HOUSING AND DEVELOPMENT (AMENDMENT) BILL

HOUSING AND DEVELOPMENT (AMENDMENT) BILL: Order for Second Reading read.

The Minister of State for National Development (Ms Grace Fu Hai Yien): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

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Context and objectives of upgrading

Our public housing programme, which houses over 80% of our people, has won us the envy and admiration of many foreign visitors. Beyond just providing a roof over our heads, HDB flats are attractive and affordable. HDB estates are well-planned and constructed to offer our residents a conducive environment to live, work and play in. They help build bonds and community ties. They are where our children grow up, where different races mingle, and where shared memories are formed.

One characteristic of our public housing programme is that, even as we build new HDB estates, we do not neglect the older ones. We bring the benefits of newer designs and improvements to these estates through our upgrading programmes so that they can continue to attract new families and maintain their vibrancy.

Upgrading also plays an important role in sustaining the value of the HDB flat. The HDB flat has become an integral part of the life story of many Singaporean families. First, we help young families buy their first flat by selling new flats at subsidised prices. If they wish to buy a resale flat, we help them with a housing grant. We provide financing at subsidised interest rate to help them buy their first flat. The lower-income group is given an additional lift through the Additional Housing Grant scheme. When the family is better off and wishes to upgrade to a bigger and better flat, we offer them another subsidy and financing to assist them. At the later stage, when it is time for the resident to retire, we offer options to monetise the flat and unlock its value for old age. Throughout this cycle, we enhance the value of the HDB flat through our upgrading programmes.

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New upgrading programmes and Heartware Forum

At the National Day Rally last year, the Prime Minister announced two new upgrading programmes - the Home Improvement Programme (HIP) and the Neighbourhood Renewal Programme (NRP). The HIP focuses on improvements within the flat while the NRP focuses on improvements outside of the flat, at the block and precinct levels.

The HIP and NRP are the result of residents' feedback on our existing upgrading programmes. Last year, the Forum on HDB Heartware, which I chaired, conducted many public dialogues and discussions to solicit ideas on ways to build more cohesive communities in HDB towns. During these sessions, residents told us that they wanted greater flexibility in flat upgrading and to opt out of certain items if they have recently carried out renovation works. Others have asked for greater consultation and less duplication for block- and precinct-level facilities. The HIP and NRP are the outcome of these feedback. So while improving our estates and upholding their value, our new upgrading programmes also allow greater flexibility in the provision of improvement items, and involve the residents more proactively. The aim is to create homes and neighbourhoods that they can call "their own".

The HIP and NRP will benefit more flats. Around 300,000 flats will be eligible for the HIP, compared to around 100,000 flats previously eligible for the Main Upgrading Programme (MUP). For NRP, around 200,000 flats will be eligible, compared with the roughly 80,000 previously eligible for the Interim Upgrading Programme Plus (IUP Plus).

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Need for legislative amendments

The NRP can be implemented within our existing legislative framework, but the HIP requires legislative changes. The Housing and Development (Amendment) Bill 2007 will amend the Housing and Development Act to allow the HIP to take place.

Home Improvement Programme

Allow me to recap the HIP for the Members of this House. The HIP addresses common maintenance problems in ageing flats, such as spalling concrete and ceiling leaks. It also offers other useful improvement items within the flat. The improvement items under the HIP can be classified into two categories - Essential Improvements and Optional Improvements.

Essential Improvements are items required to comply with the current statutory or technical requirements, mainly for safety and environmental health reasons. These include the repair of spalling concrete, replacement of waste pipes and replacement of pipe sockets (or "bamboo pole holders" as we commonly know it). They will be fully funded by the Government and if the residents collectively vote in favour of the upgrading programme; they cannot opt out of Essential Improvements.

Optional Improvements are items that are good to have but may not be essential to all residents. They include the replacement of entrance door and grille gate, and toilet upgrading. We have taken the public's suggestions and designed the HIP to allow residents to opt out of individual Optional Improvements items with a corresponding reduction in their co-payments.

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Optional Improvements will be highly subsidised, with lessees paying 5% to 12.5% of the cost, depending on their flat type. The HIP will proceed for a block if at least 75% of the eligible lessees in the block vote in favour of it.

Housing and Development (Amendment) Bill 2007

To facilitate the implementation of the HIP, three key amendments are to be made to the Housing and Development Act. Firstly, the definition of the upgrading works under the HIP will be introduced in the Act, and consequential amendments made to various other definitions. This is the purpose of clause 2 of the Housing and Development (Amendment) Bill.

Secondly, the Act will be amended to allow polling for the HIP to be carried out on a block basis, rather than on a precinct basis, which is the case for the MUP. Clause 3 of the Bill will allow HDB to conduct the HIP poll and proceed with the works if 75% or more of the residents in a block vote in favour of the programme.

Lastly, to complement the introduction of these upgrading works, clause 4 of the Bill will allow HDB to carry out the flat upgrading works and recover the co-payments that are not funded by Government.

Conclusion

Mr Speaker, Sir, the HIP will be an integral part of our upgrading programmes to rejuvenate our heartlands. Together with the NRP, the HIP will enable us to tailor the works for HDB estates according to their specific needs. To allow the HIP to proceed, the legislative amendments I outlined above will need to be enacted.

Sir, I beg to move.

Question proposed.

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3.09 pm

Mdm Cynthia Phua (Aljunied): Mr Speaker, Sir, I rise in support of the Bill, as it is timely, given that many of the older flats do require some repairs, especially the toilet. This exercise will give our residents an option to enjoy an upgrade of their flats at subsidised and economy of scale rates and nip in the bud the nagging problem of spalling concrete. The idea is hip, but what is not so hip is in the details of the quantum of co-payment by the residents and the possible contribution by the Town Council.

I would say this amendment is like the HDB offering ice-cream to dwellers of older flats. Sadly, the manner of giving is such that not all of them will be able to enjoy the offer. Because of this co-payment, some may just have to watch while others are polishing their ice-cream. This is the case I want to make for the dwellers of one-room, two-room and three-room flats.

I believe all Members in this House will know how much damage inflation has inflicted on the pockets of the lower-income group. We hear them during our meet-the-people sessions and at block visits. The list of household items, which have gone up in prices, is growing day-by-day. The lower-income dwellers do not have to wait for a recession to hit them. They are already hit. The Sunday Times ' report on 2nd December 2007 captured the essence of what is happening on the ground. Yes, the media also reported that shopping malls were crowded last December, but I am sure that the buying spree was not by those who live in one- or two-room flats.

Take a quick look at 2007: A&E charges and GP clinic charges up. Public transport, school transport charges up. University tuition fees up. Electricity tariffs went up. Food prices up.

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What about wages? The earnings of many lower-income workers are still below $2,000 a month. The salary boom highlighted in the media applied to the professionals and those in the managerial grades. The high wage growth did not come the way of the general workers, the cleaners, not the sales assistants nor the hawker assistants or chamber maids. Yes, Government has given various schemes and top-ups to cushion the GST. These would have been good if we could tame the fury of inflation, which had snatched away whatever little largesse given out to the masses. This year, we expect inflation to hit 3.5% to 4.5%. A recession is looming in the US, and dark clouds hang on the future.

Co-payment

I therefore appeal to the Ministry to create some air pockets for these lower-income residents before they suffer from hypoxia because of rising inflation. What is HDB seeking for each household if they co-pay 5% and 7.5%? HDB may be recovering a few hundred dollars from each of the one- and two-roomers, but for these residents, it is a lot of money. Furthermore, the number of these one- and two-room flats is not large relative to the overall number of HDB flats. In addition, the percentages of subsidies were worked out when the MUP, which is the Main Upgrading Programme, was first introduced some 15 years ago. The percentages have since not been reviewed.

I therefore ask the HDB to:

(a) absorb the co-payment for these smaller units and reduce the percentage for the other larger units;

(b) lower the co-payment for 4-room flats to 7.5% instead of 10%;

(c) lower the co-payment for 5-room and Executive flats to 10% instead of 12.5%.

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Spalling concrete

I note that there is no mention of the warranty period for spalling concrete and I would like to presume that the present practice of giving six months' warranty is still in practice. I would like to urge that the HDB provides a warranty of five years for spalling concrete as many of our residents have been facing this problem in the flat for so long. Give them the comfort in knowing that they can rest their mind for this period of time. A warranty shorter than this period will not be fair to long-suffering lessees of HDB flats. Even presently, when HDB contractors do the repair of spalling concrete, the spalling and the leak are still not done properly, and repair has to be carried out again and again. Each repair at the toilet is about $200 to the residents and I hear feedback from residents frequently that they sometimes have to pay for another or even a third repair two years after each repair. The present method of repair by HDB is clearly not effective. HDB should urgently look at a better repair method and the use of better materials for such repairs. If HDB and the contractors are able to provide the five-year warranty, the residents are assured of the best method of repair, good quality of material and the best skills for their repair.

In view of the frequent spalling concrete at the toilets, this brings me to my next point, that is, the Optional Improvements of toilet upgrading that HDB is empowered to carry out under the Bill. While the Bill is supposed to offer the residents a choice, in reality, is there a choice? I quote from the HDB website, "... to opt out of toilet upgrading, the toilets will have to pass a water test for leaks. This is to prevent ceiling leaks at the flat below." The reality is that many of these toilets are in bad condition. We get to hear many of these at the meet-

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the-people sessions. I have an average of at least five households seeking assistance because of water leakage in toilets every week, whether from the ceiling or from the pipes. HDB is creating a dilemma for these residents. If they fail the water-test for leaks, they are compulsorily required to repair their toilets under the Bill. The job has to be done and they have no money to pay. What next?

Court summons.

HDB should include such repairs as essential and pay for them. This is especially if the leaks are due to the same reason as the spalling concrete, in that it is due to the inadequacy of the material used, especially during the construction peak in 1986, and this is putting aside what was not properly carried out in the past by the landlord - HDB.

Before I end on toilet upgrading, please make our upgraded toilets elderly-friendly - no curb at the doorway to the toilet, lever tap, big buttons for switches, side bar next to the toilet bowl. From the photograph shown in HDB's website again - last night, I went to the website to look at some of the photographs - I did not see the bar at the side of the wall, an indication that this elderly feature is not included. I have more to dwell on the need to provide for the elderly later on.

Next, replacement of pipe sockets. I also note that the HDB will be changing the pipe sockets and the bamboo pole holders under HIP. We know that 8.5% of the population is above 65 years old. Many of them are also staying on their own. The weight of the poles with wet clothes is a real challenge for the elderly. This morning, I went to experiment again. I went to weigh the wet clothes on one bamboo of about 1.6 metres - the normal length is about 2 metres. Why I used 1.6 metres is because this was what I did when I was staying in a HDB flat with my mother-in-law who was then 65 years old. I shortened the bamboo poles for her so

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that it was lighter for her. I weighed the pole with just one pair of jeans and three T-shirts all wet, it was 4 kilogrammes. It was that heavy and I had not factored in the ring load as well. So I urge those who have not tried to go and do it before carrying out the socket part replacement.

We talk about preparing our nation and society for an ageing population. We should then not overlook this problem faced by our flat dwellers. The HDB should look at the design and ask whether it is suitable for our elderly residents. With the space adding item in their flat under MUP, which is now no longer available, HDB is unable to install the elderly-friendly racks for our residents. I sincerely hope that HDB has not forgotten this and is not going back to just repair and replace the pipe sockets. HDB must complement the work of Minister Lim Boon Heng who has, within a short period of time, come up with so many services and programmes for our elderly. We must help the elderly in their basic routine at home. I urge HDB to sincerely look into the provision of elderly-friendly clothes hanging devices for the home. Spare a thought for the elderly and do away with sockets before lives are lost.

Possible contribution by Town Councils

Next, I would like to question the amendment under clause 4 which amends section 65(d). I will first declare my interest as the Chairman of Aljunied Town Council. What are the upgrading works apart from the current works, such as the Lift Upgrading Programme (LUP), which the HDB is looking at recovering not only from residents but also from the Town Councils? The current co-payment is already a heavy burden on the shoulders of the Town Council, and adding any more to its plate would only result in passing on the cost to the residents. As we all know, the Sinking Fund and Routine Maintenance Fund are derived from the contributions of service and

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conservancy charges paid by the residents with some grants from the Government. I would like the Minister to undertake a review of the balances of the Funds in the Town Councils. The Fund is depleting because of the hefty contribution from the Town Councils for the Lift Upgrading Programme. If HIP is to be added on, I can surely say that the Town Council may be bankrupted. I seek the Minister's clarification on the improvement contributions in this Bill.

Minister's decision

Finally, the Bill states that the contribution is determined by HDB and not by the Minister directly. I would like to urge that since a Town Council, a statutory board, is under the purview of the Ministry of National Development and, being prudent, such a matter does require the Minister's attention, although we all know that our Ministers work extremely hard and long hours.

One last point as I just remember this. The works under the HIP are not new. Why only two pilot precincts? Can we start faster? Can we go full force immediately?

On this note, Sir, I support the Bill.

3.22 pm

Mr Chiam See Tong (Potong Pasir): Sir, I rise in support of this amendment Bill which, in principle, is to enable the Housing and Development Board to carry out upgrading works within flats in its housing estates if 75% of flat owners vote in favour of such upgrading works. I would also like to say that my Party, as an Opposition Party, supports the Government's policy of upgrading HDB flats. I make this statement to dispel any notion that the Minister may have that the Opposition does not support the Government's upgrading programmes. That was the reason, I believe, that the Minister gave after the last election when

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the Government failed to upgrade Potong Pasir HDB flats after promising to do so.

I note that the list of items included for upgrading under clause 2 of the Bill is all-embracing. It includes items within the flat and also items within a building or any part thereof not comprised in the flat. It is encouraging to know that the HDB shall be upgrading so many items because after 25 years, an HDB flat needs a lot of repair and upgrading. The most troublesome faults occurring within an old HDB flat are spalling concrete, leaking ceilings and corroded sewer pipes. These faults in old HDB flats are very unpleasant and unsightly. As for the spalling concrete, they are menacing and dangerous. These faults that I mentioned are best rectified by HDB upgrading.

Before those upgrading works are done, a poll has to be taken and a 75% approval must be sought from flat owners first. It must be noted that the flat owners do not give their approval automatically and vote for the upgrading of the flat. The HDB cannot take flat owners for granted and must look at the sensitivities and interest of flat owners in carrying out the upgrading programmes.

The Main Upgrading Programmes (MUP) at two precincts were rejected by flat owners - at MacPherson and Pandan Gardens. The MUP at Teck Whye was postponed and then withdrawn after the MUP was scrapped by the HDB. The said two MUPs failed because lessees complained that the upgrading took too long - two years, I believe. And it was too noisy and dusty, and a lot of inconveniences caused.

In the case of the MUP at Marine Terrace, the sub-contractor there went bust and could not continue with the work. The cost of upgrading at that time was also a factor. The inclusion of a

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space addition item (SAI) was another problem as well. I believe that the Government was surprised that residents rejected MUP, especially when the Government thinks that the MUPs were done for the benefit of the residents.

The MUP was halted at about 2004 and subsequent new upgrading programmes have come on stream. Following the MUP, there was the Interim Upgrading Programme (IUP), followed by the Lift Upgrading Programme (LUP) and the LUP-Plus. Then came the Hawkers Upgrading Programme (HUP) to be carried out by the NEA, after which came the Home Improvement Programme (HIP), then the Neighbourhood Renewal Programme (NRP). The last two programmes, namely, the HIP and the NRP, were announced by the Prime Minister at his National Day Rally Speech on 19th August 2007. And not surprisingly, Potong Pasir was not included in the list of HIP, NRP and all the upgrading programmes mentioned above.

May I ask the Minister of State what is the reason for Potong Pasir not being included in the abovementioned upgrading programmes, although Potong Pasir is eligible for it? Will Potong Pasir ever be included in the categories of upgrading programmes and, if so, when? It is unfair of the Government to discriminate against Potong Pasir. Potong Pasir for the last 20 years has been completely deprived of any upgrading benefit. Millions of dollars have been spent but Potong Pasir has not benefited even one cent of those funds spent on upgrading public flats. Are Potong Pasir residents not Singapore citizens? Do they not pay income tax? Do their sons not do National Service? The Government should use public funds fairly for the benefit of all constituencies, including the Opposition ones.

Despite the fact that Potong Pasir has not benefited at all from HDB upgrading programmes, I still support the Bill.

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3.30 pm

Mr Liang Eng Hwa (Holland-Bukit Timah): Mr Speaker, Sir, the Home Improvement Programme (HIP) is welcomed, much appreciated and, as some said, long overdue. It is much more practicable and it is targeted at areas that matter most to the residents. The slightly higher proportion of Government subsidy, coupled with the lower overall cost outlay, as compared to MUP, certainly makes HIP more affordable and increases its attractiveness.

Amending the Act to allow polling for the HIP to be conducted on a block basis, rather than on a precinct basis, is more flexible as well as more manageable in terms of securing consensus among a smaller group of residents. Hence, depending on the condition of each block, residents can better decide on what they need and want for their homes, instead of being bounded by the decisions of residents in other blocks, which may bear no semblance to theirs, even though they are in the same precinct.

Allowing residents to opt out of items they do not want is also a more equitable and practical move. The upgrading can then be tailored to meet specific needs and avoid the situation of over-providing. This amendment is certainly an improvement on our current legislation.

This HIP is overdue and, in fact, urgent for some flats, as perennial ceiling leakages, seepages and spalling concrete are common problems faced by these residents. I am glad that the Government has identified those flats that were built in the eighties, up to 1986, as there were cases of poor workmanship when HDB mounted an ambitious programme to build a large number of flats within a short span of time to meet the housing demand then. It is therefore very gracious and thoughtful of the Government to

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acknowledge this and identify these flats as the priority batch.

However, it is also not only in flats that were built before 1986 that experience these problems. Even some flats that were built after 1986 do have such seepages or ceiling leakages. I have seen fairly recent flats in my precincts where my residents have to contend with this problem. Hence, even as we implement this HIP, I hope that HDB could also look at ways to strengthen the quality control of our new HDB flats and take the contractors to task for any instances of poor workmanship.

Like the LUP, which the Government targets to complete for all eligible flats by 2014, I hope that the Minister can also set a HIP completion target date for the 200,000 flats that were identified by PM in his National Day Rally speech last year.

Our tropical wet climate can be very harsh on buildings and building materials, even though of good quality, never mind buildings with defects. Residents would appreciate repair works done in anticipation of deterioration, rather than waiting for the problems to worsen and cause all kinds of inconvenience before attempting to fix them. Hence, I hope that the Government would also consider extending HIP for flats built after 1986, if the flats' conditions warrant such improvement works to be done urgently and in totality.

Under the HIP, we have two categories of improvement, namely, the optional improvement items, which the lessee co-pays a small percentage depending on flat size; and essential improvement items, which will be fully funded by the Government. I urge the HDB to be more generous in its classification of the essential improvement items and to include items, such as replacement of aluminium window frames, fire safety features, energy conservation items, replacement of air-conditioned unit

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supporting frames and accessibility features for the elderly or disabled. These items, if left optional, will probably be opted out by residents as they have to weigh the costs and other choices available.

There were also questions as to how HIP will be implemented. For some deserving estates, for example, flats that are in need of both internal improvement works as well as precinct improvement works, would the HDB allow both the HIP and the NRP to be done at the same time?

MUP was implemented in the 1990s as part of the asset enhancement policy to increase the value of our homes and, in a way, to share the economic wealth of the country by increasing the value of our assets. Under MUP, flats that are basic and spartan are being transformed through flat, block and precinct upgrading, giving the older flats a fresh look and better ambience. HIP, on the other hand, is more maintenance in nature and hence would have lesser enhancement value to the flat owner. In fact, for some of the improvement works, like ceiling leaks, HDB already has an on-going scheme to co-share some of the repair costs on a goodwill basis. By replacing MUP with HIP, does it signal a change in the Government's policy on asset enhancement for HDB dwellers? Is the high cost of MUP the key reason why the programme has stopped? Or is it simply a case of MUP losing its appeal over time? Could the Government maintain both programmes, that is, to have HIP to address the wear and tear problems of flats and yet retaining MUP for older flats that still make better sense to do a MUP, including space adding features, and so on?

One of the reasons cited when the Government implemented the MUP in the nineties was that we want to retain the

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vibrancy of our older estates and that we do not want our flats to become "old folks home" where the young families shy away. I believe MUP still has its value and usefulness for some selected flats and should be retained. It may cost more to both residents and the Government but, if the budget permits and the residents are in favour, we should still retain it as an option. For example, for some of the older flats where SERS is not a viable option, MUP could be the next best alternative to up the quality of the flat and precinct. I hope the MOS can shed some light on the Ministry's thinking as we make this amendment to the Act.

Allow me now to push the envelope a little further. For the HDB dwellers, the Government has a set of very comprehensive upgrading programmes to improve our HDB living environment. LUP, HIP, NRP and SERS are all admirable programmes for our citizens who live in HDB towns. For landed private estates, we have the Estate Upgrading Programme (EUP) to improve the older private estates and enhance their living environment. But for a group of Singaporeans who live in private apartments and condominiums, there are to date no direct programmes that assist them in any improvement works. Some of them are not able to enjoy the attractive HDB offerings, as described by MOS earlier on, because their monthly household incomes are more than $8,000. I hope that MND can also come up with a scheme for these private apartment dwellers, some of whom may be located in or near the heartlands. Never mind if the subsidy is a smaller amount as it is sometimes the thought that counts.

The Government's policy on upgrading has thus far served Singaporeans well and our physical living environments are constantly being improved and upgraded under the various programmes. An HDB survey in 2003 showed that 95% of the households that underwent upgrading were satisfied with the programme. We

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have seen with our own eyes how many of the older estates now have a fresh lease of life. However, 15 years into the upgrading programme, it might be timely to also review if our upgrading policy has served the social aspect of bringing our residents closer together. Building community ownership and inculcating community spirit should form part of the objectives of our upgrading programme. The upgrading exercise, which involves significant resident participation, is an excellent opportunity to build stronger neighbourliness among residents and a stronger sense of identity and ownership. There should be sufficient avenues for resident participation and the process more closely blended with the grassroots organisations. I believe we can do more to extract more social capital out of our upgrading programme.

Mr Speaker, Sir, I support the amendments to the Bill.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.00 pm.

Sitting accordingly suspended

at 3.40 pm until 4.00 pm .

Sitting resumed at 4.00 pm

[Mr Speaker in the Chair]:

HOUSING AND DEVELOPMENT (AMENDMENT) BILL: Debate resumed.

Ms Grace Fu Hai Yien: Sir, let me thank Mdm Cynthia Phua, Mr Chiam See Tong and Mr Liang Eng Hwa for speaking in support of the Housing and Development (Amendment) Bill. Indeed, I think the HIP programme is a very much welcomed programme for the residents and for all Singaporeans who own HDB flats.

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Mr Chiam See Tong has very kindly given us a history of how the upgrading programme had evolved over the years, starting from MUP in the 1990s and moving on to LUP, IUP-Plus, and so on. Those are very helpful. It is important for us to remember that the upgrading programme has been evolving because HDB has been taking into consideration the feedback as well as the needs of the residents, together with the specific demands of the flat type, in designing the upgrading programme.

Mr Liang Eng Hwa and Mdm Cynthia Phua have spoken extensively about the scope of HIP. Mr Liang Eng Hwa, for example, has asked for a certain flat type built before 1989 to be included in this programme. So, in other words, instead of the cut-off that we have proposed, he has asked for flats that do not fall into this timeframe to be included as well. He has also asked for more optional improvement items to be included, similarly with Mdm Cynthia Phua, as well as some optional improvement items to be considered essential improvements so that the lessees of the flats do not have to pay.

Mr Liang Eng Hwa also brought up the issue about whether HIP or other upgrading programmes can be extended to private estates as well. I think it is important at this point in time for us to revisit the important issue here, and the starting point is always what is the objective of HIP. The objective of HIP is really to enhance the value of HDB flats for Singaporeans. I started off by saying that this indeed has been a unique point of Singapore's public housing policy because not only does the Government provide flat ownership for the majority of the people, but this is also a Government that, not only having sold the flats, would come back into the flat to upgrade and repair certain defects in the flat, and in the common facilities, to upgrade the lifts,

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lift landing areas, and so on. So it is indeed a unique feature of the public housing policy of Singapore.

How is it that we can do that? It is because of the economic policies of the PAP Government that allows us to generate the budget surplus that we can share with Singaporeans. We have decided to share this with Singaporeans who are eligible for HDB flats and, therefore, we have confined this to HDB dwellers. So the more we take these limited financial resources to spread it - whether it is to a wider group of flats, to private estate dwellers to include more items, and so on - it just means that we are spreading the benefits across a bigger base and, therefore, the benefits that individual HDB lessees tend to benefit will similarly be reduced. So it is important for us to basically strike this balance.

MUP, yes, there were more items in there, like space-adding features. But at that time, we were only looking at flats that were built before 1980. Therefore, flats eligible for MUP, for example, are only about 100,000. Right now, we are extending the eligibility to 1986 and therefore, as a result, 300,000 flats are eligible. The reason why we could do that is because we have made the HIP programme more targeted, focusing on the urgent and essential needs of the flat dwellers.

HIP and other upgrading programmes are really not a substitute for the routine maintenance and cyclical repairs that the home owners and town councils will have to undertake. It is not a substitute. While we can look forward to the upgrading programmes to be carried out in the precinct, home owners have to be responsible for the maintenance of its fittings and fixtures within the flat and, similarly, town councils have to be responsible for the routine maintenance

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and cyclical maintenance of the common areas as well. Mdm Cynthia Phua has listed a series of problems that home owners have faced. What I would say is that there must be some responsibilities to make sure that there is regular repair of the flat as well.

In designing the upgrading programme, I think a main criterion is whether the limited resources that we have can effectively address the common needs that are voiced out by the residents. Since MUP in 1990, as Mr Chiam See Tong has rightly put it, we have been improving the various upgrading schemes. In the HIP, we have made more targeted improvements, for example, spalling concrete, ceiling leakage, which have been highlighted by many residents as the key problem that they face, and therefore we have made that an essential item. We have expanded the eligibility for HIP to more than 300,000 flats. We have actually made co-payment terms more favourable, and Mdm Cynthia Phua has pointed out that these co-payment terms were in fact started many years ago with the MUP programme. That is not true. In fact, if you compare the HIP co-payment term, it is better than the MUP co-payment term. For Members' information, the MUP co-payment term stretches from 10% to 25%, whereas in HIP, it is 5% to 12.5%, and we also allow more flexibility. We have optional improvements for the very reason that if some of the residents feel that they do not have the financial means to have the good-to-have, then they should really opt out of it. There are options for them. As far as co-payments are concerned, we have various financial schemes to help the lessees with the payments, including instalment payments and the use of CPF funds.

I must clarify to Mdm Cynthia Phua that we have not taken anyone to court over non-payment of upgrading co-payments. That is not something that HDB has experienced and we believe that

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we have put in place sufficient financial assistance for the lessees, to basically look at the very favourable instalments over a prolonged period of time.

Also, I would like to clarify that MUP has not been halted, like what Mr Chiam See Tong has said. In fact, we have been carrying out the MUP programme, and there are still several MUP projects that have just been recently polled and are now being implemented.

So, on the whole, we believe that HIP is really a scheme that has taken into consideration feedback from the residents and our experiences with the various upgrading programmes that we have implemented in the past. And we think that it is very pointed to address the problems faced by the residents - the requirements of the residents of flat type built in the 1980s. I do agree with Mr Liang Eng Hwa fully that our upgrading programme should really be used as an opportunity to increase the social capital in the housing estate. And it is for that precise reason that we have allowed consultation. In fact, we have allowed NRP to stretch over a couple of precincts and we have allowed pre-consultation process as well as voting by the residents. That is precisely the intention. It is to increase ownership of the project and also an opportunity for the residents to come together to interact when they are talking about their own upgrading in that area.

Mr Speaker, I would like to address some specific issues that have been brought up by Members. First of all, on clothes drying. Mdm Cynthia Phua may like to know that, besides replacing the bamboo pole holders, we do have other options, such as the drying rack that we can still install outside the flat without a space-adding item. But this has to be basically considered in totality within the budget that has been allocated. So this is something that we have catered to and

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we are prepared to extend other methods of clothes drying.

On co-payment of 1-room, 2-room lessees, first of all, most of the 1-room and 2-room flats are rental flats, and the Government is already upgrading these flats with no payments from the lessees for 1-roomers and 2-roomers. There are a very small number of 1-room and 2-room flats that have been purchased and owned. But even that, as I mentioned, the co-payment is 5%, heavily subsidised and, on top of that, we have supported it with financing schemes to basically help lessees meet their payment demands.

On elderly-friendly items, we would consider such features to be in the optional improvements. What I would say is that this is the first time that we are coming in with the HIP. Like all upgrading programmes, we are prepared to review the items to be included over time. We would definitely allow such features to be included in future if they prove to be popular. In any case, we would allow lessees to make specific requests for the contractor to install such features on top of the HIP, and that is something that they could discuss with the contractor separately as well. If they like to put in certain features that are not included in HIP and they want to do it at the same time so that they are not inconvenienced twice, that is something that we can arrange for the lessees to discuss with the contractor and to come up with an understanding on the work to be done.

On the issue of sinking fund of the town council, at the moment, HIP, as it is designed at this point in time, does not require co-funding from the town council. But, as I said, if we are revising the scheme in future to include the many more items that Mdm Cynthia Phua and Mr Liang Eng Hwa have suggested, there may be a case where we would require some co-payments from the town council in future. But we will definitely take Mdm

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Cynthia Phua's point about adequacy of sinking fund into consideration as we design the revision to the scheme.

On the issue about private estate that Mr Liang Eng Hwa has raised, I would just like to clarify that the upgrading programme is really a means for the Government to share budget surpluses with Singaporeans who are eligible for HDB flats. Private estates have no restrictions over ownership. Many of the owners may be PRs and some of them are even foreigners. So for us to subsidise private estates in that sense, I think, would be hard to justify. And, also, I do not think private estate dwellers should compare themselves with HDB flat dwellers because there are many restrictions placed on the ownership of HDB dwellers as well as some other eligibility issues that HDB lessees would have to face. But in the case of private estates, they are free to rent out their flats. They have other options of upgrading, for example, some of them have chosen to go en bloc as well. So the comparison is really not appropriate. At the moment, I think there is no intention for the Government to extend the upgrading programme into the private estates.

Lastly, to address Mr Chiam See Tong's point, I would be very glad to hear that Mr Chiam See Tong is supportive of the HIP and upgrading programme. I just like to clarify that Potong Pasir flats will be eligible. Mr Chiam may not be able to find it on the list because when we put up the list, it is according to the estate and not divisional boundaries. So, for example, in my division in Yuhua, you probably cannot find Yuhua on the list, but you are able to find Jurong East. I am glad to report that Potong Pasir would be included under Toa Payoh estate. So Potong Pasir will be eligible but, as we have mentioned many times in this House,

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it is a case of prioritising. We do have limited financial resources that we can apply and, therefore, prioritising is required and it will be according to the support for the Government policies in the prioritisation.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Ms Grace Fu Hai Yien].

Bill considered in Committee.

Ms Grace Fu Hai Yien:

The Chairman: The citation year "2007" will be changed to "2008", as indicated in the Order Paper Supplement.

Clauses 1 to 4 inclusive ordered to stand part of the Bill.

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