HOUSING AND DEVELOPMENT BOARD

Dr Kanwaljit Soin asked the Acting Minister for National Development whether he will consider the privatisation of the Housing and Development Board in line with the nation's long-term economic plans.

Mr Matthias Yao Chih (for the Acting Minister for National Development): Mr Speaker, Sir, privatisation of Government agencies or statutory boards allows self-financing organisations greater autonomy and incentive to streamline, improve productivity and expand their scope of operations. HDB has not been identified in the list of statutory boards suitable for privatisation, as it clearly does not fall under such a category.

HDB incurs very large operating losses in its public housing programme, and has to be heavily subsidised by the Government. In FY 92, for example, the subsidy given by HDB in its sale of flats activity was $624 million, while the total subsidy in HDB's housing activities (which include its rental flats activity, for example) was $819 million.

HDB is not a suitable candidate for privatisation. However, I can assure the hon. Member that HDB has already divested itself of many of its functions which can be privatised. For example, its estate maintenance services have been privatised with the formation of two companies, and HDB's building programme is tendered out to private contractors. Some of its new neighbourhood and town centres are being developed by the private sector. HDB's design-and-build scheme involves private architects and contractors in the design and construction of HDB flats. In the Main Upgrading Programme, the design of some of the upgrading precincts is farmed out to the private sector. The formation of Town Councils is also a divestment exercise in which the management of the new towns and the estates has been passed to those in closer contact with the people on the ground.

HDB is constantly reviewing its operations and identifying further operations and functions that can be divested or privatised if appropriate.

Dr Kanwaljit Soin: Would the Minister consider following the example of the restructured hospitals which are costed, run and managed on a private basis but with subventions for the subsidised beds?

Mr Matthias Yao Chih: Sir, that can be considered, but HDB is already doing as much as it can to actually privatise part of the operations. So we will look for more ways of doing so, and at the same time providing good public housing to the public.

Mr Chiam See Tong: I want to ask about this subsidy given to the HDB in 1992. Can the Senior Parliamentary Secretary please explain how this $624 million come about?

Mr Matthias Yao Chih: Sir, this is a question on privatisation of HDB as a company.