SINGAPORE IMPROVEMENT TRUST (Borrowing from Government)

11.05 a.m.

The Minister for Local Government, Lands and Housing (Inche Abdul Hamid Bin Haji Jumat): Mr Speaker, Sir, I have to move the motion standing in my name,

That this Assembly in accordance with subsection (1) of section 25 of the Singapore Improvement Ordinance (Cap. 259) approves of the borrowing by the Singapore Improvement Trust from the Government of the sum of $44,737,000 at an interest rate of 5¼per cent per annum repayable over a period of 60 years, the repayments to be made by half yearly instalments based on the annuity method and together with repayments of previous loans to be secured by a legal mortgage of all the immovable properties belonging to and to which the Trust holds legal title and by an equitable charge of all the immovable properties belonging to and to which the Trust holds equitable title for the purposes of enabling the Trust to meet the cost of constructing buildings required for carrying out the purposes of the Singapore Improvement Ordinance.

Sir, this application is to meet the cost of what is known as the Singapore Improvement Trust Building Programme No. 8. This programme consists of 5,582 housing units and 235 shops. The loan is a very large one and it is therefore incumbent upon me to explain to this Assembly the policy on which this programme is based and to outline in some detail the building schemes of which it is composed.

The motion, Sir, is a very clear indication of this Government's firm intention to continue to give high priority to the provision of public housing in order to keep pace with the rapidly increasing population and also to rehouse the many thousands of people who are now living in slum areas. The Government will endeavour to fulfil the great demands of the lower income groups for good housing accommodation at rents within the capacity of these groups to pay.

The new Land Clearance and Resettlement Plan makes fair and adequate provision for compensation and rehousing of people living in temporary houses required for public development. This should make it possible, Sir, to clear sites for public housing more quickly and enable the housing programme of permanent dwellings to be accelerated. Present plans, Sir, provide a rate of construction of up to about 5,500 housing units a year by 1960. As hon. Members are aware, the slum areas in this city present serious problems, demanding a solution which will be acceptable to 300,000 people living in these areas. The key to the problem is the re-development of these areas and it is the intention to set aside a considerable proportion of current and future housing programmes for the rehousing of persons displaced from such slum areas. Thus, Sir, a large proportion of Programme No. 8 will be devoted to the rehousing of families of this category; approximately 1,400 housing units are being reserved for this purpose. The remainder of the housing units, amounting to 4,215 units, will be used mainly for accommodating families of the lower income group who are now on the Housing Register, but some of these houses will also be required to rehouse families from sites which will have to be cleared for public development.

I would like, Sir, now to give you the breakdown figures of Programme No. 8. 2,923 housing units and 92 shops are being constructed at Kallang Airport. 339 housing units and 59 shops in the Short Street/Rochore Road/Albert Street area. 128 housing units and 14 shops in Upper Hokkien Street, Upper Pickering Street and South Bridge Road area. 192 housing units and 6 shops at the old filter beds at Bukit Timah. 200 housing units at Bukit Panjang. 1,800 housing units and 64 shops at St. Michael's Road radio station area.

Sir, apart from this, improvement to Trust houses is also being made at Balestier Estate. Two markets are being provided - one at Kallang Airport and the other one at St. Michael's Road. The costs of these two projects, Sir, are not included in the housing programme as they are recoverable from the City Council.

The housing units provided are flats and houses built to permanent low-cost standards providing accommodation which is suitable for the lower income groups. Considerable economies have been made in accommodation standards and construction standards have been reduced to the minimum compatible with safety. The majority of flats, Sir, have either two or three rooms. A small proportion of 4-roomed flats are being provided as well as self-contained tenements. All will have their own kitchens, bathrooms and W.Cs. Lifts will be provided for all multi-storey buildings. Shopping and marketing centres will have a place in each estate at convenient locations.

It is also proposed, Sir, to provide a specially designed workshop with a small number of workshop buildings to re-house the shophouse factory type of businesses which will require to be displaced on slum clearance areas and which will appropriately be included in the housing estate.

Hon. Members will note, Sir, that the rate of interest proposed for this loan is 5¼ per cent per annum. This approximates to the present-day market rate and is in accordance with the policy of the Government as set out in the White Paper on housing subsidies.

Sir, there is one question which I know everybody will be asking, and that is, at what rents will these houses be let? Sir, I am not in a position today to give full details of the rentals which it is proposed to charge. These will be presented to the House when the motion for the approval of the subsidy which will be necessary is introduced. But I can say now, Sir, that the aim of Government is to build standard 2-roomed flats which can be let at a standard inclusive rent of $30 per mensem. There are families both on the Singapore Improvement Trust housing register and in the slum areas which will have to be cleared who will require and who can afford to pay for somewhat more spacious accommodation. The needs of these families, Sir, will be met by the construction of 3-roomed flats for which the rent will be somewhere in the region of $40 per mensum. But the subsidy which the Government has in mind will be weighted in favour of the standard 2-roomed flats.

As I have said, Sir, the House will be given the opportunity of going into the question of rental policy in greater detail at a subsequent sitting.

Sir, I think I have given sufficient details of the programme which is to be carried out from the loan for which I seek this Assembly's approval. I repeat again, Sir, that it is the firm intention of this Government to devote itself to the solution of the housing problem with a sense of urgency and to press on with determination towards the ultimate goal of healthy and decent housing for all the people of Singapore. Sir, I beg to move.

Mr Braga: Sir, I second the motion.

Question proposed.

11.14 a.m.

Mr Lee Choon Eng: Mr Speaker, Sir, I presume that the introduction of this motion is in conjunction with the White Paper on the housing subsidy policy tabled yesterday, and it is rather surprising that this policy and the motion itself are tabled after my question for oral answer in the Assembly yesterday, No. 7 in the Order Paper. At long last the Government has fulfilled its election pledge and the Minister has redeemed his promise in introducing this housing policy and motion. Had it not been for my question yesterday, this policy and the motion would have remained in the pigeon holes of the Fullerton Building for years and years to come and no one will ever dream of having any housing subsidy at all.

Mr Marshall: Wonderful!

Mr Lee Choon Eng: It is wonderful - how long it took! However, the motion in itself does not give any indication as to a reduction in rentals. According to the subsidy policy, Sir, the only benefit that existing tenants will get is the waiver of the service, lighting and conservancy charges. Apart from that, there is no benefit at all. Where is the reduction in rentals? I cannot see it at all. According to a Press report in the Singapore Standard a few days ago, Sir, it is stated that the Government intends to reduce rentals below $60 but those above $60 will not be benefited. I do not know where is the source of this report.

Mr Marshall: The usual source.

Mr Lee Choon Eng: According to this report, there is discrimination, as the subsidy (after this loan is granted) will be for 2-room flats only. Houses with three or four rooms will not be subsidised by Government. I wonder whether this report is correct. If it is, I cannot see why there should be discrimination between a 2-room flat and a 3-room flat. If it is the contention of that report in the Singapore Standard and of the Minister himself that those who live in houses with three or four rooms are rich people, then I think their contention is entirely wrong. It is nonsense. People are not happy to live in S.I.T. houses. They are forced to because they cannot find accommodation elsewhere. They are forced to pay whatever rentals are charged. The only benefit they derive from living in S.I.T. houses is that they do not have to pay "tea money". If they were to try and get a private dwelling, they would have to pay some form of "tea money". In the case of the S.I.T. houses, the high rentals charged could be said to be some form of "tea money", but the public have no alternative but to accept their terms.

I was told by the Minister, when moving this motion, that the new houses to be built out of the loan money will be subsidised by the Government and the rentals charged for them will be tabled before this Assembly after they have been worked over. The Minister has not been able to give an indication as to the rentals to be charged, but he says it may be around $30 to $40. What I feel, Sir, is that the rentals will be based on the working of the initial capital plus maintenance plus interest and any other charges, especially the administrative charges incurred by the expatriate officers in the S.I.T. They have very fat salaries and that adds to the high cost of the rentals. Why then, Sir, in this motion it is stated the loan will be repayable over a period of 60 years. Why not increase the loan repayment period further? In this way, the rentals charged will be less. The reason is that if you work on the basis of the initial capital plus interest and maintenance charges and the fat salaries of the expatriate officers and stretch all that out over a period of, say, 80 years, instead of 60 years, the rentals will be cheaper. The Financial Secretary or the Minister himself may come back with the argument that the rentals charged will not be based exactly on the factors I have enumerated. Although the actual figure will be based on this, the difference will be subsidised by Government. If this is true, Sir, then I should say that it is going to be a very heavy burden for the Government to bear. If, worked on the basis of a 60-year period, the rental comes to $60, and if the Government feels that an economic rental should be $30, then the Government will have to bear the extra $30 in the form of a subsidy. But if that figure is spread over 80 years, the actual cost may come to only about $45, and then the Government need only to subsidise $15 stretched over a longer period. The actual gross figure will be recovered. There is no difference at all. The difference is that repayment will be over 80 years instead of 60 years. If the Government intends to limit it to 60 years, then the subsidy will be higher, and when the Budget comes up before this Assembly, it will again show a very big deficit. To cover this deficit, taxes will be raised. But if the repayment is spread over 80 years, then the subsidy will be lower. Then the Budget deficit will be smaller. Maybe there might be a surplus, and in that event there will be no increase in taxes.

I am told, Sir, by some quarters that the working of this 60-year period is based on the life of a building. May I draw the attention of the Minister, the Financial Secretary and the officials of the S.I.T. that there are buildings which are about 40 years old and are still strong and they are not built of brick? They are wooden structures built before the first world war on a temporary basis. If these wooden structures can last for 40 years and more, I cannot see any reason why structures built with brick cannot last 80 years. I will refer the Minister to a block of wooden houses along Rangoon Road. They were built before the first world war and today they are as strong as any other building. If a notice to quit were given to the tenants of these buildings, I am sure they would rather prefer to remain there than be moved out into permanent structures. Why then, Sir, suggest that the life of a building as envisaged by the Minister will last for only 60 years when a temporary wooden structure can last for 40 years and more? I certainly believe that if the Improvement Trust were to give their building contracts to a reliable contractor and he were to build the Trust houses according to plan and specifications, such houses would last far longer than 60 years. According to the existing houses built by the contractor for the Trust, Sir, I can definitely say that they are not worth a cent at all. The house in which I am now staying was built about four years ago and it is cracking everywhere. I have had to complain to the Trust on many occasions about leakage. I think that is the fault of either the Trust or its contractor. I think it is the responsibility of the Trust and the contractor to see that such structures are properly built rather than work on the basis of limiting their life to 60 years. I think that is the fault - to limit the life of a building to 60 years. I hope I am in order, Sir, if I move,

In line 5 to leave out the figure "60" and insert "80".

Mr Speaker: May I have that in writing, please?

Amendment handed in.

Mr Speaker: The amendment is in order. Would the hon. Member like to add anything further to what he has said?

Mr Lee Choon Eng: The S.I.T., Sir, is my pet hobby and I can enlarge on what I have said, but I think I have said enough to explain my amendment. Sir, all these years the Trust has been telling us that we are subject to its control. Again, Sir, I have come across occasions where the Trust housing inspector has taken a lot of trouble to look, not into the condition of the houses, but into the bedrooms and the beds, and under the beds. I cannot see how he is authorised to do such a thing. I do not know whether that is right or wrong, but since the officer-in-charge of the S.I.T. is smiling, I think I am correct in making that remark.

Again, Sir, the S.I.T. has all this while been saying that the City Council-

Mr Hart: May I enquire, Sir, whether the remarks made by the hon. Member are relevant?

Mr Speaker: I was just wondering how an S.I.T. officer looking under a bed could increase the period from 60 years to 80 years!

Mr Marshall: It would shorten his life, Sir!

Mr Lee Choon Eng: Sir, whether that is relevant or not, I wonder whether any Member of the House, on my side and not on the Government side, is prepared to second my amendment. Unfortunately the Member who has agreed to second it is not here. If I cannot get a seconder, I think it is a real shame on the part of the Opposition.

Mr R. Jumabhoy: In the circumstances, Sir, I would like to second it.

Question proposed,

"That the figure '60' proposed to be left out, be left out."

11.31 a.m.

Mr Hart: With respect to my friend the Member for Queenstown, Sir, I doubt very much whether the proposed amendment would have much effect. Let us take an example: the capital sum of $1 million borrowed at 5 per cent and lent to the Singapore Improvement Trust at 5 per cent to be repaid on the annuity system over a period of 60 years. The annuity then would be $52,828. If the period of repayment were extended to 80 years, the annuity repayment per annum would be $51,030. In other words, the saving will be $1,798. If you spread that over the hundred odd houses which might be built from the $1 million, the effect in the rents would not be very great.

Therefore. I recommend that the amendment put forward, I know in all good faith by the hon. Member, be rejected.

Question, "That the figure proposed to be left out, be left out," put, and negatived.

Original Question again proposed.

11.32 a.m.

Mr Lim Koon Teck (Paya Lebar): Mr Speaker, Sir, unless I heard the Minister for Local Government, Lands and Housing wrongly, my figure for the proposed expenditure of $44,737,000 is for the building of approximately 5,500 houses, which works out at about $8,000 per unit.

Sir, it seems to me that the cost of the Singapore Improvement Trust housing, judging by these figures, has suddenly gone up by a very considerable degree. My understanding is that units of 2 bedrooms and a sitting-room would be round about $4,000 each. It had been round about $4,000 up to last year. A unit consisting of two rooms, that is, one sitting-room and one bedroom, should not cost more than $3,000 at the outside. We are told that the major programme would be in the construction of very low-cost units for which a rental of $30 per unit would be charged. I therefore think that most of these houses intended to be built with this $44,737,000 would be round the $3,000 to $4,000 figure. How is it then that the average should appear to be $8,000 per unit? We must make allowances because the shop-houses will cost well over $10,000 or even $15,000 each. We are assured that the majority of them will be low-cost houses but some houses are going to cost at least $20,000 per unit which will bring the average up to $8,000 per unit. That, Sir, to my mind, is a departure from the intention of housing the poor people or the people who cannot afford to look after themselves in this country and I would deprecate any increase for any unit costing more than $5,000 a unit. With this $44,737,000 we shall get units of houses costing $8,000 to $10,000 per unit and not about $5,000 for each unit.

Another point that I wish to bring up is the rentals charged. I have never been able to come down to figures or to understand how the flats in Elizabeth Estate, I am told, cost about $8,000 each and the rent comes to about $60 a month for each flat. I know for a fact that people who purchase their own houses through building societies and who have to pay 7 per cent interest on the money borrowed, if they are able to obtain 100 per cent mortgage on an $8,000 house, they will be paying $80 per month for capital and interest for 13 years, after which period, those houses will belong to them. Therefore, this $80 per month for an $8,000 house includes payment of capital by instalments as well as interest at 7 per cent. On those houses charged $60 a month rental, I think that the Government is only getting a return of three per cent interest and I find it very difficult to understand how the Singapore Improvement Trust can justify $60 a month rentals for so long as the houses last. According to calculations based on building societies, the capital for those houses should be recovered in about 20 or 25 years. There is therefore, in my mind, room for a reduction in the rents of those houses.

11.35 a.m.

Mr Lim Choon Mong (Serangoon): Mr Speaker, Sir, this motion would not have been necessary if there were many houses in Singapore and everybody were comfortably housed but because of the shortage of housing and the high rentals charged, we are now trying to find ways and means of helping the people of Singapore. I put it to you, Sir, that the housing shortage in Singapore will ease, not only when the Singapore Improvement Trust starts building more houses, but also when private builders accelerate their rate of building. For private builders, however, they cannot hold on to their houses all the time and rent them out and so we must have a class of people who are willing to come forward to buy such houses. We have many such people coming forward to buy these houses. A few of them buy them outright, but many others buy them after receiving loans, either from the Colonial Development Corporation, or from other building societies. These people must be encouraged not only to buy houses but to retain them and by so doing set an example to other people to buy and own houses of their own. We are trying to spread the good things of life to the people of Singapore. We always talk about wanting to help the poor people and I think that the people who do not buy luxurious houses outright but just ordinary houses to live in cannot, in any way, be classified as rich people. If they do not like such houses, then they will have to depend on the Singapore Improvement Trust to provide them with houses.

According to my calculation, Sir, for 5,500 houses costing $44,737,000, each house will cost about $8,000. Now, on an average, the Singapore Improvement Trust expects to get rentals in the region of $30 per month. In many housing estates - and I will point out one, the Serangoon Garden Estate - houses are put up for sale at $11,000 each but from that $11,000 the builder has already had his cut, and for a 2-room terrace house, the cost as calculated should be around $8,000.

Mr Francis Thomas: Phew! That is about 25 per cent.

Mr Lim Choon Mong: Yes, I think that that is about the amount of money that they make in that housing estate. Let us put the cost at about $1,000 or $2,000 higher, yet the basis of assessment which the Government is levying on them is not $30 or $40 a month but in the region of between $80 and $100. That, Sir, I maintain is not the way to encourage these people to own their own houses and that is why I believe it will make it more necessary for the Government to come to this Assembly again and again to ask for more money to be loaned out for Singapore Improvement Trust buildings. I maintain, Sir, that if we are going to help the people of Singapore, then we must not just help only those who are lucky enough to come and live in Trust houses, but also those who have the courage to try and own their own houses.

I invite Government to look into this matter of assessment on private houses again and to levy such assessments as to encourage these people to own their own houses. The necessity for coming to this House to ask for more loans to build more buildings will then be less frequent.

11.40 a.m.

The Assistant Minister, Chief Secretary's Ministry (Mr M. P. D. Nair): Sir, this motion is very significant and very wise. This also sets a new phase in the housing history of Singapore. In the past, Sir, the Singapore Improvement Trust which is the housing authority has been confronted with many difficulties. The most important one has been the cost of building. Some Members have dealt with the cost of housing in detail but from my own experience, as a member of the Singapore Improvement Trust, I have found that the Singapore Improvement Trust has to face competition from private builders. Things have not been so very easy for the Singapore Improvement Trust and they are so even now. I understand, Sir, that in the past two or three months, the cost of building materials has risen 10 per cent more than in previous months. This goes on to prove that the Singapore Improvement Trust will not be able to build houses at cheaper prices now than they were built before. I have also reviewed the question of tenders that were put up by the Singapore Improvement Trust and it was evident, from all these things, that the most important factor in building - it has always been and it will be for some time more, I believe, from what I have been told by some experts - is the cost. I think, Sir, that because of this fact, the rents also had to be increased. We are all aware that since the Government took office, it has been looking into this matter very seriously and earnestly. In the past, they declared that the interest on loans would be 2½ per cent and this had no effect on the people who were renting houses. We worked it out and found that a tenant could only get a reduction of $2 to $3 if we were to reduce the interest to 2½ per cent. The Government has now taken a bold and decisive step in subsidising public housing which will directly affect the tenants who are badly in need of help from the Government. This motion, in conjunction with the subsidy policy of the Government, should enable the poorest man in Singapore to be happy in a very decent home. It has been declared, Sir, in this White Paper, that the service charges will, in future, be withdrawn.

I think, Sir, this motion has also tackled in the right way the slum clearance situation in Singapore. Much criticism has been levelled in the past at Government's inactivity although it has not been inactive about slum clearance. This Kallang project, Sir, will enable the most congested area of the town to be replaced by a decent housing estate and the existing barren land at St. Michael's Road will be filled with decent houses and occupied by our people. I feel, Sir, that this first step towards slum clearance will be continued with all vigour by Government and, within a few years' time, we will all be able to see a very decent Singapore with no slums at all. I am hopeful, Sir, because, from my experience. I have found that the Government has at no time in the past been so sincere and honest in tackling a problem which is a great social need in Singapore than it is doing today. It is from the need for houses that discontentment and frustration arise.

Sir, a Member of this Assembly has spoken about the period for the loan. He tried to amend the 60-year period to an 80-year period some time ago, with little support from Members. It has been found from experience that a sound financial policy and loan policy do not allow the loan period to be so extended as to have no comparison with the approximate life of the building. I understand, Sir, that it is a universal practice for all permanent housing loans not to exceed 60 years.

Sir, I feel sure that the people of Singapore, from now on, can hope to obtain houses for which they pay rents which they can afford. Sir, I must congratulate the Minister for Local Government, Lands and Housing for introducing this bold and decisive policy on housing in Singapore.

11.46 a.m.

Mr R. Jumabhoy (Telok Ayer): Mr Deputy Speaker, Sir, I listened with interest on the subject of housing and the housing policy of the Singapore Improvement Trust. I find here that the interest rate charged is 5¼ per cent. In the Legislative Council, my hon. Friend the Chief Minister, who was then a member of the Labour Party, and the Hon. the Assistant Minister to the Chief Secretary, also a member of the Labour Party - if I remember correctly - generally opposed the interest of 2½ or 3½ per cent given. Their contention had been that the Government should give all the money free of interest as a subsidy. Now, from this 3½ per cent, the Government is seeking to charge us 5¼ per cent. I cannot understand why there is such a wide change and I would like to know on what basis the Government is charging 5¼ per cent for a period of 60 years.

Sir, in the postwar period, we have seen fluctuating changes in the money market. Even during the postwar period, if I remember correctly, the Government and the Municipality had loans at 3, 3¼, 3½ and even 4 per cent, but 5¼ per cent is incredibly high. If it was for six months or a year, that would have been a different matter altogether. We are charging this continuously for 60 years and this in turn will be charged on to the tenants who will have to pay such a high rate of interest. Sir, I would like an explanation for such a high rate of interest charged on this loan.

11.50 a.m.

Mr Hart: First of all, Sir, the Member for Paya Lebar raised some interesting points in connection with the existing rents of the Singapore Improvement Trust and I shall be very glad if he can come and discuss the matter with me some time. The points raised are very involved and I think that it is rather difficult to discuss them over the floor of the House.

On the question of the increase in the cost of housing, I think that most Members will agree that this is perhaps the most elaborate scheme which the Singapore Improvement Trust has ever evolved. It makes a very serious attempt to tackle the question of slum clearance and to erect on central sites which are very expensive and require much preparation houses which we hope will last for many years and provide suitable accommodation for the poorest classes in Singapore. The cost has increased owing to building costs going up but, in the main, to the cost of acquiring and preparing very difficult sites.

With regard to the points raised by the Member for Serangoon, we do hope that every interest in Singapore will endeavour to build houses either for sale or letting and thus ease the housing problem of Singapore.

As regards the question of interest rates raised by my friend the Member for Telok Ayer, it has been suggested in the past by Members on both sides of the House that the interest rate on existing loans from Government to the Singapore Improvement Trust should perhaps be reduced to 2 per cent. Indeed, I think that in the past, the Hon, the Chief Minister has himself advocated that it be reduced to nothing! That argument-if it has any validity, which I confess I am unable to agree-only applies to loans which have been made from surplus funds. All the loans to the Singapore Improvement Trust in the past have been made from funds which had been accumulated by Government owing to its inability to press on with development projects in other directions. Now, of course, we are entering into a new phase and as far as the loans to the Singapore Improvement Trust or the housing authority of Government are concerned, we are going to have to borrow money from the public to re-lend to the Singapore Improvement Trust or to the housing authority. In these circumstances, it is no more than sound finance to charge the Singapore Improvement Trust the same rate of interest and the same terms of the repayment as we have to re-pay the people from whom we borrow the money.

Inche Abdul Hamid Bin Haji Jumat: rose-

Mr Deputy Speaker (Mr R. C. H. Lim): In reply?

11.56 a.m.

Inche Abdul Hamid Bin Haji Jumat: In reply, Sir. Mr Deputy Speaker, Sir, I am glad to note that, generally, the Opposition Members do believe that there is a great demand for accelerated housing programmes in Singapore.

If I may, Sir, attempt to reply to the points raised by the Member for Queenstown (Mr Lee Choon Eng) and the Member for Paya Lebar (Mr Lim Koon Teck). The Member for Queenstown appears to be under a misapprehension when he said that but for the Question which he had tabled today, there would not have been a White Paper. Sir, I am not a magician and I can tell him that, not being a magician, I could not, within the space of a day, produce a White Paper out of my hat. This is the result of months of hard work and continuous meetings and I must say, Sir, that this White Paper is the ultimate result of close co-operation between a number of Ministries and the Singapore Improvement Trust.

If Members will refer to the White Paper, Sir, the policy, as I have mentioned earlier this morning, is in regard to the housing policy of the Government of Singapore for the future. As for the present, the best that we can possibly do is as mentioned in page 5, paragraph 24 of Sessional Paper No. Cmd. 6 of 1957 which reads:

"As an immediate measure, however, in order to afford some relief to present Trust tenants, the Government has agreed to pay the service charges at present levied on tenants for lifts, common lighting and conservancy. This form of relief is considered to be more practical than an overall reduction of interest rates on loans and will give relief where it is most needed."

Sir, that is as far as we can possibly go with regard to reliefs for present tenants of the Singapore Improvement Trust houses.

One other point raised by the Member for Queenstown was that people are forced to stay in the Singapore Improvement Trust flats. This is completely untrue because my information is that there are thousands of people on the housing register who are only too willing to be given accommodation in the Singapore Improvement Trust flats and, at the same time, those who have been afforded this opportunity have very seldom complained of the question of rentals.

The Member for Serangoon mentioned certain points but the most important one was the question of the cost of buildings. Here again, Sir, I must point out to the Member that his figure of $8,000 per flat is not quite correct in that it includes not only the cost of the building but also the cost of land and site preparation and it also includes piling, and so on. I will give you an example, Sir. In the Rochore Road/Albert Street area, the building cost of a 2-room flat is in the region of $6,250 which includes piling cost of $1,200. Here, Sir, the total figure of the cost of building and the cost of piling is $7,450 but then, Sir, the cost of the land itself is somewhere in the region of $2,500 per unit which naturally would bring the figure to well over $8,000 per flat. As I said, Sir, the cost of an S.I.T. flat must be looked at from all angles, that is to say, the cost of land, the cost of preparation of sites, piling costs and then eventually the cost of the building itself. For instance, in the old Kallang Airport area, the cost of a 2-room flat is $6,300 which includes piling cost of $1,400 whereas in Bukit Panjang where we have put up 200 houses, the building cost is about $3,200 per unit, the cost of site preparation is $1,590 and the cost of land is $123. So there you are, Sir, that where the question of piling is involved, it is bound to happen that the cost of a building would naturally be high.

With regard to the question of interest rates, my colleague the Hon. the Financial Secretary has given a very apt reply and I do not think that I will dwell on that question. Sir, I beg to move.

Original Question put, and agreed to.

Resolved,

That this Assembly in accordance with subsection (1) of section 25 of the Singapore Improvement Ordinance (Cap. 259) approves of the borrowing by the Singapore Improvement Trust from the Government of the sum of $44,737,000 at an interest rate of 5¼ per cent per annum repayable over a period of 60 years, the repayments to be made by half yearly instalments based on the annuity method and together with repayments of previous loans to be secured by a legal mortgage of all the immovable properties belonging to and to which the Trust holds legal title and by an equitable charge of all the immovable properties belonging to and to which the Trust holds equitable title for the purposes of enabling the Trust to meet the cost of constructing buildings required for carrying out the purposes of the Singapore Improvement Ordinance.