LAND TRANSPORT AUTHORITY OF SINGAPORE BILL

[Mr Deputy Speaker in the Chair]

Debate resumed.

Mr Chiam See Tong: Sir, may I be allowed to join in the debate?

Mr Deputy Speaker: Yes, carry on.

Mr Chiam See Tong: Sir, I support the Land Transport Authority of Singapore Bill. It is rational of the Government to put all transport matters under the charge of one authority. A Member has said that this Bill is perhaps one of the most important pieces of legislation so far to be passed by Parliament, as it intends to rationalise and regulate the transport systems in Singapore. The LTA is also poised to become one of the richest statutory boards as it has powers of revenue collection from motorists. One of the main functions of the LTA is to link up the various transportation systems such as MRT, the proposed light rail system, motorcars, buses and taxis. Various suggestions have already been made by Members to improve the transportation system by linking the various transport systems together.

I would suggest that the Minister, in addition to the transport systems already suggested, also look into the possibility of providing more facilities for cyclists. The humble bicycle does not seem to stand out as one of the possible means of transportation. In Europe and China, the bicycle is widely used. In Holland and Denmark which I have visited, the bicycle is a common mode of transportation. In Copenhagen, certain parts of the road have been designated and reserved for bicycles only. Bicycle lanes are part of the road system in those countries.

I wish the Minister could also introduce bicycle lanes on Singapore roads. I would suggest that perhaps for a start, the Minister could consider a pilot project by constructing bicycle lanes in certain housing estates, with a view to making bicycle lanes widespread in Singapore. I hope the Minister will take up this suggestion.

Mr Heng Chiang Meng: Mr Deputy Speaker, Sir, judging from the earlier speakers, it is clear that they welcome the establishment of the Land Transport Authority of Singapore, specially since the LTA is meant to have the total perspective of all the land transport policies and implementation in Singapore.

Sir, just as clear is also the call, especially from the two earlier speakers, for the Government to give the LTA adequate resources and, in this case, I specifically mean the funds and the money to carry out its responsibilities. If the LTA is to be successful, surely it must be in the best position to know what is needed in terms not only of policies to ensure the smooth flow of traffic and other land transportation modes but also what is needed in terms of infrastructure. Therefore, it must also have its own resources to build this infrastructure. It should not be dependent on the generosity of the Ministry of Finance. Otherwise, what we are doing today is nothing more than a reorganisation of some Government functions. There will be little or no value added if resources are not forthcoming.

Sir, in this respect, I just want to correct one point of the hon. Member for Potong Pasir, ie, under the present Bill, the LTA cannot be one of the richest statutory boards in Singapore, because the bulk of the funds from COEs and ARF actually goes to the Ministry of Finance. In fact, the Minister in his speech mentioned that LTA's projected surplus would be about $5-$10million a year.

Sir, I hope that the Minister will be able to persuade his Cabinet colleague to give the LTA adequate resources, not when the LTA needs the funds but from the start. In this way, the Land Transport Authority of Singapore can have the means to properly plan its objectives from day one.

Sir, I support the Bill.

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, first of all, may I thank all Members who have spoken for their support of the Bill, including Mr Chiam. I would like to take some of the points that have been raised by Members, particularly those that have been raised by several Members. First of all, the question of funding for LTA. Mr Heng mentioned this in his speech just now. He has made the point that we should not be stingy with funds for public transport. On that score, I would agree with him. But when he also says that we should give LTA adequate resources to do its job right from the beginning, this is where I have to explain our position.

Although this point has been raised in the House several times, let me reiterate Government's position on this. As far as improvements in land transport are concerned, there is no question about Government's commitment to improving our land transport system. And even with the formation of LTA, as the funding is currently constituted, where the LTA is only going to keep the administrative fees, registration fees and some of the road taxes for purposes of carrying out some development works but not the entire sum from COEs and ARF and the other major public transport revenues, even under this kind of scenario, there is no doubt that the Government is committed to land transport. And with the formation of LTA, we will continue to fund and invest in transport infrastructure, both public and private, to meet the needs of our people.

The Government has so far invested a total of more than $6 billion - $5 billion for the present MRT system and another $1-$1 1/2 billion for the Woodlands Extension. In addition to that, each year we spend about $250 million building and upgrading our comprehensive network of roads and expressways.

We are fortunate that we have been able to accumulate revenue and also to spend it wisely, rather than to squander them away on projects which are not justifiable. So long as we continue with this prudent fiscal policy, we should be able to set aside sufficient funds for our land transport programme without affecting our priorities in other important areas like defence, health and education. The issue therefore is not whether land transport revenues from COEs, ARF and road taxes should be earmarked and channelled directly to land transport expenditure, or whether sufficient resources have been devoted in this area. We are not suffering from a budget deficit. That is not the problem. The basic issue is how we should make use of our revenues in a manner that benefits our nation most.

Sir, the revenues from COEs, ARF and road taxes which are channelled into the Consolidated Fund are ultimately used by Government to fund the various programmes that benefit the nation, including transportation. As long as there is a need and as long as the expenditure is worthwhile, the Government will not shy away from investing in our land transport infrastructure. Whether the money comes from Government via the Ministry of Finance out of the consolidated revenue or whether the money comes directly from the LTA is not the important issue. And if we look at the issue from this perspective, then part of the revenue from COEs, ARF, road taxes, etc, is already being used to fund our public transport infrastructure.

I am not saying that it is not possible to have this direct nexus between land transport revenues and expenditures. This is another way of looking at the problem. But we have opted not to do so for now. Since the LTA is a new statutory board, it is better to start off on the current basis cautiously, allowing it to gain more experience, to take on this new role of advising Government on how best to improve the total transportation structure, how best to invest, where to invest, in a way that will give us best-value-for-money.

With time, as LTA gains more experience, we can explore the ideas that have been raised, including the idea of earmarking more land transport revenue for funding infrastructure projects. At that time, we can have another discussion in this House to determine if this is the best approach to take.

Dr Wang Kai Yuen has asked why we do not consider the possibility of cross subsidising non-viable MRT lines with the viable ones, in the same way that we are currently cross subsidising non-viable bus lines with the viable ones. The main problem is that MRT lines are not like bus lines. Buses operate on the roads and it is easy for us to change or to remove a bus route if it is deemed to be not worth having for whatever reason. It can be adjusted. It can be part of an overall integration programme. It can be duplication of a service which is now going to be provided by another mode of transport or whatever. But we cannot do the same for an MRT line. Once we build an MRT line, that is it. We cannot change its route and we have to live with it. So before we build an MRT line, it is important for us to study the proposal carefully and consider the long-term viability of the line before we can make a decision whether to proceed or not. This, of course, does not mean that we will always wait for the line to be assessed to be viable before we start construction. As I have said, if it makes economic sense to do so, we will consider building lines ahead of demand.

Mr Goh Choon Kang has raised the question about optimising the use of limited land and he has in this case supported the idea of building the North-East line underground. This is what the consultants have said. In their study, they have mentioned the possibility that if we eventually build the North-East line underground, there are certain benefits accruing from so doing, even though the cost of construction will be higher. This is why in the feasibility study we have asked the consultants to consider this possibility and to give us costings if we want to build it 100% underground, 80% underground or whatever.

Mr Goh Choon Kang has also pressed for the building of the North-East line. In an earlier Oral Answer to Members of this House I have explained the position of the Government on this. But let me just repeat that the Government has agreed in principle to pay for the capital cost of the North-East line if it satisfi es this criterion of being able to at least recover its operating cost. The latest feasibility study that the Ministry released last month shows that this criterion can be met but based on the existing pace of development, this can only be met by the year 2006. So it is not a question of whether we build the line but when we build the line. Do we build it now or do we build it at the outset in four years' time? It is going to cost a lot of money. $5 billion is a lot of money. It is a heavy investment and it is incumbent on the Government to make sure that this expenditure is carefully considered because the full capital cost of this investment is not going to be recovered. That is an important point for us to note.

While we argue about whether or not we should build the line or whether we should build it earlier, let us not forget where the money is coming from in the first place. We are in the happy position of being able to argue about when to build, and not if we build, where is the money going to come from, as is the case in other countries. We are in the happy position because we are able to finance this from our own resources and surpluses which have been generated as a result of sound policies, conducive environment for growth and the hard work of our people. One of our sound policies is that we only spend where we can fully justify our investment. We do not spend because we have the money available. The public can be assured that the Government's position on the North-East line would be a rational one. We would build it at the appropriate time. It is a rational decision which would be taken in the interest of all Singaporeans.

Encik Harun Ghani has asked some rather detailed questions about the powers to be conferred on the new LTA, for example, the powers to be involved in business, to receive donations, etc. I would just like to make a general response to this, and that is to say that these provisions are generally standard provisions which allow statutory boards to enter into either business ventures or to receive donations which would give them some flexibility. It is not a new provision and it is not a new practice in Government.

In so far as compensation is concerned, again this is not something new. We have simply lifted the current provisions of the MRTC Act and just added a new provision that allows for compensation to be given to those who may be affected by underground tunnelling works. So there is nothing exceptional about these new provisions and I would be happy to answer any further questions on this if Encik Harun would like to raise them later.

Sir, finally, let me once again reiterate Government's commitment to improving transport infrastructure in general and public transport in particular. But when I say this I just want to also make the point that we are not against private transport per se, whether it is cars, motorcycles or even bicycles. The Government can understand and empathise with the aspirations of people to own cars, but it also at the same time has to point out clearly that our constraints as a city state leave us with little choice but to continue to manage both car ownership as well as car usage. If we duck this issue now, because it is politically unpleasant, we are really storing up problems for ourselves in the future in the form of massive traffic jams, gridlock and so on. Such an outcome is clearly not in our national interest. We want to build a city for people, not for cars. So in order to preserve our quality of life, we really need a sustainable transport policy. In this respect, all Members who have spoken are clearly in favour of our current emphasis on upgrading and building up our public transport, building it up into one that is efficient and convenient, which gives value for money.

Some Members have suggested that we should give more funding to public transport. They have also suggested other ways of improving public transport. Sir, I agree with many of their suggestions, but we should not forget that, as with most things in life, all these improvements will come at a price. The question is not who pays for the burden. It is ultimately the people themselves. If we want public transport improvements, the tab has still got to be picked up. If commuters are not prepared to pay, where is the money coming from? If Government pays, it must be at the expense of expenditure on some other public cost, whether it is on education or health, or other equally pressing needs.

Dr Arthur Beng touched on this. He raised the question of LTA, for example, being involved in discussions with HDB and Town Councils concerning the upgrading programme of existing towns. Sir, the LTA will have to study these and many other complex and difficult issues and at the end of the day formulate solutions that balance the needs and aspirations for greater accessibility and mobility on the one hand and the desire for a quality living environment on the other. It is a task that the LTA cannot shoulder alone. The Authority will have to work closely with related agencies sharing the same concerns. It will have to gain the support of our people if it is to build a transport system that meets their needs. It will continue to welcome suggestions and feedback from all quarters, especially Members of this House. So your support of this Bill will signal the commitment of this House to build a transportation system befitting our vision of a city of excellence, a system which all of us can be proud of.

Dr Wang Kai Yuen: Mr Deputy Speaker, Sir, I raised a point in my speech regarding the provisions of the Elected President and I would like to seek confirmation from the Minister whether my understanding is correct. I stated that under the provisions of the Elected President, all the reserves we put into the Consolidated Fund after the current term of Government will then become our reserve, which would no longer be available to the next Government to tap, even for land transportation improvements. Is that correct?

Mr Mah Bow Tan: Sir, my understanding is that under the Elected President provision, the funds to be used for all development purposes, including public transportation, will have to come from the reserves that have been built up by this current Government. So that is correct.

Dr Wang Kai Yuen: By the next Government.

Mr Mah Bow Tan: Yes, that is correct.

Dr Wang Kai Yuen: So if we were to build the North-East line in the next term of Government, the sum of, say, $5 billion, has to be raised by the next Government, even though it is under Prime Minister Goh Chok Tong. Whereas by the end of this term of Government we probably would have collected maybe $3 billion from COE premiums, which will no longer be available for use to build the North-East line.

Mr Mah Bow Tan: That is correct.

Dr Wang Kai Yuen: Whereas if you decide to build the North-East line today, it is possible that some of the funds can be used. In other words, we have sufficient surplus to build it. If we wait till the next general election, the next Government will start with zero in their Consolidated Fund and they would have to wait a few more years until the Consolidated Fund is built up in order to build the North-East line.

Mr Mah Bow Tan: That is strictly correct, but it will take us, if we were to start building the North-East line from the moment we say yes, six to seven years to build. So we will not be incurring all the $5 billion in one go. We will have to make certain provisions in order to allow for funding to be available if such a decision were made.

Dr Wang Kai Yuen: If we establish the LTA in such a way that the LTA is going to keep most of its funds from the land transportation system, like PSA, then this problem of transitional government will no longer arise.

Mr Mah Bow Tan: I do not believe that that is so, because if we were to allocate revenue in the way that the Member has suggested, then the LTA could come under the Elected President provision in which case all the reserves in the LTA will also be considered as part of Government reserves. So that is not a solution if the Member suggests that by putting the funds into the LTA, we will not have to seek Presidential approval. It could still come under the ambit of the Elected President provision.

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 Mah Bow Tan].

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