CIVIL AVIATION AUTHORITY OF SINGAPORE BILL

Order for Second Reading read. 5.40 pm

The Acting Minister for Communications (Dr Yeo Ning Hong): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, in Singapore today, the Department of Civil Aviation is responsible for developing Singapore into an international air gateway. It should therefore efficiently manage and operate the civil airports in Singapore and provide air traffic control services of the highest order for all flights which come under Singapore's control.

Phase I of Changi Airport was completed and put into operation successfully in July 1981. Plans are now under way to construct the second passenger terminal building as part of Phase 11 development of Changi Airport. The second passenger terminal is scheduled to be completed in the late 1980's. When completed, Changi Airport will be able to handle up to 20 million passengers per year or 10,000 passengers during the peak hour.

Changi Airport is a massive capital investment. The entire Phase I development of Changi Airport represents a total capital investment of $1.5 billion by Government and the private sector. Hence, we must ensure that Singapore will remain competitive in the international market for aviation traffic. It is therefore timely to convert the Department of Civil Aviation into a statutory board. Most of the better managed and large international airports in the world today are run as statutory bodies or commercial organizations. This allows them to respond quickly to rapid changes and technological improvements in the aviation industry. Examples are Amsterdam Schiphol Airport, Frankfurt Airport, Paris Charles De Gaulle Airport, Tokyo Narita Airport, London Heathrow Airport and New York J.F. Kennedy Airport.

The new statutory board will have to organize its operations effectively, ensuring that the fees charged are fair and reasonable and that the standard of the service is high. With good management and given the necessary flexibility in planning and organizing its operations, the new Civil Aviation Authority will be better able to contribute significantly to the continued development of Singapore as a major air junction and communications centre.

Sir, the Bill before this House seeks to effect the conversion of the Department of Civil Aviation into a statutory board to be known as the Civil Aviation Authority of Singapore. The term "Civil Aviation" will be retained for the new organization. The term has been internationally accepted as one which covers all aspects of civil air transportation and it will best describe the functions and responsibilities of the new Authority.

Sir, I shall now go through the key clauses in the Civil Aviation Authority of Singapore Bill, 1984.

The functions and powers of the Authority are covered under clauses 6 to 10. The new Authority will continue to perform the functions of the former Department of Civil Aviation, which includes maintaining and managing the civil airport, providing air traffic control services, enforcing rules and regulations pertaining to air safety and representing and advising the Government on all matters relating to civil aviation. It will be fully responsible in meeting its financial obligations and will be allowed to prescribe all fees and charges for services and facilities provided by it. The Board of the new Authority shall be responsible for submitting a report on the activities of the organization to the Minister every year. This report will be presented to Parliament.

Clauses 14 to 19 contain provisions dealing with the Authority's financial matters and financial procedures to be adopted by the Authority.

The final part of the Bill covering clauses 28 to 43 deals with miscellaneous provisions. Clause 40 of the Bill provides a police officer with powers to arrest without warrant if he has reasonable cause to believe that the person has contravened any provisions of this Act and he does not know or cannot ascertain that person's name or address or if that person fails or refuses to leave the airport premises after being requested to do so. This is necessary as the airport is a sensitive security area.

Clause 41 allows the Authority to retain all fees and charges collected. Any operating surplus will then be used to finance future capital expenses so as to improve the level of airport and air traffic control services and hence upgrade existing facilities.

These then are the major highlights of the Civil Aviation Authority of Singapore Bill, 1984.

Sir, I beg to move.

Question proposed.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, I have listened with a great deal of attention and interest to what the Acting Minister for Communications said just now, when he advanced the reasons for moving the Second Reading of the Civil Aviation Authority of Singapore Bill. Sir, while I fully understand the rationale for the need to establish the Civil Aviation Authority, I am not very convinced, in fact, I am a little concerned about certain aspects. I would therefore like to seek some clarifications from him.

With regard to the establishment of such an authority, I would like to ask him whether there are other more compelling or cogent reasons for this Bill. In asking this question, I note with a little bit of apprehension that the size of the Ministry of Communications will be greatly reduced. As far as I know, there are three large statutory boards under the Ministry. They are the Port of Singapore Authority, the Telecommunications Authority of Singapore which recently had the Postal Services Department merged into it, and the Mass Rapid Transit Corporation. In other words, Sir, those on the staff establishment in the Ministry of Communications have to be transferred to these statutory bodies, thereby greatly reducing the staff in his Ministry.

Sir, I would like to correlate here by making mention of the Government's vigorous stress on the need to increase productivity, which has now become a national movement. I am just wondering whether such a move to establish the new Authority could affect the efficiency and productivity in the Ministry of Communications, as a result. Inevitably so, with such a greatly reduced staff in the Ministry. Can the Minister enlighten the House how would such staff, ie the reduced staff, be able to cope with the three large statutory boards which give employment to some 6,000 to 8,000 employees per board?

Sir, just now the Minister pointed out that there will be greater efficiency, if I got him right, in the Authority when established, so as to be able to cater to and meet the needs of the challenges in civil aviation in the foreseeable future. Before I go into the details of the Bill, I would like to ask the Minister the reasons as to why at the moment, Government is unable to ascertain its involvement in extra financial expenditure, as stated in the Bill. Where is the difficulty? Here, I would like to refer to Part VI of the Bill which touches on transfer of assets and liabilities and of employees and which are covered in clauses 20 to 27 inclusive. It is very clear in this part of the Bill, Sir, that Government has to pump in more money into the Authority to complete the second runway and to build the second terminal building.

Sir, I am sure the House is well aware of the vast sums of money that Government has spent in the building and construction of the Changi Airport. With the remarkable progress and technological advancement in civil aviation that has been achieved in the last three decades or so, may I say that this is by no means an achievement not without problems. I remember the humble beginnings at Kallang and Paya Lebar Airports. Then there was the extension to the runway at Paya Lebar Airport and the building of the second runway that was aborted and which culminated in the building and construction of Changi Airport.

The modern facilities that Changi Airport has today bear testimony to this achievement and I think both Singaporeans and Singapore are proud of this achievement. Also, I note with satisfaction the efficient service that the airport provides to the air travellers, both local and foreign. Everybody knows that Changi Air- port is a very busy airport and it has become a centre of civil aviation in this part of the world.

Having said this, Sir, I must hasten to add that, to my mind, there is still room for improvement at the airport. Without going into the details, unless the Minister so desires, I wish to point out one or two areas where there is room for improvement. One area is the present terminal building. I will zero in to the departure lounge and the unused spaces that also have central air-conditioning. To me, this is surely a waste and I think this Government is well-known for making optimum use not only of Singapore's land but also of whatever limited resources we have. I draw this illustration to highlight the need for optimum use of our resources, especially when the Minister said about the need to build a second runway and also a second terminal building. I hope the Authority, when set up, would look into this question, as it would have sufficient experience in overcoming problems at the present terminal building before proceeding with the second terminal building.

Sir, it is also very evident from what I could gather from the Minister's statement that Singapore has considerable expertise in the field of civil aviation. May I ask the Minister to enlighten the House whether such expertise would, if sought, be made available to countries that are interested, with a view to assisting these countries. The other point I wish to make, Sir, concerns the publicity that has been made to the pronouncements made by some Ministers that Singapore should develop itself into a brain and services centre. Hence the question I posed.

With these remarks, Sir, may I come to some of the clauses in the Bill. While I am in general agreement with Part Ill which concerns the functions and powers of the Authority, I am a little bit concerned about clause 7. This refers to the powers of the Authority. It seems to me that the powers vested in the Authority are excessive and vast. In other words, the Authority has all-embracing powers to deal with matters pertaining to civil aviation. I have no wish to go into the details except to point out that whilst clause 7(2) of the Bill gives "the Minister power to delegate to the Authority any of his functions and powers under the Air Navigation Act or the subsidiary legislation made thereunder", clause 9 (Directions by the Minister) appears to me to be some kind of a safeguard.

I do wish to seek an assurance from the Minister that the Authority, when set up, would not go into joint ventures which, on surface, appear to be profitable. This, to my mind, should only be done where there are compelling reasons for the Authority to be involved in such joint ventures and where it concerns only civil aviation matters.

Finally, having looked at the other Parts and clauses as well as the Schedules to the Bill, and despite the fact that I am not a lawyer, may I say that the Bill, to my mind, has been well drafted. Hence I give it my support.

Mr Rohan bin Kamis: Mr Speaker, Sir, I support the Bill. However, lately, Sir, it is becoming more and more fashionable for Government departments to be converted into statutory boards for one reason or other. Usually, the reasons are good reasons. But when these statutory boards are formed, they tend to be more market-oriented than service-oriented. In other words, they tend to be profit-driven, and this can be at the expense of services to the public. We do practise what is known as profit-centre management and I have no doubt this Authority would make a lot of profit.

Looking at the financial arrangement, Sir, I would not invest my money in this particular type of investment unless the Minister can give an assurance to the question which I have. Basically, there is clause 16 which states that "the Minister may from time to time make grants-in-aid to the Authority of such sums of money as the Minister may determine out of moneys to be provided by Parliament." My question, Sir, is that there appears to be no provision to indicate how surpluses, which definitely this Authority will have, are to be treated and under what circumstances can these funds be recalled back for consolidation into the Government account. I wish to have a clarification of this point, Sir.

Dr Yeo Ning Hong: Mr Speaker, Sir, first of all, let me thank the Member for Punggol for his very kind words about the Changi Airport. It has been a lot of hard work for Singaporeans working together building up our reputation as a major international air junction starting from the days, as he said, of Kallang, then Paya Lebar and then Changi.

Sir, as I have indicated in my earlier comments, the purpose of forming a statutory board out of the Department of Civil Aviation is to permit the Board to respond to rapid changes and technological improvements in the aviation industry. This is an industry where a lot of money has been spent on research and development where technological improvements take place practically overnight, and so without flexibility it may be difficult for us to continue to be able to respond as quickly as is necessary in order to ensure that Singapore will continue to be a place that is attractive for major airlines to come to. Because without major airlines, large numbers of them coming into Singapore, it would not be possible to generate the traffic that will justify the building of an airport involving vast sums of public funds.

Sir, the Member is also concerned about the possibility of the reduction of staff in the Ministry of Communications going over to the statutory body, the CAAS. I would like to assure the Member that there is no intention at the moment to have anybody move out of the Ministry of Communications over to the CAAS. The CAAS will take over personnel that is currently with the DCA.

The Member also raised the question of productivity. I would like to assure the Member that the CAAS will continue to strive to be competitive, as competitive as the DCA has been in days past. Sir, the records of the statutory boards under the Ministry of Communications have been such that the level of manning has over the past years been decreasing with increased through-put and production of services and goods. This is true both for the PSA as well as the Telecoms. I am sure that the CAAS will strive to do likewise. Hence, I think the productivity of the CAAS can be assured.

The Member has asked about extra financial charges to be incurred by the Government. Sir, as a Government department, the DCA is provided with services by different Government departments for which no cost is made. As a statutory board, such transactions or services will have to be paid for both ways, and the amounts that will be transacted will have to be determined. Such transactions will have to be accounted for as a result of such a conversion from a Government department into a statutory board.

Sir, I want to thank the Member for his remarks that the CAAS has room for improvement. Sir, I share completely the Member's concern because anyone who believes that any organization is without shortcoming is relatively short-sighted. I am glad that the Member has reminded the DCA, now the CAAS, that it should continue to strive to improve. Having said that, Sir, I would like to bring to the attention of this House two letters that were written to the press recently by visitors to Singapore, the first letter dated 15th of March in the Straits Times, and the second letter dated 19th of March, two days ago, also in the Straits Times. It is a very long letter, Sir, so I will just read the excerpts of the letters. The first letter was entitled, "A short and pleasant stopover at Changi". The last paragraph reads:

'Changi is easily one of the nicest and most well-maintained airports in Asia, and I've travelled to most of them. I hope you can maintain it at this high standard for a long time to come. Signed: Visitor.'

Sir, the second letter is entitled, "Changi Airport is the world's best." I think this gentleman, by the name of C.V. Groomer, has been very kind to us. He says:

'As an American expatriate who has lived out of the United States for the past 13 years, five of which have been in Singapore, I have been in most of the major airports in the world [The previous letter talks about Asia], I don't recall any of them being better than Changi.

I think it's time Changi Airport receives the recognition it deserves.

I, for one, say it's the best airport facility in the world.'

We must ensure that the CAAS does not get its head swelled as a result of such compliments. I completely share the Member's concern that there should continue to be improvements made to ensure that we continue to be close to the best, if not the best, in the world.

Sir, the Member talks about the use of space in Changi Airport. He talks about the air-conditioning. I would like to reassure the Member that we are as concerned as he is regarding the need to conserve space and energy in Singapore. However, Sir, for an airport that seeks to be ranked among the best in the world, we must strike a proper balance between functionality and aesthetics. We can, of course, save a little on space, but if we try to do too much of that, then the Airport terminal building will feel claustrophobic, which would not be an attraction to Singapore as a centre for visitors.

Sir, the air-conditioning system has also been very carefully studied. There are systems of thermostats which control the volume of air coming through, responding to the heat and to the cooling demands, as a function of passenger movement, so that when the peak period has passed and the number of passengers is reduced significantly, the volume of air-conditioning is dropped in order that energy may be conserved.

The Member made a good suggestion on the possibility of the export of brain services, particularly with respect to airport management consultancy. Sir, I would like to thank him for this suggestion. We will bear it in mind. It is, of course, Government's policy to develop Singapore as a brains and services centre. However, for the foreseeable future, with our own development of the second terminal building and the opening of the second runway, this particular suggestion is unlikely to be implemented in the short-term.

Sir, the powers referred to by the Member in clause 7 are the powers presently needed by the Department of Civil Aviation. The Member also referred to joint ventures and suggested that such joint ventures should only be for purposes or activities that are aviation-related. I think that is an excellent suggestion. It is a suggestion that we ourselves have looked at very closely and have decided that it is something that we should follow closely. In toto, I would like to thank the Member for his support. He has obviously looked at the Bill very closely. He has given very cogent arguments on various points and made some very positive suggestions which my Ministry and the CAAS will look into very carefully.

Sir, I turn now to the Member for Telok Blangah who talks about statutory boards being market-oriented and profit-oriented and, almost in the same breath, he said that he would not invest in the CAAS. Sir, there seems to be a contradiction there.

Mr Rohan bin Kamis: Sir, can I clarify this? The point is this. The financial arrangements appear to be one-sided. In other words, when CAAS makes more and more profit, there appears to be no provision whatsoever in the Bill to indicate how these surpluses are to be treated and under what circumstances can these funds be recalled for consolidation into the Government accounts again. If this can be clarified, I think it is a good investment.

Dr Yeo Ning Hong: Sir, the Government has invested in excess of $1 billion in the development of Changi Airport. This is a huge investment. It is an investment for the benefit of the whole of Singapore. In the foreseeable future, it is extremely unlikely that the sums of money could be recovered from the Airport operations alone, simply because no airport in the world is able to run the Airport in isolation as a profit centre. The Airport is but one of the many infrastructures that a nation that is as progressive as Singapore must have. Without the airport, Sir, I cannot see how we can talk about the tourist industry. I cannot see how we can talk of having a hotel industry, nor the shops that we have in Singapore. So the question of profit does not, I think, really arise at all. The surpluses of revenue over expenditure will be conserved and ploughed back for future expansion and the upgrading of facilities and services. Sir, we still have a long way to go in ensuring that at Changi we develop an airport that is able to take us well into the 21st Century.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Yeo Ning Hong].

Bill considered in Committee; reported without amendment; read a Third time and passed. 6.15 pm