POST OFFICE SAVINGS BANK (Renovation of headquarters)

[Mr Speaker in the Chair]

Dr Tan Eng Liang asked the Minister for Communications (a) why the Post office Savings Bank spent a substantial amount of money on a major renovation of its headquarters at the site of the Registry of Vehicles, when the ROV site has already been earmarked for urban renewal; and (b) whether the Bank had obtained the concurrence of the relevant authorities such as the Land Office, Planning Department, Urban Renewal Department, etc., before embarking on the renovation.

The Minister for Communications (Mr Yong Nyuk Lin): Mr Speaker, Sir, in 1970 when the Post Office Savings Bank was part of the Postal Department, it was decided to renovate its headquarters at Middle Road. At that time, the area occupied by the Bank was about 6,000 sq. ft. To cope with the Bank's much increased business, it was necessary to expand the headquarters premises to alleviate congestion. Plans were finalised and funds voted for the project. At the end of 1970, the Bank was informed that the premises of the Registry of Vehicles in Middle Road were earmarked for re-development. Attempts were made to look for alternative accommodation for the Bank but suitable alternatives could not be found. Since it was considered that the Bank's continued use of the premises at Middle Road would be consistent with an urban renewal site, the Bank discussed with the Land Office the question of the purchase of the present building and site. In the discussions, the Commissioner of Lands indicated that the Bank's purchase of the site could only be considered if the Bank had firm plans for the building. The Commissioner of Lands was advised that detailed plans would be submitted in due course and that the Bank was of the view the ROV complex at Middle Road would be suitable for the permanent headquarters of the Bank. The Bank also stated it would be interested in bidding for the whole ROV site when the latter was put up for re-development.

On 1st January, 1972, the Bank became a statutory corporation and, as the need for accommodation was very acute, the Bank decided to proceed with renovation of the existing premises, and the Public Works Department was appointed to plan and execute the project. The Bank has assured the Commissioner of Lands that it does not intend seeking compensation if the building is subsequently demolished for re-development. The Bank also reiterated its interest in making a bid for the whole of the ROV site at Middle Road when the site is eventually available for re-development.

When completed, the renovation costing approximately $266,000 will provide a total area of 10,500 sq. ft. If the Bank had tried in the open market to lease 10,500 sq. ft. of office space it would have to pay at least $120,000 per annum in rental. The ROV site at Middle Road is unlikely to be available for re-development for another three years. On this basis, even if the Bank's renovated building at Middle Road is pulled down for re-development in three years' time, there would still be a saving of about $94,000 to the Bank in renovating these existing premises rather than renting similar space on the open market.