ISSUE OF $30,000,000 SINGAPORE CITY COUNCIL 4% DEBENTURE STOCK 1955

The Financial Secretary (Mr T. M. Hart): Sir, I have the authority of His Excellency the Officer Administering the Government to move,

That this Assembly, in accordance with section 343 of the Municipal Ordinance (Chapter 133) sanctions the raising of a loan of $30 million by the City Council for the purposes stated and under the conditions specified in Sessional Paper No. Cmd. 6 of 1955.

Sir, at a special meeting of the City Council held on 24th June, it was unanimously resolved to borrow a sum not exceeding $30 million by the creation of Debenture Stock issued at 96, bearing interest at 4%, and redeemable at the option of the City Council between 1970 and 1980.

For this year the City Council has budgeted for expenditure on loan account totalling approximately $40 million. This budget, in the main, concerns extension schemes already in being for the Electricity, Water and Gas Departments. Towards this expenditure, at the beginning of this year, the City Council had in hand a sum of $1� million, being the unexpended balance of the 4% loan raised in November of last year. This sum is now exhausted and loan account expenditure has, in the meantime, been financed to the extent of almost $7 million from surplus revenue balances. It is clear, therefore, that the coffers of the City Council must be replenished as soon as possible.

It was originally intended to float this loan at a discount of 2�%. Recently, however, interest rates have hardened slightly, and the Council is now advised that, in order to bring the terms of this new loan into line with current market conditions, the rate of discount should be increased to 4%. This variation in the terms of the loan will have the effect of increasing the redemption yield from 4.15% to 4.25%, and should have the effect of making the loan attractive to investors.

As I have already stated, it is proposed to use the proceeds of this new loan mainly for the further expansion of the City Council's electricity, gas and water undertakings. During the years from 1948 to 1954 the City Council has borrowed approximately $140 million mainly for the development of these undertakings. It is now possible to see the results of this expenditure. The funds have clearly been put to productive use. The increase in output of the three utility departments has been most marked.

In the case of electricity, for example, in 1948 sales averaged 300,000 units a day. At the present time, they average 800,000 units a day. In the case of water, sales have risen from 27� million gallons a day in 1948 to 46 million gallons a day at the present time. In the case of gas, sales have risen from 600,000 cubic feet a day in 1948 to 1� million cubic feet a day at the present time.

As Singapore develops, the demand for these services will increase at an even faster rate than it has in the past, and I think hon. Members will agree that money cannot be invested better than in such undertakings. Sir, I beg to move.

Mr A. A. Williams: Sir, I rise to second.

Question put, and agreed to.

Resolved,

That this Assembly, in accordance with section 343 of the Municipal Ordinance (Chapter 133) sanctions the raising of a loan o $30 million by the City Council for the purposes stated and under the conditions specified in Sessional Paper No. Cmd. 6 of 1955.