JURONG TOWN CORPORATION (Decline in land area taken up by industrialists)

Mr Yeo Toon Chia asked the Minister for Finance if he will ascertain from the Jurong Town Corporation (a) the reason for the decline in land area in Jurong taken up by the applicants in 1975 as compared with 1974, as stated in the Economic Survey of Singapore. 1975, and whether smaller areas of land are being taken up by applicants because of the increase of rates in the leasing of land by the Corporation; (b) of the 122 applicants for land in Jurong in 1975, how many of them are companies owned by Singapore citizens and how many are joint ventures with foreign investors: and (c) what are the different rates in the leasing of land in the various industrial estates from 1973 to 1975.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, the decline in the area of land taken up by industrialists in Jurong and other industrial estates was due mainly to the generally depressed economic conditions prevailing in 1975. There is no reason to believe that the decline in the total area leased and comparatively smaller lots taken up were due to the increase in the land rent charged by JTC. JTC has increased the land rent from 1 8 cents per square foot per year in 1974 to 24 cents per square foot per year in 1975 due to the steep rise in land and development costs These rates are, however, still well below the prevailing market mates for private industrial land. Smaller lots of land were taken up because there were fewer large foreign investors who normally take up larger areas of land.

Out of the 122 allocations of industrial land made in Jurong in 1975. 58 were to companies owned by Singapore citizens, 24 to joint venture companies with foreign investors and 40 to foreign companies.

Rates for industrial land charged by JTC in Jurong and other outlying industrial estates as well as those in urban areas in 1973-1975 were as follows:- Cts per Sq Cts per Sq Ft/Yr Ft/Yr Jurong & Outlying Industrial Estates Urban Areas 1973 16.2 60 1974 18.0 72 1975 24.0 $1.08

Mr Yeo Toon Chia (Kampong Kapor): Mr Speaker, Sir, may I ask what are the determining factors in granting a lease of, say. 10 years. 20 years or 30 years? Does it depend on the amount of capital invested and the type of industry? Can the Minister enlighten us on this?

Mr Hon Sui Sen: Sir, I am not entirely familiar with the present practice of the Jurong Town Corporation. But as I understand from its practices in the past, they were dependent on the nature of the industry and the duration of the return on the capital required. If it was a relatively heavy investment, then a longer period would obviously be required. There were also other considerations, such as the relationship to the sea As there was a shortage of land along the sea-front, shorter leases were granted for investments in areas near the sea.