URBAN REDEVELOPMENT AUTHORITY SALES (Particulars)

Dr Toh Chin Chye asked the Minister for National Development (a) what is the ratio of land price to total investment for each of the Urban Redevelopment Authority sales for the years 1976 to 1982; and (b) what are the costs of land and costs of construction of the following buildings: (i) CPF Building; (ii) Treasury Building; (iii) MAS Building; (iv) Ministry of Environment Building; (v) Ministry of Labour Building; (vi) PSA Building; (vii) NPB Building; (viii) Havelock Plaza; (ix) Rochore Complex; and (x) Raffles City.

Mr Teh Cheang Wan: Mr Speaker, Sir, the Urban Redevelopment Authority conducted its 5th to 11th sales between 1976 and 1982. The ratio of land price to total investment for each sale is as follows: Ratio of land Year of Price Award of to Total Tender Sale Investment 1976 5th Sale 30% 1978 6th Sale 11% 1979 7th Sale 20% 1980 8th Sale 32% 1981 9th Sale 46% 1981 10th Sale 32% 1982 11th Sale 60%

Except for Havelock Plaza and Rochore Complex, which are URA projects, the Ministry does not have records of the land costs of the buildings listed by the Member for Rochore. The land cost of Havelock Plaza is $32,757,000 and that of Rochore Complex is $22,864,000.

Raffles City is a private development. Under the Statistics Act 1973, the Ministry cannot disclose details concerning individual projects without the written consent of the developer. The Member for Rochore may wish to check with the developer direct.

The Ministry of Labour has not yet submitted the plans of its new building for planning approval. The construction cost will be known only after plans have been finalized and tenders called.

The construction costs of the other buildings, as given by their owners, are: CPB Building : $ 52.7 million Treasury Building : $295.4 million MAS Building : $126.2 million Ministry of the Environment Building : $ 93.1 million PSA Building : $185.0 million NPB Building : $ 45.0 million Havelock Plaza : $ 35.9 million Rochore Complex : $ 34.8 million

Except for CPF building and MAS building, which have been completed, the construction costs given by the owners are estimates only and are subject to change.

Dr Toh Chin Chye (Rochore): Can the Minister elucidate the great variations in the ratio of land price to total investment?

Mr Teh Cheang Wan: Mr Speaker, Sir, these are based on two factors, ie, the time and the type of building. For example, in the year 1978 the land cost represented only 11% because at that time the land price was low and so the tender price for URA sales was low and, therefore, the land price to total investment was low. In another example, in 1981, on the 9th sale the land price constituted 46% of total development because in 1981 there was the property boom. So the tenderers were prepared to bid very high prices, and that is why you have 46%.

The other factor is the type of development. For example, in the same year, 1981, the 10th sale, the land price constituted only 32%, because it included a lot of industrial and residential development, not just commercial development. Therefore, the land price was low. These are the factors that influence the total cost.

Dr Augustine Tan: Mr Speaker, Sir, would the hon. Minister agree with me that the variation in proportion of land cost to total cost is a reflection of the failure on the part of URA to balance supply and demand in the market from year to year?

Mr Teh Cheang Wan: Mr Speaker, Sir, Singapore is a free market economy, and in a free market economy it is impossible to control and match accurately the supply and demand of the property, It is impossible to balance supply with demand to achieve a "no-surplus no-shortage situation" in order to achieve a more orderly property market devoid of any violent fluctuations. If Singapore were to adopt a central planning economy, as in communist countries, then, of course, the Government can determine everything, and perhaps there will not be these violent fluctuations in supply and demand and there will not be these violent fluctuations in the prices of property.

Dr Toh Chin Chye: Mr Speaker, Sir, I am a bit puzzled. In the 11th sale in 1982 the ratio of land price to total investment was 60%, meaning that the remaining 40% was due to the cost of building. Could the Minister explain why the ratio has suddenly doubled from 32% in 1981 to 60% in 1982?

Mr Teh Cheang Wan: Mr Speaker, Sir, I think the 11th sale mainly involved offices and shops, so the tender price was higher. For the 10th sale it was Other Properties, not so much commercial properties at all. Therefore, the price was lower.

Dr Toh Chin Chye: Mr Speaker, will the Minister assure us that in future URA sales, the URA will publish the prices of tenders which have been won, and the price of land tendered for will be published?

Mr Teh Cheang Wan: Yes, I think URA will publish them.

Dr Toh Chin Chye: Mr Speaker, Sir, I am amazed that successive sales were carried out annually from 1976 to 1982. Has the URA any master plan in putting forth these sales which thereby determine whether so many pieces of land should be put out in any period of time? Or are these sales dictated by the need to earn revenue from land sales?

Mr Teh Cheang Wan: Mr Speaker, Sir, the sale of URA sites is determined by a few factors. One is to provide land for development when there is a shortage of land in the market. The other factor is this. In certain areas, for example, in Cecil Street there are a few odd pockets of land not developed, in order to complete the total comprehensive development, these few odd pockets of land, owned by URA were offered for sale. These are the factors that govern the sale policy.

Dr Toh Chin Chye: Mr Speaker, will URA be able to sell Marina Land to finance the development of the MRT?

Mr Teh Cheang Wan: Mr Speaker, Sir, I do not think it is necessary for URA to sell Marina Land to finance the MRT. I understand from the Treasury that the financial position of Singapore is quite good. The Treasury is in a position to finance the MRT without the sale of Marina Land.

Dr Toh Chin Chye: Sir, may I take up the second part of the question which the Minister answered just now. He has given us the estimated cost of several Government buildings. May I ask whether the costs of these buildings are covered by the Development estimates? How are they financed?

Mr Teh Cheang Wan: Mr Speaker, Sir, the building cost is the cost reported by the owners to my Ministry. So, in fact, my Ministry is not involved in the financing of these buildings. For example, the Ministry of National Development is not involved in the financing of the PSA building. PSA only reported to the Ministry that their building cost was $185 million. The Ministry of National Development is not involved in their financing.

Dr Toh Chin Chye: Is the Minister saying that there is no central body to organize the building of Government buildings? Perhaps the responsibility should be shared between the Ministry of National Development and the other Ministries and the Ministry of Finance. But are these prices which the Minister has given building prices, or do they exclude land cost?

Mr Teh Cheang Wan: Mr Speaker, Sir, this is only the construction cost of building, excluding the land cost. Perhaps my colleague, the Minister for Finance, is in a better position to answer the question raised by the hon. Member for Rochore.

Mr Speaker: I think there have been too many supplementary questions already, and time is running out. We had better go on to the next question. Mr Ng.