RENTAL VALUE OF NO. 11 NAPIER ROAD

[Mr Speaker in the Chair]

Mr J.B. Jeyaretnam asked the Minister for Law whether any opinion of the rental value of the property was obtained before the Commissioner of Lands granted a lease for three years in July 1978 of No. 11 Napier Road to the People's Action Party at a rent of $2,000.00 p.m.

The Minister for Law (Mr E.W. Barker): Mr Speaker, Sir, the answer is yes.

Prior to the PAP's occupation of No. 11 Napier Road, the building, which was managed by the Ministry of Finance (Revenue Division), was rented out to the Applied Research Corporation at a monthly rental of $2,000. The Commissioner of Lands, in consultation with the Ministry of Finance, charged the PAP the same rental of $2,000 per month.

Mr J.B. Jeyaretnam (Anson): Sir, is the Minister aware or was the Commissioner of Lands aware that in 1978 the property would have fetched a rental value of $4,000 in the market?

Mr Barker: Sir, I am not aware of the values in the vicinity. The Chief Assessor made the valuation. But perhaps I could help the Member. When the Applied Research Corporation first went into occupation, the building was in a bad state and they had to spend about $72,000 towards repairs and renovations. When the PAP moved in, the PAP reimbursed the Applied Research Corporation $55,000. So, in addition to the rental of $2,000, if you consider this big sum divided by the number of years, it would be another $2,000 per month over a three-year lease.

Mr Jeyaretnam: Sir, the renovations would have been capital expenditure, would they not? Why should they be included in the rental value?

Mr Barker: Sir, one of the terms of the three-year lease was that at the end of that period the additions, including airconditioners, could not be taken away by the Applied Research Corporation. This term was also applied to the PAP.