CAPITAL ASSISTANCE SCHEME (Particulars)

Mr Yeo Toon Chia asked the Minister for Trade and Industry, since the implementation of the Capital Assistance Scheme, (i) how much has been loaned to companies so far; (ii) how many companies, especially local companies, have benefitted from this scheme; and (iii) what measures the Economic Development Board has to assist local Industries to invest in or develop into capital intensive and high technology industries.

The Minister for Trade and Industry (Dr Tony Tan Keng Yam): Mr Speaker, Sir, under the Capital Assistance Scheme (CAS) established in 1975, concessionary loans and/or equity capital are granted to industrial projects with high technological and skill content and to supporting industries critical to Singapore's industrial development. As at January 1983, a total of $157.6 million had been committed to 17 companies under the Scheme. Of these companies, one is local, three are joint ventures between local and foreign investors and the rest are foreign.

Capital assistance is also extended solely to local industries through the Small Industries Finance Scheme (SIFS) established in 1976. Under the SIFS, funds are provided to participating banks at long-term fixed interest rate for onward lending to small and medium-sized local manufacturing or technical service companies to help them to modernize and expand. As at 31st January, 1983, a total of $235 million in loans had been granted to 626 companies under the Scheme.

Apart from the CAS and SIFS, EDB's general package of tax incentives is also available to local companies to help them invest in or develop into capital intensive or high technology industries. As at 31st January, 1983, 43% of pioneer certificates and 68% of investment allowance certificates had been granted to wholly local and joint venture industries. In all, these projects have been granted 44% of the total tax incentives allocated to all industries.

In addition, the Product Development Assistance Scheme (PDAS), set up in 1978, was designed specifically to stimulate the growth of local applied research and product development. As at 31st January 1983, PDAS grants totalling $1.41 million had been awarded to 15 firms engaged in approved in-house product development work.

Many local companies have found the lack of technical knowhow a serious handi- cap in their effort to upgrade to higher technology activities. To help these companies, the Small Industries Technical Assistance Scheme (SITAS) was recently established to assist them to enlist the help of technical consultants. 90% of the approved cost of engaging such consultants is eligible for reimbursement under this Scheme. Since the Scheme was announced in October 1982, six applications have been received, of which three have been approved while the remaining three are being evaluated.