and more Singaporeans owning cars and wanting to use them, I support the Government's move to regulate road congestion by pricing road usage appropriately, and let me say that again, "appropriately". This will allow motorists to decide whether they want to pay for smoother ride or whether they wish to save the ERP charges by using alternative roads or by using public transport. For example, when I use the CTE in the evening, by paying the ERP charges for both gantries, at least I save journey time by travelling faster. In the past, even if I were in an emergency and needed to reach my destination faster, I simply had no choice but to join the traffic jam. If you need an example, just try using the CTE to rush home on a Friday or Saturday night, anytime from 10.00 pm onwards. Another example: I would try to reach the ERP gantry at Braddell before 8.30 in the morning so that I can avoid paying the $4 ERP charge. The $2 saving has affected my driving pattern. I am sure that many motorists would behave likewise. Price affects consumer or motorist's behaviour.

But, as I said last year, raising ERP charges as a means to manage traffic has its limitations. I was thus pleased to hear of the Government's three-pronged approach to managing traffic congestion, that is, besides raising ERP charges, it would continue to improve the road capacity and also the public transport

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network. So if you want me to leave my car behind and take public transport, then the public transport better be up to mark.

There are a few matters which I would like MOT to clarify.

(1) Would LTA review the ERP charges downwards for the CTE, PIE and ECP when the Kallang-Paya Lebar Expressway (KPE) is fully open for use in September 2008? After all, KPE would have expanded the road capacity for the north and north-eastern part of Singapore.

(2) When LTA takes over the centralised planning of bus network next year, would LTA consider not just having additional premium buses to cater to the rich, but also basic bus services for the less well-off who only want a convenient bus to connect them to the city area, Orchard Road or the town centres? Would LTA consider bringing back basic bus services similar to that of "Scheme B" buses, which previously operated during the morning and evening peak hours? They provide a cheap and convenient bus service which caters to many lower income commuters.

Next, I call on LTA to ensure that public transport operators provide connectivity, comfort and convenience for the residents and not merely be concerned about operating routes that are profitable. An example would be service CSS 608 which was cancelled last year because both SMRT and SBS Transit did not wish to operate a service which was not profitable. As a result, many of the commuters in Marine Parade and Tanjong Rhu were left struggling to cope with a more expensive and longer ride using another service. LTA should also review all the bus routes to make sure that buses do not take too circuitous routes just to pick up more passengers. To make public transport a choice mode, we must make public buses more convenient and trains less jam-packed during the peak hours.

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Just as we have full-day bus lanes for passengers so that they will not waste time, I think we can also ask the trains to run at more regular intervals during non-peak hours because train passengers also do not wish to waste time.

I also wish to ask MOT whether they will consider accelerating the opening of the Circle Line, not just for five stations, for the entire line. Lastly, can I ask MOT to update this House whether they intend to have a dedicated ratio station providing traffic information during peak hours, so that drivers can plan their route better so as not to contribute to traffic congestion?

The Chairman: Mr Seng Han Thong, you have two cuts. You can take them together. Six minutes total.

Public Transport Review

Mr Seng Han Thong (Yio Chu Kang): Sir, the National Transport Workers' Union (NTWU) supports the key recommendations of the land transport review and is optimistic about the future for its members. Together with the management of SBS Transit and SMRT, we held three dialogue sessions with 200-over union leaders to hear the members' concerns. As a result, NTWU has recently submitted a response paper on the review to MOT with seven recommendations for MOT's consideration.

We are confident that all these measures would lead to a more efficient, affordable and reliable public land transport system after the revamp. It will also provide more new job openings, better opportunities and better compensation for our workers.

It is expected that the public transport ridership will go up from the present 63% to 70%. The public transport operators have been asked to put in more buses on the road to enhance their services. Here,

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I would like to clarify on an age-old belief that buses add to traffic congestion rather than help to ease traffic congestion. Let me illustrate. A typical single deck bus can carry up to 87 commuters and a double deck bus about 140 commuters. So, on average, each bus can carry 100 commuters. Assuming each car carries four passengers and if we can succeed in encouraging all to switch to take bus, then 25 cars will be off the road. Thus, the effect of putting more buses on the road would in effect carry more commuters who otherwise would have travelled on cars.

However, to the operators, putting more buses on the road means more capital cost to incur. Not only do they have to incur huge cost to buy and sustain new buses, they would also have to pay more ERP charges at double the rates at gantries as buses are classified as very heavy goods vehicles. With the new gantries and higher fee charges, it is estimated that the two operators have to pay the increased ERP charges from the present $3.5 million to about $5.5 million. As we will be introducing distance-based fare structure, we are also not too certain yet on whether the fare would be lower or higher in the future and how this will impact on the operators’ cost. Hence, the overall effect of all these may result in the operators having to incur higher operating costs which would actually translate to less sharing in terms of bonus, welfare and benefits for our workers in these companies.

Sir, I must declare that I am not the shareholder of these two companies. I am speaking on behalf of my members. We view buses as an essential component to provide the solution for a seamless public transport and, in actual fact, thus help reduce traffic congestion. More importantly, a seamless transport system would not happen without the hard work of our workers. To the Government, the collection of ERP charges for buses is in effect

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cost neutral. Therefore, we would like to urge the Minister to consider reducing or even waiving the ERP charges for buses. The savings from the ERP charges for the operators could then be ploughed back to benefit and improve the welfare of the workers and encourage more Singaporeans to join the industry.

Public Transport Workers

Sir, every morning, thousands of commuters will wait at the bus stops island-wide. When the bus arrives, they will board, tap their fare card, take a seat or, if crowded, stand throughout the journey till they get down at their destination. Not many will be too bothered with greeting the driver or remembering the face of the driver. However, whenever any unforeseen or unfortunate incidents happen, the bus driver would be the first one to be blamed. Fortunately, the majority of our bus crews goes about performing their job professionally and takes criticisms and sometimes scoldings from commuters in their stride.

Sir, while we are supportive of more competition in the bus routes, we want to ensure that it is not done at the expense of commuters or our workers' interest and welfare. In particular, the tendering process for bus routes package should not become an avenue for "cheap sourcing" by existing or new operators resulting in the employment of contract and lowly paid workers, including more foreign cheap labour. We urge the MOT to consider formulating a basic framework and standards on the employment terms and conditions during the bidding and tendering process to refrain company from engaging in "cheap sourcing". This is an important and critical process in ensuring our workers' interest and their morale are kept in balance while we strive for better

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and efficient service standards for the transport system.

Similarly, I want to highlight the daily needs of our members working at the bus terminals. I certainly welcome the proposal to build more integrated hubs with built-in bus terminals. These modern structures are well ventilated and with modern and clean facilities. This augers well not only for commuters but also make it comfortable for our members working inside the terminal. I would urge LTA to take into consideration in their planning stage, the needs of the bus drivers and staff working for the operators to ensure that basic amenities like toilets, canteen and crew rest rooms are properly catered within the bus terminal so that they need not travel too far given the tight rest period – normally, it is 15-20 minutes – they have in between their duties and rest times.

Road Usage and Public Transport

Ms Jessica Tan Soon Neo: Sir, the recent completion of the Ministry of Transport's Land Transport Review had the Ministry announced the plans to put the commuters' needs in the centre of public transport. By making bus travel a more attractive travel mode, by expanding the rail system and work management to keep our roads smooth flowing, these are necessary measures and provide clear and comprehensive measures to address the growing demand of the land transport system in Singapore, and are definitely welcomed.

In my dialogues and walkabouts and interaction with residents, many support the plans and measures but have expressed concerns at the pace of the cost measures being implemented, while the improvements to the infrastructure and the capacity of the public transport system are being phased in. In 2007, there were seven new ERP gantries introduced and now there are plans in

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place for another 16 ERP gantries this year. This is a 29% increase in the number of gantries in 2008 and the base ERP rate would be increased from $1 to $2 and the increment would also be $1 instead of the current 60 cents. This increase in cost of road usage will not only impact residents but businesses.

As Minister Lim had said, the overall objective was a policy shift from vehicle taxes from ownership to usage. By improving the bus and rail systems, the intent is to coax car owners to use the public transport system instead of driving. While recognising the need to control the increased number of vehicles on the road and the intensity of usage, unless the viable alternative options for public transport are in place, this will not be resolved and will just add an additional cost burden on both residents and businesses. Higher costs will definitely result in improvement in road usage and traffic conditions. However, if public transport is not viable, it will only be a matter of time before congestion resurfaces. Hence, the net impact would be increased costs.

While we understand that it will take time to implement the various phases of the plan, in the short term, there can be fairly immediate measures taken to improve on the current connectivity of the bus system as well as the capacity of both the rail and bus systems while phasing in the cost increases more gradually.

Another aspect that will require attention is how breakdowns in services are being managed. The impact of these disruptions has shown the increasing reliability of Singaporeans on the public transport system and the inter-dependence of the various services and the need for strong coordination to minimise the impact on services to commuters. While measures are in place to not only ensure that there are

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contingency plans when services break down, more care needs to be taken also on the currency and effectiveness of these plans to minimise the impact on users. Can the Minister share also on how taxis feature in the overall land transport plan and our public transport system? What policies are in place to support the intent and for the provision of reliable and affordable public transport? Are taxis seen as part of the solution of the problem?

With an ageing population and as we are encouraging people to work longer and to stay engaged in the community, the public transport system must also be improved to meet the needs of elderly commuters. Can the Minister also share what measures are in place to make the public transport friendlier and affordable to elderly commuters?

The Chairman: Ms Lee Bee Wah, you can take your two cuts together. Three minutes in total.

Public Transport

Er Lee Bee Wah (Ang Mo Kio): Sir, we have to work tirelessly to improve the public transport system so that it will get the public buy-in as an alternative choice. Public transport must not be an enforced alternative, where grudgingly people use them because of exorbitant ERP.

One obvious area requiring improvement is the habit of commuters hogging the exit or entrance. Why? One possibility is their fear that they would not be able to get out in time. Is a one-way human traffic movement the solution to this problem? In other words, you have designated entrances and exits. Or is this problem the result of not sufficient notice on the trains to tell the commuters which station is the next stop? Or should there be a system which can flash on the train's indoor panels which is the next stop?

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For the buses, should the exit be moved from the mid-section to the back of the bus just like the double-deckers? There are no bus stop indicators on board the buses. For someone whose vision is not good, travelling at night becomes a challenge. This is especially if the glass is tinted or, worse, blocked by advertisements. Many of the signages and announcements in our public transport are not multi-lingual. How then can it serve those non-English speakers? Should we also actively educate our commuters to give up seats for the elderly and the pregnant women? So far, there is also a lack of focus on inducing residents of private estates to use the public transport. Can we consider providing more feeder bus services to serve these estates at reasonable price?

Concession Travel Rates for the Senior Citizens

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] In Singapore today, we are seeing more elderly people working beyond the retirement age, and this is something that the Government would like to encourage. Some of the elderly people are working in lower wage jobs, for example, the cleaning job or even some miscellaneous work, and they earn slightly more than $10 per day. After deducting their travelling fares and meals, they do not have much left. Therefore, I urge SMRT and SBS to consider giving our elderly people concession travel rates which include unlimited rides, particularly the low-wage elderly workers.

We can help them to age actively and healthily. In view of their contributions to our society, I hope that the transport operators can give them concessionary travel rates which include unlimited rides for all bus routes.

*Cols. 2475-2476.

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Costs of Public Transportation

12.30 pm

Mr Wee Siew Kim (Ang Mo Kio): Sir, let me declare my interest as a Board member in a PTO.

With public transportation being the most important mode of transport for most residents, it is a topic that is and will be of great interest and concern to all.

As transportation needs increase to cater to a growing population and commuters' service expectation of public transportation rises, it is inevitable that costs will rise in tandem. As the headway of buses drops from 15 minutes to 12 minutes and eventually to 10 minutes, there would inevitably be cost implications. Similarly, with increasing demand for higher standards of public transportation – be it cleanliness, speed, increased frequencies or enhanced comfort – again, there are cost implications. Hence, there is a need to have in place initiatives to rein in costs and a more concerted or joint effort to manage costs.

For the foreseeable future, oil prices will continue to be high. If we cannot rein in other costs to compensate for this, we will have a hard time sustaining the current fares in our public transportation system. Hence, we must have ongoing, healthy and honest dialogues among all major stakeholders on the balance and trade-offs between standards and costs. The public needs to be aware of the tough choices that often have to be made by both the regulators and the public transport operators. Commuters, too, can play an important role in managing public transportation costs, providing solutions that no operator can and no regulator can. For example, their behaviour on public transport will help determine its cleanliness and comfort, something which Er Lee Bee Wah has just eloquently spoken about. Considerate and respon

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sible behaviour can also bring down costs. Public awareness of these should be enhanced.

Additionally, would the Minister share with us:

(1) The anticipated cost trends, as liberalisation of the road transportation sector gains pace, since fares and their rate of increase are of paramount importance to the travelling public; and

(2) Initiatives that the Ministry has planned to rein in costs.

A multi-party forum to address the total costs of delivering public transportation would be useful. At the very least, there would be greater transparency on the cost inputs to any fare increase deliberations. Fare increases will never be easy nor completely acceptable but, at least, with such open dialogue, a larger segment of the travelling public would better understand and possibly tolerate any future increases.

Quality and Affordable Public Transport

Mdm Cynthia Phua (Aljunied): Sir, Minister Raymond Lim is a popular man on the street now. They remember him for the ERP and, hopefully, will remember him for the changes he is making for the public transport system, too. He has indeed painted a silver lining for the existing commuters of the public transport, and all of us are looking forward to the improvements to be made.

For a list of present woes of our public transport, I walked to the desks of my colleagues in my office this morning to confirm the list:

(1) Long waiting time for buses – trunk and feeder bus services – delays for as long as 45 minutes;

(2) Overcrowding, especially in trains, which I am surprised by, not in buses;

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(3) High costs of transportation. Transportation cost is about $5 per day;

(4) Infrequency;

(5) Lack of bus services – must take at least two or three buses to reach a destination; and

(6) Long journey – average, one and a half hours.

Their wish list:

(1) Comfortable standing space with a chance for a seat;

(2) Waiting time – 10 minutes is acceptable;

(3) Please do not increase costs anymore;

(4) Knowing the arrival of the next bus or train;

(5) Able to hop from one bus to another or to a train easily;

(6) Short bus journey, average 45 minutes; and

(7) For school children, one bus to the school.

From my assessment, the wish list is not too tough to achieve. If the brains and hearts in MOT and LTA are put together, with their ears on the ground, we will all soon travel in our first-class public transport system.

How to get to this first-class public transport system? We have asked for change of the ownership models of our transport companies. I do not intend to continue with the appeal for the change except to state that the bus fares will continue to rise in this model as the Board of Directors will continue to push for

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higher profits for the shareholders. That is the very essence of their existence.

My only hope of the improvement of the public transport system now is on the central planning of routes. My only request is that it be done fast and the planners must not be desk-top planners. Go to the ground, take the buses and trains, understand the needs of the different segments of the population, look at the whole journey from one service to another, key travel points within the neighbourhoods, transport costs to the people.

Improve the availability of bus services – there are still many areas where there are no bus services. Allow more private bus services to these areas, industrial estates, between small neighbourhoods, within nearby towns.

Integration of services – there should be more integration between buses and trains or feeder buses and trunk services better coordinated, less waiting time for each change of service.

Integrated benchmarks – look at the journey as a whole and set a series of integrated benchmarks and not solely on trains or buses alone. For example, the overall waiting time, the overall journey time, the standing space, and the time when there are seats available. These are all measurable.

Elderly – this is where the use of the senior citizen card is different from the national agenda. We have highlighted that the elderly must work beyond 60 years of age, into their 70s. With that, they will get more CPF LIFE payouts. The senior citizen card tells them that they can travel only after the peak periods. If they travel with other working persons, they will not get the discount. We are encouraging companies to employ the elderly and to

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give them alternative jobs that best suit them at their age. Most of the time, their salary is lower. Take care of our working elderly. Allow them to use the senior citizen card to work.

Discount cards – give an integrated discount card across transport companies and across modes of transport. Allow the daily commuters the loyalty discount. This works well with supermarkets, and I am very sure the commuters will like it too.

Affordability of Public Transport

Dr Lam Pin Min (Ang Mo Kio): Sir, I had a dialogue session with my residents on Singapore's land transport system recently, and one of the feedback that resonates so frequently was the affordability of our public transport system. Many, especially the low and middle-income residents, are worried that the rising costs of public transport, aggravated by the steep rise in food prices, will add to their burden of high cost of living in Singapore. Not surprisingly, those from the lower-income families have no choice but to rely solely on public transport while the higher-income households can enjoy the luxury and convenience of private cars and the occasional novelty of riding on buses and MRTs. Paradoxically, the majority of the lower- and middle-income households reside in the suburbs, such as Yishun, Sengkang, Punggol and Jurong, incurring higher costs on their public transportation due to the longer distance needed to travel from their residence to the city area and vice versa.

The recent announcement on the land transport review is viewed by many Singaporeans with mixed feelings and skepticism. We can expect more comfortable bus and train rides, less crowding, shorter waiting and travelling times. These are positive outcomes that the majority, if not all, Singaporeans would welcome. However, many are

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concerned that the cost of improving the public transport services would inevitably be passed on to the commuters, resulting in the cost of bus and train rides to be increased significantly. This comes at a time when inflation is set to worsen, adding to the financial burden of low- and middle-income Singaporeans.

Another pet peeve experienced by those who utilise the taxi services would be the higher surcharges imposed during peak hours and the mounting ERP charges. Whilst many understood the rationale for pricing the taxi charges higher, the majority found the ERP charges imposed on public transport, in this case, tax, is unfair. I would like to urge the Minister to consider the following suggestions to alleviate the financial burden on the less well-off Singaporeans and the retirees:

(1) Consider concessionary fares for the senior citizens and retirees to be extended to the whole day rather than during the specified periods only;

(2) Extend free rides to all children of ages four and below, rather than using the height criterion of less than 0.9 metres;

(3) Waive ERP charges for taxi; and

(4) Issue special concession cards to the low-income families, especially the Public Assistance recipients so that they can be entitled to subsidised public transport. This is somewhat similar to the concept of the medical and education assistance under the Public Assistance scheme.

Transport for the Elderly

Ms Eunice Elizabeth Olsen (Nominated Member): Sir, bus and rail commuters would have welcomed the results of the Land Transport Review a few weeks ago. The changes give our land transport

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planners a bigger role in bus and rail operations and we all hope that it translates into a more people-centric public transport system where profitability is not mistaken for sustainability and the focus is kept on commuters. The importance of these services, essential services in any country, cannot be under-stated. In Singapore, while the private sector operates these services, the recent review reminds us that the ultimate responsibility of giving the public a system to be proud of belongs to the Government whose choice it would be to either fulfill that role or to abdicate that duty.

Sir, that choice has been made, and it is reflected in the transport shake-up. The question now is: what sort of system can we be proud of? Sir, I am no transport expert. I can only speak as a citizen. And I see public transport as part of a bigger picture, a picture we want to paint to encapsulate what Singapore stands for. I would like our country to be a place where people feel valued and small yet powerful ways, where citizenship is strong because of symbolic yet emotional reasons, where we sometimes differ on cold, hard, rational logic because we want to make this place truly special, not just Singapore Inc.

Notwithstanding all that the Government has done in various areas, I would like to appeal today for it to do more in transport, in particular, for senior citizens. I would like to suggest that concessionary rates apply 24/7 for all senior citizens above 65 – I echo the sentiments of Dr Lam – and for bus and rail fares to be waived for those 85 and above. I am not sure if there is a warmer, fuzzier feeling that citizenship can give you than to know that after you have done all you can for your country, your country does all it can for you. If there is, please let me know. And I do not think you need to wait till you become a senior citizen to feel proud of a transport system that encourages the elderly to be active

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and mobile. We have heard so often how concessionary fares are cross-subsidised by other passengers without ever hearing how much it would cost for 24/7 concessions for the elderly. That is unacceptable.

As for fare waivers, CPF runs out at 85, and it would be quite a while before CPF LIFE starts paying out after that age. Every little bit of help counts. Although the impact is more than just dollars and cents, yet, even if a Government fund is set up for this group of citizens, I doubt it would cost as much as what other countries spend to provide free health care, education, and so on. In a way, it is a self-filtering help scheme. The rich will have private modes of transport. So it can be made to work, if we want it to work. That has always been our approach, and I hope that the Minister agrees with me.

Land Transport Review

Mr Siew Kum Hong (Nominated Member): Sir, thank you for allowing me to speak. I was held up because my office is at Suntec City and I did not realise that today is the first day of the IT Show, so there is an inevitable jam. So I welcome the setting up of the carpark lot availability system in the Suntec and Marina Square area.

Sir, that leads me to the Land Transport Review. I personally think that the recommendations are positive on the whole. There is some very far-reaching slaughtering of sacred cows that significantly improves the public transport landscape. In particular, the explicit focus on a commuter-centric public transport system that drivers will want to switch to, augurs very well for the future. Having said that, I have some concerns that I hope the Minister will address.

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First and foremost, it remains unclear whether the planned expansion in rail and bus capacity will be sufficient for our growing population, especially as it approaches 6.5 million. The review will guide land transport developments over the next 10 to 15 years. Last year, our population was 4.6 million. Assuming an average population growth rate of 2% over the next 12 years, which is reasonable in view of the growth rate in the past 10 years, our population would reach about 5.9 million by 2020 which is an increase of 29% over today.

12.45 pm

Sir, is the expanded public transport system sufficient for a 5.9 million population? The Minister had previously noted the importance of investing in quality and not just system capacity. Rightly so, if public transport is to become the mode of choice even over cars. But I think the implicit assumption is that there will be sufficient capacity. The rail network will double by 2020, increasing the rail density by 60%. It makes the rail network accessible to a much greater proportion of the population. Is that enough to allow the quality of the rail system to improve to entice drivers to switch? Similarly, what is the projected increase in bus capacity by 2020, so that the bus system can meet the increased demand and still be sufficiently qualitatively enhanced so as to attract drivers?

Sir, my second point relates to the scope of the review. It seems that the review was limited to matters within the Ministry's purview, and understandably so. But transport issues really cut across many lines and have many dimensions. Has enough been done across the entire Government to ensure holistic solutions to transport issues? For instance, let us take working hours. We have morning and evening peak hours, largely because most Singaporeans have very similar fixed working hours. Flexible working hours

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coupled with telecommuting can help spread commuter traffic out and hence alleviate peak hour congestion. While governmental agencies have introduced such schemes, can the Government do more? Can the Government undertake a more concerted effort to introduce flexible working hours across its various agencies? This would ease the demands on our transport infrastructure during peak hours, and also create a strong incentive for the private sector to introduce similar arrangements.

Another example is road hogging. I stay in the east and usually take the ECP home. It is really just a straight road but, for some reason, the right most lane is often one of the slower lanes, even without accidents or road works. And I have observed that this is caused by slower moving vehicles in that lane, whose drivers ignore the convoy of cars bunched up behind.

Sir, my own experience is that road hogging has gotten worse in recent years with more cars on the roads. But there have been significantly fewer summonses for road hogging in the past three years as compared to the two years before that. Would greater policy enforcement against road hogging during peak hours reduce such conduct, therefore smoothening traffic flow and increasing average speed? Would more driver education help as well? These are examples of how issues, outside the Ministry's purview, can have ramifications for transport. So I hope the Minister can shed some light on the extent to which holistic cross-Ministry approaches are adopted when considering transport issues.

My third point concerns our increasing reliance on ERP to manage congestion. Economists generally agree that ERP is the way to go in managing congestion. It puts a price on road usage and motorists get to decide whether to pay and save some time. But from a wider practical

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perspective, ERP does have flaws. Firstly, it is regressive. It reduces the choice of whether to take a certain road at a certain time to a dollar value. This effectively sends the message that some roads at certain times are largely for the use of whoever can afford to pay, even though those roads are public goods and built with public funds. While one can argue that drivers are, by definition, persons of means, I think there is a world of difference in means between a Chery QQ driver and a Lexus driver. And if one day ERP charges become punitive, as has been suggested might be necessary, then the regressive nature of ERP will become all too apparent, and could end up pricing certain stretches of roads out of the reach of regular folks at certain times – roads that tax dollars had helped to build.

ERP, as a pricing mechanism for congestion, is also not sensitive to other considerations. From next month, there will be evening ERP on Toa Payoh Lorong 6. Residents of Toa Payoh can be forgiven for the feeling that they are being penalised for living in a big town with many drivers, or for there being only one entry point into their town from the CTE. These are extrinsic factors that make Lorong 6 a choke point for traffic. ERP will not address this.

Sir, the Minister has explained the need to keep residential estates and not just the CBD free of gridlock. I think there is a lot of merit to that. But there is a significant difference between congestion inside a housing estate and congestion in the CBD. The former affects primarily the residents and businesses there. The latter has much broader repercussions. Have Toa Payoh residents and businesses been polled on whether they want evening ERP along Lorong 6?

Sir, I now turn to taxis. NTUC Comfort is by far the biggest taxi operator in Singapore, dwarfing all of the other operators. Comfort's sheer size means

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that the other operators have no choice but to follow its prices, both in terms of fares and also in terms of rental charges. The Ministry and LTA have consistently stated that the taxi industry is liberalised and that taxi supply and fares are market driven. Well, there may have been liberalisation. But is the market functioning properly? Is it truly competitive? If not, should there not be closer regulation of the market? I hope that the Minister can share his thoughts on the status of competition in the taxi industry.

I also hope that, in future, the Ministry and LTA would be more open to suggestions from the public on how to improve public transport. Recent years had seen repeated calls for the introduction of contestability in our bus and rail sectors, and also for limited duplication of some bus and rail routes, both of which are being done now under the Land Transport Review. Indeed, as far back as October 2003, I wrote a commentary in the Today newspaper questioning whether the present structure of the public transport system created meaningful competition. Such criticisms invariably met with a stock response, when there was a reply, defending the status quo as being adequately competitive. Complaints about the quality of services met with similar stock responses, referring to the PTC's quality of service standards. Clearly, the Land Transport Review calls into question the validity of such responses.

Sir, I would just like to end with how other people see our public transport system. I work with a lot of expatriates, many of them Americans. Most of them do not own cars in Singapore for two very simple reasons. Firstly, they cannot bring themselves to pay Singapore car prices, coming from countries where cars are far cheaper. Secondly, and I think more importantly, they recognise the high

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quality and affordability of our public transport system when compared with their own. I think many Singaporeans who have travelled overseas will agree that, on the whole, our public transport system works. That is important to remember.

The Land Transport Review marks a landmark in Singapore's transport policy. And I thank the Ministry for setting such a sound and strong foundation for future land transport planning.

The Minister for Transport (Mr Raymond Lim Siang Keat): Mr Chairman, Sir, I thank Members for their comments and suggestions.

As Mdm Cynthia Phua, Mr Siew Kum Hong and several other Members have said, by and large, people are supportive of the land transport review measures that are being put in place. Mr Low Thia Khiang mentioned this too. Like what Mdm Cynthia Phua said, not everybody mentions my name with affection, but that goes with the job.

Sir, we are making significant changes to our land transport system. Mr Low Thia Khiang asked when the land transport masterplan and the consultancy report were going to come out. It will be out later this month. We have said that once the full report is done, the consultancy report will be part of it and will be issued.

After we announced the Land Transport Review, we went down for community engagements to explain what these measures are all about.

Recently, towards the end of a dialogue session, someone put up his hand. I said, "Okay, last question." He asked, "Could you summarise the whole Land Transport Review in one sentence?" I think that is actually a useful exercise, because it forces us to crystallise our thoughts. My answer was, "to ensure

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that we have a liveable city". This is our overriding goal and forms the basis for our land transport policies.

We are deeply conscious and aware that transport plays a pivotal role, as it impacts significantly on the character and life of a city. Then, one more hand went up. He said, "Supplementary question." I think he watched too much TV – "Highlights of Parliament". "How do you intend to achieve this goal?" My answer was, "to make public transport your other car". In a nutshell, this is what we are trying to do – to ensure that we have a liveable city and to achieve that by making public transport your other car.

In working out our various policy initiatives to achieve this, we did two things throughout the whole process. We decided that we need to look at the system as a whole rather than on a piecemeal basis, and that we should pursue not just a top-down approach but also a bottom-up one as well, involving other Government agencies and members of the public. So I can assure Mr Siew Kum Hong that we worked closely, on an ongoing basis, with a whole range of other Government agencies – such as URA, HDB, MEWR and NParks. This is de rigueur . The reason being precisely, as he said, that we need to take a holistic approach to land transport planning. This is an integral part of our objective of ensuring that we have a liveable city.

For example, LTA uses planning parameters from various agencies to work out transport plans, such as the population growth, distribution of population, where the employment centres are, where the residential centres are, and tourist arrival numbers. In answer to Mr Siew Kum Hong, on whether we take the future population in 2020 into account when we were planning, the answer is yes, it has all been factored in.

We also take into account socio-economic and environmental considera

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tions that go into the planning of a liveable city. What is clear is that in a densely-populated city-state like Singapore, the only way that we can ensure a high-quality urban living environment is to make a decisive shift towards public transport. Hence, our strategic thrust, as I said, is to make public transport a viable alternative to the car. We need to do this by a combination of both pull and push factors. The pull factor is to improve our public transport system, and the push factor is to curb excessive car use.

I will now address some of the key issues and comments on our public transport initiatives and I will deal with those relating to managing road usage later.

There has been a lot of interest in how we are going to implement these major public transport changes. Our foremost consideration is to ensure a smooth transition with minimal disruption to commuters. Most of us make our daily commute in an "auto-pilot" mode. Imagine the stress if we wake up tomorrow morning, and find that our usual bus service has been re-routed. Multiply this confusion across the three million bus trips each day in Singapore, and we get a sense of the confusion that Seoul woke up to on 1st July 2004.

On 1st July 2004, Seoul kicked in their bus reform plans. The Seoul government had decided that they would take a "big bang" approach. They made an overnight switch, changing the numbers of 8,000 buses and adjusting 400 bus routes. The result was huge confusion for commuters and also the bus drivers.

Prof. Kim Kwang Sik, Chairman of the Bus Reform Citizens Committee in Seoul, and who is a member of the Land Transport Authority (LTA) International Advisory Panel, advised us against following Seoul's footsteps. This is good advice and we will take it.

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Over the next year or so, LTA will work closely with consultants on how best to achieve a smooth transition. LTA will build up its capabilities for route planning and bus route tendering, and roll out these changes in phases with an extensive public communications exercise. This is not because we do not want to move quickly, as some people have urged us, but we want to do this in a commuter-friendly way.

Several Members have asked how LTA will go about its central planning role for buses. While it is premature to go into implementation details, the benefits are clear. First, LTA will be able to plan the entire transport network - rail, bus, including the roads - holistically, as one integrated system. Second, LTA will be in a better position to adopt a commuter-centric approach. Third, LTA will be able to look at the "whole-journey" experience of commuters. One of the key targets is to shorten public transport journey times.

1.00 pm

LTA has set a target that 80% of door-to-door journeys on public transport during the morning peak should be within an hour by 2015.

This would be up from 71% today. This measures the total travel time, including waiting for transfers, as suggested by Mdm Phua. Mdm Phua would also be pleased to know that public transport services to key employment centres, such as the industrial estates in Tuas and Jurong, will be a key priority for LTA, in order to achieve this 80% target.

Mr Lim Biow Chuan made a point whether LTA, as central bus planner, would help address the problem of circuitous feeder services. Yes, LTA will seek to make feeder services more direct and frequent. As for the Scheme B buses which he mentioned, they dwindled because of falling demand. They were

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introduced in the mid-70s to supplement basic bus services which were not so developed then. But since then, we have built up our MRT and basic bus frequencies have gone up. Demand for Scheme B services started to fall. It is not so much that the PTOs were planning for it, it is just that the demand fell and they did not think there was sufficient justification for them to continue running. This is a market outcome and LTA even as a central planner should not intervene. However, the larger point is that the LTA, as central planner, constantly needs to monitor changing commuter demands to introduce services that best meet their needs.

Mr Low asked whether we could have some perspective of what it means to introduce greater contestability into the bus and rail sector. Some people argue that our market is too small for competition.

This is an empirical question, not a question for debate. There are reams of studies that when it comes to buses, the economies of scale tail off after about 500 buses. We have 3,700 buses today in Singapore, so we can support more than two operators. If we look at the Adelaide bus market in Australia, which is not much bigger than ours, they have successfully introduced bus competition.

Another aspect of the argument is to say that it is only contestable if there are many players in it. That is not necessarily so. Competition is not purely a numbers game. You can have just a few firms, and they can provide very effective competition. Just think of, say, Boeing and Airbus. The key is to ensure that the market is indeed contestable, that people can indeed come in and bid for the bus route packages.

Mr Cedric Foo and others have asked how exactly do we intend to introduce competition in the bus market. As he

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mentioned, we are introducing competition "for" the market. This is important as a starting principle. Operators will compete to provide a package of routes designed by LTA. They will seek to operate this package efficiently and innovate to increase ridership within their respective packages.

This is different from competition "in" the market which is head to head competition. That is often detrimental to an integrated public transport system because it duplicates resources and reduces commuters' welfare. When I was in Hong Kong, I met up with their transport officials. They told me about their problem with head-on competition, with buses competing to see who gets to the bus stop first. It caused a lot of safety problems. The transport officials are in fact planning to phase out the red mini-buses which are such a danger to the public. They drive like FI drivers, and it is a big problem for them.
Mr Cedric Foo raised the issue of tender design. He suggested that one possibility is that the revenue risk be taken by the Government and the cost risk by the public transport operators, as is done in London. This would be a big departure from our present system. In London, this has translated into an ever-growing state subsidy for the bus system. If the Government takes on the revenue risk, then the PTO has no incentive to increase patronage.

Mr Kua Hong Pak, CEO of ComfortDelGro, which operates buses in London, said that the state subsidies are increasing year by year. He said that you get this phenomenon in London of running "ghost buses". Few people were taking the bus, but the operators still ran those buses because the State was paying them for it. There is no incentive to increase ridership. But I think the point to make is that there is really no perfect model here and we will need to study all these and see what is best, given our circumstances, for Singapore.

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There are, however, two operating principles that we will adhere to.

(i) We will retain the current financial discipline that PTOs must be self-sustaining.

Our consultants highlighted that this is one of the key positive features of our system that most other cities (except Hong Kong and Tokyo) have not managed to do. In Singapore, the operating costs of the public transport system are covered by the operating revenues. We must keep it this way so that our PTOs continue to operate efficiently. If we lose this discipline, it is the taxpayer who would ultimately pay for it. This is why it is important to emphasise the point that LTA taking the central planner role does not mean that the profitability of routes is no longer a consideration. Once we shift away from this financial discipline, we will soon be running many routes that are under-utilised and paid for by the public purse. LTA will see how best to package routes, profitable and less profitable routes, to ensure the package as a whole is commercially viable.

(ii) The second principle is to ensure a performance-based element that is tied to the operating rights.

This way, operators are incentivised, even during the term of service, to provide a high level of service. For example, London introduced Quality Incentive Contracts (QIC) in 2001 as part of their bus contracts which ran for three to seven years. Under these contracts, bus operators have to fulfil key service requirements such as reliability and frequency of bus services and even bus drivers' attitudes and driving standards. This, together with other measures, has led to higher operating efficiencies, higher service standards and an increase in bus ridership.

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For the rail industry, competitive tendering is not new. When we awarded the Circle Line (CCL), it was through a tender. What is new is that we will shorten the duration of the future operating licences from the current 30-40 years to 10-15 years to enhance contestability.

Next, let me turn to some of the concerns that Mr Seng Han Thong raised. They are valid concerns on how all these changes will impact public transport workers. The National Transport Workers' Union (NTWU) sent a submission to me on the Land Transport Review recently. One of the key points they made is that more competition may well enhance their employment prospects. Indeed, the signs actually point towards a larger public transport pie over time as more people take public transport and service levels go up. Daily public transport trips are expected to double the next 12 years, from the current 5 million to 10 million by 2020. At the end of the day, whether we have two public transport operators or more, we will still need bus captains and other service staff to keep our system up and running, and good staff will always be in demand.

Mr Seng suggested that specific employment conditions could be imposed on the public transport operators. We need to have a care here. The public transport operators should be subject to the same national employment and labour laws as any other economic entity in Singapore. Beyond that, it is best not to introduce labour market distortions by prescribing special employment terms to which public transport operators must adhere. Public transport workers should be subject to the same competitive dynamics as workers in other industries. The best way to help them is not protection but rather to find ways to

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increase their productivity and hence employability.

Mr Seng also suggested that one way to help workers is to waive ERP for buses, to boost the earnings for bus companies. Our position is that as long as a vehicle occupies road space, it should be charged ERP. And buses do occupy road space. The more important issue here is that the Government has taken steps to help bus companies. Buses are exempt from COEs. The statutory lifespan of buses has been extended through the years, from 12 years to 17 years. Bus companies are charged a nominal rent for the bus interchanges, and they are allowed to keep the commercial rental revenue which comes to $2 million to $3 million a year. Through the years, we have also reduced road tax; the savings are about $13 million every year.

Members like Mr Wee Siew Kim, Mr Low Thia Khiang and Dr Lam Pin Min are concerned about the costs of all these changes, and how they will impact the commuters. Mr Wee brought up the point that the costs of public transport services should be made transparent and asked how we can incentivise PTOs to rein in their costs. Dr Lam asked whether the costs would be passed on directly to commuters.

On the issue of transparency, this is already the case today. Public transport operators are listed companies, so this information on costs is readily available. More importantly, the fare formula we have today is not a cost-plus formula. Instead, it is a price cap that is tied to macroeconomic factors like inflation and wage increases. This means that if the public transport operators do not manage their costs well and they shoot up, they will not get a larger fare increase because of that. The fare cap is fixed each year, based on these macroeconomic factors and the public transport operators are not left to raise fares as they wish. In

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addition, any productivity gains that the PTOs enjoy will ultimately be shared with commuters through the clawback mechanism, that is the sharing of productivity gains.

Hence, I would like to assure Dr Lam that the additional costs of the public transport improvements will not be directly passed on to commuters. In fact, the public transport operators may be spurred on by the competition, to improve their productivity. The Public Transport Council (PTC) also monitors the affordability of public transport closely to ensure that fares remain affordable for the majority of households over time.

It is this price cap formula that protects commuters and guards against public transport operators raising their fares as they wish. It incentivises the PTOs to rein in their costs. It has been three years since the fare adjustment formula was put in place. The weights in the formula are up for review to ensure their continued relevance. This is something that the Public Transport Council is already doing and I understand the PTC expects to complete the review by the middle of the year.

Every now and then, you hear this argument that, because public transport services are public services, they should therefore be run by non-profit making entities with fares kept cheap by subsidies. You hear echoes of this in the Chamber every now and then. But ultimately we need to understand that there is no free lunch. If you look at past examples where transport services are run by state entities, the lack of a profit motive results in higher, not lower, costs. With no incentive to reduce cost or maximise revenue, it is not surprising that the efficiency of such entities is very low. Let us take an example. In Jakarta, with the same fare tariffs, one set of public transport operators are run by the state; another set by private operators. And the

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one run by the state is always asking for subsidy and losing money. But the one run by the private operators keep their costs low and they make a return. The reason is that they have the financial discipline.

Operating subsidies are also not an answer. In other cities where public transport fares are kept lower than what it costs to operate, the result is over-consumption by all, including the rich. The costs are ultimately passed on to taxpayers. So our system is better. Our operators have the incentive to be efficient; there is a shared understanding that the Government, the public transport operators as well as the commuters all chip in to pay for what they get. Any help needed for the lower income will be targeted to them.

1.15 pm

Mdm Cynthia Phua suggested, "No more cost increase when it comes to public transport.". This is not possible. Our approach is small and regular increases, rather than a big bang. The PTC, in their deliberations, will have to strike a balance between the different interests, making sure that fares are kept affordable and ensuring that the public transport operators find it viable to continue to operate.

Mr Seng Han Thong mentioned this to me recently that every time when we come to the annual fare review exercise, people will tell the PTC, "Please don't increase." But he said this is to ignore that a large part of the increase goes into paying the public transport operators' costs, of which over 40% are manpower costs. He said that the bus captains and bus company employees have families to feed too. They also face cost of living pressures. A bus driver has to wake up at 3 to 4 o'clock in the morning to get to the bus depot because the first bus is out

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before 5 o'clock in the morning. So let us have a care. The next time when we argue, let us freeze this, let us not have it, there are implications for others.

This relates to the point which I think Mdm Cynthia Phua, Ms Lee Bee Wah, Ms Eunice Olsen and a few others made in terms of the affordability of public transport for the low income. Our approach is a targeted one, and one of "many helping hands". The Community Development Councils (CDCs), the Citizens' Consultative Committees (CCCs), the PTOs and the Government have all chipped in. In 2007, the Government committed $10 million to a Public Transport Fund over the next three years to provide additional help for the needy. Public transport fares are just one of the overall cost of living issues that low-income families face.

As the Finance Minister said in his Budget speech, the Government had sought to help needy families directly, through a substantial package of benefits in this Budget. As he pointed out, a 2-room HDB household comprising a retired elderly couple will get benefits that are more than four times their increase in cost of living.

Ms Lee Bee Wah, Dr Lam Pin Min and Ms Eunice Olsen have argued for extension of concessions for the elderly, the low-income and the young.

As I mentioned earlier, the principle for providing assistance is that it should be targeted and provided to those who need help, not according to age. This is because there are rich senior citizens and needy senior citizens, just as there are needy young people. In Singapore's case, public transport concessions are provided by the public transport operators based on their commercial considerations. Any concession that the PTOs grant, such as for senior citizens, is a form of cross-subsidy from other full-paying adults.

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The only way to get round this, if we say let us not do it this way, is that the state comes in directly and subvents across the board. I do not think this is advisable. When the state comes in, it should be targeted to those who really need help.

Nevertheless, the operators have taken in feedback and have been extending the concession hours for senior citizens over the years. Last October, SMRT extended the concession hours for their buses to also cover the evening peak period. I think they will take into account what Members have said today and review this as part of their business plans in future.

I would like to close off here with what Ms Lee Bee Wah said in her speech. Public transport improvements have to do with all of us. It is not just a matter for the Government or the public transport operators, but also the commuters. She gave some examples, and those of you who have taken public transport will know. I have observed similar situations when I checked out our public transport services. If you take a bus, it is true that there is this tendency for commuters not to move to the rear. On the train, commuters tend to crowd round the cabin doors. The public transport operators have tried to come up with different campaigns to get people to move in. SBS Transit came out with 'Move to the Rear' which sparked off a lot of fun on the Internet . We have also put riddles and puzzles at the rear of buses, hoping to entice you to move in when you get in. But it has to be a community effort. Everybody has to play their part: the Government, the public transport operators and commuters. It is an ongoing effort.

Managing Road Usage

Mr Seah Kian Peng (Marine Parade): Sir, I would like to talk about taxi drivers before moving onto private car ownership.

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A news report in the Chinese papers recounted how a taxi driver reduced his taxi fare to attract passengers. Others have mentioned that since the fare hike, taxi drivers are now earning less than what they used to. When interviewed, TransCab Operators' Association pointed out that it was illegal to reduce taxi fares by oneself but it was possible for taxi drivers to offer discounts to passengers privately. Eight out of 10 taxi drivers interviewed said that if it was not illegal to reduce the fare, they would do so. I understand that it is in the interest of transparency and simplicity to have a flat fare and a straightforward fare structure. More importantly, we need to abide by the fare meter. I cannot help feeling that taxi drivers are getting the thin end of the stick. With the impending ERP charges, they are going to feel the pinch even more. But all this is anecdotal.

So, over the last week, I took a few taxi rides myself and I asked each taxi driver the same question. And I can tell the House that a majority of them expressed the same view that they are worse off. Can the Minister inform the House if there has been any survey done on customer satisfaction and drivers' earnings after the recent round of fare revision? Can we see what the effects are?

Sir, on a larger issue, I support the changes announced by the Minister recently, which are comprehensive and which I believe have a good chance of resolving our traffic woes. I would like to make a point about car growth. What went wrong with our car population, which seems to have grown quite uncontrollably? The 3% car growth policy was put in place by the Ministry some time ago – why did we allow car growth to outstrip road growth for so many years leading to the current gridlock?

Sir, I know it is more helpful to look forward than back, but perhaps a post-

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mortem will give us some pointers ahead. Now, for the future. Car growth will, from next year, be reduced to 1.5% from the present 3%. At the same time, road growth is at 0.5% – the Mathematics suggests that somewhere along the line, the numbers will hit a bend and it is a sharp one. Why not take a more drastic measure? First, I think we ought not make a difference over car ownership and usage of cars. We have got the psychology wrong somewhere. We cannot make cars cheaper and 'induce' people to buy. Having bought a car, we make it very expensive to drive and hope motorists do not drive too often. We should not give false hopes to car owners, especially the new and aspiring motorists. So, here is a radical idea. Restrict car growth to 1%. Another radical idea – give the tax rebates fully to households with one car. If there is a second car, no rebates on this car at all. And if there is a third car, levy the tax at 150%, maybe even 200%.

I know that this will not be a popular approach, but I believe it is in line with our overall philosophy to tax the rich more, and target subsidies to those who are lower down the income line. When it comes to cars, it makes little sense to speak of the "lower income" or perhaps we can make a difference between a family of four in a four-room flat in Serangoon Avenue 3, driving a humble Suzuki Swift, and a family of four in a bungalow in Nassim Hill, with two BMWs, two Lexus and a Nissan Presage for the driver to ferry the kids to school.

Sir, as I do not live in Nassim Hill, neither do I have four cars, I cannot tell you whether this sort of policy will indeed remove the propensity for the super rich to buy new cars. I suspect not. But perhaps it will make a few parents think twice before buying new cars for their young working children, and also make young working adults to pause before taking on a new financial responsibility. We have tried all sorts of half measures,

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and tinkered here and there. This latest review has shown us what we can do with bold measures. Bottomline is that we want to encourage people to take the BMW option – not to buy more cars but to take the "B" as in Bus, the "M" as in MRT and the "W" as in the Walk option. So, I urge the Minister to take two more – reduce car growth to 1% from next year and to consider my car tax rebate formula.

Road Congestion

Mr Low Thia Khiang: Sir, the Government has turned vehicle taxation as a tool for managing traffic congestion in Singapore into a strong revenue generating model. This is evidenced by the estimates of $2.3 billion projected for motor vehicle tax, up from the estimated $1.7 billion in FY2007, representing a 35% increase in one year, despite the recent announcement of cuts in road tax and ARF, and that also answers Mr Seah Kian Peng's question on why the Government continues to allow car population to increase.

I understand that the Government uses the mechanism of ERP and COE to manage traffic congestion by taxing on road use and restricting vehicular growth numbers. Despite the presence of such a mechanism, the car population continues to increase unabatedly. The car population has increased by almost 40% from 370,000 in 1977 to 515,000 today. This has led the Government to announce measures to increase the ERP rates again and again so as to curb congestion caused by vehicular use. The Government taxes car owners relentlessly through COE and ERP, giving them little reprieve. I would like the Minister for Transport to clarify what is the optimum car population being targeted by his Ministry. In addition, would his Ministry let Singaporeans who are deciding between public and private transport know what the ERP pricing

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strategy is, as a decision to own a car rests on both upfront car ownership cost as well as knowing car usage cost when ERP starts to make up a significant component? I would also like to ask the Minister how his Ministry decides on the criteria for placing of ERP gantries. Is the Minister sure that the new formula based on the 85th percentile speed measurement method is sustainable in the long term? If it is sustainable, what are the car owners expected to pay for road usage going forward?

I have received feedback that roads in Ang Mo Kio experience similar levels of congestion during morning peak hours as Toa Payoh. However, ERP gantries have been erected in Toa Payoh but not Ang Mo Kio which incidentally happens to be the Prime Minister's constituency. I believe clarity on MOT's policy on placement of ERP gantries may perhaps explain this anomaly.

Sir, over-reliance on ERP as a main tool to control congestion has not helped to solve the congestion problem in the light of the growing vehicle population. Allowing the vehicle population to grow to a stage where ERP has become less effective suggests that MOT is imprudent in its management of road congestion. MOT has failed in this instance to adopt a holistic approach which makes total cost for car ownership and usage clear upfront to Singaporeans prior to their decision between private and public transport.

The Chairman: Mr Chiam See Tong is not here. Mr Cedric Foo.

ERP Charges

Mr Cedric Foo Chee Keng: Sir, the second thrust of the masterplan is to regulate road usage, as the Minister has said. And one of the key regulatory instruments is the ERP. ERP charges are expected to rise as LTA has reset the benchmark speeds to 85th percentile and

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also has set up more gantries. The reason to recalibrate the benchmark is to ensure, as I am told, that a large majority of motorists will experience benchmark speeds of 45 kilometres per hour on expressways and 20 kilometres per hour on arterial roads.

Previously, when the average speed was used, half the motorists were experiencing speeds below these benchmarks. That is not desirable considering that our expressways were built to cater for speeds up to 90 kilometres per hour and the arterial roads 50 kilometres per hour. Even with this new

85th percentile benchmark, we can expect statistically some 15% of the motorists still experiencing speeds below this benchmark. Therefore, really the crux of the issue is whether these speeds are calibrated correctly or not, and not so much the ERP charges. The way I see it, the ERP increases are only a consequence of recalibration. I believe the intent of MOT is not to increase ERP charges arbitrarily. Also, the intent of ERP charges is not to generate revenues for the Government, as Mr Low has suggested, but rather to ensure smooth-flowing traffic, especially in our CBD.

1.30 pm

Can the Minister confirm what ERP is really meant to do and what it is not meant to do? To test this, let me ask the Minister if he would reset all ERP charges to zero for any of our expressway or road that has traffic flowing at better than the benchmark speeds of 45 kilometres per hour and 20 kilometres per hour respectively 85% of the time?

I can understand why higher ERP charges and more ERP gantries are unpopular. We all like smooth-flowing roads without any ERP charges. But is this possible for our small island state? Do they add up? If we reflect on the issue and give it more thought, we would see

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that there is no other solution for a small compact island like ours but to regulate vehicle usage. Without proper ERP charges, roads will become congested, motorists will spend more on fuel, their vehicles will emit more CO2, they will be late for appointments for some, and there will be victims of road rage. Supply chains will also break down. Companies will think twice before investing, tourists will be deterred, and so forth. So, therefore, I think one way or another, motorists are paying for it. It is just that, without ERP and the consequential congested roads, the costs related to it are not so obvious.

Sir, I support the ERP system and I support recalibrating the benchmark speeds.

Traffic Management

Mr Hri Kumar Nair (Bishan-Toa Payoh): Sir, I commend the MOT for its recent comprehensive review of bus, rail and car issues. The announcements in respect of the first two are welcomed. More buses, trains and a wider network will always be applauded. The changes in respect of cars have, however, left the public less convinced.

Sir, I agree that it is necessary for the Government to take strong measures to curb congestion. It is easy to leave things alone, but the horrible gridlock which suffocates so many of the major cities of the world is a testimony of what happens when governments lack the political will to do what is right. My difficulty with the proposed measures is whether it applies the right antidote to the problem. The Government's current solution is mainly to calibrate ERP charges and to widen the ERP network to control car use. The current thinking is not to increase charges by small doses of 50 cents but larger doses of a dollar, thinking that this will persuade enough Singaporeans to alter their driving patterns or give up driving altogether.

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That makes, in my submission, a flawed assumption about the relationship between the Singaporean and his car. It was not so long ago that our road and registration taxes were very high. We did not even have 100% financing, but Singaporeans were not dissuaded from buying cars. COE prices hit $100,000. No problem. Today, despite the record fuel prices, SUVs and other gas-guzzling models are as popular as ever. Now, road taxes and registration fees have been reduced by thousands of dollars. COE prices are down below $20,000 for all categories. You can now buy a new car for under $50,000. We have had over 30 ERP rate adjustments in the last two years. That only proves how ineffective they have been. So, why do we think that Singaporeans will significantly change their driving habits by raising ERP rates by a dollar, or even $2, or $3? Let us do the Mathematics. Even if you paid $10 a day in ERP charges, and assuming 300 days a year, the amount of ERP a driver pays in 10 years is $30,000 which will not even come close to what Singaporeans are willing to pay for a COE in the first place. Now, those charges will be offset by even lower road taxes and registration fees.

Sir, I appreciate the Government's desire to make it easier for Singaporeans to own cars. But to persuade someone not to use his car after he has paid so much for it is a tall order. So, increasing ERP rates will not dissuade people from driving. As rates are raised, drivers simply will pay, as we have seen happened. They may initially look for alternative routes but, as those get congested, gantries will be raised again. So back to square one. This is similar, Sir, to the well-known analogy of putting a frog in a slowly boiling pot of water. It will simply die before it jumps. The result will be congestion despite ERP. And as the Singaporean driver sits idle in traffic, he will no doubt wonder whether this was all just a

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revenue generating measure in the first place.

The increase in the car population has had other negative effects. I have many HDB residents in my constituency complaining that they have difficulty finding carparks, even when they have season tickets. More residents in private estates are parking their second cars along the roads outside their homes, causing congestion within the private estates and, in some cases, tension between neighbours.

Sir, I share Mr Seah Kian Peng's views that the only real way to fight congestion is to control the population of cars. And we should do so more aggressively. We can do that now with the COE system. We should then let the market decide the price of the COEs. It is for the public to determine how much they are willing to pay for a car. If they want to pay more, so be it. The barrier to owning a car may be raised, but at least we make the commitment to buy with our eyes open and a better appreciation of the true cost of owning a car. And there are cheaper alternatives, like second-hand cars. That market has been in the doldrums in recent years because the circumstances have been such that it has become more viable for Singaporeans to scrap their cars early and buy new cars. It is simply wasteful and unnecessary.

Sir, finally, there are other aspects I would like the Minister to comment on.

(1) We used to be strict on car finance. Finance companies now offer 100% financing. You can drive a new car off the lot without putting a cent down. There are no redeeming features to this. It only encourages poor financial management. Can we relook that policy?

(2) If we are reviewing transport policy, we should take the opportunity to encourage the use of green vehicles as well. I know this has been touched on in

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previous debates. But why can we not compel our taxi and bus operators to, over time, replace their fleet to vehicles with green engines? I note that green cars will enjoy higher road tax rebates. But this is not sufficient to bring down their costs and, on that point, why are we giving higher tax rebates in absolute terms to higher capacity fuel guzzling vehicles?

(3) Why not create a new COE category for green vehicles to encourage people to switch over?

Evening ERP

Er Lee Bee Wah: Sir, the Government has been promoting family cohesion among our people. It has even done away with parking charges at most carparks in the HDB estates during weekends to encourage family togetherness.

This policy, regrettably, is not followed through in the Ministry of Transport. Instead, I would regard the evening ERP as a policy that works against pro-family. Parents may stay longer in the office to avoid the evening ERP. Children may avoid going home to have dinners with their parents or grandparents because they do not want to be hit by the evening ERP or, as some of my residents call it, "Every Round Pay". You turn here, you pay. You turn there, you pay. Or, in Malay, we say, " Pusing sini, bayar. Pusing sana, bayar ." Perhaps, this is "Uniquely Singapore".

By the way, my residents told me that they have to go through three gantries along CTE in the morning as well as in the evening, though we are all in the Prime Minister's ward.

The Chairman: Mdm Ho Geok Choo is not here. Mrs Josephine Teo.

Park and Ride Scheme

Mrs Josephine Teo (Bishan-Toa Payoh): Sir, in the recent Land Transport Review,

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the central question asked was: what will it take for Singaporeans to choose public transport over the car? Actually, I thought it was not always the case of "either-or". We have decided to make car ownership more affordable, helping more Singaporeans to feel a sense of upward progression. But as the car is still a relatively expensive purchase in Singapore, it is only realistic to expect that car owners would want to use it - if not all of the time, then at least some of the time. Otherwise, why buy a car?

For example, car owners may be persuaded to use their cars only on weekends and to fetch their children from school on weekdays, but to use public transport to get to the workplace or shopping centres in the city, thus easing city congestion. This is where the Park-and-Ride Scheme is supposed to help. But there was no mention of it in the review, which leads me to question whether the Ministry sees it as a viable third option to either driving all the time or taking public transport all the time.

Introduced in 1990, the 36 park-and-ride sites are located as far out as Tampines and Yishun, while closest to the city are carparks at Toa Payoh and Bishan. Over the past week, my assistant conducted an informal field study at five park-and-ride sites during the morning peak hours. Well-located sites, like Toa Payoh and Bishan, were not very well utilised, with 52% and 62% of the lots occupied respectively. Those using the park-and-ride monthly coupons, of all those cars that were parked there, were only about 39% in Toa Payoh and 15% in Bishan. For other sites, there is a problem of the location. In the Tampines site, for example, a person would have to walk 15 to 20 minutes or a four-bus-stop trip to the Tampines MRT station. So it is not surprising that the low occupancy rates were observed – 36% in Tampines, with about 18% using park-and-ride coupons.

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Sir, these are results of an informal study. It is not comprehensive, but I was curious enough to ask for it because, in fact, I did not personally own a car until May 2006, after I became an MP. I was a reasonably happy user of public transport, relying mostly on MRT and taxis and, even today, on days that I can avoid driving, I car-pool with my husband, whose office is also in the city. I have been wondering about the Park-and-Ride Scheme because it seems to make very good sense to car owners who live further away from the city and whose homes are not within walking distance of a bus or MRT station. Yet, the scheme does not seem to have taken off. So, I would appreciate it if the MOT could give it a more holistic assessment of the effectiveness of the scheme after 17 years.

I would also like to know whether MOT has plans to improve the scheme so that it can become an integral part of our land transport system. In any case, may I offer two suggestions to the Minister:

(1) The park-and-ride sites should be better linked to bus interchanges and MRT stations. For it to be effective, the transfer time between one mode of transport to another should not exceed five minutes. So, from the time a driver gets into the carpark, finds a lot, transfers to a bus or MRT station, ideally it should take just about five minutes, making it a very attractive option. Perhaps the MOT could consider this as new lines, such as the Circle Line and Thomson Line, are being built. For existing park-and-ride sites further away from the interchange or MRT, perhaps a premium bus service is a more viable alternative.

(2) I would also like to suggest that the Ministry improve the convenience of the park-and-ride set. Currently, at $70 per month, it is actually quite attractive. But a driver has to top up the card if it

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exceeds the $40 usage. I would like the Ministry to consider if it can make it easier for people to use the set.

Taxi Drivers

Mr Seng Han Thong: Sir, for Mr Low Thia Khiang's information, residents in Ang Mo Kio are all equally concerned about the possible ERP gantry coming to Ang Mo Kio. However, we have taken a positive approach by forming a task force involving the grassroots leaders, merchants, Traffic Police, LTA officers, etc. We are managing well. So, Minister, do not worry, we will manage it. We hope the gantry will not come to Ang Mo Kio.

On taxi drivers, just when the market demand for taxi service is adjusting and recovering from the last taxi-fare adjustment, the taxi industry is going to get another unexpected shock of change in the price of using taxi.

With more ERP gantries starting this year and higher ERP charges, the cost of road usage has increased significantly. To the taxi drivers and their commuters, this is equivalent to another round of taxi fare increase. With the worrying trend of increase in fuel price, we are gravely concerned about the livelihood of taxi drivers. An increase in the price of taxi service due to an increase in ERP charges will reduce its demand without any prospect of maintaining the current income level of taxi drivers.

Sir, the old problem of distorted supply and demand for taxi services, especially in the CBD area, due to increase in ERP charges and wanting to earn the extra taxi call booking fees, will resurface again. Last month, the Taxi Operators' Association (TOA) – I must declare my interest as I am the Adviser to the TOA – initiated the Taxi Customer Centric Initiative with the support of LTA and all taxi companies. We want to instil in them the mindset of customer-centric

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and tool them to anticipate customers' needs. They will be our service champions. It is hoped that, with better service, they will be rewarded with better income.

However, with the implementation of taxi stands and taxi stops in the CBD from this month, there are several operational issues that really jeopardise the business of taxi drivers in providing their services. So, I would urge the LTA to work with TOA to review the design and locations of the taxi stands and taxi stops, in particular, for commercial and Government buildings or hotels without driveways and drivers who are on hourly bookings by passengers or conducting city tours.

Sir, the list of our operational problems is quite long, and I shall submit it to LTA this afternoon. We should treat taxis as part of the solution, and not a problem, in making sure that Singapore will have a smooth flowing traffic.

Taxis

Mr Ang Mong Seng (Hong Kah): ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Sir, after the taxi fare hike, taxi companies think that the income of taxi drivers has increased, with an average income of $318. However, the taxi drivers say that their income has actually dropped. In order to understand the situation, the evening newspaper, Lianhe Wanbao , conducted a survey, and the results showed that the taxi drivers work 10 hours per day, and the average income is $204. After deducting the rental, diesel and ERP expenses, they only have $113 left. So the net income is $91. They have to work every day, and they get a monthly income of $2,730. Many taxi drivers work extremely hard every month, and they can only get $2,000.

They have to work more than 10 hours per day, and their income is equally

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dependent on their luck and hard work. Yet, their income is unstable. They have to work under all kinds of weather conditions. So it is very strenuous and demanding.

The taxi drivers have contributed greatly to our country, even in terms of tourism. We can see their contributions. However, the taxi service is not considered part of the public transportation service by LTA. And I would like to ask the Minister why is this so. Their main operating costs are diesel, car rental and ERP charges. Therefore, I would like to propose that the Government consider giving 30% rebates to the existing $6,500 diesel and road tax package. In this case, the taxi companies would be able to share the rebates with the taxi drivers and this, in turn, will help to reduce their rental expenses.

Secondly, ERP rate should be reduced by half as a concession for taxi drivers, because they serve the community. Every day, they have to go through the ERP gantry many times. Therefore, reducing the ERP expenses can reduce the burden on the taxi drivers and the passengers as well since they have contributed to our tourism and public transport system. Therefore, they can help to serve the elderly and office workers better.

*Cols. 2477-2478.

Mr Raymond Lim Siang Keat: Mr Chairman, Sir, the ERP is a very hot topic, and a very important topic. Mr Cedric Foo is absolutely right when he said that we should ask ourselves the fundamental question, "Why ERP?" The popular answer, like Mr Low Thia Khiang said, is to collect revenue – just put up a gantry on the road and collect money. It is a popular answer, but it flies against the facts.

Since 1998, every time we adjusted the ERP system and relied more on usage charges, we have brought down vehicle

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ownership taxes quite significantly, as some Members have noted. The annual revenue forgone for the Government from the combined vehicle ownership tax cuts – ARF, excise duty and road taxes – came up to more than $1.2 billion every year on a permanent basis. ERP revenue currently only comes up to about $100 million per year. So it is not a revenue measure but a congestion measure.

Mr Low asked why it was that the Prime Minister's Ang Mo Kio ward was not affected, when Toa Payoh has ERP. I am disappointed with what Mr Low is insinuating as he knows that this is not the way we do things. ERP is a congestion measure, and if indeed there are roads there which are congested, ERP will have to be effected. As Ms Lee Bee Wah said correctly, in Ang Mo Kio GRC, the key access roads to the city have ERP. Moreover, it is not like Toa Payoh which just has the morning ERP. Ang Mo Kio residents are also affected in the evening, on the way home.

So what is the purpose of ERP? I have said that it is a congestion measure, to help us ensure that we have a liveable city. So that even as the economy and population grow, we need ERP to ensure that we are a city in a garden, and not a city in a car park.

To further drive home this point, I have asked LTA to display the ERP charges on top of all ERP gantries. Now, we have the display of the ERP charges at the side for some of our gantries. But at the side, it is too small to be seen as we drive past. So I have asked LTA to put it up prominently on top of the gantries. There will be a car icon and it will show how much the charge is for the particular half hour, and another icon for the other categories of vehicles. So when one drives in, he can see how much it costs. I suggest the first time when we install

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these signs, when Members drive in, please do not brake suddenly as it will cause an accident.

When the signs are up, motorists would know how much it costs to drive through. This will help motorists make a considered decision the next time they need to drive through. If motorists drive less, the Government is happy to collect less ERP revenue. We will put all these signs on top of the gantries by the end of this year. Of course, when we do this, I will make sure that they consult Dr Vivian Balakrishnan and Mr Baey Yam Keng on creative inputs on how to install the signs on the ERP gantries.

I am glad that Members understand the need to manage road usage, and I am encouraged by it. Mr Cedric Foo, GPC Chairman, explained why he supports it, and he is quite right on why we have instituted the ERP. Some members of the public have emailed me, saying that they see the congestion that has been building up over the past few years, and ERP is therefore the way forward.

Let me now address some key issues which Members have raised.

Mr Seah Kian Peng and Mr Hri Kumar's principal argument is that we should cut the vehicle growth rate more drastically. I have said this before, but I think it is best to repeat this point. There is no single measure to solve road congestion. We need a suite of measures, not just vehicle control measures, but also ERP, build roads and improve public transport – a holistic approach.

Even if we were to cut the vehicle population growth rate to zero, we will still need the recent ERP changes to deal with the existing congestion from the 850,000 vehicles. Mr Seah Kian Peng made a good point. He says maybe we should have a sense of perspective on how we got to today’s situation.

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Members who have long memories will recall that, in 1994, when COE prices went above $100,000 there was great public unhappiness. Many Singaporeans felt we should not just rely on one single measure – the vehicle control measure – but that we should rely on usage measures as well. They said, "Let us have a balance. Don't just put everything on vehicle control measures – very high ownership taxes. Let us have a balance."

The Government agreed that it is better to have a balance and introduced the ERP in 1998. The trade off was clear – lower vehicle ownership costs but higher usage charges. The vehicle ownership costs have fallen quite significantly.

Let us take an example. For a new 1.6 litre Toyota Corolla, in 1997, it cost about $122,000. In 2007, it cost just $61,000. The tax component had also dropped from $40,000 to $20,000. So Members can see how much had come off, just to give you a feel of it.

So that is the background. Previously, there was great unhappiness when car prices were high, and Singaporeans' aspirations to own cars were not met. They said, "Why don't you make it easier for us to own cars?"

So we adjusted the system by lowering the ownership costs, so that we pay as we use. It is a fair system. Today, we have made it easier to own cars. The argument then became, "Why do you make it easy for me to own cars, and now I have to pay to use the car?" So it is a matter of balance, and this balance changes over time.

We have consulted widely, and we have decided on halving the vehicle population growth rate from 3% a year to 1.5% for the next three years. After that, we will review the figure.

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Mr Low Thia Khiang asked whether there is an optimal figure that we are looking at. It is not possible in the longer term for us to have a vehicle population growth rate that is faster than the projected road growth. I think a few Members have mentioned this, including Mr Cedric Foo and Mr Seah Kian Peng, that we cannot sustain the growth rate going forward.

For Quota Year (QY) 2008, when the growth rate is still at 3%, LTA will be issuing a total COE quota of 115,946. After this, it will go down to 1.5% in QY2009 for three years. After these three years, we will review it to see whether we need to make a further reduction.

I am not in favour of a more drastic approach, although some like Mr Hri Kumar and Mr Seah Kian Peng have argued for it. We could do a "shock and awe" approach, cutting it down to 1% or zero, all at one go. But the problem with "shock and awe" is that the morning after is often going to be quite awful. My own preference is that when we are doing big changes, we give people time to adjust because it impacts on people's lives.

Mr Seah Kian Peng asked whether we could have a differential tax rate for the first or second car owners. But congestion is a function of both total vehicle population and the intensity of usage. Once supply is determined, how costs are shifted would not change the supply.

Several Members have questioned the effectiveness of the ERP. One of the arguments that we hear is that once a person buys a car, he will drive it regardless of the ERP charges. This is an over-statement. Yes, for some people, they will continue to drive regardless of the price, but not all will do so. If this was so, all ERP-priced roads today will still be congested. And if the ERP system

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was a failure, other cities would not be following us or want to learn from us. London has gone this way, and also Milan. New York City has just approved it from the 60th Street onwards in Manhattan.

Just this week, on Monday, the Danish Transport Minister was here with their Parliamentary Committee for Transport. They wanted to study our ERP system because they have a congestion problem in Copenhagen. They wanted to see how it works, and if they could introduce the system in Copenhagen.

Let me stress that the purpose of the ERP is not to stop everyone from driving. This is absolutely counter-productive, as the roads would then be sub-optimised after we have invested so much into our road network. On a congested road, the idea of ERP is that we try to discourage the people at the margin. A 5% to 10% shift is enough to relieve pressure on that particularly heavily used road.

Let me give Members an example – CTE. In October 2007, in the evening between 6 pm and 7 pm, traffic was very slow. Mr Chiam is not here today, but I remember he brought up this point to me in the House. He said, "If you look at the evening ERP, you have a gantry after the PIE exit but you do not have a gantry before PIE, from Bukit Timah to PIE." He said, "That also adds to traffic, because they come in and they swing off into the PIE." Traffic was very slow – 34 kilometres per hour (kph). We installed a gantry in November 2007, and it took off about 10% of the traffic volume. The traffic volume was about 7,700. After we installed the gantry, 700 vehicles did not go in there. This 10% shift was enough to improve speeds.

It went up to 50 kph, a 50% increase in terms of traffic speed.

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Mr Lim Biow Chuan asked whether we will review the ERP rate for the CTE, PIE and ECP after the KPE is fully open in September 2008. LTA monitors the speed on all our expressways and arterial roads to ensure that the road capacity is optimised. Depending on the traffic flow on these expressways – CTE, PIE and ECP – if there is indeed significant improvement after we open the KPE, then of course the LTA will adjust the rates downwards. That is how the system works.

Some Members, in particular Mr Siew Kum Hong, said that he understands the reason for the ERP. But he asked that equity considerations be taken into account. It is not possible to tailor the ERP based on individual needs and circumstances, as this then involves making a value judgement. Let me give you some examples. For instance, is a housewife who drives her children to school more meritorious than her neighbour who commutes to work? If we say, yes, and it is also meritorious that you visit your grandparents or bring your sick pet to the vet, and therefore need not pay ERP, soon we will find many meritorious drivers in Singapore. So, once you start to make value judgements as to what trips are more meritorious than others, you end up with a poor solution to your original problem, which is to fight congestion. From a traffic perspective, everyone who drives on a congested road contributes to the congestion, and should pay accordingly. This is not just efficient but also fair, because you pay as you use.

Ms Lee Bee Wah suggested that we abolish the evening ERP to be pro-family. If we were to abolish it, would it be pro-family? Absolutely not, it would be the exact opposite. The CTE would be jammed very quickly, with drivers all wanting to take the shortest route home at the same time in the evening.

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If you take away ERP, the road space does not expand. If you leave the traffic unregulated, you will get a huge jam. The shortest route will take the longest of time. And I assure you that there is no joy in driving home in the evening – you get stuck in a jam and you may never be sure what time you get home. You are not sure how bad the traffic will be. The result is that everyone suffers: People who drive and also people who take buses, because they get caught in the same gridlock.

So what is uniquely Singapore? It is not what Ms Lee Bee Wah said "because motorists pay ERP in the evening". But rather that for such a compact and densely populated city state, when people drive home in the evening, they do not get caught in a traffic jam. That is uniquely Singapore. This is what many people who have been here from overseas and travelled on our roads say. Congestion hurts families. ERP is not the problem, but part of the solution.

It is not true that people do not mind a slow drive home in the evening. Mr Inderjit Singh mentioned to me that his wife finds it such a huge improvement, ever since we put in the gantry at the CTE. She picks up their son every evening to bring him home and she is appreciative of it.

Minister of State for Transport Lim Hwee Hua tells me that this additional gantry has cut down her travelling time by half, when she visits her ward.

Members of the public have sent us emails. Let me quote just one to Members. Mr Neo Aik Chuan wrote to the LTA. He lives in Woodlands and, thanks to the evening ERP, he now can get home earlier and spend more quality time with his family.

The next issue is one which Ms Jessica Tan brought up. She said that we should make sure that, before we phase

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in all these ERP changes, we have good public transport alternatives in place. I agree with her. This is critical. This is why LTA will effect immediate public transport improvements before the ERP changes are phased in. Let me just mention what we will do before July 2008.

For basic bus services, we will reduce the headway from 15 minutes to 12 minutes in corridors affected by the ERP changes. The outcome will be shorter waiting times and less crowded buses.

Second, we will allow basic bus services to run parallel along sections of the North-South and East-West lines, so as to give people more choice and less crowded trains.

We will also introduce more premium buses in the affected areas. We have added 12 new services since January, so there are now 54 premium bus services. We will have at least 72 by the end of June 2008. We will also start to provide evening premium bus services on high demand routes.

Many motorists find that these premium bus services are a good alternative to driving. Let me just give Members an example. Mr Loo Chiew Hooi, quoted in the Straits Times last year, has a Toyota Corolla and has now opted to take the premium bus services. This is what he said: "The premium bus service is like having a chauffeur. You can catch up on the news or read a book. You don't have to be stressed about driving."

The fourth thing we would do is to increase train trips. SMRT and SBST have already added 93 train trips in the peak hours since February 2008. Recently, I visited the Toa Payoh and Ang Mo Kio stations and found trains to be more frequent during the morning peak. The key is not just whether everybody can get into the trains, but how long you need to

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wait for the next train. It is about two to three minutes now. We have increased the frequency and the trains are less crowded.

Mr Lim Biow Chuan asked if the long-term rail infrastructural projects announced can be completed faster, especially the Eastern Region Line and the Thomson Line. These large-scale infrastructural projects require a series of detailed engineering studies and planning, before the actual construction can take place. The indicative completion date for these new lines that I have announced in January is LTA’s best estimate of what is possible. Certainly, if it is possible to move faster, we will, but it is premature to indicate otherwise at this point.

As for the Circle Line, again, if we could open the entire line, we would. But, as you know, we have done this in stages. The reason why we could bring forward Circle Line 3 was because it was least affected by the Nicoll Highway collapse. As for the other stages, there is still considerable work to be done. So the schedule will be 2009 for Circle Line 3 and the rest of it, from 2010 onwards.

Mr Cedric Foo, in his speech earlier, talked about optimal mix of rail and bus services, and his preference is weighted more to rail. He cited some figures and asked about the ratio. I think we need to look at this not as an issue of between bus and rail, but as public transport as a whole. I think our starting point is that, going forward, when a commuter has to make a choice between making a car trip or a public transport trip, he would look at public transport as a whole. That is why we have come up with all these measures, like what Mdm Cynthia Phua says "a total journey" experience, where season cards and travel cards can be used across modes. So, it is really not an issue of rail versus bus but really how do we

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optimise the system as a whole. Buses play a very important role – we have a hub-and-spoke system – because they feed into the rail system. And, again, as Mdm Phua said, we have to ensure that the feed-in is optimal when you get into the bus interchanges and the MRT stations. And that is what we will do.

Mr Lim Biow Chuan asked whether we will set up a dedicated radio channel for traffic information during peak hours. He brought up this point last year. I think Dr Lam Pin Min also mentioned it last year. This is something that LTA is looking into. Mr Lim Biow Chuan's suggestion is that we have frequent traffic information during the peak hours. Can we do that over the radio? The answer is, yes, but what is the best way to do this? We will not set up our own radio station because LTA is not in the business of running a radio station. So we will probably outsource it, work with a local broadcaster and see how best to get this done. We hope to get it done by the third quarter of this year.

Mr Cedric Foo asked whether MOT would allow for more liberal conversion to off-peak cars (OPC). We have no plans now to liberalise further. It is very easy for existing car owners to convert to OPC. You pay a $100 administrative fee, change the colour of your licence plate and you enjoy tax rebates similar in quantum to someone who has bought a new OPC upfront.

He asked: why not ease the restrictions, it might help make it more popular? But these restrictions have been carefully calibrated because we give tax concessions. If we were to change them, then we might need to adjust the concessions also. It is a matter of balance. I think right now, the balance is about right. The proof of the pudding is in the eating and you just look at the numbers.

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In 2003, new OPC registrations were about 1,000. It has gone up 11 times now. In 2007, we have 11,180 new registrations; 2003 was 1,032. So, it has gone up in popularity.

Mrs Josephine Teo made a suggestion that we should encourage more Park and Ride. I agree with her because we should indeed facilitate inter-modal transfer – whether it be taking a car or a bicycle to an MRT station and then change the mode.

She also made the point that, when we were talking about promoting public transport, it should not be "either or": either all-car or public transport. That is not our intent. What we really want is an integrated multi-modal system, not a uni-modal system.

The existing Park and Ride package is actually quite attractive. You pay $70 a month, $30 for the parking, and $40 for the ez-link card that you can use. However, there are some issues we are looking at.

One is that there has been abuse. Some people are not doing inter-modal transfer but are using it as a cheap office carpark. For some of the popular carparks near the MRT or bus stations, we need to balance the needs of visitors and the residents.

To build new carparks near the MRT stations, we have to balance land use needs. Should the land be for commercial or residential uses? It is important for us to make sure that all the incentives are properly aligned and not abused. We will weigh all these different considerations and review it.

2.15 pm

Ms Jessica Tan asked what is the role of taxis in our land transport system. Taxis are at the high-end of the land transport system. They provide a personalised service to the commuters. Taxi association members have told me that

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this is a chauffeur driven service, so it has to be priced accordingly and people would have to decide whether they want to take it or not. I think the Government should not be involved in this. The Government's role here is to facilitate the workings of the market, rather than to say whether you should take it or not.

Mr Seah Kian Peng is quite right that we should not just rely simply on anecdotal evidence on the impact of the recent taxi fares revision on taxi drivers. Do we have some hard facts or evidence on what has been the impact? Last month, I told the House that we have preliminary data from ComfortDelgro, the largest operator, and their preliminary data showed that earnings had improved for the taxi drivers. LTA's scan also showed that waiting time at the taxi stands has come down quite significantly. It is also easier to get a cab through the phone.

Now, we have more data on taxi drivers' earnings. For the month of January 2008, based on 3,700 taxis – these are not just from ComfortDelgro, but from the different companies – gross earnings for one shift and two shifts have improved, compared to November 2007, by 4.8% for one shift to $216, and slightly by about 0.6% for two shifts to $308.

Recently, I met the taxi association leaders and Mr Seng Han Thong, who is the advisor, just to get a feel on the ground. They confirmed that the majority of taxi drivers have seen an improvement in earnings and lower operating costs. The reason for lower operating cost is that they do not have to make as many trips as before, so they do not have to burn so much fuel. But I am sure that there are also some taxi drivers who are not doing so well. What is important is for the taxi companies and taxi associations to see how they can help them do better in this new operating environment. I understand from the taxi associations

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that they are ready to advise their members how best to operate in this new environment.

Mr Ang Mong Seng suggested that we reduce the statutory costs for taxis by reducing the ERP charges and the road and diesel taxes. Dr Lam Pin Min suggested that we waive ERP for taxis. As I have explained, ERP is imposed based on the road space you occupy. As long as you contribute to the congestion, you should pay for it. Taxis are in fact no different from private cars. They are one of the biggest consumers of road space. On average, there are about 1.5 persons in a taxi, like a private car. They take up 30 times more road space per travelling person, compared to a bus. So it is right that when we charge ERP for taxis, we charge them like private cars.

As for diesel and road taxes, taxis are already enjoying concessionary rates. Taxis pay a diesel tax of $5,100. If we were to charge them the equivalent for a petrol-driven private car, it should be $6,150. This is already a concession. The road tax they pay is $1,200 regardless of capacity. Most of the taxis are about 3,000 cc and if we take that as a figure, it should be actually $2,800. And like cars, the road tax for taxis will also be cut by 15% from July this year.

Mr Seng Han Thong gave some suggestions given the changing landscape and operating environment for taxis. He said that there are issues that we should work closely with LTA to see how best to move forward. I agree with him, and we will take up his offer.

Sir, I think I have taken most of the key issues.

Barrier-free Accessibility and the Elderly

Mr Wee Siew Kim: Sir, although barrier-free accessibility (BFA) is rapidly

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becoming a reality within our precincts, there is still much room for improvement.

The major issue is the connectivity to key areas in the estates that are separated by major roads. Shops and areas of social activities and entertainment are increasingly being centralised. In estates like Serangoon North and Buangkok, the markets and shops are not within the precincts but concentrated in adjacent estates. This is an economic reality that we cannot change.

However, major roads separate the estates. As a result, the entire efficacy of BFA is affected as the elderly and handicapped have great difficulty climbing up and down the pedestrian overhead bridges that are the primary means of crossing the roads today. In many areas, ramps cannot be incorporated. In others, lengthy snake-like ramps ruin the aesthetics of an estate and hence are not welcomed by some residents.

May I ask the Ministry to come out with other means of crossing roads that will eliminate the need for the elderly to climb almost the equivalent of six storeys of steps to get back and forth each time they use a pedestrian overhead bridge, because the nature of the pedestrian overhead bridge is such that every time you cross over the other side, you must get back? Can escalators and elevators be considered, especially since HDB has made much progress in sourcing and using technologies that have brought down the cost of elevators? In addition, would the Ministry consider connecting pedestrian overhead bridges to existing HDB flats nearby to take advantage of the elevators that are already in the blocks? Heavier pedestrian traffic to some lobbies may cause new problems. But can the MOT and MND look at them jointly?

I would also suggest that for future developments, BFA must be factored into the masterplan from the every beginning.

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It should also be re-confirmed at every step of the design so that accessibility is built into the entire development, especially for the crossing of major roads to important, heavily utilised amenities.

As one of the most rapidly ageing population, we have to be mindful that the mobility needs of the elderly will only increase and the sooner we have a holistic approach to incorporating BFA into our developments, the better.

Improvements in Public Transport System and Ageing Population

Dr Muhammad Faishal Ibrahim (Marine Parade): Sir, the Land Transport Review aims to make public transport more seamless for the commuters. I believe that the two key elements in achieving seamless travel are, firstly, the availability of flexible transport options and, secondly, the ease of connectivity during the travel process. This not only involves the characteristics or features of the transport modes and its transfer process, but also the integration of the transport system to the land uses which it connects to the users. In order to make the public transport a choice mode and a viable alternative to the car, we need to look at the details of the travel needs and options available to Singaporeans wherever they live, particularly for those who live in public housing. It should also maximise their level of accessibility in travelling to activity nodes, especially those close to their neighbourhoods. In addition, in view of the ageing population in the horizon, the land transport system should meet the needs of the young and old.

Sir, we need to continuously keep a close eye on the ground in meeting the travel needs of Singaporeans. Within Kaki Bukit division, Marine Parade GRC, my grassroots leaders and I have been receiving feedback from residents about the need to improve their "ease of connectivity" in commuting from Chai

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Chee to Bedok North neighbourhoods. This need became apparent when we began to observe our residents, particularly, the elderly having difficulties in accessing a nearby neighbourhood due to the unavailability of an easy and direct travel option. This has made these two neighbourhoods, in the words of one of my residents, "so near yet so far". My grassroots leaders and I have met the transport operator and LTA and we are now keenly awaiting for the outcome of the operators' evaluation exercise.

In view of the ageing population, I feel that it is important that the Ministry focuses on providing "affordable" and "flexible" public transport options as well as "ease of connectivity" in its attempt to improve the public transport system. Initial findings from an ongoing research which I am supervising shows that those aged 55 years and above place high importance on the travel factors in their choice of shopping areas. In addition, they tend to travel shorter distance for their shopping needs. As transport and mobility are key elements in the quality of life indicators, improvements to the flexibility and connectivity of the land transport system would certainly enhance the quality of life of Singaporeans, including the elderly. Further to the above, I would like the Minister to update the House on the plans of the Ministry in meeting the transport needs of an ageing population in Singapore.

Escalators or Lifts for Overhead Bridge at Khatib MRT

Er Lee Bee Wah: Sir, we have implemented escalators in selected overhead bridges near shopping centres to serve the public. Today, in the context of an ageing population in Singapore, this is no longer a luxury. In fact, we should make use of overhead bridges more user-friendly if we are to attract more people to use the public transport system. We must take a holistic approach to improve

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the public transport system and its ancillary facilities such as overhead bridges.

For example, in my constituency in Nee Soon South, the overhead bridge at Khatib Station has 67 steps. This is surely more like a vertical marathon for the elderly. I agree with Mr Wee Siew Kim that we should install either an escalator or a lift. If this is done, I am sure more elderly and those who have mobility problems will be willing to take public transport like train and buses.

Road Safety

Mr Arthur Fong (West Coast): Sir, the focus on public education on road safety should not be restricted to drink driving and motorcycle safety only. The number of road traffic accidents is growing faster than the growth of our car population. This suggests that we should also be vigilant against other issues that affect road safety. The number of road traffic accidents resulting in death has risen from 190 in 2006 to 219 cases last year. The total number of road accidents reported in 2006 was 7,499 and by 2007, the total had gone up to 8,323. The total number of cases had risen by more than 10% while our corresponding car population had grown only by 6.2%. The number of summonses had also risen in the two years of comparison, from 350,000 to 417,000. But many in this House, as regular road users, have seen many perennial challenges to road safety and the poor driving attitude or, should I say, attitude of some, which is a threat to other road users.

I have also noticed less presence of the Traffic Police officers on the road, especially during peak hours or late hours. I appreciate that our officers often have to strike a balance between enforcement and the need for regular traffic flow. But the safe driving standards of motorists seem

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to have deteriorated. The recent two cases of the polytechnic students and the sad case of the four Indian youths on a shopping mission before a wedding had fatal outcome. In all these cases, all those who met their death did not belt up and those who survived did. I would like to highlight the point that the dead youth did not belt up even though it is required by law. We would think that after so many years of implementing the seat belt-up law, it would be second nature to belt up when we get into a vehicle. After all, it is only for our own safety that we belt up. I say, better a live chicken than a dead duck.

I have mentioned the next aspect of road safety in this House before and will do it again. The ignorance, or rather the lackadaisical attitudes, of parents who belt up or seated in the front seats and have their toddlers or babies in their arms in front of them, do they not know or care that their child will be severely or fatally injured in an accident when the impact occurs either through their own carelessness or that of others? An impact is an impact. They will only have themselves to blame for causing hurt to their child. I fail to understand why some parents would allow their children to be put through the risk of death. The child would be flung out of the windscreen if they had to halt suddenly or if their vehicle was hit from the rear.

Another observation

of heavy goods vehicles and passenger vehicles is that it is common for me to come across heavy goods vehicles driving above the speed limit and also those of speeding lorries ferrying workmen. Moreover, a fully-laden lorry at high speed would have a difficult time stopping without putting its occupants and other road users in danger. I have brought up this subject in the House two years ago. We have seen a couple of accidents last year where some workers were flung from their vehicles on the expressway. Recently, Mdm Halimah

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Yacob had also brought this up as well, and the Straits Times had a feature on this matter some weeks ago too. What are the authorities doing about these? It seems that this road safety ball has been on an uncongested and seamless round trip between MHA and MOT.

Bicycles

Ms Irene Ng Phek Hoong (Tampines): Sir, I would like to declare that I am the Patron of the Singapore Amateur Cycling Association.

More people are cycling for transport and for leisure. This is to be encouraged. Cycling ensures a healthier population, reduces pollution and provides for a more affordable and sustainable transport system. It also provides a cheaper and convenient travel option for residents to reach key nodes within their neighbourhood, such as the markets and schools.

LTA is the leading land transport policy agency, but there is a sense that it has been reluctant to provide leadership in developing bike-friendly infrastructure and policies, or to take bicycles seriously in general. Its moves towards facilitating the use of bicycles have been tentative and piecemeal at best. The LTA should put in place a more coherent and integrated policy towards bicycles as part of the urban transport system, instead of ad-hoc measures and trials. I would urge the LTA to commission a study to examine how busy and congested cities, such as Chicago and Paris, integrate bicycles seamlessly into their transport system.

While LTA recognises that cycling is a transport option, it does not seem to have a clear stand on it. Does it encourage the use of bicycles or does it merely tolerate it? Can the Minister state clearly his position? It will make a significant difference in policy as well as on public attitudes towards cyclists. For instance, Norway aims to raise bicycle traffic to at

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least 8% of all travel by 2015, double its current level, while Sweden hopes to move from 12% to 16% by 2010. Paris has put thousands of low-cost rental bikes throughout the city to cut traffic and reduce pollution. Copenhagen has doubled its spending on biking infrastructure over three years, and Denmark has also increased spending on bike lanes on roads. Just this January, the UK government announced that it will invest 140 million pounds over the next three years to boost cycling nationally. The new funds will allow half a million school children to take up cycling training, built 250 "safe Links to School", connecting around 500 more schools to the National Cycle Network, and create 10 Cycling Demonstration Towns in England. In Chicago, its Mayor cycles to work, setting the example for the city, which released an ambitious new bike plan to make all of Chicago's streets safe and convenient for cycling. The Chicago Transit Authority's network of buses and trains also accommodates bicycles.

In Singapore, the debate has come down to whether cyclists should share footpaths with pedestrians. But this masks the real issue, ie, whether cyclists have a place in our transport system on our roads. The fact is that our roads remain very dangerous for cyclists. About 541 cyclists or pillion riders were killed or injured last year, ie, an increase of 43.8% from 2005. Many of us can cite experiences of inconsiderate and reckless cyclists, so can I. But we can also cite experiences of inconsiderate pedestrians who dash dangerously across roads or inconsiderate motorists who do not give way to buses. But it does not mean that we then ban all pedestrians from crossing roads, or ban motorists from roads. We improve on our infrastructure, eg, build more bus lanes, more pedestrian crossings, we mount public education programmes and step up on enforcement. The same thoughtful and imaginative approach should apply to cyclists.

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On the usual response that our weather does not encourage cycling, it must be noted that other countries, which experience inclement weather and tougher road gradients, have encouraged employers to provide facilities for staff to change and shower. In other words, our weather should not be used as an excuse for not doing more to create a bike-friendly culture.

I would urge the Minister to review LTA's approach towards cycling and to increase its investment in bike-friendly initiatives. Mr Seah Kian Peng mentioned the BMW approach, ie, Bus, MRT and Walk. I would suggest a MERC approach, ie, "M" for MRT, "E" for ERP for cars, "R" for ride buses, and "C" for cycle.

Cycling

The Parliamentary Secretary to the Minister for Community Development, Youth and Sports (Mr Teo Ser Luck): Sir, first, I would like to thank Ms Irene Ng for making such a compelling case for cycling. At the same time, I would like to thank Mrs Josephine Teo for bringing up park-and-ride. It should be ride-and-park, ie, ride first and then we park, because my topic is still about cycling. I declare my interest as a daily cyclist using the road every day.

I am also very encouraged that we are actually accommodating more cyclists, but not on the road, because we are moving the cyclists from the road to the pavements, so we are riding more on the pavements. I would actually have preferred that we should implement more safety measures for cyclists on the road before going on the pavement to cycle, because we do not want to endanger other pedestrians. Still, I applaud the Ministry for putting up road signs to create awareness of cyclists on the road since last year's work cooperation with

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the Safe Cycling Task Force. Twenty-four road signs may seem a small step for the LTA or the Ministry, but it is a big step for the cycling community. So I look forward to the day when our citizens can consider cycling as a form of transport.

As I read the Land Transport Review, I would like to know what are the plans for cycling in the future, and would appreciate it if the Minister could share with us whether there is any possibility of getting a cycling lane on the road.

The Minister of State for Transport (Mrs Lim Hwee Hua): Sir, Members would have heard how the Land Transport Review puts the commuter at the centre. As part of our people-centred land transport system, we have to provide for the diverse needs of our society and contribute to a quality, liveable environment.

We are mindful of the social and demographic changes to our society and the need for our land transport system to adjust to these changes and better meet the expectations of our people. So, we will be putting in place initiatives to provide better access for our entire community, especially the elderly, wheelchair users, families with young children, pedestrians and cyclists.

The number of elderly amongst us will grow over time, as Dr Faishal, Ms Lee Bee Wah, Mr Wee Siew Kim and many others have highlighted.

As part of our land transport review, we will try to plug the accessibility gaps in and around our public transport facilities, so that the less mobile segments of our population will be able to gain access to them easily. For example, by 2010, LTA would have completed its $60 million islandwide programme to make pedestrian walkways, access to MRT stations, taxi and bus shelters, and public roads barrier-free. By 2010 too, 40% of our buses will also be low-floor and

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wheelchair accessible and we intend that, by 2020, the entire fleet will be so. To enhance connectivity to bus stops, bus interchanges and MRT stations and to provide all commuters with a comfortable walking environment, come rain or shine, LTA will provide more covered linkways and pedestrian overhead bridges. By 2010, 86% of our existing overhead bridges will be covered.

Sir, I am pleased to say that our entire MRT network is now fully accessible to our elderly and less mobile citizens. All our existing stations have at least one entrance fitted with a lift, a barrier-free route, including tactile guidance systems, and wheelchair accessible toilets. This is not all. By end 2011, more than 70% of our MRT stations will have at least two barrier-free access routes. As part of the initiatives announced with the Land Transport Review, we will also provide additional lifts and ramps at MRT stations, such as Boon Keng, Toa Payoh and Queenstown, where the station entrances are far apart or separated by a major road. This is so that our elderly and wheelchair users can avoid having to make long detours to reach the entrance with a lift. All these initiatives are work-in-progress but the objective is clear, ie, to have an easily accessible and comfortable journey for the entire public transport system.

Sir, Mr Wee Siew Kim asked that we look into connectivity to key amenities in estates. I understand his sentiments as he and I happen to share a common corridor along Serangoon North. Our challenge is in assessing the feasibility of the different ways of making our pedestrian overhead bridges more accessible. Where feasible, we can certainly consider, but a more cost-effective approach is really to look at providing at-grade (or at street-level) crossings which are more elderly-friendly. This is something that LTA will be doing - more traffic light crossings at street level at suitable locations, wherever possible. In estates

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where there is a higher concentration of the elderly, the traffic light timings would also be adjusted to allow the elderly more time to cross safely.

Last year, the LTA conducted a trial in Toa Payoh on a system to lengthen the "green man time" for elderly citizens at pedestrian crossings, by using Radio Frequency Identification (RFID) technology. Elderly pedestrians holding on to a RFID device can activate readers that are mounted on the traffic lights. This will add an extra five seconds to the "green man time". The trial received positive feedback from the participants and LTA is therefore currently reviewing how this scheme can be implemented.

However, there are still situations, such as those cited by Mr Wee, where there is a major road with heavy traffic flow and where it is not possible for LTA to provide such at-grade pedestrian crossings. In such situations, we will have to make do with alternatives, such as underpasses or overhead bridges.

Both Mr Wee and Ms Lee Bee Wah have asked if lifts or escalators can be installed at pedestrian overhead bridges. First, let me clarify that an escalator is not a barrier-free access facility. That aside, should the staircase be replaced with an escalator, we may encounter other problems when the escalators undergo maintenance or when they break down. Pedestrians might find it more difficult to walk up or down the steps of the escalator as they are steeper and higher than the steps on the ordinary staircase. Furthermore, exposure of escalators to the elements will also add to the maintenance burden.

Lifts remain expensive to build and maintain and are not a cost-effective solution. As explained earlier, the needs of the less able-bodied and elderly are best addressed by the provision of at-grade or street level crossings where

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feasible. In the case of Khatib MRT station, which Ms Lee Bee Wah has cited, there is actually a nearby at-grade crossing at the traffic junction of Yishun Ave 2 and Yishun Ring Road, which is some 32 metres away from the station.

So far, LTA has connected pedestrian overhead bridges to commercial buildings, such as the Ang Mo Kio Hub, Sengkang Town Centre and Beauty World, but not to HDB blocks, as Mr Wee has suggested. We will need to address privacy and security issues, as most home owners would not want a public thoroughfare to be near their homes. Even for the provision of an overhead bridge near a block of residential flats, LTA has to manage the concerns of affected home owners and put in place screens along sections of the overhead bridge. Nevertheless, I would like to assure Members that LTA will continue to explore and look for innovative and cost-effective solutions to enhance access to public transport and amenities for the less able-bodied and elderly.

Sir, let me now move on to the service disruption issue. As more and more Singaporeans rely on the public transport system for their daily commuting trips, the impact of any service disruption has become more severe, and the tolerance for such disruptions is also much lower. I would like to assure Ms Jessica Tan that we take a serious view towards service disruptions. We understand that such disruptions bring about significant inconvenience to commuters and will certainly work with the operators to minimise the occurrence of such incidents.

Just last month, in response to Dr Lam Pin Min and Mr Lim Biow Chuan’s questions in Parliament, I had explained that, under the rail licensing framework, the train operators are required to adhere to prescribed standards, such as Train

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Service Availability and Service Adherence under the Operating Performance Standards imposed by the LTA. They are required to meet service attributes on reliability and safety under the Quality of Service standards as well, as stipulated by the Public Transport Council. If they fail to meet these performance standards, LTA and PTC will penalise the operators accordingly.

As with any mechanical and electrical systems, service disruptions do occur from time to time. When such disruptions occur, the operators will have to activate their service recovery plans. Just to recap, they have Rail Incident Management Plans (RIMP) and Standing Operating Procedures (SOPs) in place to handle such situations. Following the recent train disruption incident on 21st January 2008, LTA is working with the operators to refine both the management plans as well as the SOPs with a view to tightening the contingency plans where necessary in order to ensure that timely information updates and bus bridging services for affected commuters are provided in the event of a service disruption.

Sir, let me now turn to cycling.

We recognise that cycling provides an additional, if not alternative, mode of transport, especially for intra-town travel and to key transport nodes, like the MRT stations and the bus interchanges.

To promote greater use of public transport, LTA will be implementing several measures to facilitate cycling. Better bicycle parking facilities at the MRT stations and bus interchanges in housing estates will be provided. The bicycle parking facilities will be sheltered and more optimally designed for supporting and securing the bicycles. A one-year pilot will be carried out next year at the MRT stations cum bus interchanges at Pasir Ris, Tampines and Yishun. This pilot will allow LTA to gather feedback so as to better understand the usage patterns and

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needs of the cyclists before extending the facilities to all the other MRT stations.

LTA, together with the public transport operators, will also launch a six-month trial from mid-March 2008 to allow cyclists to carry their foldable bikes on board trains and buses.

However, we have to recognise that given our land constraints, it is not feasible to provide a comprehensive set of dedicated cycling tracks or cycle lanes island-wide, which is what Mr Teo Ser Luck has suggested. We have to ask ourselves if this is the best way to make full use of our very limited road space. The issue is not whether cyclists have a place in our public transport system, but how do we allocate space amongst competing users that will best make use of our very limited land.

Ms Ng would know that in May 2007, the Traffic Police and LTA, together with the Grassroots Organisations at Tampines, started a one-year trial to allow cycling on pedestrian footways in Tampines. The outcome of the trial and the feedback gathered will also help us to determine how best to meet the needs of both cyclists and pedestrians within our land constraints. This would include addressing the enforcement issues and infrastructure needs.

The LTA will work with other agencies to leverage on NParks' nation-wide Park Connectors Network to enable cyclists to get to public transport interchanges more easily. Where feasible, new paths or expansion of existing walkways will be undertaken to achieve that.

As for Ms Irene Ng’s suggestion to look into developments in other cities, yes, certainly LTA will continue to study their experiences. However, it is important, Sir, to remember that we would need to tailor the experience of overseas cities to our local context.

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In facilitating cycling, safety is always a priority, both for the cyclists as well as for the pedestrians. Following a pilot in Changi, LTA will, from March 2008, install appropriate signs to alert motorists of the presence of cyclists along frequently used recreational cycling routes such as those in the West Coast and the Thomson areas. Apart from this initiative, the Traffic Police will also continue to conduct annual road safety campaigns, talks and exhibitions on how to use our roads safely.

Sir, finally on road safety. Mr Arthur Fong and Mdm Halimah who had earlier filed a PQ have raised a few concerns on road safety including the importance of belting up, and the safety of young children sitting in front and of workers transported at the back of lorries. Let me take them in turn.

Sir, under the Road Traffic (Motor Vehicles, Wearing of Seat Belts) Rules, a child below the age of eight years has to be properly secured by an approved child restraint. This is because most Singaporean children below that age are not tall enough to use a seat belt safely. Therefore, a young child cannot sit with his parent in the front passenger seat. Any driver who fails to comply with this may be fined $120 and given three demerit points.

But I agree with Mr Arthur Fong that the key point is really getting parents to recognise that using a child restraint can save a child’s life. To raise awareness and promote their use, the Traffic Police will continue to educate parents through exhibitions and talks conducted at pre-schools and primary schools. But Government agencies can only do so much. At the end of the day, the key point is that parents must take the responsibility to ensure the safety of their children. Likewise, adults must themselves take the responsibility by belting up.

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As for the safety of workers transported in the rear of lorries, the Land Transport Authority (LTA) has in place a set of rules under the Road Traffic Act. These rules require the workers to be safely seated at a height of not more than 3.2 metres from the ground. The vehicles must not travel faster than 60 km/h. And as part of the safety requirement, drivers must also display a label on the vehicles indicating the maximum number of workers that can be transported on the cargo deck of the vehicles, to facilitate checking by enforcement officers as to whether the lorry is overloaded.

According to the Traffic Police, there were two fatal and one serious accidents involving lorries carrying workers on the cargo deck last year. The statistics also show that from 1st January 2000 to 31st December 2007, the annual average fatality rate of workers carried on the cargo decks of lorries was 4.5 per 100,000 vehicles and the annual average injury rate was 202.2 per 100,000 vehicles. Both these rates are about six times lower than the annual corresponding rates of all road accidents over the same period.

The LTA and the Traffic Police will continue to monitor the situation closely and conduct strict enforcement against lorry owners or drivers who violate safety rules when they are carrying workers on their vehicles. To further enhance the safety of workers transported on lorries, a work group, to be co-chaired by LTA and the Ministry of Manpower, will be formed to review the safety of workers transported on lorries.

Sir, at the end of the day, road safety is a shared responsibility. We cannot depend solely on rules and regulations put in place by the authorities, or build separate lanes and bridges for cars, cyclists and pedestrians. All road users

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will have to play their part. We all need to be responsible, considerate, and to keep a lookout for the more vulnerable road users like cyclists and pedestrians, the young and the old. Only then, can we ensure that everyone can get to where they need to be safely, and worry-free.

The Chairman: Order, I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended

at 2.56 pm until 3.20 pm.

Sitting resumed at 3.20 pm

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[Mr Speaker in the Chair]:

[Mr Speaker in the Chair]: Debate in Committee of Supply resumed.

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[Mr Speaker in the Chair]

Head W – (cont.)

The Chairman: Mr Cedric Foo, take your two cuts together. Total, three minutes.

Development of Singapore as a Regional Air Hub

Mr Cedric Foo Chee Keng: Singapore has done well to establish itself as a regional air hub. However, many other cities have also invested heavily in their airports. Bangkok, as we discussed earlier, has natural advantages. Many South-East Asian cities also have a lower cost base than Singapore. I understand that one of our key strategies in developing Singapore as an air hub is to anchor airlines in Singapore, including low cost carriers (or LCCs). However, I also understand that Changi Airport has lost some

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airlines last year. Could the Minister elaborate on the number of airline flights that Changi Airport has lost last year, compared to what it has gained?

Sir, EU countries have done away with embarkation and disembarkation forms for all visitors. It is paperwork that visitors have to do when they visit Singapore. Also, I am told that our visa application process, especially for Middle-East visitors, takes much too long to process. Many other airports have also positioned themselves to attract premium passengers with dedicated security and immigration lines for such passengers. These may be details but they are not lost on airport managers around the world. They illustrate the efforts that many cities are making to attract tourists and visitors. Changi Airport, therefore, must keep up or our competitive edge may be chipped away gradually.

How can we make coming to Singapore as frictionless and as seamless as possible? Have we studied customer touch points and evaluate how we could improve for each of these touch points?

Sir, more recently, CAAS has constructed a Budget Terminal to serve low cost carriers (or LCCs). I would like to ask the Minister how successful we have been in attracting LCCs to anchor in Singapore. Could the Minister also update the House on his plans to maintain Singapore's position as a regional air hub for passengers, cargoes, ground handling, catering, and MRO (or Maintenance, Repairs and Overhaul) services?

Performance of Singapore Changi Airport

Sir, my next cut is on Changi Airport itself. Changi Airport is an oasis and a treat to many who visit Singapore. In 2006, Changi Airport welcomed 35 million passengers and handled 1.9 million tonnes of cargo.

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Sir, how have we fared last year in terms of Changi Airport for passenger and cargo performances as compared to other airports like Bangkok and Hong Kong?

Managing Singapore as an Aviation Hub

Dr Lam Pin Min: Sir, competition in the aviation industry is fierce, and getting hotter by the day. Singapore's Changi Airport may enjoy pole position today but the competition from the region remains very keen. Hot on our heels are KLIA, Bangkok Suwannaphum Airport, Dubai International, and Hong Kong's Chek Lap Kok Airport - probably counted as the strongest rival to our Changi Airport.

In fact, a new airport being built by the Chinese Government in time for the 2008 Beijing Olympics will be the world's biggest and can be truly awesome, according to its British architect, Lord Foster. We have done a whole lot in recent years to improve and transform the landscape of Singapore that will result in significantly more tourist arrivals. The staging of the inaugural Formula 1 night race this year, completion of the two Integrated Resorts in 2009 and 2010 respectively, and our recent success in our bid to host the Youth Olympics in 2010 will inadvertently put Singapore in the world map once again. We should continually look into improving our infrastructure and our connectivity to keep our competitive edge as a regional aviation hub.

I would like to ask the Minister the following: what are our strategies to maintain Singapore as an aviation hub amidst the rising competition from regional players? How would the recent developments towards air liberalisation place additional challenges on our status as an aviation hub? And lastly, with the introduction of many more ultra long haul planes, such as the A345 and Boeing 777 extended range, would our strength of high connectivity and being a transit hub become irrelevant?

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Changi Airport

Mr Wee Siew Kim: Sir, Changi Airport is a Singapore icon. It has made its mark in the aviation and travel industries as a benchmark for service excellence. In many ways, Changi Airport is representative of the efficiency, high standards and excellence the world has come to associate with Singapore. However, the competition is catching up with new and bigger regional airports built or in the process of being built. As such, we must continue to improve our airport standards in all areas, whether it is service delivery, connectivity, facilities. Keep coming up with innovative and industry-firsts in products and services for all users, be they passengers, airlines or airport service providers.

Recently, T3 commenced operations. I have used it, and it is an outstanding terminal with top-notch operations by any standards. Beyond T3, what are the other initiatives that are being pursued to ensure the continued supremacy and dominance of Changi Airport and its reputation as a pace-setter?

Will the Minister also share with us the initiatives that are being pursued to ensure Changi Airport's leading position as one of the world's best airports? Of interest would be any initiatives to attract new carriers and efforts to recapture certain carriers which have stopped using Changi and opted to use other airports in the region.

Additionally, as the LCC segment gains strength and generates a whole new category of air travellers, we must ensure that local and foreign LCCs continue to be attracted here. Hence, what does Changi Airport offer to such carriers which pride themselves on delivering low cost travel? How can Changi Airport be competitive against other regional airport aspirants in this category? What are the plans we

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have in place to ensure that we continue to capture a significant share of the LCC segment.

The Chairman: Mr Cedric Foo, take all your three cuts together. Total, four minutes.

Air Services Agreements (ASAS) for Passenger and Cargo Flights

Mr Cedric Foo Chee Keng: Sir, I am pleased to note that Singapore and Malaysia have finally agreed to liberalise access on the Sin-KL route, thus, allowing for more flights including low-cost carriers to operate between Singapore and Kuala Lumpur. I also note from the MOT press release that transport officials from Singapore and Malaysia were scheduled to have met in January this year to discuss further liberalisation of air services between Singapore and other Malaysian cities, other than Kuala Lumpur. Such liberalisation is obviously good for consumers, both in Malaysia and in Singapore. I would like the Minister to give us an update on these discussions.

There was also an initiative from ASEAN to liberalise air travel among all the capital cities. This initiative was first mooted in 2004 and was called the ASEAN Roadmap for Integrated Air Travel Sector, or RIATS. May I ask the Minister what additional benefits would RIATS bring to Singapore, and Singapore carriers, and how soon can we expect the roadmap to be realised?

Sir, connectivity for an airport is the cornerstone for its success and this, in turn, depended on the air rights that each country can negotiate successfully each year. Could the Minister update the House on the number of ASAs (Air Services Agreements) and OSAs (Open Skies Agreements) that Singapore has concluded recently, and what are its plans for 2008 as far as ASAs are concerned?

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Air Rights for Singapore Carriers to Fly between Australia and USA

Sir, there is one particular ASA that Singapore has tried to negotiate for many years but had been in vain. Our many attempts at obtaining Fifth and Sixth freedom rights with Australia appear elusive. Yet Australia and the US have recently signed an open-skies agreement that will allow for vast expansion of air travel and competition on the busy trans-Pacific route. Can the Minister share with us his thoughts on whether he believes Singapore will ever reach a Fifth and Sixth freedom rights agreement with Australia and when will that take place?

Civil Aviation Authority of Singapore

Sir, in August 2007, the Minister announced plans to corporatise CAAS (Civil Aviation Authority of Singapore) with regulatory functions invested in the new regulatory body and its commercial functions separated and corporatised. This, he said, was to enable Changi Airport to compete more effectively and to enhance Changi Airport's position as a premier air hub. It is noted that consultants were to have been appointed to advise the Government on this corporatisation effort. Can the Minister update us on the status of the review, and elaborate more on the rationale behind his plans and the next step beyond corporatisation?

Would the commercial arm of CAAS be eventually privatised or sold? And if that should happen, what would be the implication of such a move, and how would the strategic imperatives of Changi Airport be safeguarded under a purely commercial entity?

Mrs Lim Hwee Hua: Sir, Mr Cedric Foo, Mr Wee Siew Kim and Dr Lam Pin Min have asked about the strategy to enhance Singapore as an air hub in the face of rising competition.

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Sir, the growth of Changi Airport as an air hub has been healthy. The number of scheduled weekly flights operating out of Changi Airport grew from 3,400 to 4,300 from year 2002 to 2007.

In the same period, the number of city links has grown from 140 to 190. The total number of passengers using Changi Airport grew from 29 million in 2002 to 36.7 million last year.

While these numbers are good, Changi Airport is facing strong competition from other airports in the region. For example, Kuala Lumpur International Airport grew by almost 10% in 2007, with more than 26 million passengers, including seven million using the new Low-Cost Carrier (LCC) Terminal. The new Bangkok International Airport also did well, serving 42 million passengers in its first full year of operation (from October 2006 to September 2007). And Hong Kong saw a growth of 7.5% in air passenger traffic, with almost 48 million passengers last year.

Beyond our immediate region, we are also facing increasing competition from the Middle East. In particular, Dubai International Airport, the largest aviation hub of the Middle East, is expected to overtake Changi's passenger traffic volume this year, crossing the 40 million passenger mark. Dubai is a formidable competitor for the Australia-Europe traffic. It is seeing phenomenal growth in passenger volume, with an almost 20% increase last year. The situation is similar in terms of air cargo. In 2007, Changi Airport saw 1.89 million tonnes of airfreight pass through it, 0.9% less growth than in 2006. However, Hong Kong moved 3.7 million tonnes in air cargo, representing a growth of 4.5%, while Dubai had 1.7 million tonnes pass through it, with an impressive growth of 11%.

Changi Airport is no stranger to competition but it is critical that we are aware of these challenges and that we

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take decisive steps to strengthen Changi Airport's position as a leading air hub in the region. We will pursue a three-pronged approach:

Firstly, we will continue to push for the liberalisation of the aviation regime;

Secondly, we build capacity to keep ahead of growing demands; and

Thirdly, we will take measures to encourage airlines to come to Singapore and to keep those that are already here.

The key to air hub development is connectivity and the starting point to achieving connectivity is for the Government to negotiate maximum air rights with as many countries as possible. A liberal air services framework will allow carriers to respond to changing consumer demands as and when they arise, leading to widespread economic benefits for the countries involved. We believe in open skies and have always pursued air services liberalisation.

To this end, last year we expanded our Air Services Agreements with 18 countries, including Open Skies Agreements (OSAs) with five countries. Of significance amongst these is the opening up of the Singapore-Kuala Lumpur route to the low cost airlines as a result of the bilateral air services consultations in November last year. We are in the process of arranging for further meetings to discuss the opening up of other points in Malaysia. In the expansion of Air Services Agreements, we will strive to do even better this year. Our focus will be on Asia, including ASEAN, as well as Europe. We have got off to a good start. In the first two months of this year, we have already concluded three OSAs with Denmark, Norway and Sweden, and expanded our Air Services Agreement with the Netherlands and Portugal. In the

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case of Portugal, we will have full OSA by 2010.

Mr Foo also asked about our Air Services Agreement with Australia. Air access between the two countries was last expanded in September 2003, providing unlimited 3rd and 4th freedom rights. The main restriction remaining is the right for carriers to operate passenger services beyond Singapore and Australia. There has been some movement towards liberalisation in the trans-Pacific route between Australia and the United States - when on 15th February, very recently this year, the US and Australia concluded an OSA. We will continue to raise this matter with Australia, reminding them of the mutual benefits of liberalising air travel, amongst which will be more competitive airfares and better services for all consumers.

Besides bilateral engagements, there is also a multi-lateral dimension to freeing up our skies. Singapore is supportive of a multi-lateral approach towards liberalisation. Within our immediate region, ASEAN Member States are currently in the final phase of concluding the Roadmap for Integration of Air Travel Sector (RIATS), a set of multilateral agreements, and formulating the implementation framework of the ASEAN Single Aviation Market. It is our hope that ASEAN could eventually enter into air services agreements as a bloc, with key partners such as China and India, and successfully create an open aviation area in Asia similar to that of the EU. This in turn will greatly facilitate not just intra-ASEAN flow of trade, services, investment and tourism, but also increase ASEAN's attractiveness as an investment and tourism destination. We are therefore looking forward to ASEAN realising the first milestone under the RIATS when there will be unlimited air access between the ASEAN capitals.

In terms of building capacity ahead of demand, Terminal 3 (T3) of Changi Air

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port, started operations on 9th January 2008 and has been performing well. Within the first week, T3 had served a total of 838 flights, and handled a total of 232,000 passengers. With the successful opening of Terminal 3, we are now looking at other aspects of Changi's infrastructure. To continue to ensure that we have sufficient capacity to accommodate growth in the aviation market, the master-planning for Terminal 4 (T4) has started. In the near term, the focus will be on the expansion of the Budget Terminal and the upgrading of Terminal 1.

The Low Cost Carrier, or LCC, sector is one of the key growth areas in Changi Airport. Mr Foo has asked how successful we have been in attracting LCCs to come here. In 2006, we have six LCCs operating in Singapore. In 2007, we have eight. At present, with AirAsia starting operation on 1st February on the Singapore-Kuala Lumpur route, we now have nine LCCs operating out of Changi Airport. Indeed, in 2007, LCCs contributed 3.6 million passengers or around 10% of Changi Airport’s total traffic, and half of its overall traffic growth. To keep ahead of this growth, we will be expanding the Budget Terminal, from its current capacity of 2.7 million passengers per annum to 7 million passengers per annum at an estimated cost of $10 million. We target to commence construction in July this year and to complete the expansion by early 2009.

As CAAS had announced on 14th February, we will also be upgrading Terminal 1 at an estimated cost of $500 million. Work will commence in May this year, with a planned completion date of June 2011. The works will be carried out in multiple phases so as to minimise disruption to airport operations.

Sir, let me now address Mr Foo's question about air passengers' experience through Changi Airport by assuring Members that, apart from paying attention to

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hardware, Changi is also mindful of the software aspects of customer service. CAAS has been regularly monitoring key performance indicators such as the amount of time passengers would need to clear through immigration, security screening, and collect their baggage. And thus far, Changi Airport has been meeting the targets set. Mr Foo has mentioned that other airports have provided dedicated lanes for premium passengers. He may be heartened to know that such a premium lane has also been put in place at T3. Changi Airport will continue to look at other ways to improve and keep ahead of our competition.

Let me now move on to the third thrust of our air hub development. Mr Foo asked about the number of airlines we are hosting: we gained seven airlines and lost nine. It is clear that we must continue to find ways to enhance Changi Airport's attractiveness as an air hub for airlines, both passenger and cargo.

In terms of passenger airlines, one of the means to achieve this is through the Air Hub Development Fund. This fund serves to reduce costs for the airlines and provide incentives for them to grow their traffic out of Changi Airport, to mount more new services, and to make Singapore the hub of choice for their operations.

Changi Airport's key message to the airlines is that Singapore is poised to become an even more exciting destination for both business and leisure over the next few years, especially with the impending opening of the two Integrated Resorts and other exciting world-class events such as the Formula 1 night race and Youth Olympic Games. It would make good commercial sense for airlines to place Singapore high on their radar screens. CAAS will collaborate with other agencies, such as the Singapore Tourism Board and EDB, in these developmental efforts.

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In terms of air cargo carriers, I had noted earlier the slowdown in Changi Airport's air cargo sector. This mirrors the structural shift of our own manufacturing activities towards high value-added output and product miniaturisation. To strengthen the air cargo sector, we are exploring new markets, business segments and customers.

Changi Airport's air cargo movement has so far relied heavily on Singapore's exports from the manufacturing sector. Specifically, electronic shipments constitute over 50% of Changi Airport's total air cargo throughput. This reliance means that should the volume of these shipments drop - as they did due to lower output and the trend of 'miniaturisation' - they have a disproportionate impact on our air cargo volume. To address this, we will: First, diversify our air cargo mix; and, second, encourage more inter-modal transhipments.

To diversify the mix of air cargo that Changi handles, we will be expanding into goods such as pharmaceutical, biomedical and lifestyle products. One of the ways to do this will be to encourage the development of specialised infrastructure, such as a "Fresh Hub" for handling perishables, and an Air Cargo Express (ACE) hub, for express cargo. To grow inter-modal transhipments, we are looking to encourage more Regional Distribution Centre (RDC) operations to be set up here, to help generate more air cargo volume through Changi.

Finally, Sir, let me touch on the corporatisation of Changi Airport and the restructuring of CAAS. Mr Foo has asked for updates to corporatise Changi Airport and whether the corporatised entity would be divested eventually.

The Civil Aviation Authority of Singapore (CAAS) as a statutory board

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has many responsibilities. It manages Changi Airport, provides air traffic services in Singapore, and regulates aviation matters. In addition, it advances Singapore's strategic interests in the international arena such as in the International Civil Aviation Organisation (ICAO). In other words, it is both a regulator and a business combined.

Although Changi Airport has been successful thus far, we cannot take it for granted that we will continue to be competitive. We have to think ahead. To meet future challenges and ensure that we strengthen our air hub status, we will have to restructure the existing CAAS into two entities, namely, a new company to run Changi Airport and a new Civil Aviation Authority for the regulatory and strategic functions.

We need the entity responsible for running Changi Airport to be nimble and responsive to changes in the aviation market. A corporatised body will be more responsive to competition from other hub airports and customers' needs. It will be more prepared to take risks to stay ahead of the competition. It will also have more flexibility to attract and retain global aviation talents. Today, Changi Airport has several ventures overseas through Changi Airports International, a subsidiary of CAAS. Through corporatisation, a company managing both Changi Airport and its overseas airport projects will realise a lot more synergy and potentially be more successful. In short, we hope that corporatisation will bring about a mindset change that is even more pro-business and that will continually look out for more and new opportunities with a greater commercial outlook.

With corporatisation, the new CAAS team could focus their attention on both the regulation of the industry and advancing Singapore's strategic interests, including the air hub development strategy. They will no longer be bogged

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down by the day-to-day running of the airports.

As for the new airport company, it will be 100% owned by the Government. There are no immediate plans to divest the airport company as yet. We should make the changes one step at a time. We are fully aware that our strategic interests as an air hub should not be compromised. As part of the corporatisation exercise, we are designing an economic regulatory framework for the operations of the new airport company to ensure that our hub interests - such as having sufficient infrastructure capacity for future growth - are sustained and promoted.

3.45 pm

We started this process in August last year, and expect it to last for 18 to 24 months. We have been working closely with all stakeholders on this. These include the airlines, ground handling companies, the Maintenance, Repair and Overhaul (MRO) companies, as well as the International Air Transport Association (IATA). We have met with them to explain the intent of corporatisation and to gather feedback at an early stage.

More importantly, both MOT and CAAS have held dialogue sessions with the most important stakeholder of all, the CAAS staff. One of Changi Airport’s chief assets is its human capital. The smooth opening of Terminal 3 in January this year is reflective of the professionalism and competence of the staff. As such, we must ensure that we plan this corporatisation with their interests at heart.

The Chairman: Mr Cedric Foo, you can take your remaining three cuts together. Four minutes.

Security and Environmental Protection in Maritime Sector

Mr Cedric Foo Chee Keng: Sir, from cars, we have moved to aeroplanes. Now, I would like to move to ships.

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Sir, let me first declare my interest as an Executive in the shipping line. It was recently announced in January that MPA will be taking active steps to address environmental concerns related to shipping. These steps include MPA's revision of its "Gate System" for licensing of bunker tankers, and from April 2008 it will issue new harbour craft licences to bunker tankers that comply with limits on nitrogen oxide emissions from ships, as provided for by the IMO MARPOL Convention No. 2.

I would like to ask the Minister if there are any other initiatives to be taken this year to protect our environment in addition to those that he has just announced.

On the security front, it was also recently announced that (1) Singapore is participating in a trial project under the US Secure Freight Initiative Programme; (2) Singapore is leading an APEC group to develop a Trade Recovery Programme; and (3) the launch of the Secure Trade Partnership Programme by the Singapore Customs. Can the Minister update us on the progress of implementation of these various programmes and how successful these programmes have been?

International Maritime Centre

Sir, the maritime sector has served Singapore well for many years. Although often touted as “old economy” shipping was, is and will continue to be the principal mode of cargo transport. In fact, without shipping, there would be no order fulfilment and the modern world of globalisation, as we know it, would not have happened. I am pleased to note from the Minister’s speech in January that Singapore continues to grow, both in terms of vessel arrivals, container and cargo throughput and ship registrations. In terms of container cargoes, Singapore managed to retain her top ranking as the world’s busiest container port, just ahead of

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Shanghai, by a very narrow margin last year. It would not be long before Singapore loses out to Shanghai as the world’s busiest container port. However, what is important for Singapore, apart from being ranked the busiest, is to grow its maritime cluster. This cluster is huge and comprises of not just shipping lines but also ship financing companies, marine insurance companies, classification societies, ship brokering, ship bunkering, ship husbandry, shipping logistics, shipping law and so forth. In these and other areas like the AIS and ASL schemes as well as the recently launched Maritime Financing Initiative Scheme, could the Minister update us on how Singapore has fared in 2007 compared to 2006?

_Training, R &D and Innovation in the Maritime Sector
_ Sir, in order for the maritime sector to thrive in Singapore, we need to train skilled managers and have skilled manpower. To remain in the forefront, the Government also has a role to promote R&D and innovation in this sector.

I am pleased to note that the MPA has the state-of-the-art facilities, such as the Integrated Simulation Centre, to offer maritime training and for R&D in terminal development. It also has maritime risk assessment, crisis management and investigation into shipping incidents. MPA has also established a $80 million Maritime Cluster Fund in 2002 to help promote and strengthen the maritime cluster in Singapore. More recently, in July 2006, the Singapore Maritime Training Fund was launched by SMOU in an attempt to equip sea-faring officers with up-to-date skills.

I also know of a MINT fund, which was launched some years back, to promote research, particularly in the

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maritime sector. I would like to ask the Minister what is the original size of this fund, when was it first established and how much has been invested out of this fund to-date?

Sir, apart from these initiatives, does the Minister also have other plans to promote training, research and development as well as innovation in the maritime sector.

Mrs Lim Hwee Hua: Sir, I thank Mr Cedric Foo for his interest in the maritime sector.

In 2007, Singapore continued to perform well across all sectors of our International Maritime Centre, or IMC. Container throughput grew strongly to almost 28 million TEUs, an increase of 13%, which is faster than the 7% growth that we saw in 2006. Tonnage of vessel arrivals rose by 11% to reach close to 1.5 billion gross tonnes while bunker sales also rose at the same pace to 31.6 million tonnes. On each of these measures, the Singapore Port maintained its key position globally.

We will continue to build on Singapore’s role as a leading hub port. Good port connectivity adds to the competitiveness of our economy. With about 90 daily sailings to over 600 ports in more than 120 countries, Singapore-based manufacturers benefit from a level of connectivity second to none in the world. This is critical as the vast majority of our exports and imports go through our port.

Frequent sailings mean better inventory management for manufacturers, and more timely and reliable deliveries for their overseas customers. The extensive choice of shipping lines that serve the port helps keep freight rates competitive, which translates to lower shipping and logistics costs for our manufacturers than for those based in competing locations.

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This connectivity advantage cannot be taken for granted. Japan's Kobe port was once one of the world's top five container ports, yet Japan today no longer has a container port ranked within the top 20. The Ministry therefore remains focused on upholding our connectivity advantage.

This means, firstly, that our port capacity must be able to meet growing demand, so that we will always stay “a few steps ahead”, in the words of Mr Foo. To this end, the tender to develop an additional 16 berths at Pasir Panjang Terminal was awarded last year, which will add a capacity of about 14 million TEUs, equivalent to about half our current container throughput. Plans to cater for growth beyond Pasir Panjang Terminal are also in motion.

Secondly, we must ensure that Singapore remains the preferred port of call. To this end, the Maritime and Port Authority (MPA) ensures that port services are efficient and user-friendly. Our port operators have also been responsive to customers’ wish for more operational control and autonomy. So, to date, PSA has entered into four joint ventures with shipping lines.

As highlighted by Mr Foo, security and environmental concerns have risen up the agenda and our strategies must therefore take them into account as well.

In this regard, we see an opportunity to position our port as a trusted and secure node in the international supply chain. We have already tightened security within the port. We are now broadening our focus to secure the supply chain itself. To this end, the Ministry worked with the Singapore Customs to launch in May last year the “Secure Trade Partnership”, a national supply chain security standard. Some 21 companies have come on board, and more companies are gaining interest.

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Internationally, as referred to by Mr Foo, Singapore is helping to improve the resilience of the supply chain through the APEC Trade Recovery Programme, or the TRP. Endorsed by the APEC Leaders in September 2007, the TRP aims to help APEC economies resume trade in the event of a major terrorist attack on the global supply chain. Singapore will be organising a workshop later this year to help the APEC economies gain a better understanding of the TRP and its benefits.

Singapore agreed to participate in the US-initiated Secure Freight Initiative, or SFI, to test the feasibility of 100% security scanning of US-bound containers at upstream ports. This trial is scheduled to commence in June 2008 and will last for six months. This is part of our wider effort to work with stakeholders to seek practical approaches and measures so as to enhance the security of maritime trade across the world.

Environmental considerations have also been integral to our port and shipping policies. Mr Foo mentioned revisions to the Gate System, which will ensure that new bunker tankers licensed will meet more stringent emissions standards. Today, our port development projects must also undergo independently-conducted environmental impact assessments. Together with Malaysia and Indonesia, we have also launched a Cooperative Mechanism that will involve international users of the Straits of Malacca and Singapore in the environmental protection of the Straits. Singapore has signed up to all key international conventions that regulate air emissions from ships, and we are also participating in international discussions on how to further reduce these emissions to make shipping less pollutive.

Sir, I agree with Mr Foo on the importance of the development of a cluster beyond the port. Our IMC promotion efforts also include developing

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Singapore as a base for shipping and maritime services. I am happy to report that we have made good progress. Over the last three years, ship brokering and chartering grew at an annualised rate of about 12% while the number of international shipping companies under our Approved International Shipping Enterprise Scheme has jumped by 50% to about 100 today. Singapore is now well-recognised as a major maritime centre, with a critical mass of companies forming a very vibrant community.

To add further momentum, for this Budget, we have included foreign exchange gains and gains from risk management activities as qualifying income for tax concessions under Singapore Registry of Ships and the AIS Scheme. We have also extended the concession that gains from sale of vessels will not be subject to income tax for a further five years. These changes will provide greater tax certainty to companies, an attribute which many players place a premium on.

We have also made inroads into new segments where we have had less presence traditionally. Ship finance is one example. The Maritime Finance Incentive, or MFI, introduced in 2006 to promote alternative ship finance structures, has attracted five companies with US$1.2 billion in assets under management, three of which are listed on the Singapore Exchange as shipping trusts.

This year’s Budget provides further fillip in the form of two new measures to enhance Singapore’s attractiveness.

First, we have extended the MFI to include containers as a qualifying asset. Income from the leasing of containers will enjoy a concessionary tax rate of 5% or 10%. This inclusion will attract specialised container funds to Singapore, and

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add to the growing number of shipping funds here.

Second, partnerships will now be included as qualifying entities for the MFI. Hence, shipping funds which are structured as partnerships are now also eligible for the MFI. Once current market uncertainties abate, we can expect more companies to sign up.

Trading of forward freight agreements has also witnessed stellar growth since it began in May 2006. In 2007, the SGX AsiaClear cleared a total value of more than US$800 million of FFA trades, compared to about US$3 million from May to December 2006. As AsiaClear gains wider acceptance and freight rates remain volatile, we can expect volumes to climb.

We are also taking steps to strengthen Singapore as a centre for marine insurance. MAS has announced changes to fine-tune the regulatory requirements on marine mutual insurers, such as a reduction in the minimum paid-up capital requirement from $25 million to $5 million and also reduced fund solvency requirements.

With the favourable trends of shipping and trade flows in our favour as the centre of gravity of shipping continues to move east with Asia’s dynamic growth, international maritime service providers are realising the importance of an Asian presence. While we believe we have a very attractive proposition as an IMC, MPA will no doubt be redoubling its efforts to grow the maritime services, and to listen carefully to our customers and our potential customers to continue to improve upon the existing suite of incentives as well as to reduce the regulatory burden.

Mr Foo also asked what was being done to promote training, innovation and R&D. With the maritime sector generating

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more than 7% of GDP and providing about 100,000 jobs, opportunities for job seekers abound. There is generous financing for maritime training through the various funds as mentioned by Mr Foo. Over the years, MPA has also worked with our tertiary institutions to put in place a comprehensive range of maritime courses. We will now reach out to potential recruits, especially through the Maritime Outreach Network, or MaritimeONE, which was launched last year.

4.00 pm

MPA also has several initiatives in the area of R&D and innovation and many of these are supported by the MINT Fund, which Mr Foo referred to, which was set up in September 2003 with $100 million. Already $30 million has been committed. As industry and researchers ramp up their maritime research programmes, we expect the Fund to be tapped at a faster pace.

Sir, our efforts to catalyse maritime research are already showing results. In December last year, Keppel set up its new Keppel Offshore and Marine Technology Centre, and committed more than $100 million to fund its activities over five years.

Through our enhanced maritime incentives and numerous maritime initiatives, we aim to make Singapore an even more compelling location for maritime businesses. At the inaugural Singapore Maritime Lecture last year, Minister Mentor said that the maritime industry was "basic" to Singapore's development. My Ministry intends to make sure that the maritime industry is similarly integral to our future.

Mr Cedric Foo Chee Keng: Sir, I would like to clarify what I said about the issue of tendering out and making the bus or rail sector contestable.

Sir, I mentioned that in tendering out different parcels of the bus routes, there

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are two ways the Ministry could think about. The first way is for the PTOs who are bidding for such parcels of routes to take the risk of revenue changes or fare increases. That is one way. The other way is for the Government to take the risk of the fare changes.

I have not advocated a system whereby the Government should not be paid or should not increase fares when warranted. I think that discipline of the marketplace should continue. Just like every worker that puts in an effort requires to be paid, anybody who puts in capital requires to be paid too. I think Singaporeans understand that concept.

But if we make the prospective PTO assume fare risks and in structuring his bids, he would have to calculate how much it costs for him to meet the prescribed standards, and then he has to guess whether or not he would get fare increases in year one, year five or year seven. When there is risk associated with such fare uncertainties, he has to price into his bids and, therefore, chances are you will receive higher bids (or a higher operating cost) than if the Government agency takes over the fare risks.

So, I would like to seek the Minister's inputs as to whether or not such a system would work better in reducing overall fares for the public transport network in Singapore.

Mr Raymond Lim Siang Keat: I thank the Member for the clarification. As I mentioned just now, there is no perfect model here. That is why LTA has to study what best suits our local circumstances. The Member has posited two different possibilities. One, the State takes the revenue risk and the other one, the public transport operator takes the revenue risk. And his argument towards the latter was that, if they take the revenue risk, then their pricing might not be as competitive. He also said that the quality might be

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affected . But these are early days, we have to study it, and we cannot really just look at one particular model, say, the London model, and say that we should apply this to Singapore. Adelaide, for instance, has a model where both the revenue and the cost risks are taken by the PTO and it works quite well.

Mr Seng Han Thong: The Minister has not addressed the issue on the distance-based fare structure and whether it will lead to higher or lower fares in future. Second, has LTA done any comparative studies on taxi services in other countries? Also, is the Minister aware that lately, LTA has put out this advisory note to all commuters, tourists included, that "For errant drivers, please call this number." throughout all taxi stands in the CBD? This will give a wrong impression that our taxi drivers are so bad that it warrants the LTA to put up this advisory throughout all the taxi stands. Can we replace 'errant drivers' with the word 'feedback'?

Mr Raymond Lim Siang Keat: I think just now in the Member's cut, he mentioned about the distance-based fare and whether or not we are going to keep the same fare formula. The answer is yes. We will still use the existing fare formula , where the two elements are the CPI and the national wage number, and then subtract out the productivity component.

As I mentioned earlier, the Public Transport Council is now reviewing it, because after three years, they have been asked to review what are the appropriate weights and what the productivity component should be. On the distance-based fare, the fare formula will remain the same.

The other question is on the advisory notice in the CBD where it says that for errant taxi drivers, there is a phone

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number to call. This is based on commuter feedback, foreign visitors as well as our own locals, who said that in case there is an errant taxi driver, they do not have a number to call. We are responding to commuter feedback. Will it give the impression that our taxi drivers are all errant taxi drivers? I do not think it is necessarily so. We do have signs in Singapore, as you know, saying "Don't Litter", "Don't Smoke", "Don't Spit" and it does not mean that we are a nation of litterbugs, inconsiderate smokers or a nation of spit artists. We are not. In fact, what it shows is, to us as a society, this is what is the acceptable standard and anything beyond that is an exceptional behaviour that we frown upon. So, I think that is the context in which we are doing this and we are trying to further the reputation of the taxi industry. But I take Mr Seng Han Thong's feedback seriously. He asked whether LTA could look at the wordings and he has made a suggestion. We will look into it.

Dr Lam Pin Min: I would like to ask MOS, with the liberalisation of air rights as well as the advent of more ultra long-haul aircraft, such as the A345 and many more that will come up, how would this impact on the air traffic volume to Singapore, and whether MOT has taken these changes into consideration in their strategy to maintain Changi Airport as an aviation hub?

Mrs Lim Hwee Hua: I would like to inform Dr Lam that we do track these developments very closely in terms of the types of aircraft that have been developed and when they are ready. But, at the same time, we focus a lot more on connectivity, especially in terms of the flow of passengers, investment and business, and so on, vis-a-vis travel patterns as well.

And it is a rather complicated and complex combination of different parameters but it is something that we feel at

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the heart of it sits liberalisation. Therefore, we are going great lengths with open skies, and we are pushing for open skies because we believe that would then ensure flows would come to Singapore, and through Singapore, on a whole variety of aircraft.

The Chairman: We have a long list of names here, so please make your clarifications short.

Mr Seah Kian Peng: Just a clarification to the Minister regarding car ownership. He mentioned that the Ministry will review the adequacy of the 1.5% car growth policy after three years. My proposal is to reduce it to 1% from next year because over a three-year period, this half a percent reduction means more than 12,000 fewer cars on the roads. That is enough to line up the cars from east to west on the island. Surely, this is something which is worth seriously considering now rather than subject our roads and our motorists to further stress and frustration?

Mr Raymond Lim Siang Keat: I do not think by lining up 36,000 cars, we will line up the whole island; the island is not that small.

But as I explained, the reason why we are doing this is because we are making big changes. All these things are a matter of judgment. We have to balance these things. My preference is that when we are making big changes, let us do it in a gradual way if we can because it impacts people's lives. This is the basis of the decision. So we are doing it from 3% to 1.5% for three years, and after that, we will review it again.

Mr Lim Biow Chuan: Sir, the Minister said that Scheme B buses were taken off because demand had fallen. Sir, I understand that many Scheme B buses were cancelled so as not to waste resources and duplicate the routes of the

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North-East line, and this is part of the rationalisation exercise carried out by the Public Transport Council.

So, when LTA takes over central planning, would the Minister consider allowing private bus operators to run Scheme B buses? Basically, the main point, Sir, is to provide affordable and convenient bus services, and not just premium buses with premium fares.

Sir, just one more point. The formula for public transport fare was supposed to be reviewed three years after 2005. Is the Ministry asking the Public Transport Council to review the formula or would the Minister be asking another committee? I understand that this committee was previously spearheaded by the Chairman of the GPC for Transport.

Mr Raymond Lim Siang Keat: Two questions here. One is that, going forward, with LTA as central planner, when they look at how best to optimise the network, will they allow Scheme B operators? As I said, when they design the route packages and open it for tender, I do not think there is any preclusion. It is up to the particular company whether they would like to tender for that package. The key thing is to meet the requirements in the tender. There will be certain requirements on frequencies and service obligations.

The second question is on the formula. The GPC had already deliberated on this three years ago and came out with a report and said this is the way to go. So I do not think that we want to re-open this whole thing again about the formula. We want some certainty. But the GPC report said that after three years, we should look at the weights in the formula. That is what the PTC is now doing.

Er Lee Bee Wah (Ang Mo Kio): Sir, I have two clarifications. First, to the Minister. Will the Ministry consider having

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the announcement in the trains, especially the name of the next stop in four languages instead of just English?

The next question is to the Minister of State. Just now, the Minister of State mentioned that it is expensive to install a lift in the Khatib MRT overhead bridge. I would like to know how much it would cost and just now, she mentioned that for the elderly, they just have to walk 32 metres to the nearest traffic light. I asked my guy to quickly run there with the measuring tape. He told me that it is 156 metres to the traffic light, crossed six lanes, 22.2 metres, and walked back, a total 310 metres.

Mr Raymond Lim Siang Keat: A very energetic chap, I must say.

In terms of the announcement, all these things are really a matter of judgment.

We now have multi-lingual signs in the stations. If you go to the key maps, you have them as well. What about the announcements? We have been looking at all these feedback and already the complaint sometimes is that the announcement in English is a bit long. So can you imagine, if we have it in four languages, by the time they finished announcing all four, you might have shot past the station.

Ms Eunice Elizabeth Olsen: Sir, I thank the Minister for his reply. I seek two clarifications. First, it is with regard to the signs for errant taxi drivers. Instead of just saying they are for errant taxi drivers, perhaps we can also commend taxi drivers because we should not just focus on the negative. There are some taxi drivers who make your ride pleasant.

Secondly, with regard to cross subsidising, should the public not have the information on how much more it will cost in order to judge whether they want

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their mothers, fathers, grandmothers and grandfathers to have full concessionary rates?

The Minister of State for Transport (Mrs Lim Hwee Hua): Sir, in reply to Ms Lee, first of all, a typical pair of lifts would cost about $1.8 million in terms of capital cost. But it would only last for about 20 years. On top of that, the running cost is about $90,000 a year, which is way in excess of the $1,400 a year for the maintenance of a typical ramp. Currently, the cost differential is still really very large and, of course, over time, there is a possibility that this could come down and, at that point, certainly we can bear that in mind.

As for the actual location and the experience at the Khatib station, I stand corrected and would certainly be happy to go and walk that length with Ms Lee. Certainly, if the distances exceed the benchmark that we have currently between the existing lift and the provision for a second one, the LTA will be quite happy to consider that. So if Ms Lee could provide me with the details, we would be happy to take that up.

Mdm Halimah Yacob (Jurong): Clarification for the Minister of State. Last Saturday, I was travelling along the CTE for a duration of 10 minutes, and there were seven lorries carrying workers in their backs and significant numbers of them did not comply with regulations. Considering that thousands of lorries are carrying workers in their backs every day, how effective are the enforcement measures?

Last year, two workers died and 184 were injured because of road accidents. I would like to ask the Minister of State whether more stringent measures will be enforced, including banning carriage of workers in backs of lorries if the situation does not improve, to provide better protection for foreign workers.

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Mrs Lim Hwee Hua: Sir, Mdm Halimah's concerns are valid which is why the Ministry of Manpower and the LTA would proceed with this Committee to look at the issues that are involved. Enforcement is certainly one key factor and that will be one of the points of focus as well.

Mr Low Thia Khiang: Sir, the Minister says that no single measure is sufficient to manage road congestion. I want to ask him whether he agrees that the measures taken so far are aimed to squeeze money out of car owners. How about having some measures like incentives or rebates to reward car owners who do not contribute to the congestion?

The second clarification is this. So far the Government has been using ERP and COE as a dual lever, like music mixers, to try to control congestion. Can the Minister tell us what is the optimum mix in terms of the number of cars that will be allowed on the road and also what are the maximum charges he envisages for future ERP? Would he also envisage that ERP gantries would need to be erected on all major trunk routes leading to the housing estates? Or would he envisage that one day, the MOT would need to erect MRT gantries, like the Police's ring fencing method to catch the drinkers in the pub, in order to manage road congestion? The Minister also cited examples of how efficient the new ERP gantries would be when come into operation. He cited, for example, the turn to CTE and all that, that reduces road congestion. I would like to ask him how long the effect will last? Because after a while, people will get used to the ERP charges and start using the same route again, causing congestion, and you have to keep on raising ERP charges. Is that a solution, moving forward?

Sir, I want to also ask this. He said this is something unique in Singapore - our transport policy where people pay for

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usage. What is unique in Singapore is perhaps private car users pay through their nose with the highest car price in the world and probably road usage in time to come, while the Government benefited and enriched its coffers. So, this is another Number One that we have in the world.

Sir, my second set of clarification is on contestability of bus services, not ERP. I want to ask him whether he will see real contestability amongst the big boys, ie, the GLCs. In other words, will the new initiative end up like what the Chinese say, " huan tang bu huan yao " (换汤不换药) – you just change the form but the content or substance remains the same.

What is the Minister's projection in terms of the number of PTOs that will be able to compete for the market? And what will be the entry requirements for the PTOs to enter into the market? Will the entry requirements tilt in favour of small players?

Mr Raymond Lim Siang Keat: Let me take Ms Eunice Olsen's clarifications first. I agree with Ms Olsen that it is not just reporting errant taxi drivers but that taxi drivers who perform well should be commended. Actually, if you read the Straits Times , they do have that. They have a small column where they say "Bouquets", and they run that every now and then.

On the issue of cross-subsidy, it is not so much the numbers. You can have this number but it keeps on changing over time. It is really the policy intent behind it - should the State come and subvent it so that the concessions are funded by the State. And I have said that we should not go down this road because if you look at other countries that have done so, this subsidy keeps on growing and it does not get smaller.

I mentioned the example of the Seoul bus reform and one of the reforms they

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did was to shift the revenue risk to the State so that the State could offer low fares, lower than they should have been. Within a short period of time, the deficit was US$400 million, and I mentioned Professor Kim, who is in the advisory panel, who said that this is something we have to be careful about. So I think it is the policy intent that is important. The figure itself is not static, as it could change over time.

Mr Low Thia Khiang asked many clarifications. Let me start with the incentives for the motorists. I mentioned earlier what we have really done is to have a balance, that whenever we make system changes to the ERP, we try to reduce ownership costs. If we take the latest exercise that we have, we estimate ERP to go up by about $70 million but the road tax reduction comes up to about $110 million on an annual basis.

He asked if there is an optimum mix, in terms of the ERP and COE. It really depends on the congestion levels and you therefore need a dynamic system. It keeps on changing, and you cannot say that you are going to fix it this way. However, one of the constraints is that the vehicle population growth rate in the longer term cannot grow faster than the rate in which our roads are growing.

He mentioned that this is nothing more than a revenue measure. I have explained to him that it is not, if you look at the figures, say, in 1998 when we introduced and shifted down the ownership costs, $1.2 billion foregone every year – ARF excise duty, road tax. He had earlier mentioned another figure, the net revenue, and asked how come it goes up. You have got to take the net revenue figure over time because it changes by the number of car de-registration as it affects the PARF. If the net de-registration goes down for a particular year, it will affect

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that net revenue figure. If you take the net revenue figure from, say, before we introduced ERP in 1997, it is in the order of about $3.4 billion. By 2006, I think it is about $1.7 billion. So the net revenue figure has actually come down over time.

The other issue is contestability of bus services. His point is whether there is real contestability or it is just only for GLCs. I am not sure how he came to this conclusion that it was just meant for GLCs. We will make the market contestable and it depends on the players - whether or not they wish to compete in that particular market. Whether it is GLC or non-GLC is really not the issue. The issue is to ensure that when we design the tender package, it is a level playing field and that different operators can participate in the tender.

Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, the Minister in his reply to Ms Jessica Tan earlier on, categorised the taxis as high-end in the overall scheme of public transport. I am a little concerned when I heard that labelling because it may just lead to more upside in taxi fares. I differ with the Minister to say that far from high-end, taxis actually currently fill up many of the areas of gaps that the buses and the trains do not fill. And, in fact, like in areas where there are no buses, beyond midnight or in emergency, taxis are essential. So I do not see it as being high-end. Can the Minister clarify?

Mr Raymond Lim Siang Keat: I beg to differ too. I think it is high-end. I explained that when I met the taxi associations, they told me that this is a chauffeur-driven service and that it must be appropriately priced.

Ms Irene Ng Phek Hoong: Sir, on cycling, other than the ad hoc trials and the measures announced, can I ask the MOS whether the Ministry has gathered any specific data on bicycle traffic and look at trends and see how a more

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bicycle-friendly culture can be fostered? I am happy that the Minister of State has said that it is open to the experience of other countries. Can I stress that it will be more useful if the Ministry conducts a serious study into how other cities which experience road congestion, like Paris and London, have managed to use the bicycle as one of the options to solve the problem, especially in our quest to be more eco-friendly.

And, finally, I just want to cite an anecdote. There was a letter in Today on the Singapore airshow from a couple who was trying to catch the show. They drove and got stuck in the road congestion. They then drove to a bus station to catch the public transport, hoping that it would get them to the airshow but they found that the queue was long and the buses were all full. So they drove all the way to a bicycle rental kiosk at East Coast Parkway and cycled all the way, 14 kilometres, to get to the airshow. They got there, beat the traffic but, of course, missed the show. The point I am trying to relate is that it is an option and if our planners have that in their heads and look at the bicycle with fresh eyes, it can be a solution rather than a problem on our roads.

Mrs Lim Hwee Hua: Sir, I thank Ms Irene Ng for her comments. I would just want to reiterate that whilst the experiences of the other cities are extremely helpful in terms of planning, what we do notice is that the culture here is completely different in terms of attitudes of cyclists themselves, and of motorists when it comes to learning to share road space, to be courteous and to be considerate. These are long-term challenges.

We will continue to work at it so that we can all share the space with the eventuality of cyclists being able to get to the transport nodes and therefore to be linked up to the rest of the island through the network system. This would continue to be work in progress.

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4.30 pm

The Chairman: Mr Cedric Foo, would you like to withdraw your amendment?

Mr Cedric Foo Chee Keng: Sir, let me first thank the Minister and the Minister of State for their very comprehensive replies. When the Land Transport Review was first announced, many were sceptical and thought that changes would only be at the periphery. I am happy to say that the feedback the GPC has received so far is that the plans coming out of the Land Transport Review are promising, bold and imaginative. Sir, ERP gantries will be unpopular. But I believe Singaporeans are thoughtful and well travelled, and they know that this is the right thing to do if Singapore is to remain a liveable city. I believe Singaporeans will accept it, albeit reluctantly. Sir, I commend the Minister and his team for a very bold plan. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn .

The sum of $388,424,600 for Head W ordered to stand part of the Main Estimates.

The sum of $2,990,457,700 for Head W ordered to stand part of the Development Estimates.

The Chairman:

The Chairman: I shall now deal with the remaining heads of expenditure in respect of which no amendment stands on the Order Paper Supplement. In respect of the Main Estimates, they are Heads B, C, D, E, F and G. I propose to take these heads of expenditure en bloc .

Question, "That the sums stated for Heads B, C, D, E, F and G which appear in the last column of the Schedule of estimated expenditure under the Main Estimates on page 6 of Paper Cmd. 2 of 2008 stand part of the Main Estimates," put and agreed to.

The Chairman : In respect of the Development Estimates, they are Heads B, C, E and F.

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Question, “That the sums stated for Heads B, C, E and F which appear in the last column of the Schedule of estimated expenditure under the Development Estimates on page 7 of Paper Cmd. 2 of 2008 stand part of the Development Estimates,” put and agreed to.

Question, "That the sum of $39,679,546,800 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Main Estimates for the financial year 1st April, 2008 to 31st March, 2009, as amended, contained in Paper Cmd. 2 of 2008," put and agreed to.

Question, "That the sum of $15,383,667,900 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Development Estimates for the financial year 1st April, 2008 to 31st March, 2009, contained in Paper Cmd. 2 of 2008," put and agreed to.

Resolutions to be reported.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

The Minister for Finance (Mr Tharman Shanmugaratnam): Sir, I beg to report that the Committee of Supply have come to certain resolutions.

First Resolution reported –

"That the sum of $39,679,546,800 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Main Estimates of expenditure for the financial

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year 1st April, 2008 to 31st March, 2009, as amended, contained in Paper Cmd. 2 of 2008."

Second Resolution reported –

"That the sum of $15,383,667,900 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Development Estimates for the financial year 1st April, 2008 to 31st March, 2009, contained in Paper Cmd. 2 of 2008."

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

Question put, and agreed to.

Resolutions accordingly agreed to.