PLANNING (AMENDMENT NO. 2) BILL

Order for Second Reading read.

The Minister for National Development (Mr S. Dhanabalan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Planning (Amendment No. 2) Bill 1989 serves two main purposes. First, it redefines the scope of the planning functions in the Planning Act. This is done in conjunction with the establishment of the new Urban Redevelopment Authority which will amalgamate the functions of the present URA and the Ministry of National Development's Planning Department and Research and Statistics Unit. The new URA will be established under the Urban Redevelopment Bill 1989. I shall be moving the second reading of this Bill later today.

The second purpose of this Planning (Amendment No.2) Bill is to revise the system of imposing development charges for permission to develop land.

Let me first take the re-definition and consolidation of the planning functions. Mr Speaker, Sir, because of URA's present role in the planning of our Central Area and its role as the conservation authority, some planning functions are at present in the Urban Redevelopment Authority Act. Other planning functions are in the Planning Act. With the establishment of the new URA, we are taking the opportunity to re-define the legal framework for land use and development planning by placing the main planning functions in the Planning Act. These functions include the preparation of the Master Plan, the control of development, the regulation of car parks and urban conservation. This Bill will bring all these functions within the purview of the Planning Act. The Planning Act will therefore embody the full range of powers necessary for the Government to control, guide and promote proper land use and development in Singapore.

The actual department or authority which will administer the provisions of the Act is not stated in the Planning Act. The appointment of competent authorities by the Minister to administer the Act can be done by notifications in the Gazette. With this intention in mind, the Bill will delete all references to specific government departments and agencies, for example, the Planning Department and the URA, from the principal legislation.

It is important to keep the Planning Act detached from any organization so that there is flexibility in future to appoint any person or organization with the right expertise as the competent authorities to administer the Act without the need to amend the Act each time such an appointment is necessary.

We intend that the new URA will carry out these planning functions through the appointment of its Chief Executive as the competent authority. This will be done by gazetting the Chief Executive Officer of the URA as the competent authority.

These are the broad principles re-defining the legal framework for planning which I have stated as the first purpose of the Bill.

Let me now take the main clauses in the Bill relating to this first purpose.

Clauses 2 and 3 delete references to the Planning Department and URA. I have explained the reasons for this.

Clause 4 will introduce the term "provisional permission". The term is the same as what is generally known as the "in-principle approval" which is given to a development application prior to written permission. It is valid for a period not exceeding six months unless extended by the competent authority or Minister. The provisional permission ceases once written permission is granted or refused.

The introduction of this term will give legal status to a well established administrative practice. All in-principle approvals granted before the commencement of this Act will have the same force and effect as provisional permission.

The introduction of the term is also related to the implementation of the revised development charge system which I shall explain when I come to the second purpose of the Bill.

Clause 5 of the Bill will insert a new section to enable the conservation authority to issue conservation guidelines for the conservation of any building or land within a conservation area. The conservation authority is required to publish and make available copies of such guidelines for free inspection and for sale at a reasonable price.

Clause 6 will enable the Minister to make rules on the provision and requirements of car parks and the collection of the related fees. These functions will be deleted from the URA Act where they are at present.

Clause 7 of the Bill will empower the Minister to make rules for the collection of fees and charges for services performed under the Act by the competent authorities. Such fees and charges shall be paid into the Consolidated Fund unless the Minister directs otherwise. The Minister may direct that such fees be paid to that agency or board.

Mr Speaker, Sir, I would like to now move to the next objective of the Bill, that is, to give effect to the revised development charge system.

Sir, my Ministry has received feedback from the building industry that the present development charge system has introduced uncertainty in development and has given rise to delays in obtaining planning permission. In response to this, in May this year my Ministry announced the implementation of a revised system of calculating development charges which will minimize the uncertainty and be simpler to use and easier to administer.

Sir, I will highlight the three significant aspects of the revised system.

First, modification of the conditions under which development charge is levied. The development charge is a tax levied on a developer when he is allowed to use his land for a purpose that is more valuable than what is prescribed in the Master Plan. For example, a developer may propose a commercial building on a piece of land in an area which is designated as a residential zone in the Master Plan, or he may propose development with a plot ratio that is higher than the plot ratio that is prescribed in the Master Plan.

Sir, when we compute the development charge at present, we measure the intensity of development in commercial, industrial and other non-residential developments by using the plot ratio. The plot ratio is the ratio of the proposed total floor area of the development to the total site or land area. For example, if you have a site which is 10,000

sq feet and you build a building with a floor area of 20,000 sq feet, then the plot ratio is 2, the floor area being twice the land area. So the plot ratio is the system of measuring intensity in the case of all non-residential developments.

In the case of residential properties, the intensity of development is measured by density, which is the number of persons per hectare. There is an assumption, for example, that any house or flat which is up to 80 sq metres would be occupied by two persons, and that is how the number of persons per hectare is measured. So density which is the number of persons per hectare is a way of measuring intensity for residential properties and plot ratio is a way of measuring intensity for non-residential developments.

Clause 8 of the Bill will streamline the system of computing the development charge. We will compute the levy according to the total floor area proposed in the development. In other words, we will use the same measure for all developments, whether they are residential or commercial or other types of developments.

The second aspect is the separation of the development charge system from the planning system. Sir, under the present section 26 of the Act, the zones and development intensities shown in the Master Plan form the basis for computing the development charge. The Master Plan is basically a 1958 document. Our present and future requirements as we see them today are quite different from what they would have appeared to planners in 1958. We may, for example, want to change an area that is zoned for industrial use in the Master Plan to residential use to reflect current needs and current standards. If the Master Plan is changed, the basis for computing development charge may be affected.

As a result of this connection between the Master Plan and the development charge, the planning authority is reluctant to make changes to the Master Plan even though such changes may be necessary to show the long term planning intentions for an area. For example, if an area is zoned as green belt today and we want to change it to residential and the planners made the change, then the owner of a plot in the green belt would expect to be automatically allowed to develop housing in that area. For this reason, the planners are reluctant to make changes.

To overcome this inflexibility, the Bill stipulates that the Master Plan to be used for the purpose of development charge will be the Master Plan approved in 1958, including of course all subsequent alterations and additions that have been made to it and for which development charge has already been paid. That will be the basis for calculating development charge. On the other hand, for purposes of guiding and approving development, the Master Plan could be a series of development guide plans, street plans and other documents which will incorporate the latest thinking of the planners.

With this stipulation, the base for computing development charge is fixed and the planning authority is free to make changes to the Master Plan without being concerned about how they will affect the development charge. This will give the planning authority the flexibility to update the current Master Plan, for example, by drawing up new development guide plans for various areas in Singapore and to make known the long term planning intentions of an area to the public.

The third aspect is that this new system is a simpler way of computing the development charge. The present development charge system requires the Chief Valuer to determine the enhancement of land value arising from each and every development approval when it is granted. Not only is this time-consuming but it also makes it difficult for a developer to know how much development charge is payable at the outset when he has to assess the viability of his development. For example, somebody may want to buy a piece of land where the plot ratio is, say, 1.2. But he is thinking in terms of developing something with a plot ratio of 2, or he might buy a piece of land where the density is 125 persons per hectare, and he might want to buy the piece of land to build something of 250 persons per hectare. Before he buys the piece of land he must know what development charge he would have to pay in order to calculate the viability of the project. At present he would not know the development charge until he actually submits an application for development and the valuer has valued that piece of land. Based on difference in valuation for the changed use, a certain development charge would be levied. So he would not know the development charge before he buys the piece of land.

Clause 9 of the Bill will introduce a simpler system which will enable the development charge to be computed in accordance with a set of prescribed rates determined by the Chief Valuer and with a definite method of calculation.

As the prescribed rates have not yet been fully tested by the market, clause 9 of the Bill allows an applicant to request the Chief Valuer for an individual valuation if the applicant feels that the prescribed rate does not reasonably reflect the value of a site. I think Members know that there were quite a few comments and discussions on the system and some felt that the prescribed rates do not accurately reflect the value of the land. So in order to test the system, in the initial stages, we will allow the owner of a land the option of choosing an individual valuation to be made for development charge purposes rather than just using the table. Clause 10 will allow this option by retaining the present system of appeals for individual valuations. Once somebody chooses to use the prescribed table, then there would be no appeal. But if he chooses to have an individual valuation made, and the valuation by the Chief Valuer is something that he does not accept, he can make an appeal.

However, Sir, to maintain the simplicity of the system, clause 9 will give the Minister the power to limit requests for individual valuations to cases where the development charges are more than a prescribed amount. Sir, this provision to limit requests for individual valuations will be brought into effect at an appropriate time after we have tested the prescribed rate system. In the initial stages, we will allow everybody to make requests for individual valuation and to make appeals. But after some time of implementing this system, the Minister can have a cut off so that all development charges below a certain amount will not have this option of asking for individual valuation.

Now, to the implementation of the revised development charge system. To clearly establish the cut off point for the implementation of the revised system, clause 13(6) provides that the revised system will not apply to all development applications that have already been granted provisional permission before the commencement of the Act.

There are a few other transitional provisions, Sir, that I will just mention. Clause 13 of the Bill sets out the transitional provisions to spell out clearly how existing operational, financial and contractual arrangements are to be dealt with following the amalgamation of the present URA and Planning Department. The salient provisions are:

(a) under sub-clause (2), conservation guidelines issued by the present URA before the commencement of the Act will be deemed to be issued under the amended Act;

(b) under sub-clause (3), the car parking waiver charges paid to and held by the present URA at the effective date of the amalgamation will be paid into the Consolidated Fund; and

(c) under sub-clauses (4) and (5), any requirement or conditions imposed regarding the provision of car parking spaces made by the present URA will continue to have effect and can be enforced under the Planning Act.

Sir, I beg to move.

Question proposed.

Mr Ng Pock Too (Nee Soon Central): Mr Speaker, Sir, my GPC supports the Bill as it will enable the Ministry to streamline its planning functions and to establish a clearer system of imposing development charges for permission to develop land in Singapore. My GPC has also been following closely the developments concerning the proposed implementation of the revised system of determining development charges by a set of prescribed rates and a definite method of calculation. In particular, we have been monitoring the Ministry's recent decision to allow from 1st September 1989 the present system of computing development charges based on a case by case valuation of enhanced land value by the Chief Valuer to run parallel with the revised system based on a published table of rates drawn up by the Ministry. The trial period will be for one year to enable developers and the Ministry to iron out the problems in implementing the new system.

My GPC is happy that the Ministry consulted the building professionals and developers on the revised development charge system. As a result, we understand the Ministry will be modifying the original proposed system to take into account recommendations made by the developers. My GPC Members and I are not experts in determining land valuation. The system of determining development charges is extremely technical and complicated and we do not profess to have a complete understanding of the issues involved. But whatever system is to emerge ultimately must be one that is practical, equitable and simple to implement. I hope the Minister will continue to consult the building professionals and developer groups and take their professional advice seriously when making further refinements to the revised system of computing development charges.

On the aspect of conservation authority, the Bill also empowers the Minister to appoint any person to be a conservation authority. Conservation carried to its absurd limits can stifle development. We have seen how many major projects in other countries can be stalled simply because someone found good reason through conservation protection to block or to prevent new development. In Singapore, with our limited land resources, we need to maximize the use of land for development purposes. But at the same time, emphasis on history and heritage is also important to give our young nation the guidepost to our sense of history. Good judgment must prevail when weighing the benefits of development on the one hand, and keeping our heritage through conservation on the other. The Ministry has to consider the cost versus the benefits carefully when making the decision. Conservation must not stifle development, nor indiscriminately demolish structures of immense historic value. The Ministry must therefore have a set of balanced objectives to guide intelligently the development in Singapore.

Mr Dhanabalan: Mr Speaker, Sir, I thank the Member for his support for the Bill. We will continue to monitor the implementation of the development charge system. As a result of discussions and consultation with the professionals and with the industry, we have already made changes in this Bill to allow the prescribed rate system and the present individual valuation system to run parallel for some time so. This modification has already been built in and we will see how it operates.

As a result also of discussions with the industry, we, together with the Chief Valuer, have increased the number of sectors. In other words, Singapore was originally divided into about 20 sectors for valuation purposes which were just too few. We have now increased it to 47 sectors and 28 of them are really within the City area. We hope that this would remove a lot of the initial unhappiness with the valuations that were indicated for each sector. As I said, we will continue to work closely with the industry. The whole purpose of this system is not to impose something that is unacceptable and that is likely to adversely affect the building industry in Singapore. The purpose of this system is to make things easy, expedite and encourage. And as long as we have those objectives clearly in mind, I am sure that, together with the industry, we can work out a system that will be acceptable and good for Singapore.

Regarding conservation, I entirely agree with the Member's views. In the initial stage of our development, we did not pay much regard to the historical or architectural merits of buildings and we were rather indiscriminate in knocking down some buildings which we regret now. But we must guard against swinging to the other extreme of wanting to preserve everything, because there is a cost to this effort. So we will be very careful. In the Ministry, we will be monitoring the various proposals put up by the URA which will be the conservation authority. We will be monitoring very carefully to ensure that we only conserve those areas that are really worth conserving. On conservation, of course, once you have dealt with very clear cases, there is a large grey area where it can be quite subjective. And we are very very mindful that the economic imperatives should prevail in many cases. So we will make sure that we will not stifle development or unnecessarily devalue people's properties because we have swung to the other extreme of wanting to conserve everything.

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. - [Mr Dhanabalan].

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