WORLD CLASS LAND TRANSPORT SYSTEM

Debate resumed. 4.42 pm

The Minister for Communications (Mr Mah Bow Tan): Mr Deputy Speaker, Sir, first of all, I would like to thank all Members who have participated actively in this debate. They have given us very valuable feedback, many, many suggestions, a lot of food for thought. As Mr Goh Choon Kang said earlier, this is a very important part of the process of building consensus on the Government's transport policy and our commitment to building for Singaporeans a truly superior and world class transport system.

Many of the proposals in the White Paper have been accepted. Some Members have expressed doubts and sought clarifications about other proposals and expressed their concerns about still other proposals. I welcome this opportunity to clarify the misunderstanding and also allay some of the Members' concerns.

But before I proceed any further, I, too, would like to express my surprise at the SDP's very conspicuous silence. The SDP did make a very big song and dance, some time ago, when it presented the SDP's Land Transport Report 1995. I read it and I decided that it was not worth replying at that time. However, I thought that this would be a wonderful opportunity for the SDP to come out with not only its own proposals but, having seen the plans put up by the Land Transport Authority, to have a full-scale debate with us as to what is the best solution for Singapore in the future. This is a wonderful opportunity for us to hear from the SDP what are the details that are hidden behind its report.

Mr Cheo has criticised or commented that the Land Transport Authority's White Paper is not detailed enough and, therefore, he is not able to comment. If that is the case, then I would like Members of this House to read the SDP's Land Transport Report and to decide for themselves whether their own report contains more details as to convince all Singaporeans that they have a superior system. Instead of which, one Member is conspicuous by his absence and another Member was, until just towards the end of the debate, conspicuous by his silence. The third Member of the SDP, I am presuming, is not speaking on behalf of the SDP. May I ask the Member whether I am correct in assuming so?

Mr Chiam See Tong: I should tell this House that I have got no instructions from the centre of the Party. I have got no communication whatsoever in regard to this debate. And I was not even told that the Chairman was going to be away until I read in the papers that he was in Subic Bay. As I was commenting to some Members in the Members' Room, Subic Bay is no longer the Subic Bay. I understand it is now a big city, or some kind of a city. So I do not know what attractions are there. But in any event, if I were told that the Chairman was going to Subic Bay, I would certainly say that it is not a good time to go because his first priority must be in this House.

Some hon. Members: Hear, hear!

Mr Chiam See Tong: I think it is pure common sense that priority must be given to a debate of this magnitude which involves a very important subject in Singapore. The Minister has asked me whether I was speaking for myself or for the SDP. I wish to say that these are my own views.

Mr Mah Bow Tan: I would like to thank Mr Chiam for his clarification. If he had said that he was going to speak on behalf of the SDP, then I would have asked him a next question which is: why is this document silent on a point which concerns almost every other Singaporean, ie, the question of the North-east line?

Mr Chiam See Tong: Can I get it clarified?

Mr Mah Bow Tan: The fact that there is no mention of the North-East line and the fact that Mr Chiam obviously has got a very important interest in this and has raised it, I guess, supports what he said earlier that he does not know anything about what is going on in the SDP.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, may I clarify? I have not even read one page of the report.

Mr Cheo Chai Chen: ( In Mandarin): Mr Deputy Speaker, Sir, I believe that the Minister for Communications may not have noted that during the debate in this House, normally Members express their personal views. Sometimes, they may take the stand of their party. I would like to tell this House that the SDP is not the government. So it is not possible for the SDP to give a comprehensive plan because we do not know how much financial resources the Government has. It is only when we become the government then we will be able to put up our plan according to the financial resources available. It is not possible for us to present a more detailed plan or White Paper as it is being done by the PAP Government. What I meant just now was that the White Paper did not spell out the details of implementation. For example, if you want to collect money, how much do you want to collect? You want to have tax deductions, how much? You have not told the people.

Mr Mah Bow Tan: Mr Cheo has a very convenient excuse. The SDP is not the government and therefore it is not expected to produce a reasonable report. This is an excuse. But have we not heard that the SDP aspires to be the alternative government of Singapore? And this is the reason why it has stated, when it produced its land transport report, that this is the alternative vision for Singaporeans. If I may read the first sentence of the preface of this report:

`In our effort to provide Singaporeans with an alternative government, the SDP feels that it is important to be constructive in its criticisms ...' So how can Mr Cheo now claim that because the SDP is not the government that it is not in a position to, first of all, put up a decent report and, secondly, to comment on what has been put up by the Land Transport Authority?

Mr Cheo Chai Chen: ( In Mandarin): Mr Deputy Speaker, Sir, as I have said, the SDP has already published a report on transport policies. So our policies and views are already spelt out there. But the various schemes and plans require a lot of consideration concerning so many factors. So this kind of work can only be undertaken by the Government. It is more appropriate.

Mr Mah Bow Tan: I think I can summarise what Mr Cheo has said, ie, that the subject matter is too complex for the SDP to comprehend. Therefore, rather than debating this issue in Parliament, it is much better to go to Subic Bay in the Philippines and celebrate the 50th anniversary of the Liberal Party of the Philippines. I think it is a much safer place for the Chairman of the SDP to be in, rather than coming here and exposing what they obviously do not have, an alternative plan for Singapore. But I think it is important for the Chairman of the party, the elected representative of his constituency, to explain to his constituents why they did not take this opportunity to explain what are the alternative plans for Singapore. I think SDP owes the people who voted for them to represent them in Parliament an explanation.

Earlier, I asked Mr Chiam whether he spoke on behalf of the SDP and he said that he did not. If that is the case, then I will have to ask him in his personal capacity what he meant when he said that the White Paper is an election ploy, an election gimmick? What is an election gimmick? Based on my understanding of the word "gimmick", it is a trick. It is a publicity stunt. In other words, when the PAP Government and the Land Transport Authority put up our plan we have no intention whatsoever of carrying it out, but it is a means of hoodwinking the people. Can Mr Chiam let this House know which part of the report he considers to be an election ploy? Which chapter, which paragraph, which page is an election ploy, which this Government has no intention whatsoever of carrying out, but is just publicising and publishing this report as a gimmick for the election? Can I ask Mr Chiam this question?

Mr Chiam See Tong: Sir, perhaps I should also take this opportunity to explain what I said in regard to my party. I am not in any way siding the Government when I speak out in respect of certain members of my party. In fact, what I am trying to do is to get the party in order and to improve itself.

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, I would like to have an answer to my question. I think that is probably more relevant.

Mr Chiam See Tong: After having prefaced that and made myself understood, if I have been misunderstood, then I would withdraw the word "gimmick". But certainly having gone through three successful elections, I do not think that the Minister can deny that this White Paper, published at this opportune time, will be definitely used in the elections. In that sense, it is not a pure effort in trying to tell the people about the Government's plan. But it has some bearing on the elections. So you cannot deny that it is in fact going to be used to the advantage of the PAP. In that sense, I am saying that it is an election ploy. We have seen it before. I have given my reasons for it. This kind of strategy has been used before. Basically, that is what I am trying to say. I am not saying that the PAP is not going to carry out the plans and programmes that are mentioned in the White Paper. But certainly there will be a lot of amendments and reconsiderations and the Government is not going to carry out in detail what is set out in the White Paper. There will certainly be certain amendments.

Mr Mah Bow Tan: What exactly does Mr Chiam mean by that, Sir?

Mr Chiam See Tong: The Minister has been changing. There will be amendments. I am certain of that. Even if we take the North-East line, at first the Government was supposed ---

Mr Deputy Speaker: Order. I think we are straying. Mr Chiam, will you please resume your seat? Mr Mah, please ask your question again.

Mr Low Thia Khiang: Mr Deputy Speaker, Sir, ---

Mr Deputy Speaker: I only recognise Mr Mah and Mr Chiam. The others should resume their seats.

Mr Low Thia Khiang: Sir, I would like to seek clarification from Mr Mah regarding the election issue which he has mentioned.

Mr Deputy Speaker: Mr Low, will you resume your seat first. Mr Mah, please ask your question.

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, I would like a categorical answer from Mr Chiam as to which part of this White Paper on "A World Class Land Transport System" he considers to be an election ploy or a gimmick. He was quoted in the Straits Times as saying so. He repeated his statement in Parliament in the debate yesterday. I am now asking him which part of the White Paper he considers to be an election ploy, because, as far as my understanding of the word is concerned, it carries a very negative connotation, in the sense that we are not serious about what we are going to do and we are trying to hoodwink the people. As soon as the election is over, we are going to change all our plans, as Mr Chiam has alluded to just now. So I am going to ask Mr Chiam, Sir, which part of this White Paper he thinks we are going to change after the elections. I am also going to ask him further if he can show this House the relevant plan, strategy or measure that he considers to be a "gimmick". Then I will ask the LTA to expunge that particular measure from the White Paper and not implement it.

Mr Chiam See Tong: Much obliged, Sir. As I said, I have clarified myself. I did not mean that the whole thing was a fraud or something untrue. What I mean is that the White Paper comes out at an opportune time in view of the coming elections. And that is basically what the PAP in fact has done before, and I think they are just repeating this kind of election strategy. But I am not saying that the whole thing is not true. I am not saying that at all. Basically, of course, the Government will carry out its transportation plan. But the fact is that the title "World Class Transport System" is used. They could have used many other titles. They could have used "Singapore's comprehensive transport policy". The title used is to catch the eye. What is the purpose of having such a title? Can the Minister explain to me what is a "world class transport system"? Would he say that Zurich's transport system is a world class transport system or is it the system of some European or American country? Do we have to be at par with them and then we are considered world class? What does it mean by world class transport system? At what stage? I can say that we already have a world class transport system, as far as motorists are concerned in Singapore. If you ask motorists, people who can really afford a car, I think they will have no complaints. It is those people who do not own a car and people who have a car but barely can afford it, these are the people who complain. Basically, who are the complainants in Singapore? It is probably the 80% Singaporeans who do not own a car, and also those people who own a car but cannot really afford it.

Mr Mah Bow Tan: Sir, can I take it that Mr Chiam actually agrees with the White Paper on land transport? The only thing that he does not agree with is that it is the title which is too eye-catching. Can I confirm that? So if we rename it "Land Transport System for Singapore", he will vote for and support the motion.

Mr Chiam See Tong: This question on whether or not the White Paper is going to be used as an election strategy has been admitted by many. I think it will be. This is my point. I am not saying anything else. What I am saying is that it is a PAP election strategy. Basically, that is what I am trying to tell the people.

Mr Heng Chiang Meng: Sir, as the Chairman of the GPC for Communications, the LTA has briefed us and spent quite a lot of hours telling us about this White Paper. I sincerely believe that the LTA would go through with it if this House accepts the White Paper. I am shocked in a sense that one of my parliamentary colleagues has said that this is an election ploy. A "ploy" means that you put up something and have no intention of doing it. If that is the case, I must say that I have been terribly hoodwinked. So I would really like to find out from him, just as the Minister would like to, whether he really believes that this Government, if after the next election still remains the Government, would not carry this policy out. Let us give him all the latitude possible. I would not say when. I think this is of great importance to the House and, in particular, to the people of Singapore.

Mr Mah Bow Tan: Sir, I take it from our exchanges just now that Mr Chiam is going to vote in favour of the motion. If he does not, then I would think that what he has told the House just now is an election ploy.

Mr Chiam See Tong rose ---

Mr Deputy Speaker: Mr Mah, do you want to give way?

Mr Mah Bow Tan resumed his seat.

Mr Chiam See Tong: Sir, I think the word "gimmick" may be a bit strong and I would withdraw it. As for the word "ploy", if you could bring up a proper dictionary, I do not think there is anything sinister about its meaning. We can even now have a look at it.

Mr Mah Bow Tan: Sir, I would also like to make the point that when Mr Chiam said those words I felt upset not only for the Government but also for the fact that a lot of people, professionals in the Land Transport Authority, have done a lot of work over the last few months. The White Paper was drafted in response to the challenge that I posed to the LTA when I launched the Land Transport Authority last September. To me, his remarks demeaned the efforts that they put in and devalued the professionalism of this statutory board. This is the reason why I felt that it is very important for me to get Mr Chiam to retract his statement that the White Paper is actually an election ploy or an election gimmick. I am glad to note that he has actually done so.

Mr Chiam See Tong: After hearing what the Minister has said, I must make it clear that I did not mean to insult or belittle the efforts of the professionals who have put up this White Paper. I think I should congratulate them. They have done a very good job. But Mr Mah is a politician and I am a politician. I think I am justified in saying that this White Paper, coming out at this time, is an election ploy. I am not saying anything against the people who put up this paper or, as I say, to belittle them. I think they have done a very good job. But it is the tactic of the PAP. We have seen all this before. So I do not think I am really trying to have some bad motives. Not at all.

Mr Mah Bow Tan: I would take Mr Chiam's remarks as withdrawing what he has said earlier and that he appreciates the work that has been put in by the professionals. I think the Land Transport Authority will be pleased to hear that. But I would say that it is one thing for Mr Chiam to play opposition politics and to criticise every Government initiative as a ploy. But it is quite another to say things which are clearly not valid and after a while people may not take him seriously except for hard core opposition supporters.

Sir, let me now respond to the Members' queries. Many Members have fed back to us the concerns of their constituents through this House. One of the major concerns that I detect is that commuters fear that they may have to pay unaffordable prices if the plans that are proposed in the White Paper are implemented. Sir, this is an understandable concern and I would like to take this opportunity to allay those concerns. First of all, let me remind Members of this House that today's motion is to develop an outstanding and affordable transport system for Singapore. I think the word "affordable" has been put into the motion quite deliberately and this is the whole substance of the debate that we are having today as to whether Singapore and Singaporeans working with the Government and in partnership with the Government can develop not only an outstanding but also an affordable transport system.

Sir, a world class land transport system would not come cheap. I think all Members appreciate that. It will involve a lot of investments in billions of dollars in infrastructure. But the White Paper has also stressed that it must be affordable. It must be affordable not just from the point of view of the commuters but also from the point of view of the nation and the taxpayers.

As far as price is concerned, so far the indications are that people are generally satisfied that public transport prices are considered reasonable or cheap. This is not something that I pluck out from the air, but as a result of several surveys that have been done, not just by the authorities but also by some members of the media. There was a recent survey by the Straits Times that revealed that our basic transport services are considered cheap and reasonable by the majority of commuters. As far as bus fares are concerned, 87% of respondents to this survey felt that they are cheap or reasonable. As far as MRT fares are concerned, 83% felt this way.

I must confess that I am not exactly surprised by the results because over the last 15 years the average rate of increase in the cost of public transport travel per kilometre was actually lower than the CPI. For buses, the increase per annum was about 2.9%, for MRT it was about 1.9%. Over the same period, the average wage increase was 8.2% per annum. So it is really not surprising because of the productivity improvement and efficiency improvement that have been squeezed out by the operators that the PTC has been able to keep their fare increases below CPI. But we do recognise, and we have to recognise, that this question of affordability means different things to different people. I think Mr Imram actually pointed that out in his speech. Some may be willing to pay a little bit more for better service, others, either they cannot afford to pay for the better service or they are not willing to do so, will settle for the basic service. So it is not just in transport but any other service or good that people want to buy or partake of, whether it is chicken rice at $2 at a hawker stall, $3.50 at air-conditioned food courts, and $14-plus-plus if you go to Mandarin Hotel.

The point really is that we should make sure that there will always be hawker stalls selling food or chicken rice at that basic price, no frills but food that is enjoyable, palatable and nutritious. But we must also recognise that there are always people who want and who are prepared to pay for something better, whether it is better food, better quality of service, better ambience, or whatever. A higher level of service costs more to provide and therefore it is only fair that those who enjoy the better service pay for it. If customers feel that they are not getting good value for money, very soon that service provider, whether he is a chicken rice seller or a taxi operator or a bus operator, will get to hear about it.

So what the White Paper recommends is to widen the spectrum of services that are available to give commuters more choice apart from the basic bus service and the basic taxi service. So air-conditioned buses, Bus-Plus and Taxi-Plus services should also be made available in the same way that hawker centres, air-conditioned food courts and restaurants are available for customers who want different service levels to suit their own pockets. But I think we must also recognise that, over time with rising expectations, even basic services will have to be improved. Even though some Members have called for basic non-air-conditioned bus services to be retained, I can see a situation in the not-too-distant future where the demand would be for all buses to be air-conditioned, in the same way that many years ago some taxis were non-air-conditioned, but today you will not find a non-air-conditioned taxi on the road.

I turn now to another point that has been made by Mr Low Thia Khiang. Mr Low, in trying to suggest a solution to reduce the cost of public transport fares, has put up this proposal on a non-profit making national transport enterprise. I presume that is the correct idea. Can I ask Mr Low whether by this he means that this enterprise will amalgamate the functions of TIBS, SBS and SMRT and since these are public companies, is he also suggesting that the Government nationalises them? If he is, I hope he is not serious because this is a very major step backwards in the opinion of the Government.

First of all, we have gone past that stage. We did an exercise many years ago to bring all the different bus companies together, as Mr Low may recall, at a time when 11 bus companies provided a level of service which many people felt was not up to standard. There was free-for-all competition, as Mr Low may well remember. In Hougang there were about three or four services running and buses were poorly maintained and crowded. They broke down and, worse of all, they were not making money at the same time. The Government took the initiative, made many painful adjustments and at the end of which they came up with a single bus company that reduced duplication and wastefulness and revamped the whole transport system. I think this is what Mr Low is alluding to, that we should go back to that system.

But what happened after that? Why did we change? Why did we introduce another bus company? For the reason that one single company, without any other means of checking on its performance, would inevitably deteriorate and decline into inefficiency. Not only that, the public was not convinced that a monopoly for buses, no matter how efficient, was actually doing a good job.

As a not-for-profit organisation perhaps and as a sole service provider, what incentive is there for the enterprise to reduce operating cost? Why can it not just pass on the operating cost? Why should it, even without making a profit, take the trouble to go and squeeze out all these inefficiencies and rationalise buses? Why not just accept every single proposal that comes along? After all, if the company loses money, or does not make money, it could just raise the fares and pass on the cost to the commuters. Where is that profit motive? Where is that incentive for the operator to operate a viable, profitable company for its shareholders? This is one sure way for inefficiency. This is one sure way of higher operating cost, and eventually higher than necessary fares. And if Mr Low thinks that I am saying this just to rebut him, let me reassure him that this is not the case. We have been through that. Many other cities have done the same. Many cities in the West have nationalised monopoly bus operators. You talk to the operators, you talk to the management of those companies, and you have a totally different approach to the running of a bus company. So you ask them: how do you plan routes? They say, "Oh, very simple. Whatever the people ask, whatever the city mayor asks, we just provide. After all, you just pass on the cost to the commuters." And if there is a shortfall - this is the difference for them - they will go to the city mayor, or they will go to the local government, to cover the balance. What is the big deal? Why go through the hassle of going for an efficient system?

I think this is a big lesson that we have learned, and this is the reason why we have decided not to go that way.

Mr Low Thia Khiang: Sir, would you allow me to clarify?

Mr Deputy Speaker: Yes.

Mr Low Thia Khiang: Thank you. First of all, I believe that with the development of a rail system and different modes of public transport, it might come a day when you find that there is conflict of interest, for instance, between bus companies and SMRT, in terms of route provision.

Secondly, I think, whether we like it or not, even if we have two bus companies now, there is quite a degree of monopoly. So there is no real competition in this sense.

Thirdly, I am not convinced that having just one operator, and supervised by the Government, would be less efficient than the competition that you have now. I think it is less competition. It is not full competition at all. And given the size of a compact city that Singapore is, will it be better if we integrate all the public transport services into one enterprise and run it in such a way that it is as efficient as CAAS or PSA, for instance, which is not privatised yet? Does it necessarily mean that once you operate a system under the supervision of the Government, as the case may be, it is going to be less efficient? I am not convinced of that.

The situation, as it is now, is not conducive to forge, as stated in the White Paper, a social contract of cost-sharing or financing of the public transport system. Because, on the one hand, the commuter has to pay for increases in operating cost, eg, manpower cost increases, and on the other hand, he is also paying for the profit of, for instance, the bus company. And if SMRT is privatised, there are shareholders. They have to look after the interest of their shareholders. I understand, but I stand corrected, SBS has promised its shareholders a certain percentage of 7.5% or something like that. I do not know whether it is correct. If that is the case, then why should commuters pay, on the one hand, for operating cost increases, and at the same time, the profit. They will not be convinced. So if an enterprise is run and supervised by the Government, or LTA, and it is non-profit making, I think it will be more convincing.

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, I do not think I can ever convince Mr Low if he is not willing to be convinced. All I can tell him is that, based on the experience that we have had in several other countries, and based on our own experience, an institution or an enterprise which does not have a responsibility or an incentive to do well will eventually just deteriorate. And I think the fact that even SBS as a private company with the need to pay profits has been able to keep fares below CPI over the last 15 years is, I submit, a credit to them.

Sir, some other Members of the House have asked what exactly does the White Paper mean by a world class transport system. Unlike ports and airports, there are no international rankings as such of transport systems, to the best of my knowledge. There is also no one particular system in the world that we are aware of that has the attributes that we are seeking to introduce in this system. Each transport system is unique. What we have to do is to be prepared to learn from, emulate and adapt the best features of systems in other parts of the world. It will have, therefore, the many good qualities of different systems such as the convenience and comprehensiveness of rail systems in cities like London and Paris, that have been quoted in the White Paper. It should be integrated and accessible like the light rail systems in cities like Miami and Hong Kong. It should be financially viable. The Hong Kong public transport system is financially viable. It should have a high percentage of commuters taking public transport, like in Zurich where 75% of trips are made by public transport. That is a quantifiable target that the Land Transport Authority can use in deciding how far it is going in that direction. And above all, it should remain affordable, like the fares for our public transport today which, as I have explained, over the last 15 years have on average risen less than the CPI.

The total transport system should also have relatively free flowing roads, just like what we have achieved in our CBD. So, these are some of the attributes and we will continue to learn from the examples of other countries. It will not be cheap but the Government recognises that transport is not purely consumption but also investment in human capital, like investment in education and health which ensures that our workers are healthy, knowledgeable, skilled, and productive. In that same way, the Government is willing to invest in transport facilities to facilitate higher productivity and enhance both economic activities as well as our quality of life.

Dr Wang Kai Yuen and Dr Ker Sin Tze have commented separately on the need to have more integrated development of transport facilities within buildings. I agree with them that we should as far as possible integrate transport facilities with building developments as early as possible. And this is to maximise convenience and accessibility. We have done this for densely developed areas, like Raffles City area, where MRT stations are well integrated. But this has to be done progressively. We now have 42 stations. When Woodlands station opens, we will have 48 stations. We cannot develop all 48 stations at once. But we will do so, and when we do so, we will take, as I said earlier, the best examples and experiences of other cities like Hong Kong, London and Tokyo.

When we do this, our aim is not just to maximise development potential. It is also to make sure that there is ease of travel and convenience for the commuters. If necessary, because of some of the problems that have been faced by developers in some of these sites, as have been cited, I am sure the LTA will consider taking the lead to demonstrate the feasibility and desirability of building above and around MRT stations. They can do this in conjunction or in joint ventures with private sector developers. I think that is a good idea because then, all ideas and experiences will be brought into this venture, and the city will grow and can only benefit from such a wide variety of ideas and designs. In carrying out this exercise, the LTA will obviously have to work with many other agencies, in particular with HDB and the URA.

Dr Wang also asked what exactly is the time-frame for such buildings and what exactly will be built in the next 10 years. And I believe Mr Chiam in another form also wanted to know what exactly will be the rate of progress. I want to say that what is important in the White Paper is a commitment that has been made to develop this outstanding transport system. The White Paper lists out a series of projects that the LTA will undertake, both in the short term as well as in the medium term.

Let me, however, point out that these things take time. Our port and airport infrastructure took many years to develop. They are paid for by the port and airport authorities themselves. They are expensive. CAAS took close to 10 years to accumulate sufficient operation surplus to plan to build the third airport terminal. If we adopt the same financing model and ask our public transport operators to pay for the building of new MRT lines, we will probably take maybe not as long as but almost as long as London and Paris to build up their rail network, which is roughly 100 years, and I do not think we can wait 100 years. So Government will invest heavily to improve the public transport system. Business Times added up some numbers and estimated that the world class transport system will cost $20 billion. Economists estimated the bill to be US$9 billion. But a world class transport system cannot be constructed without a commitment on not only the Government's part but also on the part of the users. It cannot be done with a pre-determined budget today.

Many Members, I think, felt that the plan is too long term. It is 10 years, 15 years. Why can it not be done now? Why must it take so long? I think Mr Sinnakaruppan, in fact, said that we should have done all these things yesterday. I received a letter a few days after the White Paper was published. An irate father wrote to complain that the bus did not stop for him and his family. This Mr Yeo wrote and said: "My daughter was emotionally shattered. I suffered anguish. My wife was stunned. So we took a taxi to the airport, and we had to explain painfully to our daughter why this particular bus driver was behaving so badly." So he said: "`Improving public transport - chief goal', says the White Paper. Government spells out its vision of top transport system, reports the Straits Times ...", etc. "What does SBS have to say about this?"

Sir, I think this is something that we would have to be careful about. The White Paper does not promise that overnight we will transform all bus drivers into angels and make Mr Yeo and his family happy. But, I believe that, over time, such incidents can become less and less frequent. I do not think that it is ever possible for us to reach a situation when there would be no such incidents. Even SIA, world renowned for good service, still receives letters of complaint from time to time. But what sets SIA apart is that it learns from each incident. It takes great pains to ensure that such incidents do not recur and therefore our transport operators and all who are involved in building this outstanding land transport system must do the same. The LTA will help. We will provide incentives to foster good service. We will train to generally improve conditions on the road. But the point I want to make is, please do not expect miracles overnight. I think that is why Dr Vasoo and Mr Ibrahim Othman are also concerned over things like travel time and waiting times of public transport services. They want to know, not what is going to happen in 15 years' time, but what is going to happen next month, next year.

The LTA will work with the public transport operators to implement short-term measures. These short-term measures will be visible. It will make a difference. I agree that there is a necessity for these intermediate markers on the road to our final destination. The White Paper has spelt it out. I will list some of them. The Woodlands MRT extension which will be opened on 10th February will provide residents in the northern region superior public transport services. There will be technology to improve the flow of traffic on our roads. Several junctions are going to be converted into interchanges. These will be completed within the next two to five years. Some of the bus stops in town will be refurbished as part of the project to provide better facilities and amenities at bus stops. The bus fleet will be fitted with new technology which will allow the transport operators to monitor their buses and, if necessary, to do the kind of things that all of us want the operators to do. In other words, when there is a break in the service, or when there is a disruption in the schedule, it will be able to despatch alternatives to plug the gap. That is possible with technology and it is something that the operators are committed to do.

These are some of the examples. There are many others. There will be the introduction of intra-town services. Members have complained that some services require transfers. The LTA is relooking at some of these services and see whether there is an opportunity to provide direct services in some cases.

There will be express services, as Mr Goh has asked for, because, as he has rightly pointed out, without an MRT and, if we do not improve the public bus service, you do not provide an alternative when you have to implement other restraint measures. So the introduction of express services and airconditioned services are on the cards. And the LTA will, in the course of the next few years, be looking at these short-term measures.

Others include real-time bus arrival information system. Again, another Member, and I believe it was Dr Wong, who said that these facilities are available in some other public transport operations that he has seen. These would be introduced. On bus priority schemes, more would be introduced, for example, bus lanes and traffic light priorities. Taxis would be fitted with a radio despatch system, again using GPS (Global Positioning System) technology to better manage supply and demand, and so on.

It is not possible for us to list all that is possible or all that is doable in the White Paper. But I would certainly keep Members informed as the LTA goes along in the next few years to plant the intermediate markers on the road to that final destination we are all looking forward to.

Let me put all these transport issues in perspective. As I said earlier, and I repeat it again, the measures that are in the White Paper should not be seen in isolation. They should be seen in totality. Land transport is a very complex and multi-faceted subject and you need different measures to tackle the different aspects of the problem. So for demand management, we have ALS, RPS and VQS. For traffic management, we have GLIDE, GPS, and so on. In fact, there are so many abbreviations that the authors of the White Paper felt it necessary to list them out in an index.

All these measures and strategies form a comprehensive package. They each serve a purpose. No single measure on its own will work. So if we rely only on introducing more ALS locations without providing good public transport choices, that will not do. If we provide more roads and build more expressways without appropriate usage measures, again, that will not do.

So when Dr Arthur Beng felt that public transport should be improved before we introduce more extensive road pricing, this is precisely the kind of piecemeal solution that we want to avoid. Road pricing is part and parcel of the package. It is necessary because it will freeze up roads for more efficient bus services. And faster travelling time on buses will give motorists who are affected by road pricing an alternative that they are looking for.

Dr Ow Chin Hock wanted more assurance that the current bus industry structure is sound. He advocated the opposite of what Mr Low was advocating just now, and he wanted more competition in the industry. As I have explained in this House several times, the Government policy is to encourage competition and to let market forces prevail wherever possible. But the bus industry is one example where the Government has used market forces but created an environment where there is limited competition so that it suits our circumstances. There are many different other examples in other countries. There are different models. What the British has done is to go the way that Dr Ow was talking about. They have opened it up completely to free-for-all competition. And what has happened, based on the feedback that we have had, is not entirely satisfactory.

Another consideration in this policy that we have is that we need to provide universal public transport services. So in areas where demand is low, we have had to create an obligation on the part of the operators to run prescribed services at regular intervals and frequencies and at affordable fares. And this is the reason why you have bus services running in places like Tuas and Loyang, even though those services are not as frequent as those in town. But there is a bus service. And sometimes, when you are there, you are wondering what the buses are doing there in the first place because they are all running empty. But that is part of the universal service obligation because there are certain times of the day when people do take those buses.

So at the end of the day, we have had to look at our own situation and we have to decide a balance between the free-for-all competition that some had advocated and the monopolistic single agency model that others have advocated. We believe that we have a system that works and we would like to keep it that way.

Both SBS and TIBS maintain some form of check and balance on one another. The PTC keeps a check on both. We compare their performance standards, cost-effectiveness and service levels. It is a good comparison. It is not ideal but it suits our circumstance. And besides, when you talk about competition, there is some form of indirect competition from other forms of public transport, like BusPlus, taxis, and so on.

What I would like to submit is that the present issue is really not whether there is too much competition or not enough competition. The issue really is that our traffic conditions will deteriorate and, in fact, are deteriorating, if we do nothing. Because as the traffic becomes more heavy, buses tend to bunch up and they are unable to adhere to their schedules. And this is the nature of bus operations.

So one of the immediate tasks that the LTA will have to undertake will be to implement measures to improve traffic flow and improve the efficiency of bus operations by according buses suitable priority on the roads.

Dr Arthur Beng has also asked about the future road tax structure. I sense that there was some confusion in the media reports about the review of the road tax structure as well as the road tax rebates that I mentioned in the White Paper.

The present vehicle tax structure has accumulated over time. It lacks a consistent basis for charging. For example, the present road tax is based on engine capacity for cars and motorcycles. For goods vehicles, it is based on maximum laden weight. For buses, it is based on seating capacity. And for some goods vehicles, it is based on a flat fee. Before we implement the ERP, we will rationalise the vehicle tax structure to clearly reflect the actual purpose of each tax. For example, road tax is a usage tax and, therefore, should ideally be based on the road space that is occupied by the vehicle. Ideally it means that, as suggested by some Members, a big car and a small car should pay the same road tax because they more or less occupy the same road space. But this is a big deviation from the present progressive nature of our road tax structure.

At the moment, a small motorcycle is subject to an annual road tax of $20. A luxury car can be taxed as much as $5,000. But traffic studies show that a moving motorcycle occupies as much as 70% of the road space of a moving car. So if you were to base strictly on traffic management alone, the motorcycle owners should be paying 70% of the road tax of a luxury car. I am talking about a moving vehicle. So I am explaining all this to make sure that when we change our road tax structure, we cannot completely go for an ideal system. We would have to maintain our progressivity which has been in place for many years. We would have to also, at the same time, take into account social and equity considerations. And at the end of the day, after we have made all the revisions, we would target for revenue neutrality. These are the general principles which Dr Arthur Beng wanted to know. The details would be announced when it is ready.

Then the question of road tax rebate when we introduce ERP. That is another story. When we introduce ERP, we will give road tax rebates to motorists in order to help ease or cushion the introduction of a new charge, which is the road pricing fee. These would be largest at the beginning and it would progressively tail off over time. We will also help taxi operators to adjust to ERP by phasing in ERP charges over a few years, as some Members have asked for.

As far as taxis are concerned, some Members have fed back concerns from members of the public about the affordability of taxi rides. Sir, in the spectrum of taxi services worldwide, there is no doubt that taxi fares in Singapore are cheap by world standards, but obviously this is not a consideration for some people. However, this is also accepted by quite a few of the respondents to the surveys which said that 35% or so of our commuters find our taxi fares cheap. It is not a high figure, I admit. Some might argue that we should make taxis as cheap as buses, or cheaper, so that more people can take taxis. I think this is not possible. We have to be realistic. Taxi fares must reflect the higher level of service which they provide, and they must also reflect the congestion that they cause. While we have recognised that taxis are a form of public transport, we never said that they are a basic form of transport, like the bus or even the MRT. They are at the high end of the spectrum and, as such, we will have to make sure that the charges, fees and taxes that are levied on taxis reflect their position in the spectrum.

I turn now to several Members' very emotional, or should I say very strong, appeal for consideration for the aged as well as the disabled in the White Paper. They have mentioned that the White Paper does not specifically spell out what the proposed transport system has in store for the aged and the disabled.

The White Paper spells out the Government's commitment and plans to provide an efficient, integrated, affordable and sustainable land transport system for all Singaporeans. And I want to assure this House that this includes the disabled and the greying population. When designing public transport systems, thought has been given to being as friendly to the aged, as it makes sense to do so. It has incorporated features like special flooring and special facilities at the various new stations, including vertical lifts to be incorporated in the new Woodlands Station. But let me take this opportunity to stress that the MRT, like buses, is a form of mass rapid transit, and there must be overriding concerns regarding the safety of all commuters and the overall efficiency of the system. In other words, we have to make sure that the system carries large numbers of people in as safe a manner as possible. And within this design perimeter, where it is sensible to do so, we will certainly take all possible steps to make sure that the concerns of the disabled and the aged are taken care of. And this, I would like to inform the House, has been done, but within reason.

It is not possible to cater for all forms of disabilities and this is the reason why there are very highly specified niche services that have been provided by organisations such as the Handicap Welfare Association. There are dial-a-ride services for people who want such services and who have difficulty in using public transport. What the Government has done for them is to exempt these vehicles from customs duty, registration fees, ARF and COEs.

Mr Deputy Speaker, Sir, I would like to briefly touch on a very interesting proposal that was put up by Dr Michael Lim. He suggested that utility agencies should be charged for use of road space because they inconvenience the public and cause congestion, and that imposing such a levy will make the agencies more conscious of the externalities that they impose. I think this is an interesting suggestion and I will ask the LTA to look into it.

Mr Sinnakaruppan made a point about the whole-day ALS not being effective. He said that traffic during peak hours is now worse than before the whole-day ALS was introduced. Let me explain that the objective of the whole-day ALS is to even out the traffic flow over all periods of the day so that our roads can take more traffic. It allows for a better distribution of traffic in the CBD throughout the whole day. The traffic engineering studies show that the whole-day ALS has achieved its objectives and, if anything, what Mr Sinnakaruppan has highlighted is the fact that the peak ALS fee is probably too low compared to the off-peak fee. It is now $3 and $2. So this is something that we will have to review at the appropriate time.

Assoc. Prof. Walter Woon suggested that we should allocate COEs. He used the analogy of HDB flats to argue that we should allocate COEs through balloting in order to benefit those who are not so well off. Sir, I think this is not an appropriate analogy. Cars are not analogous to HDB flats. Public transport is the equivalent of HDB flats.

HDB flats are allocated by queuing because it is Government's aim to provide every household with a HDB flat. But there is no queuing system for terrace houses and landed property because there is not enough land for everyone to own landed property. So only those who can afford to pay the price will own it. Similarly, Government can ensure universal access to basic public transport services, like buses and MRT. But it cannot guarantee universal car ownership. We strive to be a hundred per cent home owning society, not a hundred per cent car owning society.

But let us assume that we do give balloting a try, I take the House through the argument, and assume we take Assoc. Prof. Walter Woon's idea at face value and give it a try. How many COEs do we allocate? There are 250 small-car COEs a month. He says we need not ballot all. Let us say we take half, ie, 100 COEs a month. Who will qualify is the next question. By salary level, first-time car owners, newly married couples, those with children, those who do not have a car? Assuming we can settle that question, after we have done the balloting, you will find that there will be a few very happy people but a lot of very unhappy people. When HDB had balloting for flats, we met many people who came to see us at our meet-the-people sessions. They complained that this was a very unfair system, because so-and-so balloted for the first time got a flat. And he, with a wife and four children and living with his parents in a 3-room flat, had balloted 10 times but could not get a flat.

So even HDB, which tried the balloting system, decided to revert to queuing. What more in this case where there is simply no logical reason for us to ballot for cars. I do not think Assoc. Prof. Walter Woon actually thought through his proposal when he came to this House. In any case, if he is really suggesting a lottery, there is already a system like this in town. It is called the Big Sweep. For $2, if you are lucky, you can go and buy any number of COEs or, in fact, any number of cars that you want.

I turn to Mr Heng Chiang Meng's comments. He made the point that the LTA should take the trouble to look at the problem at source. In other words, to look at how traffic is generated and for the Government to consider giving incentives for people to minimise travel demand. I think there are already some measures like this in place, as he may be aware. What the LTA has advocated in the White Paper really addresses part of what he is concerned about. In other words, to minimise the need for travel, and this is done through sound land use planning integrated with transport planning.

He also suggested staggered working hours. I believe the civil service does practise staggered working hours. As for school hours, in fact, there is really no reason to change the school hours because the school hours dovetail very nicely into the peak hours for the working population. And because schools start earlier and buses are able to ferry both school children as well as adult workers, there is an optimal usage of resources. So it may not be necessary to touch the school hours.

Tele-working, yes, this is a new idea. This is now possible with advances in technology and I think companies will, on their own accord, go for this method of operation, particularly if we introduce road usage measures, because this will then force individuals as well as companies to re-examine their present mode of operation.

I turn now to the question on financing. This is a question of great concern to many Members. Let me start by saying that the experience of major cities around the world and these are the cities that we have cited - Paris, London, Tokyo - points to a very heavy reliance on rail. Rail can provide that high level quality service and reliable form of public transport that compact cities need and that people living in those cities desire. And as Singapore becomes more compact and as the aspiration for a high level of service goes up, we too have to go for the rail option. But rail options are expensive options. Rail systems are very expensive to build and operate.

What is important to recognise when we are talking about financing of rail is that whichever way the Government decides to finance the development of the infrastructure for rail, the cost ultimately is borne by us, the taxpayers. We can choose to pay for both infrastructure and operations, as some Members have suggested, but where will the funds come from? From general taxation or at the expense of budgets for something else, for education, health or housing. We can do what the French government does, which is to impose a transport tax on employers to finance public transport improvements. It is very attractive for some people but again ultimately this must mean lower wages for workers or higher prices of goods. So the question, therefore, is not who pays, but what is the financial arrangement that we must adopt which can (a) encourage fiscal prudence; (b) encourage individual financial discipline; and (c) encourage operators to keep their operations efficient, lean and trim. If we can do that, then not only the commuters but the taxpayers will get the best value for money. So the key is to retain this partnership concept that balances the interest and the financial responsibility of the commuters, operators and the Government.

Under the current financial arrangement, commuters are burdened by the responsibility to pay fares and these are the fares that cover the cost of not just the direct operations but also the replacement of assets. This is the reason why the Government has decided to revise the financial regime for rail and to redefine operating cost to mean the historical cost for the first set of trains. This lowers the hurdle rates for rail projects and it allows a rail network to grow and allows us to grow our public transport system in a way which is highly reliable and efficient, but at the same time it does not forsake the concept of partnership, ie, Government builds the infrastructure and commuters pay fares that cover the operating cost.

Many Members in this House are concerned that we are moving very far away from our existing financial policy. There have been many other questions raised about the financing framework by Dr Lee, Mr Chew Heng Ching, Mr Heng Chiang Meng and many others.

Let me explain. The revised formula retains the concept of partnership, as I said, but it changes the treatment of operating assets like trains, signalling systems and escalators because these are equipment that generally have a life span not exceeding 30 years. In the old financing framework, Government pays for the first set of assets and the operator is required to set aside funds from fares to finance the replacement of all these operating assets. What this arrangement de facto means is that the present generation of commuters - those who take the trains today - will have to pay for the next set of trains to be used by the next generation of commuters.

Let me just illustrate. Assuming operating assets comprise trains which cost $1 billion today and assuming that the replacement set that is due in 30 years' time will cost $4 billion. The old formula will require the operator to charge the present generation of commuters a fare that would pay for the replacement set of trains costing $4 billion in year 30. The new financing formula in contrast requires today's commuters to pay only the historical cost of $1 billion towards the replacement cost of the next set. The difference of $3 billion would be paid in year 30 by the Government and tomorrow's generation of commuters will have to cover the cost of the second set of trains in year 30. This is how each generation of commuters pay for its own set of trains. This is a fairer system.

Even if we start a sinking fund, as suggested by Mr Heng Chiang Meng and several others, it would mean that the present Government, if we did not change the formula, would have to pay for future commuters' consumption, and the present Government would still need to generate surpluses. So by changing this formula, it has allowed us to relieve the operators from the burden of having to provide through their fare box the extra fares that are needed to buy the next set of trains.

Some Members have expressed concern that the revised formula will burden future governments. I think it is right that these concerns should be expressed by Dr Ow Chin Hock and Mr Chng Hee Kok. But the formula that we have is a fairer formula and it is up to the future government to decide on how best it finances their component of the operating assets. It can use several methods. It can use the surpluses that it generates. It can use past reserves if the Elected President approves it. It can issue bonds to raise funds. It can raise taxes. Or if the elected government of the day has allowed the economy to degenerate and is in no position to pay, the only choice it has may be to delay the replacement, and to run the trains, decrepit though they may be, because there is no other choice.

So this reinforces the point that we have to be judicious when we are building infrastructure and rail extensions today to make absolutely sure that the projects we intend to invest in will be economically viable and sustainable. It also means that if we want to finance the replacement and extension of future rail systems, we must have the funds to do so.

So the underlying, unstated assumption in the White Paper is that we continue to have good Government, we continue with rational policies which will keep our economy strong and growing and provide sufficient surpluses to finance all our public projects, including the renewal of operating assets for the rail system of the future.

Some Members of this House argued very strongly that Government should be spending more on transport. They used the comparisons between the revenue that is collected from vehicle taxes and COEs and so on, and compare it with expenditure on transport. Having made the comparison, they come to the conclusion that since we have collected so much money, we should be spending it. I think the Government has explained many times that vehicle taxes, like other revenues, go into the Consolidated Fund, which is administered by the Ministry of Finance. This is the same consolidated fund which is used to finance projects like housing, education and health which Dr Lee mentioned. This arrangement ensures that taxpayers' money is most well spent to bring maximum benefit to the nation. Indeed as I listened to the debate and I was scribbling the notes, the wish-list kept getting longer and longer and each speaker kept adding to the list. If we added it all up, I think you would get quite a fright. Because there is really no end to how far and how much we want to spend. If I may quote Dr Lee, there is really no such thing as a free lunch. In the case that we have proposed in the new financing formula, we believe that the lunch we intend to serve will be affordable.

There are other people, however, who feel that the financing framework is in fact not generous enough and specifically there was a request by SBS, which is supported by some Members of this House, to also help defray part of their operating cost, like co-financing the cost of replaceing bus fleet. Let me say, first of all, that the Government has adopted similar financing approaches, whether it be for rail, bus or taxi transport. We bear the cost of the infrastructure and users pay for operating cost. So in the case of buses, Government pays for bus interchanges, roads, expressways, bus stops and bus stands; and in the case of taxis, all of these and taxi stands as well. Further, the Government helps scheduled bus operators to keep their cost of bus fleet low. They are exempted from COE and ALS. What is the result? They have fared well. They have turned in respectable performances. Bus fares have been kept reasonable.

In the case of taxis, they enjoy a host of vehicle tax concessions, even though they occupy the same road space as the car. We have given concessions for taxis on ARF. They do not pay the full ARF. Cars pay 150% and taxis pay a flat $2,000. Taxi owners pay lower customs duties, lower registration fees, a flat road tax regardless of engine size. They do not have to bid for Category 3 COEs, rather they go for PQP (prevailing quota premium) for Category 2 cars. Again, in this kind of a tax regime, taxi operators have fared well. They make a decent living. Taxi fares are kept, as people do agree, reasonable. We have not treated them exactly like cars but we treat them as the highest grade of public transport.

But while I say that the basic financing principles for rail, bus and taxi are the same, we must also recognise that there are differences in the cost structure of rail, bus and taxi operations. Because they have a different cost structure and the economics is different, therefore we also need to recognise and levy different rates. We need different solutions. Therefore, for the rail industry, the White Paper has revised its financing framework and redefined the replacement of operating assets; for the bus industry, the White Paper calls for bus fares to be adjusted in small steps on a regular basis, if they can justify it. If fares are adjusted to take care of rising wages and other operational cost, and incentives are given for bus operators to run their fleet in the most efficient manner, then there will be sufficient incentives for bus operators to provide good service and at the same time give good return for their shareholders. There is no need for us to apply the same formula as for rail by co-financing or co-paying for buses. I see no justification for that whatsoever.

Of course, there have been other calls on Government for more subsidies. There has always been this point that the Government should not be talking about money. In fact, there have been some people who said we should be providing these services free because after all it is the Government's duty to provide something as basic as transport infrastructure. If that were the case, then we should also be providing public utilities like water and electricity also for free. So these are calls which we have to constantly guard against. They are very easy to make. The Opposition comes up with it from time to time. It is very seductive. But if we start to go down that way, I think we have seen with our own eyes what happened in other countries. We have to stand firm on our principles, and I am glad that there are MPs in this House who are here to remind us that we should continue to stand firm on these principles. As Mr Heng Chiang Meng put it in an interview, the Government has been willing to subsidise public services but to the point of affordability, not in the way that encourages wastage and inefficiency.

Another very popular one. Why do we not build, so long as the whole system is viable? Let us cross-subsidise profitable and non-profitable lines. This approach is rational but, again, it is short-sighted. It leads to either rising fares for the existing commuters or it leads to increasing losses by MRT operators. Every extension that is not breaking even adds to the financial burden of the company. So the argument goes that bus companies do that all the time. They operate money-making and loss-making services. But that is the reason why bus companies are so reluctant to introduce new loss-making services. Because every service that they introduce that loses money adds to the burden. And either they come back to the PTC for fare increases when their bottomline is no longer sustainable, or they have to operate in the red. So it is better for us to stick to the partnership arrangement that has been spelt out, because that is the only sustainable arrangement that can allow us to grow our network in the most judicious manner while we ensure fiscal prudence and financial discipline.

I want to reiterate Government's commitment to improve public transport. We will do so by expanding the rail network. But, as I have said, we cannot do so lightly. We will only invest in a rail project if it meets the following two conditions:

(a) the benefits of the project outweigh the costs, from an overall national perspective; and

(b) commuters that use the line are willing to pay fares that cover operating cost.

If the operating cost of a system is high for whatever reason, commuters must be prepared to pay higher fares. This is their share of responsibility under this partnership arrangement. It is also a clear indication that they value the service that is provided by the new lines. If they do not value the service, if they are not prepared to cover the operating cost, then it would be a sheer waste of public funds and we should not build. The existing MRT lines were built on this basis. Future MRT and LRT lines will also be built on this basis. We cannot adopt the alternative approach, as I have explained earlier, where we build any line, so long as they can be cross-subsidised by the rest of the network and so long as the overall bottomline remains healthy. If we were to proceed on this basis, we will be building lines all over the place, including lines that do not make economic sense, and we will continue to do so until the MRT system goes into the red.

Let me quote an observation of a transport economist who was formerly with the World Bank. He related this story that if a group of friends go to a restaurant and decide beforehand that they will share the bill evenly, they will tend to over-order and waste food. Because they know that whatever extra each of them orders is cross-subsidised by the rest. If each person pays for his own food or order, each will only order what he needs and what he is prepared to pay for. So Mr Chin should realise that it is not that unusual for different people to go to a restaurant and pay different bills if they order different meals. I think in his speech he mentioned that it would be untenable for different people to do so, based on service. I am suggesting that it is not just service alone, but what each person orders that determines what the size of the bill will be.

Recently the PRC government raised subway fares in Beijing by 400%. And we are told that in the PRC system, the application to raise fares requires the approval of the Premier and two Vice-Premiers, as well as the top officials of the city government. Even then the company officials said that, because the new fares cannot cover costs, a new rail line promised this year will not be ready till at least after the year 2000. I think this is a good example and lesson for us to learn. Services must cover operating cost. If we want to minimise wastage and keep the whole network affordable, then let us preserve this nexus between the cost of using a particular line and the cost of operating that line.

This was the message I brought to residents living in the North-East sector when I visited them at the invitation of a few MPs. Residents are understandably keen to have the North-East line built early. So I explained that while the Government was committed to building the North-East line as the next MRT extension, the question of when to start work depended on whether the line could recover its operating cost. I further went on to explain that, based on the projections, this criterion could not be met if we were to factor in the existing fares. So I asked the residents, "Are you prepared to pay slightly higher fares in order to bring the line forward, because of all these benefits that will accrue to you? Do you really value this enough to help us to bring this line forward?" I said that this will enable the North-East line to cover its operating cost sooner and signal the value that they place. The immediate reaction was not unexpected. Some people thought that it was very unfair. Others felt that they were victimised and many of my MP colleagues were wondering what was going on. However, after more explanation and clarification, I believe the rationale and benefits of such a proposal have become better understood.

I have been very encouraged by public feedback and by the various dialogue sessions that we have had with the MPs in the area. More residents now have indicated that they are prepared and willing to pay slightly higher fares to cover the higher operating cost of the North-East MRT line, in order to bring forward the construction of this line. The LTA has revised the financial projections for the North-East line, taking into account these slightly higher fares and the revised definition of operating cost, as it has spelt out in the White Paper. It has concluded that with these changes, the North-East line can break even operationally from the year 2003, instead of only from the year 2006 onwards, as was originally forecast. We are not yet certain how much the fare premium for the North-East line needs to be. But with the new financing formula, I am confident that it can be less than the 20 cents figure I estimated when I visited Hougang and Cheng San constituencies. I have reported this to Cabinet and have recommended that the LTA should proceed to build the North-East MRT line immediately. [Applause]. Cabinet has agreed. And the LTA will announce further details on the North-East line in due course.

The North-East line will bring many benefits to the residents of the North-East. We have gone through the benefits. I am sure Members here are fully aware of them. But let me stress that there will be sacrifices involved. While the LTA will try its best to minimise congestion and noise and air pollution during the construction process, residents will have to bear with this disruption for a considerably long period, because it takes a long time to build.

An hon. Member: How long?

Mr Mah Bow Tan: The Government will need to acquire land along the route of the North-East line, especially around the sites of the stations. It must do this to be able to redevelop comprehensively the areas around the MRT stations, to build the North-East line facilities, and also to ensure that windfall capital gains resulting from construction of the North-East line accrue to the State rather than to individual property owners. But these sacrifices are inevitable if we take a long-term perspective and do what is best for the nation. And over time, a good public transport system will bring considerable benefits to all Singaporeans. The North-East line is just the beginning. The LTA is finalising the evaluation of several LRT projects. We should be able to announce the results of the evaluation soon.

Mr Deputy Speaker, Sir, I would like to thank the Members who have spoken during this debate and also all those who have contributed to the debate on the White Paper over the last two weeks. All the suggestions and feedback received will be considered and implemented wherever they make sense. The White Paper does not promise a revolutionary change in the way we tackle transport-related issues, rather it builds upon what we already have but in a more integrated, holistic manner. Because of the complexities of transport, we cannot hope to solve the problem once and for all. We will have to refine our approach and we will have to make adjustments and manage the challenges as we go along.

One Straits Times commentator said "the road to achieving a world class transport system will be a long and perhaps arduous one". It will not be easy. It will take time. But I believe the results will be well worth our collective efforts. As the White Paper says, if we are true to the philosophy and approach of this White Paper, we should have a world class transport system that Singaporeans deserve. I have every confidence that the LTA will be able to fulfill its mission and deliver an outstanding and affordable transport system for the benefit of all Singaporeans. [Applause].

Question put, "That this House endorses the Paper Cmd 1 of 1996 on `A World Class Land Transport System' as the basis for developing an outstanding and affordable transport system for Singaporeans."

Dr Ong Chit Chung: Mr Deputy Speaker, Sir, I call for a division.

Mr Deputy Speaker: Will hon. Members who support the claim for a division please rise?

More than five Members rising in their places ---

Mr Deputy Speaker: There are more than five Members who support a division. Ring the Division bells.

The House divided: Ayes, 40; No, Nil; Abstentions, 3. Ayes Ayes (cont.) Beng Kian Lam, Arthur Jayakumar, S Chandra Das, S Kanwaljit Soin Chen Koon Lap, Kenneth Ker Sin Tze Chen Seow Phun, John Koh Lip Lin Chew Heng Ching Lau Ping Sum Ch'ng Jit Koon Lee Boon Yang Chong, Charles Lee Hsien Loong De Payva, John Lee Yiok Seng Goh Chee Wee Lee Yock Suan Goh Choon Kang Lew Syn Pau Harun bin A Ghani Low Seow Chay Heng Chiang Meng Mah Bow Tan Ho Kah Leong Ong Chit Chung Ho Peng Kee Othman bin Haron Eusofe Hu Tsu Tau, Richard Ow Chin Hock Ibrahim bin Othman Tan Keng Yam, Tony Imram bin Mohamed Teo Chee Hean Ayes (cont.) No Teo Chong Tee Nil Wong Kan Seng Yap Giau Cheng, Eugene Abstentions Yatiman Yusof Yu-Foo Yee Shoon Cheo Chai Chen Zulkifli bin Mohammed Chiam See Tong Low Thia Khiang

Resolved,

That this House endorses the Paper Cmd 1 of 1996 on `A World Class Land Transport System' as the basis for developing an outstanding and affordable transport system for Singaporeans.