ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1997 TO 31ST MARCH, 1998 (Paper Cmd. 2 of 1997)

Order read for consideration in Committee of Supply [4th Allotted Day].

[Mr Speaker in the Chair]

Head U (cont.) -

Resumption of Debate on Question [25th July, 1997].

"That the total sum to be allocated for Head U of the Main Estimates be reduced by $100." - [Mr Leong Horn Kee].

Question again proposed. 12.42 pm

Mr Ong Kian Min (Pasir Ris): Sir, I would like to join my fellow GPC members in speaking about providing facilities to promote community bonding. Please allow me to illustrate with a resident living in Pasir Ris. This resident comes back from work and as he walks from the bus stop or the multi-storey car park to his block, he enjoys the quietness and residential feel of his neighbourhood which has been developed on the precinct concept. He passes the linked building and remembers the RC block party held there two Sundays ago where he had the opportunity to meet many other residents and made some new friends. The linked building is spacious and very useful for organised activities such as block parties and ceremonies. However, that day, being a week day, the linked building is bare and empty and is used by some children playing football.

He passes the RC centre which occupies the Civil Defence bomb shelter. The layout of the CD shelter does not encourage him to venture in and he is too shy to simply walk in and say that he wishes to get to know more people. Unlike the coffeeshops and provision shops in the older housing estates where people can meet other people, there are no such outlets within his precinct. As there is nothing to cause him to linger, he heads straight for his home and shuts the door behind him. Thereafter, he is isolated from the rest of his community. Somehow, he feels a sense of loneliness and misses the hustle and bustle usually associated with the older housing estates like Toa Payoh where he was living with his parents before he moved to Pasir Ris.

Sir, I believe what we need are conducive communal meeting points within the precinct that encourages residents to come together spontaneously to socialise and interact around common interests. It would add so much more to the concept of living as a community if residents come back to their precinct and find a conglomerate of family activities revolving around what I would term as a family activity centre. I envisage such a centre to be a cross between the Officers' Mess in the army camps, the students' lounge in the university campus, the mini clubhouse of a private condominium and the increasingly popular coffee clubs. It does not have to be a big or spacious centre. But it should have a snacks corner serving food, tea and even specially brewed coffee where residents could meet casually, and next to it, could be a reading room with magazines sponsored by Singapore Press Holdings. In an adjoining room, there could be a children's adventure nook, art and craft niche, music corner or hobby centre. Outside, there could be a children's playground.

These family activity centres could be built as an extension to the existing RC centre or they can be purpose-built at a suitable location, for example, next to the PCF education centre, community children's library or childcare centres. In any case, these centres should be strategically located for residents to come together informally to trade stories and share experiences. They should be open and readily available, a place where residents can call their own, where they can gravitate to, whenever they have some time, a home away from home where they can feel at ease, where they can always find good company.

Sir, I would like to raise this with the Ministry of National Development for consideration. Because I feel that once the physical structures are built, the residents themselves, with the RCs acting as the catalyst, can arrange for activities that appeal to their particular community.

Mr Leong Horn Kee (Bishan-Toa Payoh): Sir, the Interim Upgrading Programme (IUP) is a very well-received exercise for residents in HDB estates. The Government has recently increased the allocation to $7,000 per household.

One popular item in the IUP is to provide for new lifts to land on every floor. This provision of lifts to stop at every floor is needed by the old folks, the handicapped and young children. The problem is that new lifts are quite expensive, and different precincts have different requirements for lifts. In most IUPs, lift upgrading is usually given the top priority. The remaining funds are then assigned for other improvement works in the precincts. In some old estates with tall blocks, a situation may arise where most of the funds are used to provide for lift upgrading. Little money is left for other improvement works which are also necessary, such as linkways, lobby area upgrading and landscaping.

I would like to suggest that the Ministry of National Development consider splitting the IUP in two portions. One portion is for funding of lift upgrading and another portion for funding of other requirements. The first portion for lift upgrading should be funded entirely by MND, while the second portion may be based on a dollar value per household. This two-portion formula will be more equitable as all precincts will receive the same allocation per household for upgrading of the common areas, other than lifts.

As upgrading of lifts under the IUP is a very popular and critical item, I hope the Minister will consider this proposal favourably.

Mr Sinnakaruppan: Sir, I join my Chairman of the GPC in asking for a lift upgrading programme.

Sir, in estates that are 14 years and older, the lifts are the old design and they are very, very slow. These lifts have a speed of about 45 metres per minute compared to the latest HDB lifts that are up to 120 metres per minute, in other words three times faster. Not only that, some of these lifts have an old relay control such that when a user presses for a lift, both the adjacent lifts come up to the floor of the user. As a result, many other residents have to wait much longer to get on to the lifts. Some of my residents tell me that they have to wait as long as five minutes before they get on to the lift and take them several minutes more to get on to the ground floor. Worse still, some of these lifts break down often and on several occasions during my house-to-house visits, my grassroots leaders and I have been trapped in some of these lifts. And, of course, the biggest complaints come from the older residents who want lift landing on every floor.

Sir, the present HDB's lift replacement cycle is 28 years. This is certainly far too long, especially in relation to the rapid advances in lift technology. It is like trying to use a 286 computer until the computer cannot boot up any more, totally inefficient and obsolete.

Luckily for residents, HDB allows lift replacement during IUP from Batch 4 onwards. But what about those precincts that were upgraded in the first Batch, the second Batch and the third Batch? It will take a long time before they get their Main Upgrading Programme. What about those estates that have yet to be selected for IUP or MUP?

Sir, therefore, I would like to propose to the Minister to introduce a new scheme for upgrading of lifts that are 14 years and above, and which are not identified for IUP or MUP. As the Lift Upgrading Programme can be done much faster than the IUP or MUP, it will certainly benefit residents, especially the older residents who would benefit from having lift landing on every floor. The HDB funding must certainly be adequate for the Town Councils to embark on it. Like Mr Leong Horn Kee, I would like to suggest that the funding for the IUP incorporating the lift upgrading be increased. Presently, only $1,000 per household is allocated for this purpose, and this accounts for about 15% of the total funding. My estimates for one of the precincts in my estate suggest that you need to provide for about $3,500 per household unit in order to do the lift upgrading, so that there is sufficient fund for other enhancements in the precinct and to do the repainting works. Therefore, I would like to suggest to the Minister to increase the funding for IUP from the present $7,000 to $9,500 per household.

Sir, finally, on another point. The Minister, in his reply to Mr Ang Mong Seng's request to install lifts in four-storey flats, had agreed to do so during the MUP for such flats. I would like to request the Minister to go one step further and allow this to be done in the IUP as well.

Mr Chng Hee Kok (East Coast): Sir, like my colleagues before me, I rise in support of this issue on lift upgrading. This was raised by me in a Question for Oral Answer just last week. The Minister had indicated that we are spending close to $170 million a year on lift upgrading. Therefore, politically, I see that it benefits both the Government and the people. We can show that the asset enhancement scheme is now extended to a new scheme called the Lift Upgrading Programme. After all, $170 million is not small beer.

By having the lift upgrading programme in a separate scheme, we can then target the precincts or the flats which require such upgrading. For example, in the current Interim Upgrading Programme in my estate, the latest batch, there are nine blocks of flats which qualify for interim upgrading, but only four blocks of flats can reasonably be done with the funds provided under the IUP for upgrading the lifts. But the other five blocks of flats just cannot be done because of the way the flats were designed and structured. It will cost a lot of money. Because the estates are not homogenous, it is almost impossible to have lift upgrading to be spread all over the precinct under the current IUP scheme.

As we all know, almost all new flats do have lifts that stop on every floor. There is a lift landing on every floor. Obviously, this is a very popular item. The irony of it is that most of the flats which require some form of upgrading usually have older folks or senior citizens living in those estates as the younger ones tend to move into new estates where there is lift landing on every floor. But it is the older estates which are the ones where lift upgrading has to be done. I really urge the Minister to consider creating a separate programme called the Lift Upgrading Programme on top of the MUP and the IUP.

Mr Ong Kian Min: Sir, I would like to commend the Ministry of National Development and the Housing and Development Board for their good work in continually improving the design and finish of HDB flats. The improvement is so significant that there is a vast difference between flats that are 10 years old and those that are built even five years after that. One difference stands out, and that is, the new flats are provided with lifts that serve every floor. In Pasir Ris South division of Pasir Ris GRC, there is a mix of older blocks where the lifts do not stop at every floor and newer blocks where the lifts do. A number of residents from the older blocks have told me that with the newer flats having reached five years' old and coming onto the resale market, prospective purchasers are no longer interested even to consider the older flats as these are not served directly by lifts. Purchasers naturally prefer flats with direct same floor access to the lifts.

Under the revised IUP programme, the Government has increased its IUP funding from $6,000 per unit to $7,000 per unit for those blocks which incorporated full lift upgrading in their works. I do not think this funding is sufficient for older slab blocks where there are common corridors only on certain floors. Units at the two sides of the block which are not served by the central lift well can only be accessible by way of a common corridor and the stairs. The solution is therefore not as simple as punching holes in the central lift well and upgrading the lift mechanism to stop at every floor. For such blocks, separate lift wells may have to be constructed at huge cost. I would like to join my hon. colleagues in asking the Minister to consider implementing a separate comprehensive programme on lift upgrading, so that residents of older HDB flats will benefit from the latest improvement in HDB design and our standard of living.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, ever since the Government announced the measures to cool property speculation, the price of residential property is stable and some show signs of declining. The demand has fallen and the property in the low end shows that HDB upgraders are the main buyers. The outcome of the anti-speculation measures is anticipated. When the property speculators are wiped out from the market, the subsequent demand will be genuine, and the market will then take some time, perhaps a few years, to adjust itself to a price level which is acceptable and suitable.

Comparing the price index, today's price of the private residential property is about 2.55 times the price in the third quarter in 1991. Though the price shows a 3.7% dip in the first quarter of this year, the present price is still more than 2.45 times the price in 1991. How far the current price should be readjusted is a question that nobody could answer. Based on the 1985 experience, the downward adjustment of the price could be as much as 40% below the price at the peak.

In Singapore's residential property market, the main bulk of supply is from a handful of big developers. As long as they believe that the Government will come out to support the property market if the price should drop significantly, they will continue to bid high in the Government's land sales. They know that as long as the market does not collapse, the tendered land price will be eventually paid by the buyer.

There are good reasons why people believe that the Government will come out to support the market. First, the Government is the largest land owner. Second, the Government is also the largest developer who supplies more than half of the quantity of residential units through its public housing programme. The collapse of the private housing market will depress the construction industry which has approximately 10% share in our GDP, and it will be reflected in our economic growth figures.

I feel that the Government should allow the market to settle itself to a new level without much interference. Otherwise, it will be misunderstood by the people that we really have an interest in the market to jack up the price. What we should do is to have a long-term view on the property prices. They should reaffirm the long-term commitment of the Government on the announcement that 30% of residential property is for private housing and the remaining 70% is for public housing. In order to achieve this objective, the Government should continue to supply adequate land and the targeted people for those 30% of private property should have an income level which is comfortable enough to own a private property. In other words, the long-term price of a private property must be affordable.

Look at the current stock of the residential property. The estimated numbers are about 730,000 units for public housing and about 150,000 for private residential units. In other words, the present private residential housing is about 17% of the total. If public housing is still committed to 25,000 to 30,000 units per annum, and the 30% target for private housing is to be achieved in the long term, say, 20 years from now, the supply of private houses or flats per year will be around 13,000 units. This is a very huge figure. It will not be achievable if Government does not continue to supply a significant number of land sites through its land sale programme.

I urge the Government to look into the long-term supply of land, instead of playing with the current supply, to deal with the short-term fluctuations of property prices.

Sir, the next issue is the affordability of the people who will be the potential buyers of private properties. Let us assume that a household uses 30% of its monthly disposable income, and all in CPF contributions, as monthly instalments for housing loan. If the loan is 70% of the property price, repayment is 25 years, and based on current interest rate of 6%, according to the 1990 Population Census of a couple's income, ie, husband's and wife's income, and the annual increase of income was 5% per annum, calculated until today's date, at the entry point to the top 10% of the couples' income, they could only afford a house or flat of $840,000. For those couple's income at the entry point of the top 16%, they could only afford a flat costing $633,000. If the built-up area for this kind of flat is about 1,100 sq ft, the affordable price will be around $575 per sq ft. If we really wish the top 20%, or 30%, of the couple's income, who can afford to own this 30% of the potential private residential housing, the current price is still considered too high. I would like to urge the Government to study the long-term pricing of private property and hope that, with some appropriate measure, private property will be affordable for the potential local buyers. 1.00 pm

Mr Leong Horn Kee: Sir, I am speaking on the upgrading of private estates, not on the private residential market. This request for the Government's assistance to help upgrade private estates is a regular item raised by MPs during the yearly Committee of Supply debate, particularly by MPs with large private residential populations, such as Mr Sinnakaruppan, Mr Lew Syn Pau and myself.

Compared to the HDB residents, some private estates, especially the old ones, are becoming like their poor cousins. In HDB estates, the residents enjoy upgrading programmes like IUP and MUP. For the fortunate some, they even get cash grants under the SERS programme. Private estates so far get nothing.

There have been constant calls to look into upgrading of private estates. I am not suggesting that the upgrading of private estates be similar to the MUP in HDB estates where the blocks and their interiors are upgraded. For private estates, the upgrading need only be similar to the IUP concept. The estate can be provided with a grant amounting to a certain dollar value per household. If we use a figure of just $5,000 per household (less than the HDB's IUP provision of $7,000 per household), then an estate with 100 units may receive about $500,000 to upgrade the common areas in their estate. This sum is quite meaningful. The grant can be used for improvement of common areas and provision of recreational facilities, such as playgrounds, linkways, clubhouse upgrading, barbeque pits and landscaping.

I would like to suggest that the selection criteria for eligible private estates for this grant can also be based on some criteria similar to the HDB estates, like age of the estate, whether they have community spirit and whether they have active and responsible area committees. I recall that the Government has previously formed a Committee under Mr Matthias Yao, the former Senior Parliamentary Secretary to the Minister for National Development, to study this matter. May I ask the Minister what is the status of the study.

I believe MPs will continue to raise this proposal until we get a satisfactory answer.

Mr Sinnakaruppan: Sir, I join my colleague, Mr Leong Horn Kee, to make the same plea for the private estate residents. Sir, some time ago, the Government announced that the private estates will be upgraded. In fact, the Minister and even our Prime Minister have mentioned so and that various amenities, such as what Mr Leong Horn Kee has mentioned, covered linkways, children's playgrounds, landscaping, landmarks and so on, were some of the ideas that will be considered.

Sir, in my constituency about 50% of my residents live in private estates and during my many house-to-house visits to these estates, I am frequently flooded with numerous requests for the upgrading of their estates. So I would like to ask the Minister when the Ministry intends to initiate this project for the private estates and whether there will be any pilot schemes as in the case of the MUP for HDB estates.

The Minister for National Development (Mr Lim Hng Kiang): Let me take the questions raised up to this point. First of all, Mr Leong Horn Kee and Mr Chng Hee Kok raised a very fundamental issue of housing subsidies. Both of them commented that HDB housing subsidies would lead to excessive demand. Mr Leong Horn Kee proposed the "one bite of the cherry" for all those who buy 3-bedroom flats. Owners of smaller flats will be given the opportunity to upgrade to bigger flats. Mr Chng Kee Kok asked that the market mechanism be used. In other words, he has always advocated that HDB should set prices at market levels and give a discount to the first-timers. This is also equivalent to the "one bite of the cherry".

If we were indeed starting the public housing programme from scratch, I would be inclined to adopt their approach. It would be simple to understand and easy to implement. Although not so elegant, let me explain that the recent changes to the HDB mortgage financing policy and the HDB allocation policy were intended to achieve similar objectives. Let me first recapitulate the reasons for these major revisions and also take this opportunity to give the House a preliminary assessment of what has been achieved with these changes. As you know, HDB gave a grace period of up to 12th July 1997 for applicants to adjust to these changes. It is therefore timely for us to give a preliminary assessment of the impact of these changes.

Before we made these changes, let me again recapitulate the public housing situation. (1) The resale prices of HDB flats have gone up very sharply in the last three years: 12% in 1994, 35% in 1995, and another 35% in 1996. (2) The amount of HDB housing loans has ballooned correspondingly with these sharp resale prices. In 1994, HDB provided $5.8 billion in housing loans. This was increased to $7.1 billion in 1995, and $9.5 billion in 1996. This is a major injection of credit. (3) The number of new applications increased from a monthly average of 2,500 in 1992 to 5,600 in 1996. In other words, in 1996, we had a staggering 66,800 new applicants joining our HDB queue. The surge in demand for new HDB flats resulted in an increase in the HDB waiting list from about 80,000 in October 1994 to 146,000 in April 1997. The number of new applications did not correspond to our present demographic patterns. The high demand for public housing is also not consistent with the fact that there is no housing shortage at all in Singapore.

There are several causes for these sharp increases in HDB resale prices and also the artificially high demand for new HDB flats. Let me give some of these reasons. The first reason is that the mortgage financing rules for HDB flats were too liberal. Second, many flat lessees were applying for another HDB flat even though their flats currently meet their needs. They apply for flats of the same size or even smaller flats so as to enjoy the large market subsidy for new HDB flats and the highly subsidised HDB mortgage loans. Third, some first-timers were applying for flats under the Fiance/Fiancee Scheme ahead of their housing needs even before they were certain that they were going to get married. Fourth, some HDB flat lessees immediately apply for their second flat after they have stayed in their first flat for five years. Fifth, some applicants who were in fact interested in Punggol New Town were applying in advance for flats in the North-east zone although the first tender for Punggol 21 will only be called next year.

Sir, as we approached the beginning of this year, it was clear that the situation was untenable. We cannot have HDB resale prices spiralling up at 35% per year. The situation was also not equitable. Those upgraders who applied early, particularly those living in bigger flats, enjoy two large housing subsidies. Whereas young couples who apply later have to wait for many years before they get their first flat.

So two sets of measures were necessary. One set of measures is aimed at tightening the mortgage loan conditions, especially for upgraders and purchasers of bigger flats. Every Singaporean family was limited to two housing loan subsidies. This was announced on 12th April 1997.

The second set of measures is to prioritise the demand of those on the waiting list, to favour applicants who are in more genuine need of the flats, in particular first-timers who are waiting for HDB flats to set up their homes, and upgraders from 3-room flats who need bigger flats for a growing family. This set of measures was announced on 18th May 1997.

Both sets of measures were necessary to put the housing policies on a more rational and more sustainable basis. Mr Chng Hee Kok asked whether these measures were coordinated. Yes, they were. He also asked whether they could have been announced together. Well, they could have. It was really a judgment call. Announcing them together would have a bigger psychological impact on the HDB housing market. Taking them separately allows us to gauge the market response to the first set of measures before proceeding to the next step. We decided to go for separate announcements. The more important questions we should ask in fact should be: were these the right policies and were they effective?

Like Mr Leong Horn Kee and Mr Chng Hee Kok, most Singaporeans agree that there must be some limit to the number of HDB housing loan subsidies. Restricting every Singaporean family to two housing loan subsidies was fair. Giving housing priority to young couples to start their first home was also fair. Restricting upgraders in getting their "second bite of the cherry" was fair. This was achieved by setting the 10-year bar and the graded levy system. In other words, the "second bite of the cherry" should be smaller than the "first bite of the cherry".

Let me now deal with the result of these policy changes. First, as a result of these changes, we have prevented the bubble in the HDB resale market from growing bigger and risking a major collapse in the HDB resale prices. By imposing strict credit assessment criteria, we have introduced some financial discipline and prudence in the resale market. The HDB resale market is now consolidating instead of continuing on an upward spiral.

Second, the number of new applicants was 3,100 in May 1997 and 2,100 in June 1997. The demand for new HDB flats is now at a more realistic level. If it continues at this level, it will average 30,000 to 35,000 per year. This was a typical level that we had before the massive surge in demand since 1994.

The third impact is that during the two-month adjustment period from May to 12th July, only 9,400 applicants cancelled their applications for new HDB flats. So it shows that the measures were not draconian. It was focused, maybe it was sharp. But only 9,400 found it necessary to cancel their applications. If you look at these applications, they comprise 5,700 upgraders and 2,900 applicants under the Fiance/Fiancee Scheme with another 800 other applicants. As we expected, the 5,700 upgraders who cancelled their applications were mainly upgraders from the bigger flats who now have to pay a substantially larger resale levy when they apply for flats of the same size or smaller flats. The market subsidy for their second flat is correspondingly reduced and they find it not worthwhile to pursue their applications. The 2,900 applicants under the Fiance/Fiancee Scheme who cancelled their applications constitute about 16% of the total number of applicants under this scheme. This confirmed our assessment that a substantial number of those who applied under the Fiance/Fiancee Scheme do so ahead of serious plans to get married. 1.15 pm

Let me now turn to the fourth impact of the measures. The fourth impact resulted from the 10-year time bar. As a result of this 10-year time bar, 24,000 upgraders in the waiting list who have lived less than 10 years in their existing flats had their applications deferred. By deferring these people, it will benefit the 3-roomers, the majority of whom have lived in their flats for more than 10 years. And because we now defer those who have lived only 5-10 years, those in the 3-room who have lived more than 10 years will now get their flats faster. This is what has been advocated by Mr Leong Horn Kee.

The fifth impact is that by having a separate queue for the Punggol 21 town, we managed to attract 27,500 applicants to switch over to Punggol 21. The majority of these applicants who switched over were from the north east zone. It shows that they are prepared to wait longer for flats in Punggol 21 town. As a result of their switching over, this reduces the waiting time for first-timer applicants waiting for flats in the north east zone.

The final impact is that within this grace period, another 7,700 applicants have transferred their applications to flats of a smaller size without any penalty in their applications. These applicants have decided not to over commit themselves and buy bigger flats which are beyond their means.

Sir, the measures have achieved what they set out to do. Now, HDB is reviewing the building programme, increasing and distributing flats according to the new patterns in the waiting list. By doing so, we are able to reduce the average waiting time for first-timers, from 4.5 years in April 1997 to 3 years in July 1997, as we set out to achieve. Also, upgraders from 3-room flats will also get their flats earlier than before. I would say that the overall impact of the revised policies on the waiting time for new HDB flats has been positive.

As I said earlier, our approach may not be as simple or as elegant as that proposed by Mr Leong Horn Kee or Mr Chng Hee Kok, but we managed to achieve similar results. Young couples get their "first bite of the cherry" to start their family. Upgraders from 3-room and smaller flats can still upgrade comfortably. Most 3-room applicants have stayed more than 10 years in their flats, and they are not affected by the 10-year time bar rule. The revised resale levy has also not undermined the ability of the small flat owners to upgrade to 4-room or 5-room flats.

Through the graded levy system, the second housing subsidy for 4-room flat owners is now smaller. And the second housing subsidy for the 5-room and Executive flat owners is smaller still.

I am not saying that the whole housing issue is now resolved, far from it. We still have more than 140,000 applicants on our waiting list. Many more will apply if the market subsidy increases. Perhaps not as many as the 100,000 per year that Mr Leong Hong Kee forecasted, but it really depends on how big is the "second bite of the cherry". We therefore have to monitor the situation.

With the recent policy changes, however, we have placed the housing programme on a firmer and more sustainable basis

Let me now turn to the issue of affordability raised by Dr Tan Cheng Bock. This is a very important issue and I am grateful to Dr Tan for giving me the opportunity to reiterate the Government's position on affordability. As he said many times before, the Government's pricing policy for HDB new flats is to set the selling prices of new HDB flats such that 90% of new Singaporean households can afford at least a 3-room flat, and at least 70% of new Singaporean households can afford 4-room flats. Those with higher incomes can continue to buy the bigger HDB flats.

Other than setting this pricing according to the policy announced by the Government two years ago, MND and HDB have also some affordability indicators to make sure that we are on track, and Singaporeans are able to afford their flats. The first indicator is that we try to make sure that the flat prices, as a multiple of the household income, should range from about 5-6. This will make sure that the flats continue to be affordable. The second indicator is the proportion of income and the CPF savings utilised to pay for both the downpayment and the mortgage instalments. This should be around 25-30% of gross household incomes, so that most families can comfortably pay for their mortgage instalments using CPF contributions.

In general, applicants who have worked for four or five years should be able to pay the 20% downpayment using their CPF savings. Their monthly CPF contributions should also be sufficient to service the monthly loan instalments. As we have indicated many times, more than 85% of HDB flat owners are able to service their mortgage loans entirely through their CPF contributions.

The third indicator that we use to monitor affordability is the application patterns. We notice that more and more applicants are now opting for the bigger flats. In the past six months, 61% of all new applications are for 5-room flats. Obviously, they must think that they can afford the 5-room flats. Otherwise, they would not have applied for them.

I remember we had some debate here over how to make flats affordable to the low-income families, and we have a programme of assisting low-income families to buy their flats. Two years ago, Dr Vasoo lobbied very hard for households with less than $1,500 per month to be considered as low-income families, so that they can also buy 3-room flats under the HDB Buy-Back Scheme. We have been tracking these so-called low-income families. In the period January to June this year, 15% of households with income less than $1,500 per month applied for 3-room flats. So by increasing the income ceiling, 15% of these applicants now can apply for 3-room flats. But 55% applied for 4-room flats, and 30% applied for 3-room flats. So they are by no means low-income families.

Last Friday, Dr Tan Cheng Bock asked whether a family with a monthly income of $4,000 per month can afford a 4-room flat. I immediately answered yes without having to check any notes, because a family with a household income of $1,800 per month can easily afford a 4-room flat, let alone a family with $4,000 per month.

Let me now turn to the other aspects of housing policies. Unlike what Mr Leong Horn Kee said, we not only have to worry about shelter and asset, many of the heartaches that MPs feel are towards housing policies set up to achieve social objectives.

Let me first turn to housing for the elderly. This has been one of the objectives of our public housing programme to make sure that the elderly have their flats and to make sure that the young and the old live together. If we look at the life cycle of a family, I think it is ideal if we can encourage extended families staying together. That is not always the case. So we have to live with the reality that some elderly couples may want to stay on their own. This should not present a problem if the couple remains together and they stay in their flat, whether it is a 5-room flat or a 3-room flat. I think the difficulties arise when one of the spouses passes away and the surviving spouse has to live alone in the flat. So we have a single elderly problem.

We also have a sub-category of poor single elderly households, not very many. Our last survey shows that there are about 6,000 of such households, single elderly people living on their own with very poor means of income support, either because there are very few relatives or immediate families supporting them or they were the early immigrants who came here on their own and did not get married.

How has HDB tried to tackle this problem? As I said, our most preferred outcome is for children and their parents to stay together as an extended family, and that is why HDB gives priority to the multi-tier family scheme. But we have to recognise that this may not work out all the time and, therefore, some elderly couples want to stay on their own. If they do so, then our next step is to encourage their children to stay near to them. We do so by giving the CPF housing grant scheme to encourage young couples to buy resale flats in the mature estates to stay near their parents. We recognise that there may not be enough new flats or resale flats for the young couples to stay in the mature estates and, therefore, we also have the joint selection scheme whereby the young couple together with their parents can apply for two flats in the new towns. So if they are prepared to uproot and go to a new town, they get two flats. They live close to one another, providing mutual support. But this means that the elderly couple must buy a 4-room flat or a 5-room flat. This, again, may not fit the requirements. So some years ago we developed granny flats - 2-room flats in Pasir Ris - so that the young couple can apply for a 4-room or 5-room flat and the elderly couple can apply for a 2-room flat. Unfortunately, that did not work out. The demand was very low.

For the poor single elderly staying in a 1-room flat, we have a programme where we upgrade the flats to make the living conditions better. Right now, we have 18 blocks being upgraded, primarily in the mature estates.

Several Members have suggested that the HDB consider studio apartments, so as to put in smaller studio apartments in the new towns for the elderly couples to apply. HDB is considering this, as we indicated in the Addendum to the President's Address under MND's programme. This is an issue which HDB together with the other Ministries are studying very closely. We have the Inter-Ministry Committee on the Elderly and part of the issues we are looking at is the housing options for the elderly. I thank Members for the various suggestions and we will see how we can approach the housing needs of the elderly.

Let me now turn to housing for singles. As Members know, the HDB's policies are biased in favour of families. This is because it is the Government's policy to uphold the family as the basic social unit and to uphold core family values. So the present rules allow singles who are above 35 years old to buy a 3-room or smaller resale flat. Also, we allow joint singles above 35 years old to rent or buy a flat from the HDB. Some may argue that the criterion of 35 years old is perhaps too stringent. Mr Leong has suggested perhaps a smaller CPF grant to cater for the singles. Again, this is something that we are studying and I like to thank Members for the various suggestions put forward.

I would like to address Mr Shanmugam's point about our policies towards single unmarried mothers. Let me, first, say that the Government's policy is to discourage single unmarried mothers. And we have treated single unmarried mothers in the same way as singles. We have not discriminated against them. It is just that we do not recognise the child that is born out of wedlock. As far as single unmarried mothers are concerned, they enjoy the same policies as the singles. Having a child outside wedlock does not give them higher demand on HDB resources. 1.30 pm

Mr Shanmugam suggests that this is too harsh and that perhaps HDB should rent them flats at market prices. I think the solution is not so simple. If you look at the problem of single unmarried mothers, and if they are above 35 years old, I think they have all the avenues to buy a resale flat or to have joint-singles to apply to purchase or rent a flat from HDB. The problem comes when they are below 35 years old. If they are below 35 years old and they cannot have recourse to HDB, they have to either rent a flat or a room in the open market. HDB has liberalised its policies of subletting. Today, we have around 6,000 flats which are approved for subletting as an entire flat. HDB has liberalised the rules for subletting of rooms within a flat. We no longer monitor the number of such flats which are let out. In other words, anybody can let out a room as long as he continues to occupy the flat. So a single unmarried mother can easily rent a room or the whole flat in the open market.

I think the problem is on the category which cannot afford it. If they can afford it, there are enough avenues for them to rent a room or rent a flat. So there is no reason for HDB to come in and rent a room or a flat to them at market prices. If they can afford market prices, they can go to the market and do so. The problem is when they cannot afford it. Does that mean that you want to extend subsidised flats, either rental or sale, to single unmarried mothers? That would send a wrong signal that we are now allowing single unmarried mothers to have access to subsidised HDB flats. Even if you give them the rental flat, I do not think that solves the problem, from a social angle. Because if they cannot afford market rentals, these young single unmarried mothers would not be able to afford a flat and at the same time go out and find work. Who then looks after the child in the HDB rental flat? I think the solution is really for these single unmarried mothers to go back to their families so that the family can look after the child and the mother can go out to work.

Mr Shanmugam says such single unmarried mothers have made a mistake and why should the HDB penalise them? HDB is not penalising them. HDB treats them as any other singles. It is a mistake. I think the family should get together and try and help resolve the mistake that the girl has made.

The next area which I would like to turn to is how to achieve community bonding in HDB flats. There are several components to this objective of community bonding. First is how to integrate Singaporeans from different income levels within the HDB estates. Dr Teo Ho Pin suggests that we should build flats which integrate 1-room, 2-room, 3-room, 4-room, 5-room flats flexibly. That is possible, but I am not sure whether it will work. Many years ago, we tried building blocks which incorporate 3-room flats and 5-room flats. Even at that, we did not find it working. There was a very poor take-up of the 5-room flats. So we have to recognise that although we can change and not call 1-room "1-room flats" or call them "studio apartments", and not call 2-room flats "2-room flats", but call them "luxurious studious apartments", it would not change the reality on the ground. That is not to say that HDB is not prepared to adapt to the market. When we go to Punggol 21, we will indeed adopt a new nomenclature of mixing the flats and also naming them as "3-bedroom flats" or "2-bedroom flats", and not distinguish them as "1-room", "2-room", "3-room", "4-room", "5-room", "Executive flats". We have done so already in our design-and-build flats. We call them Apartment "A", "B", "C" but let us not fool ourselves. On the ground, the stratifications still occur. But we take great pains to try and facilitate the integration.

The second aspect of integration is racial integration. This is a core objective. We realise that to ensure the multi-racial character of Singapore, every estate, every constituency, every precinct, down to every block, should reflect the multi-racial character of Singapore. Since 1989, we have set certain limits on the number of families of a particular race that can live in a block or in a precinct. We have reviewed these limits regularly every three to four years, and we have found that these have not caused undue hardships on the various races.

Let me take up both Mr Zainul's and Mr Sinnakaruppan's suggestion. My Ministry and HDB will review this one more time to study the extent and to see whether there are any more ways we can achieve the objective while causing minimal constraints and difficulties, especially on the minority races. Of the two suggestions that Mr Sinnakaruppan suggested, I do not want to go through the pros and cons in detail here, but just to give Members a flavour of the difficulties and complexities involved. As Members know, the ethnic ceiling problem affects the Indian and other races community more than the Malays, and it affects the Chinese even less.

As Mr Sinnakaruppan suggested, there are a few areas where the ceiling for the Indians has been reached, like in the Little India area, Serangoon area or in the Sembawang area. So they can only be allowed to sell to another Indian. That is not a problem because it is a very popular area. The Indians want to buy into the area. They are prepared to pay the market rate for the flat. The problem arises in the Chinese areas. For example, in Bishan, Thomson and Hougang where the Chinese want to buy into these areas, but because of this ethnic ceiling, we restrict them. We insist that the Indians who are already living in these areas must sell their flat to another Indian. So here you have a Chinese who is willing to pay Bishan prices to go into Bishan but the Government is saying, "No. Because if you do so, very soon the entire Bishan and Thomson areas would be entirely Chinese." So we say, "No, you must sell to another Indian." We have to look at such cases and see how we can achieve this good mix without causing too much hardship.

Mr Sinnakaruppan suggested that in such areas, perhaps the ceiling should be combined - the Indians with others or the Indians with the Chinese. This is the same problem that we have with the enrolment of our Malay students in schools where the Malay PAP MPs, to their credit, proposed to Government some years ago that if we did not set some limit there will be some schools where over time will be closely identified as Malay schools. So it is better that we have a limit so that every school reflects the multi-racial character. For that, we need also to restrict the other races.

Similarly, for Bishan and Thomson. If, as Mr Sinnakaruppan suggested, we only set the cap for Little India and Sembawang and merge the ceilings for other areas, then very soon Bishan, Pasir Ris and Hougang will all be entirely Chinese areas. Where do the Indians go to when they cannot go to Little India and Sembawang? They will have to pay Chinese prices to go to the next Chinese town. By having the ceilings, you are in fact lowering the price for Indian families going into Bishan. So you are favouring the new entrants into Bishan but, of course, the Indian family who is selling the flat feels aggrieved because he could have sold his flat to a Chinese family at a much higher price. We have got to look at the problem not only from the point of the seller but also from the buyer, the community and within the nation. I am not saying that the subject is closed. It is eight years since we announced this policy. We will take another look at it.

Several MPs stood up to ask about the facilities in the town to encourage community interaction. HDB tries its best to design the community facilities in such a way as to enhance cohesion. At the block level, we kept the void decks open so that we can introduce activities at the void decks. This is a major design requirement, that the void decks be kept open and as the social needs of the community change or increase, we are able to put in community facilities at the void decks. At the precinct level, we have precinct facilities, whether it is the RC centre, kindergartens, etc. At the neighbourhood level which consists of 6,000 to 8,000 flats, we have a neighbourhood park and other facilities at the neighbourhood level, for example, a neighbourhood centre, coffeeshops, etc. So we are constantly reviewing the community facilities to try and see how we can improve. For example, in Punggol 21, we are breaking up the neighbourhood into smaller communities or estates so that between two and three precincts we can introduce some facilities to allow inter-precinct interaction.

Mr Ong Kian Min suggests that we should have family activity centres. I think that comes entirely under the purview of advisors to the grassroots organisations. All of us have a certain quota of facilities that we can introduce. If you want to introduce and try out family activity centres, by all means put up your suggestion within the quota of community facilities that is allocated to you.

Mr Ong Kian Min also lamented that there is a lack of coffeeshops and cafes now at the precinct or block level. HDB also has to adapt to the market. Now with the MRT and entertainment centres at the town centres, you will find it very difficult to also have coffeeshops at the precinct level or at the block level. The market is now in favour of families going to the town centre where they have the full range of shopping facilities. I remember over the last one week I have been answering a lot of questions from Members lamenting the poor take-up rate of both shops and eating places at the neighbourhood level. So to go in with more cafes and coffeeshops at the precinct level will not solve the problem. We have to change with the shopping and eating habits of Singaporeans. 1.45 pm

Before I turn to the many arguments for lift upgrading, let me just address the point made by Mr Chng Hee Kok, now that he has entered the Chamber. Mr Chng said on Friday that he needed a computer to navigate the many HDB rules. I completely sympathise with him. I do not use a computer. I just send a letter to HDB and let them tell me what is the policy. But I wish there were more Mr Chng Hee Koks in the House, because let me tell you, every sub-section of HDB rules, I can pinpoint to a particular Member in the House who has asked for exceptions to be made for that sub-category of Singaporeans. If we embark on an HDB policy which is simple, straightforward, I can assure Members that HDB rules will have been very simple. But because of the persuasiveness and the hardworking nature of all Members - you all lobby very hard for some exceptions to be made, and for every exception that I was foolish enough to accede - there is a sub-section in the HDB regulations. So I would wish Mr Chng work harder on the rest of you and I shall try my best to be harder to accede.

So this is now the starting point of all the negative answers.

Lift upgrading - as I have explained earlier, let me try and present the problem and why we think the present solution of an Interim Upgrading Programme and the Main Upgrading Programme address this issue.

We recognise that not so many years ago we were much poorer. We designed our flats without the lifts stopping at every floor. Now we can afford it. Our new flats are built with lifts stopping at every floor. So how do we go back and retrofit all the old lifts? We want to do so. It is a matter of getting the funds, setting the priorities and doing it in a most efficient way. So we design the Main Upgrading Programme. Under the Main Upgrading Programme, we envisage that flats which are more than 23 or 25 years old will undertake a major upgrading. And under the Main Upgrading Programme, we encounter many of the structural problems where we could not just punch a hole and let the lifts stop at every floor. Many of the structural problems that we encounter can be solved under the MUP. Because under the MUP, we will have shifted the surfaces out of the immediate apron and we are able to put additional lift core and therefore provide new lifts which can stop at every floor. So really the main solution must be under the MUP because it is a major re-investment, major structural works and can only be done using the funds under the MUP. So all the old flats will in due course be upgraded.

In responding to all the Members' persuasiveness, they all ask for an IUP. So we implemented an Interim Upgrading Programme whereby flats which are between 10 and 17 years old will also have interim upgrading, and under the interim upgrading they can also upgrade their lifts to stop at every floor. With $6,000 per unit, let me tell you that several Town Councils, even in Batch 1, were able to incorporate lift upgrading for every floor. Of course, it means a trade-off between other nice-to-have facilities, like linkways, etc. But it is a test of how valuable you think the lift upgrading is.

Again, in response to your many requests, we managed to convince the Finance Ministry to cough up an extra $1,000, so that the lift upgrading can be done within the IUP.

Why is it not a good idea to have a separate programme for the lift upgrading? Because between 14 years and 23 or 25 years, you do not have that much time to put in three major programmes. I think two major programmes are about the best for us to go to the residents and do major renovations to their environment. Under either programme, it takes you about one year to go through your consultations and getting your consensus on the design. It takes you another 1(r), up to 2 years, to implement the programme. And if you go back again and say, look, you want another major programme, I think you are causing undue interruptions and inconvenience. So I think we only have time between 14 years, 17 years and 23 years to do two programmes. They do an Interim Upgrading Programme and at the next cycle, seven years later, we let them have the MUP. If they do the Interim Upgrading Programme much earlier when they are 10 years' old, again, in response to Members' request, then, of course, you have to wait two cycles.

When we design the IUP, it was intended to start with those at 17 years old, so that seven years later they upgrade. But many MPs started putting in nominations of flats which are only 10 years. Between Interim and Main Upgrading, we have enough time for two major programmes. If you do not want to do IUP and you want the Lift Upgrading Programme, we can do so. We can change IUP to Lift Upgrading Programme. But you should only go to the flats two times - once either to change the lifts or to do a IUP, and the second time to do the MUP.

As for the four-storey blocks, this is a special problem. It is only economical to put in lifts if there is a sensible ratio between the lift and the flats. If it is walk-up flat, a staircase serving flats on two sides, it is very, very expensive to put in a lift serving eight flats. As a rule, we think a lift should serve around 50 units to make it economically viable. So if you have 4-storey blocks which are common corridors, I think it makes a lot of sense that you can introduce your lift either at IUP or MUP. It is no problem, but work within your budget. If you only have a single staircase, like those flats in Tiong Bahru or Boon Tiong, it is just not economical to put in the lift.

Let me now turn to Prof. Low Seow Chay's comments on private housing. I agree with him entirely that the Government will not interfere in the private housing market in as far as target prices are concerned. That is not our job. Our job is to ensure that there is indeed a long-term supply of private residential properties. We have no fixed target of ratio between public and private housing. As I mentioned earlier, as part of the long-term plan, we envisage that many more Singaporeans want to own private property and therefore our concept plan and development guide plans do cater for a higher ratio of private properties, because private properties entail lower housing density and therefore require more land. And as part of that target, by the year 2010, for example, we have set aside enough land for 75% high density public housing and 25% private housing. But let me clarify that this is not a target that we will achieve. We will release the land and it will be up to the market to settle, find its level and if, indeed, the demand is for private housing, we may achieve 75:25 or 70:30, or even more. We have contingency plans to provide for more private housing.

So the Government policy on private properties is quite clear. We set out a long-term strategy of land releases. For this year, it is 7,000 units for Government land sales for private property, and 4,000 units for the Executive Condominium scheme. Then together with the private property that can come out from the developers' land holdings, we feel it is enough to meet the demands for private housing in Singapore.

Upgrading of private housing estates - both Mr Leong Horn Kee and Mr Sinnakaruppan asked for an update of our plans for this. As you know, we set up a Committee to look at improvements to private residential estates chaired by my former Senior Parliamentary Secretary, Mr Matthias Yao. He has finished the study. The Committee's recommendations are:

(1) that we should only improve the common areas outside the homes in private housing estates, that means, we are not going into the blocks or not going into the compounds of the private housing estates;

(2) that the improvement projects will have to be proposed by the Citizens Consultative Committees; (3) that the budget should be similar to the amounts spent on precinct works in HDB's Interim Upgrading Programme, ie, $3,000 per dwelling unit; and

(4) that there should be certain criteria for prioritising the estates to be upgraded. Such criteria as age of the estate, deficiencies in the infrastructure, as well as the level of support from the community for the project.

We have accepted the Committee's proposal in-principle, but we have to recognise that the private housing estates are very diverse and therefore we have to look at many of them in detail to see whether or not these general principles are applicable. Therefore, we are now studying these in greater detail and we are looking at between four and six estates as a pilot project, if we find this feasible.

Mr Leong Horn Kee: Sir, I am pleased to hear that the Minister is finally saying yes to the upgrading of the private estates.

Three points of clarification, Sir. First, I did not suggest specifically that the Government should go for a "one-bite" HDB policy. What I did suggest was that the Government should review its "two-bite" policy. The first bite, which is if the Government can provide a 3-bedroom unit, it has basically fulfilled its obligation. The second bite, which comes as an investment gain for the applicant, is only if there are extras, as a bonus to them.

I want to seek a clarification from the Minister about these 3-room flats. He is saying the present policy allows them to upgrade earlier. But I am asking whether if there are applicants staying currently in 3-room units who are in need of upgrading to 4- or 5-room flats because of family size being too big or the children have grown up to become adults. Could they actually be given an earlier allocation, if there is a demand for space?

I am also pleased to hear that the Minister is going to consider the proposal of a CPF cash grant to singles and the old poor singles. As an extension of the policy, could the Minister also consider whether two old single applicants for a 3-room resale flat can actually be allocated this grant? That means if two of them apply together, they may not necessarily be married, but just two old females or two old males who are going to live together as friends, and to make it more affordable for them, they can both get a grant each of, say, $20,000, (combined $40,000). This can help them to buy a flat.

Mr Lim Hng Kiang: Sir, as I have mentioned earlier, the majority of our 3-room owners have lived in their flats for more than 10 years and therefore under the revised policies, they will not be greatly affected and they can continue to apply for a bigger flat without any delay in their applications.

I am reluctant to give priority according to family size because it will start a new criterion and more computers for all of you to navigate. A very small proportion of 3-room owners have less than 10 years' occupation and these are primarily those whom we have sold the flats recently to them under the Sitting Tenants Scheme or under the Buy Back Scheme. So for this small category of applicants, I think it is fair that they stay 10 years before they consider upgrading to a 4-room flat, because it is only very recent history that they bought a 3-room flat from us under very heavily subsidised rates, under the Buy Back Scheme or the Sitting Tenants Scheme.

Cash grants for singles - I say that we are studying this. We do not want to create other social problems by allowing two singles to combine their grants. We do not want to encourage new forms of lifestyle. But our minds are not closed. Basically, we do recognise that our policies have favoured greatly families and that singles, particularly those below 35 years old, have not been helped in owning flats, and therefore it is in our agenda to look at this. We will study his suggestions but I would not go as far as to say that we will be very liberal and we allow singles to combine and buy flats together. 2.00 pm

Mr Zainul Abidin Rasheed (Cheng San): Sir, may I, by clarification, ask the Minister on the ethnic integration policy? I am reassured that the Minister is very sensitive to the consequences of that policy as far as the minorities are concerned, and in the process of reviewing the policy, would the Minister look at it from two perspectives? One is, as the Minister said just now, to look at the mechanism where they can help minority groups who are affected by that policy. The other is that while we all recognise the social cost behind that policy in achieving a better spread of our population, in terms of ethnic distribution and integration, will the Minister also consider looking at alleviating that economic price that has resulted from the social policy? I know that sometimes we have to make sacrifices to achieve a greater goal. Could the Minister also consider in helping with the financial assistance to alleviate that economic price?

Mr Lim Hng Kiang: Let me assure Members here that when we come up with the proposal to look at the ethnic ceilings, we will circulate to all Members for their comments and further suggestions. For this policy to work, we need all your assistance to sell it on the ground. So we are not going to spring this upon you. All your ideas will be incorporated, we will try them out and we hope that we can work out together a package which will serve us well for the next 10-20 years.

Mr Chiam See Tong (Potong Pasir): Sir, no opposition town council has received any Community Improvement Projects Committee (CIPC) funds. On the other hand, over $65 million of such funds have been disbursed to all PAP-controlled town councils and other PAP grassroots organisations. On an average, each PAP MP, if he were to control a single constituency, that constituency would have benefited by about $800,000. Compared to the PAP constituencies, the opposition ward is deprived of at least that amount of CIPC funds.

The way the Ministry of National Development hands out such funds, which are really public funds, is most unfair. Whatever quota or funds to be disbursed have all been allocated to the PAP town councils and other PAP supported organisations but none to the opposition town councils. It is high time that the MND changed the ground rules in regard to the applications for CIPC funds. At the moment, all applications must go through the Chairman of the CCC. In the case of Potong Pasir, the Advisor to the CCC is the twice-defeated PAP candidate, Mr Andy Gan. How do you think Mr Gan will advise the Chairman of the CCC when I, as the Chairman of the Potong Pasir Town Council, apply for CIPC funds? I think all of you know the answer. Anyway, the Potong Pasir Town Council has so far never been successful in any of its applications for CIPC funds.

Mr Jeyeratnam has made several calls to the Government to set up independent bodies to check the Government on Government decisions and he has met with rebuff from the Government. The Government says that as long as you have good men, nothing shall go wrong. There shall also be no abuse of power. But I would say that everything has gone wrong as far as the allocation of CIPC funds to the opposition constituencies is concerned. We have not been granted any of such funds for community works. I would say that it is most appropriate to appoint an independent body to receive and approve applications for CIPC funds.

Under the present setup, the CCCs are not appropriate bodies to receive and recommend applications for grants for community works. The CCCs are definitely biased against the opposition MPs. The CCCs are known to have close links with PAP Members and, in Potong Pasir, the PAP candidate in the two previous Parliamentary elections has close links with the CCC there.

If the present setup for approval of CIPC funds is not changed, it would appear that opposition town councils will not be able to benefit any of the millions of dollars the Government shall be granting for improvements and upgrading of HDB housing estates. I would call on the Government not to maintain the present unfair system for the disbursements of CIPC funds and to have an independent body to decide on which organisation should be granted such funds on an objective basis.

The Parliamentary Secretary to the Minister for National Development (Mr Koo Tsai Kee): Sir, there needs to be a clarification on the question raised by Mr Chiam See Tong, the Member for Potong Pasir. He said that no opposition town council has ever received CIPC funding. He did not also add that no PAP town council has also received any CIPC funding because he elaborated that CIPC funding is strictly for the CCCs. I want to point out to Mr Chiam See Tong that in October 1995, the defeated candidate, Mr Andy Gan, on the advice of the CCC Chairman, had applied for CIPC fund to build five estate landmarks and signages in Sennett Estate, which is a non-common property and that project cost the CIPC $7,755. So his CCC had indeed applied to the CIPC and successfully obtained funding. So it is not correct to say that his CCC will never cooperate with him.

The present system has worked very well. It is the extension of the URSC since 1965. CIPC funding has always been released on the advice of the CCC Chairman. I do not see any reason why a system that has worked so well should be changed. In fact, the Minister, anticipating that he will come late and file this amendment, has decided to answer the items ending with Mr Sinnakaruppan so that we can enlighten him again. He has raised this issue six times in Parliament and he is very familiar with the procedures and principles, and these principles are open for investigation. The system is totally transparent, and I am here to answer any questions he might want to raise further.

Mr Chiam See Tong: May I have a clarification, Sir? I purposely left this bit out from my speech. I knew that the Parliamentary Secretary would bring up this matter and say that some monies have been allocated to Potong Pasir. This $7,500 is minuscule compared to the individual PAP MPs who have received the amounts. I have mentioned that it is about $800,000. I would just comment on these five signages and landmarks. Mr Andy Gan is the Advisor to the CCC. If the CCC applies for money, probably from his prodding, how do you think he will advise? It is in fact a very bad example that he has brought up. It is for his own benefit because he lives there and therefore he would have the advantage of these funds personally. And it benefits Sennett Estate which does not have the main population centre in Potong Pasir. What he should have asked is for the advantage of the majority of the residents there and not for a place where he lives and benefits him personally as well.

Mr Koo Tsai Kee: Sir, I think his clarification is slanderous. He claims that the Advisor to the CCC applied for CIPC funding for his own benefit. In fact, Sennett Estate is a non-common property area. It is outside his control actually because he is only in charge of the common property which is defined as the area owned by HDB. In fact, if I am not mistaken, his supporters are in Sennett Estate. So the Advisor to the CCCs had actually asked for CIPC funding to benefit him. In fact, it is also not true that CCC Advisors do not cooperate with the opposition MPs. He will remember, I do not know whether he does, that in October 1995, the CCC Advisor of Nee Soon Central worked together with the then MP for Nee Soon Central, Mr Cheo Chai Chen, to apply for CIPC funding costing something like $51,450 to build a linkway. So there are instances that the opposition MP has worked very effectively with the CCC Advisor to apply for CIPC funding and this is one case that I can quote to him.

Mr Chiam See Tong: Sir, the main point is that the present system is definitely biased against the opposition wards. So my main concern is whether or not the Parliamentary Secretary is willing to get his Minister to change this system of allocation of CIPC funds. You must really have an open and transparent system. At the moment, this system that I am saying is biased and biased very badly against the opposition MPs. The amount of money disbursed will tell you so. Over $65 million had been disbursed and, as far as the opposition wards are concerned, even if the little bit that is given out is manifestly too little, and is weighed against the opposition side. So will the Parliamentary Secretary change the system?

Mr Koo Tsai Kee: The answer is no. The system, as it is, works well. There is no need to change the system for everybody. Mr Chiam assumes that every time, the Advisor of the CCC in the PAP ward applies for CIPC funding, the funds are released. In fact, it is not the case. Many CCC Chairmen are lobbying me to release funds. In fact, not all the projects will receive CIPC funding approval. That is the first thing. The second thing is that, in most cases, the town council, if it is an agent of the CCC, will have to fork out a substantial amount of co-funding. I have looked through his Town Council's Annual Financial Report. You are in the red, Mr Chiam. I do not see how, even if he applies for CIPC funds, he will be able to carry out some of the projects. In fact, what he should do now is to quickly cut away some of the improvement projects that he has in mind.

Mr Chiam See Tong: The Parliamentary Secretary is very anxious that I cut down more of my community projects and that will of course lessen my chances of getting re-elected.

The fact is that we have spent about $300,000 on covered linkaways and we have also spent lots of money on children's playgrounds, upgrading the landscape and all this money comes from our recurrent expenses. We save those recurrent expenses and we use them for the improvement projects. Why does the Parliamentary Secretary not suggest to the Minister to release $800,000 to Potong Pasir and we will show them what we can do? Then we will talk of comparisons between constituencies. Otherwise, there is no comparison.

Mr Koo Tsai Kee: For that you have to work with the CCC Chairman. The CCC Chairman is the best person to recommend the project to the CIPC. 2.15 pm

Mr Chiam See Tong: Sir, as I said - I have got to repeat myself - this system is very biased. The Advisor to the CCC is Mr Andy Gan and he has an opposite interest to me. He wants to get elected. How can he advise his Chairman, "All right, when Mr Chiam applies, you approve every one of them?" Will he do that? You just ask Mr Andy Gan.

An hon. Member: Why don't you ask him?

Mr Koo Tsai Kee: First of all, you can ask him. Secondly, he has just proved you wrong. In fact, he applied for CIPC funding to do a project in Sennet Estate which, I understand, is politically in your favour, and not in his favour.

Mr Chiam See Tong: Sir, everything has been weighted against Potong Pasir. Even the latest episode which the Parliamentary Secretary is well aware of. We were forced to take over the EMSU, and even a small room of less than 100 square feet was not allocated to us by the HDB. How is the HDB going to give us $800,000 when it is not even willing to allocate a small room to the Potong Pasir Town Council to house a very important unit - the EMSU is a very important emergency unit - for our lift rescue workers there?

Mr Koo Tsai Kee: Sir, he is moving away from CIPC funding to something else. Since he has raised it, I want to tell him that he is a squatter in the office that is in a market. Mr Chiam has planted his EMSU in a room in a market, and he has written to me through the HDB to ask me to formalise or legalise it. As a lawyer, he should know that this is not possible, because he is a squatter. He should be evicted immediately. Instead, every time he writes in, I say, "OK, let him stay on for three months." For every void deck, every open space, every room in every estate, there is a designated long-term use. Just because you see an open space, you cannot plonk yourself there. I think after this, I will have to ask to look at the legal issues and if need be evict him. Because the longer he stays there, he will invoke the adverse possession rule. In this case, I will be contesting his occupation of the site.

Mr Chiam See Tong: Sir, I brought up this separate issue only because I say that even for a small room of less than 100 square feet, the HDB is not willing to hand it over to us. So how can the HDB approve $800,000 or more to the Potong Pasir Town Council? That is the only reason why I brought it up. I was not trying to canvass this issue in Parliament. I think we will deal with it through the normal way.

Sir, the point is that the system is definitely biased - I would not repeat myself again - and whether or not you can make the system less biased. That is all that we ask for - equality. We ask for equality of treatment to all Members of Parliament.

Dr Teo Ho Pin: Sir, my topic is on the upgrading of contractors. Countries in the Asia-Pacific are growing rapidly. There are immense business opportunities in these countries, especially in infrastructure, industrial, housing and commercial developments.

According to the World Bank's forecast, there will be over $450 billion dollars worth of infrastructure works in Asia in the next few years and trillions of dollars in the years to come. As highlighted by our Finance Minister, we have a limited domestic market and have no choice but to compete in the world market. We can grow faster by seizing opportunities overseas, especially in the booming Asia-Pacific countries.

I think the local construction industry is capable of providing a key pillar to our external economy. Construction businesses are less capital intensive and thus more adaptable to changing business environment. The construction industry also provides relatively high per capita income as compared to other industries.

Thus, I would like to urge the Ministry to provide more support to spearhead the regionalisation drive of local construction firms. However, before we do so, we need to consider whether local construction firms are ready to compete in the international market. In my opinion, there are a number of G8 registered and specialist firms capable of competing in the world market. The remaining construction firms would need the support of our Government to upgrade their firms before venturing overseas.

Thus, I hope the National Development Ministry could adopt a policy to upgrade local contractors to international standing. Clear policy directions must be set so as to enable local construction firms to grow and expand both their local and overseas construction operations.

At present, I am concerned that the local construction industry is suffering from a "brain drain" as many large construction firms are diversifying and scaling down their construction activities. This phenomenon will have adverse effect on the quality of construction in the future.

I understand that the CIDB has a number of schemes such as the Investment Allowance and the Local Enterprise Technical Assistance Schemes to assist local contractors. In addition to this, I would like to provide the following suggestions for the Minister to consider. To upgrade contractors, we should adopt a stick and carrot approach. The stick approach would entail the following: (1) Stringent control on the grading of contractors

The grading of construction firms by the CIDB should be streamlined to ensure that construction firms maintain consistent quality in their work. Upgrading of firms to higher grading must be supported by good track record, such as consistently achieving high CONQUAS score and an acceptable level of professional practices. Construction firms which fail to maintain certain specified CONQUAS score consistently should be downgraded accordingly.

There should also be stipulated requirements by the CIDB to ensure that firms submit their CONQUAS scores for projects of certain specified contract value according to their respective grading category. This would ensure consistent quality of work.

(2) Prevent total sub-contracting practices in Singapore

Presently, there are a number of construction firms which totally sub-contract projects to smaller firms which sometimes are unable to produce quality work. Such arrangements not only inflate the cost of construction but also distort the matching of a construction firm's ability with the size of the project. Thus, under such circumstances, tender pre-qualification will be ineffective in selecting suitable contractors for construction projects. I hope the Ministry could take stringent action to prevent total sub-contracting practices in Singapore.

(3) Control of sub-contractors

The local construction industry adopts the practice of labour sub-contracting for most projects. In order to control the quality of workmanship, it is necessary for CIDB to register and monitor the quality of work of sub-contractors in the industry.

Sub-contractors who fail to perform satisfactorily consistently shall be deregistered or suspended from businesses accordingly. This will ensure that sub-contractors also upgrade their operations and engage the necessary skilled workers to produce quality work. To upgrade the industry, we need to remove all "fly-by-night" contractors and sub-contractors.

Sir, let me now highlight the carrot approach to upgrade contractors.

(1) Construction competitiveness committee

There is a need to form a construction competitiveness committee comprising representatives from the various Ministries and contractors. The committee could be tasked to study the problems faced by contractors and map out strategies to upgrade the capabilities of our contractors. It could also look into the requirements by the respective authorities and suggest ways to coordinate the Ministries so as to shorten the development period of projects.

(2) Tax incentives for quality work

At present, the work culture among authorities, developers, consultants and contractors is not very cohesive and is sometimes adversarial. The various parties to a project have different project objectives and are usually not complementary. As such, construction projects may not be completed within the time frame and the required quality.

There is a need to set a common goal in construction projects so that all parties will work together. I would like to urge the Government to grant tax incentives to projects which attain high CONQUAS score.

(3) Tax incentives for overseas earned income

Tax incentives should also be provided to encourage construction firms to venture overseas. Income earned from overseas should be tax exempt for the initial period when construction firms export their services in approved construction projects. Such incentives will provide additional impetus for construction firms to go regional.

Mr Leong Horn Kee: Sir, my colleague, Mr Sinnakaruppan, has raised this proposal of Corporate Training Parks or Regional Training Parks during the debate on the Ministry of Trade and Industry. The Ministry's reply to him was that it would consider applications on a case-by-case basis.

I would like to raise this proposal under the Ministry of National Development from the angle that it would be beneficial to designate certain suitable locations as Regional Training Parks to encourage MNCs and regional conglomerates to co-locate their training facilities. This idea of a regional training park is conceived by some members of our Resource Panel of the GPC for National Development.

An increasing proportion of the activities of a business is taken up for the training of managerial and technical personnel. Most MNCs and cutting-edge companies develop in-house and other highly customised programmes which seek to enhance the job related competence of their staff. Their investments in training facilities and programmes can be considerable.

In our efforts to complement the promotion of Singapore as a base for regional headquarters, ie, OHQ programme, there is a strong case to add to the possibility of a training park infrastructure. Many MNCs as well as some regional and Singapore companies, conduct corporate training programmes in Singapore for all their staff located in this region. The training park can draw upon the synergies of a number of tertiary institutions such as NUS and NTU, and Government agencies such as PSB, NCB and the NSTB.

A corporate training park helps to lower the threshold costs for the location of a company's training activities in Singapore in the following three ways:

Firstly, it enables the company to share hardware and infrastructure facilities, as well as the software, specialists and training personnel.

Secondly, it enables training activities to be conducted away from their offices in the city where rentals are high.

Thirdly, the economies of scale generated in a training park allows these facilities to be located in a very conducive campus-like environment.

The proposal of the corporate or regional training park will enable Singapore to enhance its attraction as a location for regional headquarters and other regional operations. There will also be spin-offs for the tourism and retail sectors.

I would like to urge the Minister to look into this idea and designate suitable locations for training parks. One location could be an area adjacent to the present Science Park, which is also near to NUS and NUH.

The Chairman: We appear to have exceeded the time allotted for this amendment. Can I ask the other Members to be brief if we are to have time for the other amendments on this Head? Dr Teo Ho Pin.

Dr Teo Ho Pin: Sir, in a fast-pace and urban city like Singapore, parks play a significant role in providing an outlet for people to relax, socialise and escape from the stresses of urban life, as research has shown that parks and open spaces can help a person to clear his mind and enable him to find himself.

Thus, we must continuously manage and upgrade our parks to achieve high repeat visits by both Singaporeans and tourists. To achieve this, we need to determine what forms of parks and open spaces to provide, and what are the features and qualities people seek and find satisfying.

I would like to ask the Ministry the following suggestions: can the Ministry provide a wider range of environmental features and recreational facilities in the parks and park connectors? Can parks and park connectors be conveniently located and integrated with our transportation system? What are the activities organised to inject life into our parks? Can we expedite the construction of all planned park connectors in Singapore?

Mr Zainul Abidin Rasheed: Sir, in our increasingly urbanised environment, park lands and nature sites play an important role in softening the harshness of our built-up surroundings. I notice this first hand from experience serving in Punggol East of Cheng San GRC where I have about 70 blocks of flats in the area. An enlightened HDB planning has avoided us ending up with a concrete jungle, and the Punggol Park has provided the area with a green lung that brings lots of joy and freshness for the residents of the Punggol area and even from afar. Whenever I go on my walkabouts especially to apartment blocks near the park, no matter how stressed the residents were or what problems they may have to bring up to me, they never failed to smile and they even speak fondly when asked about the park nearby. Most of them and their families use the park regularly. May I ask what plans are in store to enhance the usefulness and value of the park for its users? Will MND consider providing other facilities, like mini-camping sites and barbecue pits? 2.30 pm

Sir, MND should be congratulated for its park connector programme, which also helps to enhance the usefulness of the park lands. What more could be done, and can MND expedite the completion of the building of park connectors island-wide to optimise park land usage, specifically for the Punggol Park area? When will the park be able to see connectors linking Punggol Park with the East Coast Park and the Bishan Park? Can its building programme be expedited too? I would also like to urge the MND to include park connectors to link Punggol Park to Punggol 21 Park and recreational facilities.

Mr Peh Chin Hua (Jalan Besar): ( In Mandarin):Sir, just now we were all talking about housing. I am not going to speak on housing. I am going to speak about cruelty to animals.

Recently, a person was sentenced to six weeks' imprisonment for an offence of killing a cat. Although this is a very small matter, the response from the ordinary citizens is very intense. Many people agree that it is guilty to be cruel to animals but imprisonment of six weeks appears to be manifestly excessive.

Sir, in Singapore the Chinese community associates imprisonment with very serious criminal offences and it is a very shameful matter. Recently, for many small offences, like killing an animal or using a CBD area licence on another car, imprisonment sentences were imposed. If we want to punish someone for killing a cat, on the surface, yes, it is being cruel to the animal by killing it. But you must look at why he killed the cat. In this incident, the cat went to his house to kill his pet bird. I agree that his way of killing the cat was brutal and he was certainly guilty. But he was merely trying to protect the defenceless bird in the cage. He appeared to be an animal lover too. Being an animal lover, he killed the cat and he was sentenced to six weeks' imprisonment. That is too heavy. We should review our law on cruelty to animals.

The Animals and Birds Act was instituted from the human perspective. As human beings we can think. But animals act on instinct. Like a mosquito sucks blood from human beings, it is its nature. So when a cat kills a rat or a bird, it was just looking for food. But when a man sees such an action being done, of course, he will attack the aggressor to protect the victim. Like the cat which killed the pet bird, if someone kills a mosquito, or a rat, would you send him to imprisonment for one day, three days or one week? By killing a cat I think he should only be fined, not an imprisonment for six weeks. Because to the Chinese community, sending a person to prison for killing a cat is very hard to accept. So I think he should be fined, instead of imprisonment.

The Chairman: Can you take your two subjects together very quickly, Mr Zainul?

Mr Zainul Abidin Rasheed: Sir, my contribution is not on cruelty to animals but food for thought and food for the tummy. It is about diversifying sources of food supply.

Sir, may I first declare my interest in the sense that I am working for NTUC Fairprice, although I think many of you will realise that Fairprice is an NTUC Cooperative committed to playing a social role to keep the price of basic essentials low.

Land and water have often enough been cited as scarce and therefore of strategic interest to Singapore. I think the production and import of food deserve more attention as a matter of strategic interest too. The imports of food exceed $5 billion a year. Singapore is heavily dependent on overseas suppliers of meat, fish, vegetables, fruits and eggs. The question is, are we putting all our eggs in one basket or too few baskets?

I believe less than 10% of what we eat here is actually produced locally. While this is understandable because of the shortage of land, had we really exhausted all possibilities of encouraging and facilitating production of food locally? What is the progress of our efforts at exploiting agrotechnology to maximise local food production? The Sunday Times story yesterday, which I have here, on deep sea fish farming is indeed reassuring, as it will eventually supply 40% of Singapore's fish supply. I would like to urge MND to introduce programmes, including tax incentives, if possible, to encourage more Singaporeans to engage in food production locally. More should also be done to encourage the local food producers to start farms overseas in order to diversify our sources of food supply. MND should also consciously encourage imports of food and related imports to spread their net wider to avoid being over-dependent on a few sources, especially for the import of basic essentials. MND should also consider providing incentives for food importers to widen their sources as this will give us sufficient ballast not to be over-dependent on any few countries.

Sir, on the fish wholesale market, before Raffles opened Singapore as a trading port, the islanders' main occupation was fishing. Today that vocation is done by a tiny fraction of the population. In the light of the need to diversify our sources of food supply, they play an important role. Today, local fish production accounts for only 10% of the total fish supply of Singapore. Although this could easily be replaced by imports, I am glad to see that the Government has decided to maintain a home base to serve the local fishing fleet. This is evident from the relocation of the Punggol Fish Market to Senoko. What is the progress of the relocation work, if I may ask, and what assistance has the Government given to those affected by the relocation? Since the Government has decided to retain this vanishing trade, MND should consider providing incentives for the fishermen to upgrade, possibly with new vessels and new technology. With the opening of the new Senoko base, would MND support the provision of immigration and customs facilities there to facilitate foreign fishing vessels to trade and thus enhancing the role and value of Senoko as a new fishing base?

Mr Lim Hng Kiang: Sir, I shall be brief in my responses. I would like to thank Dr Teo Ho Pin for his many good suggestions on how to upgrade the local contractors so that they can pursue overseas contracts. I would direct the CIDB to take this up and see whether these are applicable.

To Mr Leong Horn Kee's suggestion on the regional training parks, this was dealt with during the debate on MTI. I will get my Ministry to work with MTI to determine whether there is indeed a demand for such a regional training park. And if there is, we will try to identify a suitable location for the regional training park.

On Dr Teo Ho Pin's and Mr Zainul's comments on parks and park connectors, I would like to thank them for their support of the park connectors. The National Parks Board is very conscious that this is very useful and would try to accelerate the completion as quickly as possible. Under the Master Plan, we have some 360 km of park connectors to be developed by the year 2010. The National Parks Board would try to do quickly but I would like Members' understanding of some of the difficulties they have because the park connectors have to be tied in with the other infrastructure construction. For example, in Cheng San, part of the park connector has to wait until the canals and the drainage reserves are constituted. Then we can put in the park connector. Similarly, for the connection to Punggol 21, we will require the reclamation and the basic infrastructure of Punggol 21 to be ready before the park connector can be placed. But bearing all these constraints in mind, we will try to do the best we can and put in the various facilities, like camping sites or barbecue pits. You will have to get your inputs on where to put them because every time you put a barbecue pit, some people are happy and some are not.

Mr Peh Chin Hua raised the issue about this case of somebody being jailed for killing a cat. Let me explain that the Animals and Birds Act provides for a penalty of a fine not exceeding $500 or to imprisonment for a term not exceeding six months, or both, for acts concerning cruelty to animals. For this particular case, it is up to the court to decide on the level of the punishment. The Act gives a range of penalties so as to give sufficient flexibility to the court to decide the appropriate penalty in regard to the circumstances of the case. I understand the person has filed a notice of appeal in May and his petition is up for hearing. So I would not want to go into the details of the case.

Is it very excessive to have a penalty of $500 or a term of imprisonment not exceeding six months? Apparently, this is a fairly standard clause in many of the Government Acts. I have a list of 20 Acts where they prescribe this penalty. I will have to consult the Minster for Law whether this is an appropriate correspondence, ie, does $500 fine correspond to six months' imprisonment. Maybe times have changed and the Government should look at this correspondence.

On diversification of sources of food, I agree entirely with Mr Zainul Abidin that we should be very careful where we import from. Where we can, we should increase local production. The example cited by him about our deep sea fishing is a good example of how we can combine technology with our determination to try and have greater self-sufficiency. But we must be realistic. Land is very expensive in Singapore. Singaporeans do not want to be farmers. We own the boats but the fishermen are foreigners. So working with these constraints, we will try to enhance the capability to facilitate our farmers to start farms overseas and have diversification in our imports. But perhaps the most important point to remember is that the bottom line is our food imports are not the same as water. For food imports there are close substitutes and we have many potential sources. So if any one particular food product is embargoed, if fresh chickens are embargoed, we have recourse to fresh chickens from other countries as well as frozen chickens or other meat. So diversification is not a major difficulty and we are working with the market forces to make sure that Singaporeans will always continue to have a wide range of food at very competitive prices. Our records have shown that food prices in Singapore have indeed remained very stable. 2.45 pm

Another good example is the Punggol Fish Market. We have to close it down because we are reclaiming Punggol for Punggol 21. But instead of just closing the fish market, we have built a new one at Senoko. The 16 fish merchants at Punggol Fish Market were given replacement lots at Senoko. They were given preference to select their lots. The rental is charged at the original rate, which is very, very low. Currently they are paying $380 per month for their lots. We have tendered out the remaining 15 lots and they fetched $7,000 per month. But we were prepared to relocate them, let them continue to pay the existing rates and we would take some time to adjust their rate to the market rate. This is an example of how we try to facilitate the fish trade in the fish market and encourage foreign vessels to land their catch in Senoko. And we hope that if deep sea fishing is successful, up to 40% of our fish can be produced locally.

Mr Leong Horn Kee: Sir, I wish to thank the Minister and the Parliamentary Secretary for their very patient answers to all the MPs' questions and also for being so considerate. Many proposals are under consideration. On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Choo.

Mr Choo Wee Khiang (Jalan Besar): Sir, I beg to move,

That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UA 1500.

Sir, I have come across cases during my meet-the-people sessions where residents were accompanied by housing agents, and they asked me to appeal on their behalf pertaining to their property transactions. Subsequently, I realised that such appeals were not very meaningful because they were either not lawful or not within the rules and procedures laid down by HDB.

In the interest of all our HDB residents and in order to protect them, I just want to ask the Minister whether he has any plans to review the existing laws governing the housing agents. For example, the Auctioneers' Licences Act, which is a legislation governing estate agents, dated 1906. So it is obviously inadequate to deal with the demands of modern real estate transactions.

Secondly, I wonder whether the Ministry will look into the Listed Housing Agents Scheme (LHAS) operated by HDB. I have received some complaints that it is not very tight in terms of controlling the unscrupulous and unprofessional estate agents and there is very little to discriminate a listed housing agent from a non-listed one. For example, a de-listed housing agent is also entitled to subscribe to HDB's Resale Net to facilitate resale transactions.

I also wonder whether HDB will plug the loophole of spinning off a separate company to keep on the list an agency firm that does not meet the HDB's criteria.

Mr Koo Tsai Kee: Sir, I want to thank the Member for Jalan Besar for raising this issue of the real estate agents handling resale HDB flats. It gives me the opportunity to clarify certain matters.

In December 1995, HDB implemented the Listed Housing Agents Scheme (LHAS) to raise the professionalism of housing agencies involved in the transactions of HDB resale flats. In the past, agents were not so interested in HDB resale flats. But over the last few years, the volume and the dollar value of HDB resale flats have jumped manifold. So HDB has put in place a certain system. Housing agencies which commit infringements, for malpractices like under-declaration of the resale price, will be dropped from the scheme and the respective agent and the agency will be debarred from handling resale transactions. So they will be debarred from handling resale transactions. This is a fairly severe penalty knowing today's high volume and high value HDB resale market.

With effect from 1st July 1997, a housing agency which wishes to be admitted into the LHAS must meet HDB's admission criteria that its agents, that means everybody in the agency, must possess the relevant qualifications recognised by the IRAS. It is called the Common Examinations for Housing Agents, which is administered by the Inland Revenue Authority of Singapore. For existing housing agencies in the LHAS, those who have made an effort to upgrade the professionalism of their agents such that at least 50% of their agents have achieved the relevant qualifications, will be provisionally retained in the scheme for one more year.

HDB is also looking into more measures to help upgrade the professionalism of housing agencies and their agents operating in the resale market. HDB has no immediate plans for now to restrict resale transactions to only qualified housing agents. HDB prefers to work with the housing agencies to upgrade their services voluntarily. However, compulsory qualification as the requirement is not ruled out in the long term.

Some of the problems raised by the Member are well known within my Ministry and we will tackle them accordingly.

Review of the Auctioneers' Licences Act - I am not sure it is under the Ministry of Law. But we will look at it. In fact, the examinations are set by IRAS, not by us.

The advantage of being on the LHAS is that if a buyer buys a resale flat from a LHAS agent, then the application will receive three weeks of faster processing time. So that is quite a lot. We will make sure the HDB tightens the penalty and makes it an incentive for agents to come on board the LHAS. I think the Member suggested that it is no big deal and some agents do not consider the LHAS scheme that beneficial. In fact, some agents have devised various schemes to by-pass it. He asked whether we can close the loophole of a particular company, for example, de-listing some of their agents who have not passed the Common Examinations for Housing Agents into another company, decanting these unqualified agents, so to speak, into another company, so that this company will have all the agents who have passed the examinations. This is a legal matter. We have to look into that.

I want to assure the Member that the LHAS scheme is something the HDB thinks very seriously. We encourage all potential HDB resale buyers to select an agent who is listed under the LHAS.

Mr Choo Wee Khiang: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), Mr Goh Choon Kang.

Mr Goh Choon Kang (Marine Parade): Sir, I beg to move,

That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UE 2100.

Sir, community centres (CCs) are very important institutions in nation building, but they seem less important to national development. I am told that because of the construction of the North-East MRT line, CCs near to MRT stations have to give way, not because they are directly affected but because they are sitting on land which are now considered to have enhanced commercial value. Braddell Heights Community Centre is one such CC.

As the proposed Serangoon Station of the North-East line is just nearby, the CCMC was informed that it has to relocate the CC. Understandably, the CCMC is very upset as they originally hope that the MRT station will bring more people to the CC. I would like to appeal to the Minister to allow the CC to remain. I am not asking the Minister to make an exception. I am asking him merely to exercise flexibility and also to consider each case on its own merits.

For the Braddell Heights CC, because the piece of land is very small (it is about one acre or so), from my point of view, it is not big enough for any commercial purpose, for example, to build a commercial complex out of it. To maximise the use of that piece of land, if the existing 3-storey building is considered too low, we can actually demolish it and rebuild it into maybe a 6-storey building and then we can co-locate with other public facilities, like community library or a Neighbourhood Police Centre.

If that is not possible, then I would like to appeal to the Minister to quickly identify another piece of land which is easily accessible for the reconstruction or relocation of the CC.

Mr Koo Tsai Kee: Sir, the Ministry is sympathetic towards Mr Goh Choon Kang's concern. But it makes good sense to maximise the use of land around MRT stations. After sinking large amounts of public investment in developing the stations, we want to ensure that as many people from all over Singapore, not just within his constituency, benefit from the use and tap into the convenience provided by the development around the MRT stations. This means, in planning terms, high density development should be located next to MRT stations.

Sir, many of our existing community centres or community clubs are today stand-alone, low density developments that do not take advantage of existing land use, especially in land scarce Singapore. The People's Association is already looking into this problem and is intensifying the use of existing CCs by integrating them with other compatible uses, like libraries, etc. Community centres are thus not precluded from being located near MRT stations, if they are part of a high density development which makes optimal use of the land.

The Braddell Heights CC, which the Member of Parliament was alluding to, is immediately next to the future Serangoon Station along the North-East line. The site has been proposed to be rezoned for high density residential use. This is to fully optimise the use of the site. Alternative sites, within the vicinity of Serangoon Town Centre, are being proposed for the CC to be co-located with a community library. The HDB, URA, NLB and PA will be meeting soon to consider the various locations for this integrated development and we will seek the feedback and advice of the Member of Parliament before a final site is confirmed.

Mr Goh Choon Kang: Sir, I thank the Parliamentary Secretary for his answer and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (4), Prof. Low.

Assoc. Prof. Low Seow Chay: ( In Mandarin): Sir, I beg to move,

That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UF 1500.

Sir, I am referring to the question of branding of eggs. In last year's Budget debate, I also referred to the question of branding of eggs but the Minister's answer was that an "egg is an egg". Branding of eggs or date-marking is not necessary.

Sir, to say "eggs are eggs" is not fair to the high-technology egg farmers. We all know that high-technology egg farms operate in a very hygienic condition. They have also introduced research and development and high technology to ensure that their eggs have lower cholesterol level and a lot of Omega-3 which is said to be good for prevention of clogging of the arteries. To ensure that our consumers are able to distinguish good eggs from the bad eggs, I think branding is necessary. At the moment, all the egg farms have already proceeded to brand their eggs. However, there are no rules and regulations to say that only eggs produced in Singapore can be branded. So, as a result, the branded eggs purchased by our consumers are not necessarily produced by the local high-tech farms. They can be cheated and they will waste their money.

On the other hand, I understand that imported eggs have been branded like our local ones. Even the colour of the ink they used is very close and similar to that used in Singapore. In this way, all eggs, whether good ones or bad ones, will have the same colour of branding or similar labelling, and to consumers, it is very confusing and difficult to distinguish. 3.00 pm

I hope that the Ministry can seriously consider having a standard set to make sure that only Singapore-produced eggs can bear a certain kind of branding. Better still, the eggs can be date-marked to ensure their freshness. At the same time, I hope that locally-produced eggs will have branding which is different from those used on the imported eggs, in terms of colour or trade marks. We can have some special marks used for eggs produced in Singapore so as to enable consumers to distinguish between local eggs and foreign eggs. I think by so doing, we will be able to protect the interest of our consumers and to ensure that they would not suffer from the confusion between bad eggs and good eggs.

Mr Koo Tsai Kee: Sir, the MP for Chua Chu Kang is very persistent on the egg issue. He said that there are two kinds of eggs in Chinese, hao dan ( ), huai dan ( ). The Chinese also say, hun dan ( ). But jokes aside, Sir, the labelling of eggs, including date stamping, alluded to by the Member of Parliament comes under the purview of the Ministry of the Environment's Sale of Food Act, but nonetheless my Ministry will answer him.

Since January 1997, the Primary Production Department (PPD) requires eggs to be labelled to indicate their source, in other words, which farm the eggs come from. This will enable the PPD to take the necessary action, such as blocking the import of the eggs if any particular consignment is found to be contaminated with harmful pathogens or residues. PPD monitors the egg farms very closely to ensure food safety. They are extremely vigilant, so you do not see any outbreak of disease. The Ministry of the Environment has also indicated that the freshness of eggs sold in Singapore is generally not a problem and therefore there is no necessity at this point to make it compulsory to date mark it. My Ministry's PPD, however, actually encourages all local farms to date stamp their eggs for better quality control. We leave it to the farmers to do so on a voluntary basis. It is part of their marketing strategy.

The Member claims that we should restrict the Singapore poultry farms to a certain branding and foreign imports to another branding. I think it is not possible to do that. We leave it to the market. If the local farms want to sell a high quality product, they know how to do it. In fact, on television, I have seen one farm advertising their eggs. I think it is quite a new approach. I think over time, consumers will know which are the good eggs and which are the bad eggs. You cannot tell a foreign importer that you can only label it this way. We are in a new age now. WTO rules have come in. We cannot restrict them to different styles of branding.

Assoc. Prof. Low Seow Chay: ( In Mandarin): Sir, this time the Ministry has given some positive answers and they are more friendly. We have good eggs and bad eggs and so, under this principle, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: I think after all that talk about eggs, it is time for us to take a break.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended at 3.05 pm until 3.30 pm. Sitting resumed at 3.30 pm

[Mr Speaker in the Chair]

Head U (cont.) -

The Chairman: Amendment No. (5), Encik Zainul Abidin.

Mr Zainul Abidin Rasheed: Sir, I beg to move,

That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UG 2100.

Sir, land reclamation is one of the success stories of our tiny Singapore, where land is indeed scarce. The range of uses for reclaimed land has also grown, from housing to roads to airport. The latest, as in the FY97 budget, is for the North East Coast Scheme from Pasir Ris to Seletar.

I remember being told once that Singapore has about reached its maximum in terms of land reclamation. My question is: is this true? Has new technology and new needs made it imperative for MND to review its position? MND should study further other potentials for land reclamation, especially around the shores of the Southern Islands and also the Northern shores, in view of the possible replacement of the Causeway with a bridge, opening new visions for greater use of the area for housing and recreational facilities.

Mr Koo Tsai Kee: Sir, I thank the Member for Cheng San on his question on land reclamation. He specifically asked whether we have reached the limits of our land reclamation programme. The answer is no. For example, the land reclamation project at Punggol is the fourth and last phase of the North Eastern Coast Reclamation Scheme which was approved by Parliament in the year 1984. Under this phase, about 155 hectares of land will be reclaimed from the shallow foreshore between Coney Island and Punggol, which is near Punggol Point. Coney Island will also be enlarged and a water channel between 100-200 metres will be created between Coney Island and Punggol.

A tender for the reclamation project was called in February this year and was closed in May this year. HDB is currently evaluating all the tenders submitted. The reclamation work is expected to start towards the end of the year and will take about four years to complete. If we take another two years for settlement and consolidation of the reclaimed land, development of the reclaimed land can commence after the year 2003. The reclaimed land is earmarked mainly for private residential, commercial and recreational developments with some mix of public housing under the Punggol 21 plan.

Mr Zainul Abidin Rasheed: Sir, I thank the Parliamentary Secretary for the answer.

The Chairman: Encik Zainul, you can go on to your next topic.

Mr Zainul Abidin Rasheed: Sir, the Malayan Railway land has been at the centre of a controversy lately. I do not want to go into the intricacies and the question marks that have arisen regarding the use or abuse of the land by squatters, but just to ask whether MND is in any way involved in the settling of the problem. I see a budget for FY97 allowing for "clearance of squatters on Malayan Railway".

I am sure many Singaporeans would like to see the matter resolved as early as possible, and I wonder whether there has been any movement on this subject.

Mr Koo Tsai Kee: Sir, I thank the Member again for giving me the opportunity to clarify the issue which has appeared in the newspapers recently. Since 1990, URA and PWD have been working with KTM very closely to clear the squatters along the KTM Railway Line. The exercise was completed in April 1993, four years ago. In April this year, KTM and its lawyers issued eviction notices to the squatters who have resurfaced on its land. There have since been no squatter activities on the land, although some debris and small temporary structures still remain. Some users, however, have attempted to get back into the land to make use of the facilities left behind. KTM has taken action to warn against illegal use of the sites and will remove the structures.

Mr Zainul Abidin Rasheed: Sir, I beg leave to withdraw my

amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (6), Mr Goh Choon Kang.

Mr Goh Choon Kang: Sir, I beg to move,

That the sum to be allocated for Head U of the Development Estimates be reduced by $10 in respect of Code UH 5100.

Sir, consideration for building conservation seems to be based mainly on architectural values of old buildings. Old buildings actually have more than architectural values. They have historical values and therefore educational value as well. Take Chinatown and Clarke Quay, for example. Thirty years ago, many of our parents were still living in these old houses. Many of the families lived in small cubicles. Each storey of these houses consisted of many cubicles. All these families actually had to share a kitchen and just one toilet.

The post-independence generation has no idea at all how over the last 30 years, we have, through the public housing programme, rehoused many families into HDB flats. In our conservation programme, however, only the facade of the houses is preserved. The contents are gone, which means that the historical value as well as the educational values are no more there also. Because after conservation, after retrofitting, all these houses are rented out for commercial purposes.

Take Clarke Quay, for example, they are all run by commercial people, and we can find a lot of entertainment outlets, including pubs there. Therefore, we find our youths patronising the area, drinking and fighting.

I would like to suggest to the Ministry of National Development that, in our effort to conserve, can we consider preserving some of these old houses in their original form as well as the contents, so as to use them for National Education purposes?

Mr Zainul Abidin Rasheed: Sir, conservation of old buildings is progressing at a very impressive pace indeed. We can be proud of the levels of achievement in those conservation works. It is proof that they can be an economic asset and not a liability.

The building conservation programme first started "modestly" with 38 shophouses in Tanjong Pagar, and has since moved on to Chinatown, Little India and Kampong Glam. The Bussorah Street Mall restoration is idyllic. Indeed, the first Heritage Signboard unveiled more than two years ago speaks of the surrounding area and its history with much pride. However, with more and more of the surrounding area getting restored, the historic Sultan Palace will stand out like a sore thumb. Are plans in store to bring the Istana Kampong Glam back to its original grace? Can the Government help expedite the process? This national heritage should not be allowed to lag behind others in its restoration, not only for Singapore but for the region and the world to enjoy.

With your indulgence, Sir, I was reminded by the earlier discussion about the Nanyang Arch and Lieutenant Adnan's Memorial, and the thought flashed my mind then how I wished to see a day when, in fact, our heritage, whether Chinese or Malay, the interests of those heritage are represented, not necessarily from the same community, same ethnic background, but in fact from the other ethnic backgrounds. Like in the case of the Nanyang Arch, for example, although I am a non-Chinese, I could feel the passion and importance of the Arch being restored and preserved. Similarly, for the Lieutenant Adnan's Memorial.

In that context, Sir, I am raising the question of the Kampong Glam Istana as a Singaporean, and I hope it will be seen in that context.

Mr Lim Hng Kiang: Sir, first of all, let me explain that conservation is not preservation. We have more limited objectives when we conserve the various districts. It is not possible for us to recreate the lifestyle of the past in our conservation areas. We recognise that we should not just restore the architectural merits of the conservation areas, but we should try and bring back some of the character and identity of the conservation areas. To this end, URA works with the various agencies, eg, to bring back some traditional trades and cultural performances.

For Chinatown, URA is also working with STPB to see whether a few units in the historical districts can be developed into interpretive centres to cover the history of the migrants in the area. STPB is considering the idea of setting up an interpretive centre at Pagoda Street which will recreate the lifestyle of the early migrants in Chinatown. This will also serve as an introduction to visitors to Chinatown before they embark on the Chinatown walking tours.

For the Kampong Glam area, not only the 35 shophouses at Bussorah Mall have been completed, the entire conservation would encompass the Istana Kampong Glam and other buildings in the area. A total of 622 buildings within the Kampong Glam historic streets, with historical as well as architectural significance, have been designated for conservation.

URA is working with MITA and Ministry of Law to try and finalise the plans for the restoration of the Istana Kampong Glam.

Mr Goh Choon Kang: Sir, I thank the Minister for his answer and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Mr Chng Hee Kok, amendment No. (7).

Mr Chng Hee Kok: Sir, I beg to move,

That the sum to be allocated for Head U of the Development Estimates be reduced by $10 in respect of Code UI 5100.

Sir, I think the Minister has given an adequate response to the point I was intending to raise on the HDB building programme. May I have your permission to move on to the next topic?

The Chairman: Yes.

Mr Chng Hee Kok: Sir, on the Executive Condominium (EC) subsidy, the EC scheme was mainly established to cater for a group of Singaporeans and HDB upgraders who find that private property prices are getting out of their reach, and they would like ownership of private property. As a result, the land that has been allocated or being alienated for the EC is heavily subsidised compared to the market. The current EC pricing indicates that for similar properties without ownership restrictions, the difference is about 25-30%. 3.45 pm

I am surprised that in one of the developments, a Government-linked company has in fact developed units of more than 2,000 square feet and intending to sell those ECs for more than $1 million. As the flats get larger in size, the Minister would be aware that the subsidy escalates. One can also imagine that if a person who can afford a million dollar property can best buy it from the private property market and not from the Government, which is what the EC is at the moment.

I wonder what guidelines or controls has the Minister established with the designer of the Executive Condominiums, as this is going to be a feature of our housing supply system. If nothing is done about this, I am afraid it may go the same way as the HDB market. In other words, more people would like to have larger flats because the subsidy is higher. What will happen is that the developers of the Executive Condominiums would tend to build larger flats for that purpose.

Dr Wan Soon Bee (West Coast): Sir, I strongly believe that a flat or a house is a home and not a commodity for people to trade. This is particularly true for public housing. That is why I am fully supportive of the measures to curb this unhealthy trend.

However, the current across-the-board resale levy, irrespective of the length of stay, is inequitable. This indirectly encourages the people to treat the house as a commodity for personal gain. So to make it more equitable for those who upgrade their flats after 15, 20 or even 25 years, they should not pay the same levy as those who upgrade after every five years. Take, for example, in 1980, HDB's selling price for one 4-room flat was only slightly above $20,000. How much could the subsidy be in 1980? $5,000? $10,000 or $20,000? Today, with the new resale levy, he has to pay more than $70,000. In 1991, the HDB's selling price of a 4-room flat was about $140,000. Obviously, the subsidy was much more. When he sells the flat, he still pays a levy of about $70,000. In these two examples, the subsidies are very different but they pay more or less the same levy.

I would like to ask the Minister to consider revising the levy for owners who stay beyond their 10th year in the first flat. This levy, applicable from 10 years onwards, should be on a reducing scale, perhaps 1% reduction per year, so that for those who have stayed beyond 20 years, they do not have to pay the levy.

Mr Zainul Abidin Rasheed: Sir, talking about markets remind me about eggs again. Earlier on, I was asking that we should not put all our eggs in one basket. But with my simple taste, I hope Prof. Low Seow Chay would not mind that I do not really need branded eggs.

It has been some years now since the Government reviewed its policy to stop building wet markets. What is the progress to-date?

In my walkabouts, since last December, one recurring request by many housewives is the need to have more markets and cooked food centres convenient to their residence. Is there any plan for a wet market in the Cheng San GRC and/or other areas? I would like to urge MND to consider building one in the Punggol East area. Will a multi-storey car park near Punggol Primary School be a suitable site to have a wet market and a cooked food centre, like the one proposed for Serangoon North area of Jalan Kayu division?

Will the Government also encourage supermarket operators to include wet markets in their premises like "The Pasar" concept in some of the NTUC Fairprice outlets?

Mr Chay Wai Chuen (Tanjong Pagar): Sir, presently, the markets and the food centres in HDB estates are not being upgraded when there is a MUP precinct. They are conveniently sectored out. The Government is spending about $60,000 per dwelling unit for every space adding item in MUP upgrading. I wonder whether the Minister would be prepared to consider upgrading the markets and food centres in those precincts where these markets exist. Specifically, I am referring to the Mei Ling precinct upgrading where right in the centre of the precinct is a market and food centre and the precinct is being upgraded under MUP. But there is no grant for the upgrading and renovation and refurbishing of the market. I wonder if the Ministry would think through this. Otherwise, after the whole MUP is over, everything around would be very beautiful and nice except for the market.

Mr Chiam See Tong: Sir, clearing of rubbish is one of the main tasks of the Town Councils. The design of rubbish chutes in HDB flats and the manner in which rubbish is cleared from those flats have changed very little in the past 30 years. Basically, rubbish is thrown from an opening in each flat into the rubbish chute. At the bottom of the chute, there is a rubbish bin to collect all the rubbish. Workers have to physically remove the rubbish every day. On special occasions like the Chinese New Year season, of course, the rubbish piles up and it has to be cleared at least twice a day. Whatever it is, Sir, the clearing of rubbish is very labour intensive.

At Potong Pasir my experience is that whenever there is a change of cleaning contractors or the contractors have some problems with their workers, and some of them do not turn up for work, the rubbish cannot be cleared in time and they are piled up which caused smell and hygienic problems.

Sir, all these problems can be avoided and cost of clearing the rubbish can also be lowered if the system of clearing rubbish from HDB flats can be improved. The solution is really to design a rubbish disposal system where there is optimum mechanisation.

The usage of manpower must be reduced as much as possible, Sir. I hope that the HDB can improve on its rubbish clearing system and introduce more mechanisation in the clearing of rubbish.

Sir, I have another amendment. Can I continue?

The Chairman: Yes.

Mr Chiam See Tong: Thank you, Sir. About three weeks ago, a lady residing in Potong Pasir estate came to see me in my meet-the-people session. She brought along a piece of concrete, about 15 cm by 10 cm, which has fallen from the ceiling above her toilet. The piece of fallen concrete which fell from the ceiling was caused by spalling of the ceiling. That lady said that she would have been badly injured or even killed if that piece of concrete had fallen on her head. Fortunately, for that lady, she left the toilet a couple of minutes earlier.

Spalling concrete is a prevalent problem in Potong Pasir estate. It is caused by poor workmanship. Therefore, it has also an inherent problem. I believe the HDB, as the owner of the buildings, should be held responsible and be liable to make good such inherent faults. The HDB, in fact, has recognised its responsibility and has undertaken to repair spalling ceilings. But unfortunately, Sir, that programme was halted in about December 1992. After that date, the HDB refused to entertain any more complaints of spalling concrete. I think the HDB should not shirk its responsibility. Since falling concrete is caused by inherent problems and poor workmanship, the HDB, as owner, should be held liable and should continue to carry out the programme of repairing spalling ceilings. I know I have not heard of anyone getting killed by a piece of concrete falling from the ceiling but I hope that the HDB would take some action before something serious happens. Of course, I am concerned.

Mr Chay Wai Chuen: Sir, there are some industrial factories which are located on the ground floor of high rise HDB apartments. These are the older HDB flats. Specifically, I am talking about some of these industrial factories located on the ground floor of flats in Tanglin Halt. They cause problems of heat, smoke, noise, and dust pollution for the residents. It is an agony for many of these residents to stay there. The problems have persisted for years because initially when these flats were built, the rules were not so strict and industrial factories were allowed to be there at the ground floor. But today, people's lifestyles have changed and they are more demanding. I suggest that the HDB provide alternative locations for these people in the factories to move to, so that the residents will be spared this agony. I hope the HDB will look into this matter once and for all because this problem has persisted for a long time.

Mr Lim Hng Kiang: Sir, first of all, on the Executive Condominium Secheme. As Members know, we introduced the Executive Condominiums so that we can build properties with certain restrictions targeted at families earning below $10,000. Mr Chng Hee Kok raised the issue of the developer in Windermere who provided very large flats and whether MND would consider some restrictions to prevent developers going that way. Sir, the main control would be that every developer tendering for the EC can only sell to households having $10,000 and below. I think that is the best control. I doubt whether with that kind of household income there will be a very big market for very big units to be priced at the level that $10,000 household families can afford.

In this particular case in Windermere, what has happened is that the developer provided four very big units incorporating the roof top terraces and, as part of his marketing, he enclosed this space, terraced the void spaces and marketed it at $1 million. I think the market for such units would be very small. MND is monitoring the situation. If indeed there is a trend of developers going for very large units, then we would consider putting some restrictions. But for the time being, I think this is a very niche market which the first few developers are able to capitalise. But as the system gets into a steady state, we will see the developers providing sensibly small flats for which households with less than $10,000 can afford. So I would urge Members not to insist on restrictions at the first sign of developers building big units. I think the trend would clearly show itself.

On the resale levy for upgraders, let me explain that the resale levy is in fact a misnomer. The levy is only imposed if a person applies for a second new flat from HDB. If you buy a flat from HDB and you sell off the flat, and you do not apply for a second flat from HDB, in fact, you do not pay any levy. So the resale levy is not a capital gains tax, unlike the situation in Hong Kong. In Hong Kong, they sell you a flat and at the point of selling you the first flat, they estimate what is the market subsidy as a percentage of the market price. So if the housing authority sells you a flat and is 30% subsidy from the market price, and the occupation period is 10 years, unlike Singapore where it is 5 years, when you do sell your flat 10 years later, the Government will tax you at 30% of the resale price. So that is a capital gains tax.

In Singapore, in fact, we are very generous. You buy the first flat from the Government and when you sell it off after five years, you keep all the capital gains. There is no capital gains tax. But if you want to apply for a second new flat from HDB, then we say the second bite should be smaller than the first bite. Therefore, you should pay part of the price of the first flat so as to make the second bite smaller. So the situation is very different and therefore we do not see the need to have the resale levy decreasing or graded according to the length of stay. The resale levy is meant to make sure that the second subsidy is smaller than the first subsidy.

On hawker centres and markets, since 1992, HDB has started to build wet markets again. Before that, we had the so-called dry markets which did not end up so dry. So for every area where we have provided the dry market, and the MPs wish to re-introduce the wet market into their estates, HDB will consider every request. What we want to do is to make sure that the tenants of existing dry produce shops agree that we build another wet market, so that there is no excessive shop space for the wet market produce, and if there is also a space for doing so. 4.00 pm

In Cheng San, for example, we have three wet markets. Another wet market is presently being constructed in Sengkang Neighbourhood 1. In response to Mr Heng Chiang Meng's request, HDB will be providing another wet market in Serangoon North Neighbourhood 5. The design is in construction. It is scheduled to start in July 1997.

In Mr Zainul's case, we will look at his request to build the wet market near Punggol Primary School.

Upgrading of markets in MUP - the philosophy is that when we undertake the Main Upgrading Programme, we upgrade the residential units. Commercial units do not enjoy the large subsidies from Government under the MUP. The reasoning is that the commercial units will enjoy the subsidies under the Sale of Shops or Sale of Stalls Scheme. They enjoy a 30% discount, up to $96,000, and therefore it will not be fair to sell them the shop or the stall with a big discount, and at the same time upgrade the shops and stalls with another big subsidy. So under MUP, the upgrading will be done by the shopkeepers or stallholders in conjunction with the Town Councils and HDB. So if you have a wet market in a MUP and you want to upgrade it, it will be a cost-sharing project. You can apply for funds under the CIPC. The Town Council will have to put in a contribution. HDB will contribute some funds based on the life cycle cost of some of the big items and the stallholders will also have to contribute because this is a commercial property.

Rubbish chutes - Mr Chiam complains about clearing of rubbish and he asks for mechanisation. In the newer estates, we have centralised rubbish chutes where the collection is done mechanically. We are also trying out as a pilot project a pneumatic refuse collection system. This is being done now, I believe, in Chua Chu Kang, and we are testing to see whether it is viable.

For the old estates, however, to retrofit a pneumatic rubbish collection system will be a very, very capital-intensive and very expensive programme. So we have to assess very carefully whether this can be done. If Mr Chiam wants a quicker solution, I think the best way is to seal up all the individual chutes and ask his residents to bring the rubbish to a central collection point. Then I think, working together with the residents, he can solve his rubbish clearance problem. But a mechanisation solution will take much longer. If Mr Chiam wants, I can send my people down and seal up all the rubbish chutes in Potong Pasir. Then everybody cooperates by bringing down the rubbish and he does not have to use workers to clear his rubbish.

On spalling concrete, let me stress that this is not HDB's design faults. I have explained many times in this House that spalling concrete is a natural process of carbonisation. Concrete by its nature is porous. Over time, moisture gets in. The iron bars in the concrete get rusty. It increases in bulk. As a result, it breaks up the concrete. We have a project to repair all the spalling concrete on a goodwill basis. That has been completed. In 1995, the Government announced another programme which would assist home owners to repair the spalling concrete on a cost-sharing basis. This will run for three years and will be completed by July 1998.

I was not under the impression that spalling concrete is such a big problem in Potong Pasir. I know spalling concrete is a big problem in Yuhua because Mrs Yu-Foo will catch hold of me every time she sees me to complain of the spalling concrete and she will give me letters of all the cases that she has put up. In Potong Pasir, I have asked HDB how many such cases they have received from the MP. And HDB told me that in the last four years, they have received a grand total of four appeals from Mr Chiam. So I do not see spalling concrete as a big problem. Perhaps, if Mr Chiam were to write more vigorously about all the cases, then we will understand that there is a big spalling concrete problem in Potong Pasir.

On industrial factories at HDB blocks' ground level, we indeed do recognise the problem and HDB is taking a major programme to rebuild new industrial premises. We are now reviewing the relocation programme for industrial premises at the void decks and when these new factories are available, we will allow these existing premises to be relocated.

Mr Chiam See Tong: Point of clarification from the Minister, Sir. As regards clearing of rubbish, I was hoping that the Minister could give us some of the research on clearing of rubbish, especially on mechanisation. At the moment, even in the old flats, the rubbish chute chamber is a bit too small. I think it should have been enlarged so that the rubbish bins could be taken out easily and loaded onto trolleys. In this way, there must be some kind of improvement. I am not suggesting that we should seal up all the rubbish chambers. If the HDB has not even done any research on improving the present clearance of rubbish, then he should tell us, rather than give us a rude answer.

Mr Lim Hng Kiang: Mr Chiam wants us to go to Potong Pasir and knock the rubbish chutes to make them bigger. Is that what he was suggesting?

Mr Chiam See Tong: Sir, I had gone to see all this rubbish clearance myself and I noticed that the chamber door is rather smallish. They have to crouch and then drag the whole rubbish bin out. They should be a bit larger, in a standing position, and perhaps have safety devices to cover from rubbish being thrown down when they are clearing. All these things should have been thought out by HDB. If they have got a think-tank on this problem, they should let us know the solutions that they have.

Mr Lim Hng Kiang: HDB's approach to rubbish clearance is to mechanise the collection so that much of the back-breaking work is eliminated. HDB puts up regular circulars about its findings and recommendations. Many of the PAP Town Councils have adopted them to tile the collection area so that there is very little sullage and smell, and to mechanise the collection. These circulars are also freely available. If he wants to do major structural works, the Town Council can put in its recommendation and HDB can study it. He wants to enlarge the chute, we can also study it. But HDB's finding so far has been that most of the hard work is in the pulling out of the trolley and in the mechanisation of the carriage of the rubbish, and that is the recommended solution to all the Town Councils.

Mr Chng Hee Kok: Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (8). I am afraid we are running behind time. Mr Leong, you have to be brief.

Mr Leong Horn Kee: Yes, Sir, I shall try to be brief. Sir, I beg to move,

That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UJ 2600.

Sir, I understand that once the HUDC privatisation programme is announced, the Community Improvement Projects Committee (CIPC) will immediately stop the CIPC funding for the estate named. Sir, I feel this ruling is rather unfair. Allow me to explain why.

When the announcement was made to privatise the HUDC estates, actual planning and preparation work will take about one to two years. Then there is a need to go for a voting process where at least 75% of the residents have to agree to the privatisation exercise. Therefore, it takes one to two years before the actual privatisation is implemented. Meanwhile, the estate is still under the management of HDB and therefore run like an HDB estate.

On this basis, I feel that it will be more equitable for the Government to actually include or retain the HUDC estate as part of the estate eligible for CIPC funding. I feel that the Government should only review the CIPC funding such that the rule will only apply when the number of votes gathered is above 75%; whereby it is sure that the privatisation exercise will go ahead.

I have an example on hand in the proposed privatisation of the Shunfu HUDC estate. After the announcement of this estate's privatisation exercise, the CIPC has refused to fund a proposed linkway from a block of flats to the bus stop. In fact, this proposal was conceived before the privatisation exercise was announced. I would like the Minister to reconsider the above ruling.

Mr Low Thia Khiang (Hougang): ( In Mandarin): Sir, in February 1995, the Hougang Town Council submitted to install 16 illuminated block number directional signboards at car park entrances for approval. Only two were approved. The others, because it involved the use of land belonging to PWD, were not approved. In October 1995, Hougang Town Council amended the plan to use land belonging to the HDB and again applied to the HDB for approval to install the remaining signboards. In February 1996, HDB replied to say that the Hougang CCC has also applied to put up these illuminated signs, and there was thus a duplication of applications. Because of that, HDB did not approve the installation of the illuminated signs by the Town Council. The HDB also instructed Hougang Town Council to liaise with Hougang CCC to submit a single application. Hougang Town Council also wrote to the CCC of Hougang asking them to indicate their stand, but so far, the CCC has not replied.

Regarding the installation of illuminated signs at our car park, from February 1995, we applied and until now, almost two-and-a-half years have passed, and because of the Hougang CCC's interference, our residents cannot enjoy the benefit of illuminated signboards at the car park entrance for the convenience of their friends and relatives who visit them.

I have a few questions to ask. Firstly, in approving such applications for projects, what are the principles involved? Does it mean that if any organisation applies, HDB will approve, irrespective of whether it has got the Town Council's agreement? Secondly, does it mean that once HDB receives double applications for the same project regardless of who is the applicant and who puts up the application first, it will not approve?

Sir, I will move on to the next topic. The Town Council has been empowered to issue TOL for installation of public pay phone and call zone bases. Recently, HDB has informed the Town Council that it will take over the issuing of TOL for public pay phone and call zone bases and charge the operator a fee, and the Town Council cannot collect fees from the operators. Why is there a sudden change of mind in disallowing the Town Council to issue such TOL? If HDB can collect the fees from the operators, why can it not allow our Town Council to do so?

The public pay phones and call zone bases were installed at common property which the Town Council has to maintain. Is it fair that whilst the Town Council incurs cost to maintain the common property, it cannot collect TOL fees and yet the HDB collects such fees by just issuing the TOL?

Mr Koo Tsai Kee: Sir, I thank the Members for raising these issues in the Committee of Supply so that it gives my Ministry an opportunity to clarify the policies.

Mr Leong Horn Kee asked why is it that CIPC does not approve funding for projects in HUDC estates which have been announced for privatisation. The principle is very simple, because the CIPC funding is meant to benefit the most number of people within an estate. The completed CIPC project must also be accessible to the public. Hence, his application for a linkway in Shunfu HUDC estate was rejected. Because, based on his submission, the project would only benefit a small fraction of a select group of people. He stated in his project that the CIPC linkway will benefit 168 dwelling units. This is less than 2% of the households in his constituency and the proposed budget was 30% of the estimated funding for the entire constituency for the year 1996/97. 4.15 pm

Mr Leong also mentioned that it is not fair because it takes about two years after the announcement of privatisation to the time when the estate is actually privatised. But the property market does not move like that. The moment the Ministry announces a particular HUDC estate for privatisation, the real estate agents will assume that the estate has been privatised and this is reflected immediately in the resale price. If you look at the newspapers, you will find that the price of Shunfu HUDC estate has shot up because of this announcement and usually, after privatisation, the HUDC estate will fence it up so that the facilities will be blocked off to the public at large. So I think it is not fair for CIPC to fund a project which only benefits a small fraction of the people. Mr Chiam may want to take note that this is one case that I have rejected a PAP Advisor for CIPC funding.

Sir, Mr Low raised two issues. HDB has received two sets of applications from both the Hougang Town Council and the Hougang CCC separately to install illuminated car park entrance signages at roughly the same location. To prevent wastage, HDB, as the land owner, informed both the Hougang Town Council and the Hougang CCC to submit a single application. However, up to now, both the Hougang Town Council and the Hougang CCC had failed to submit a single application. I have spoken to the Hougang CCC Advisor and he will have a closer review.

From the Ministry's perspective, if both the CCC and the Hougang Town Council want to build the same project in the same location, I think it is advisable for these two parties to come to some kind of an agreement. The idea is not to block the town council's project. The idea is to save the town council money. You may remember that in October 1995, Nee Soon Town Council, at that time run by Mr Cheo Chai Chen, wanted to build a linkway. The Advisor to the Nee Soon Central CCC, Mr Ong Ah Heng, also wanted to do something like that, but there was some dispute. Finally, two of them sat down - I think over coffee, I do not know - and decided to put in a single submission and the project was funded by CIPC, thus saving the town council money, preventing wastage for the town council as well as the CCC. In this case, I have spoken to the CCC Chairman who will come back to the Member and, hopefully, there will be some agreement.

Mr Low Thia Khiang also asked why is it that HDB has prevented him from collecting the fees from the TOLs issued for public telephones and call zone bases. The answer is a very legal one. The Town Council (Use of Common Property) Rules 1997 was published in the Government Gazette on 31st January this year. The Rules prescribed, Sir, the uses of parts of the common property in the town which the town council can impose charges from 1st February 1997. The installation and operation of public telephones and call zone bases are not, I repeat not, specified in the Rules. Therefore, he cannot issue TOLs for the operation of public phones and call zone bases.

Mr Low Thia Khiang: Clarification, Sir. Is the Parliamentary Secretary aware that the HDB had approved two car park signages to be installed, and one was approved by the PWD and already installed before the CCC submitted another application?

The Chairman: Order. It is 4.20 pm, "guillotine" time.

Mr Leong Horn Kee: I beg leave to withdraw the amendment.

Amendment, by leave, withdraw.

The sum of $404,800,300 for Head U ordered to stand part of the Main Estimates.

The sum of $16,760,370,000 for Head U ordered to stand part of the Development Estimates.

Head I -

The Chairman: Head I - Ministry of Communications. Amendment No. (1), Mr Chay.

Mr Chay Wai Chuen: Sir, I beg to move,

That the total sum to be allocated for Head I of the Main Estimates be reduced by $100.

Sir, some of the recent criticisms of our public transport system because of the recent fee hikes should not detract us from recognising that we do have an enviable public transport system. In many ways, our transport system is acknowledged to be one of the most progressive and in the area of congestion pricing and road usage pricing, we are at the forefront in creative solutions. What we do here in our transport system is being watched and studied avidly in many advanced countries in the world.

There are several areas I would like to raise. First, in the World Class Land Transport System Report, it was stated quite clearly that the public transport system must be affordable to all Singaporeans. To protect commuters, it cannot be on a cost plus basis. Otherwise, inefficiency will be translated into higher fares. Fare increases must be justified to the Public Transport Council. However, many people think that the Public Transport Council should be more transparent in publicizing the rationale, the justification, the review and decision more comprehensively. For example, in the last fare increase, what were the cost and productivity yardsticks used and reviewed to evaluate against the public transport companies' justification, or was it a cost plus justification?

Secondly, public transport vehicles are required to be properly maintained and subject to regular inspections. In view of this, is it not possible for such vehicles which are well-maintained to be used for an extended life instead of just seven years? That would lower the depreciation charges on the vehicles and lower the cost of operation.

Thirdly, what policy decision has the Minister come to with regard to the question of the quantum of charges for the Electronic Road Pricing system to be implemented soon? This is an important issue in the mind of many people because the quantum and structure of costing of the ERP will have an impact on the asset price valuation on cars and vehicles. As the deadline for implementation draws near, perhaps, the Minister can give us some guidelines, especially on what kind of adjustment in usage and ownership cost will be involved to pave the way for this new scheme to be phased in. What kind of offsets, if any, does the Minister have in mind? Does the ERP imply that COE prices can be moderated? To do this, public policy objectives or targets should be announced clearly in advance so that motorists can make the important decisions to own the next car or save the next journey. Can the Minister say whether the implementation of the ERP charges will also aim to be revenue-neutral with related offsets, just like the implementation of the GST scheme?

Fourthly, what improvements to the quality of bus service does the Minister intend to make, if any, to respond to the frequent queries on this? Will he consider giving some competition to the bus operators, just like the magic which competition did to the prices of handphones and radio handphone fees on 1st April 1997?

Finally, what is the status of the plan to develop the integrated town and transport services, as stated in the White Paper on World Class Land Transport System, in order to facilitate commuters and give them easier access to food, retailing, shopping, marketing and other services, with the minimum of breakages and time loss?

Dr Michael Lim Chun Leng (Cheng San): Sir, land transport affects every Singaporean, whether he uses public transportation or his own vehicle. In the areas of public transport, one of the major concerns of most Singaporeans is the affordability of fares. Bus fares were increased in June this year to meet the increased operating costs of bus services. There has been no doubt that the quality of buses and the bus services have improved. However, the capital cost of a bus remains a major cost factor. Many of the buses used come from reputable companies, such as Mercedes and Volvo, and if there is a regular maintenance programme with an occasional major overhaul, one would expect that these buses would have a longer road life than the current 12 years. As such, I would suggest that the Ministry consider extending the road life of public buses to reduce the cost for bus companies. Extension of the road life of buses should be accompanied by certain standards of maintenance as well.

Likewise, the Ministry may also want to study the feasibility of prolonging the replacement schedule of MRT trains to reduce costs. This should also reduce the quantum of the increase for MRT fares.

As MRT will be the backbone for the public transport system, the completion of the North-East MRT line will certainly alleviate the transport woes of those in the North-East corridor. Residents in the north eastern area look forward to the completion of the line. Can the Minister give us an update on the North-East line and the operational date of the line?

The second major area I like to deal with is vehicle ownership and usage. In controlling the car ownership, the current vehicle taxation structure and the COE system result in significant cost upfront for the car owner and once he owns the car, the cost of usage is relatively inexpensive considering the high cost of purchasing the car. The Ministry already has COE as a mechanism for controlling car ownership, hence the Ministry may want to consider off loading some of the upfront taxation costs and transfer it to usage costs. Hence, motorists will have to plan their car usage more carefully. With restraint on usage, it will also allow a higher vehicle population and satisfy the desire of Singaporeans to own cars.

The current vehicle tax structure is inconsistent. For example, the present road tax is based on engine capacity for cars and motorcycles, maximum laden weight for goods vehicles, seating capacity for some buses and an arbitrary flat fee for some classes of goods vehicles and buses. The system does not have a consistent system for road taxation and does not directly take into consideration the space occupied by the vehicle on the road. Hence, models of a car with the same exterior but different engine capacities attract different road taxes although they occupy the same space on the road.

Can the Minister let us know whether there are plans to review the current tax system on vehicles? Even as we control road usage on Singapore roads, one cannot help but notice the long traffic jams along the Causeway. With the completion of the second link in the near future, will there be any measures implemented to prevent severe traffic congestion along the second link?

[Mr Deputy Speaker in the Chair]

4.25 pm

Dr Michael Lim Chun Leng (Cheng San): Ultimately, all Singaporeans want a world class transport system. We will be successful if Singaporeans can have a seamless integrated public transport system that is affordable, accessible and comprehensive and roads with good trafficability. We are not there yet but we look forward to the Ministry's implementation of its land transport plan and to make this a reality in the near future.

Mr Yeo Guat Kwang (Cheng San): ( In Mandarin): Sir, in the Chinese classic "Romance of the Three Kingdoms" there is an episode known as "Quenching the thirst by looking at the plums." When Cao Cao ( ) and his army were marching, they ran out of drinking water, and the soldiers were so thirsty that they could hardly walk. An idea came to Cao Cao. He pointed at a tree nearby, and told his men that there was a plum orchard over there. At the mention of the plum, triggered by psychological reactions, the saliva welled up into their mouths, these soldiers did not feel thirsty any more and so they were able to march on. Sir, quenching the thirst by looking at the plum is a temporary measure. With the publication of the White Paper on World Class Land Transport, I hope the Minister could provide us with more specific information on how it is implemented. Clothing, food, housing and travelling are important in our life. Travelling is especially important in a fast pace society. Apart from COEs to curb increase in vehicles, we need a fast, convenient public transport network to enable us to go from one place to another without having to own cars. The MRT has brought many benefits to people who live along the line. Therefore, I hope that the North East line will be built earlier so that the people living along the line could benefit from such transport system without having to buy or own cars. Could the Minister tell us when the line can be completed? 4.30 pm

Sir, what the MRT provides is a trunk line service. Buses and taxis also play an important role in helping people to move from one place to another without having to own cars. Does the Ministry of Communications have any plan to help bus and taxi operators to raise the standard of their service, and to bring down operating cost, so that they do not have to resort to fare hike to solve their problems?

Building the LRT is another way to accelerate traffic movement. But up till now, we have heard that only Bukit Panjang and Sengkang will have such a system. I suggest that the Government consider building LRT in other housing estates when our economic growth is better.

Sir, when we talk about transport, it does not mean land transport only. We have also sea and air transport. Today, sea and air transport has been relegated to a secondary position and, therefore, has been neglected. Precisely in these areas, our neighbouring countries have gone all out to out-perform us. They have decided to build larger airports and sea ports and they have decided to raise the quality of their service. We should not wait until most other major airline companies and shipping companies have relocated to our neighbouring countries before we regret.

I would like to know, apart from enhancing SIA and PSA's competitive advantage, are we ready to deal with the competition from our neighboring countries? When we look at the work of MINCOM, I am reminded of a proverb in Chinese - internal worries and external threats. I hope the Ministry of Communications would not neglect external threats.

Mr Goh Choon Kang: Sir, construction of the North East MRT line is expected to start soon. My constituents are both excited as well as worried, excited because this is something that they have been asking for so long and, eventually, it is going to be constructed; worried, because, at the moment, they are already experiencing very bad traffic jams during peak hours along the stretch of roads at Upper Serangoon Road as well as Braddell Road. So with the construction of the North East line, as it is a massive construction project, the traffic situation along these stretches of roads can be expected to worsen. I would like to ask the Minister what are the plans in hand to tackle these anticipated problems.

Mr Low Thia Khiang: ( In Mandarin): Sir, in January 1996, the Government announced that the North East MRT line was to be built. One year later, I read in the newspaper that the Land Transport Authority has awarded design and building contracts for the building of Zhujiao, Farrer Park, Sengkang and Buang Kok stations. There are altogether 13 stations along the North East line, and the Government has agreed that the line from Sengkang to Dhoby Ghaut will be operating first. I would like to know when will the MRT service from Sengkang to Dhoby Ghaut commence, and when will the construction of Hougang station commence? When will the tender for Hougang station be awarded and when is the construction work expected to be completed?

Sir, I would also like to know whether the LTA has decided on how to deal with the earth that is going to be excavated when building the North East line. According to reports, the LTA has decided to use catenary system of overhead cable for the North East line. How much would be saved from using this system?

Mr Chiam See Tong: Sir, last year was an election year and it was not a good time to get accurate answers from the Minister in regard to the North East line. Now, the dust stirred up by the last election has all settled down. I hope to get better answers this time.

I have five specific questions to ask the Minister. (1) Do the funds set aside in the budget include funds for the building of the two MRT stations at Woodsville and Sennett? (2) Will the two MRT stations at Woodsville and Sennett be constructed in this North East MRT project? (3) When will the houses and shops along Upper Serangoon Road, Pheng Gek Avenue and Tai Thong Crescent be demolished? (4) Will any blocks of HDB flats in Potong Pasir Estate be compulsorily acquired in relation to the construction of the Sennett MRT station? (5) Has the Minister already decided on the rate of fares for commuters of the North East MRT line, and whether, in principle, those commuters will be charged more than travelling in other MRT lines?

Dr Michael Lim Chun Leng: Sir, the Public Transport Council makes important decisions on public transport, including bus routes, new bus services and increase in fares of public transportation. However, many people are not clear as to the way in which the Public Transport Council works. It is not clear what forms the basis for decisions and how the Public Transport Council makes these decisions. Can the Minister explain to Members how the PTC makes decisions so that appeals by MPs for changes in bus services can be more effectively put forward to the PTC for consideration?

Dr Tan Cheng Bock: Sir, I am not speaking, as Dr Michael Lim's points are similar to mine.

Mr Sinnakaruppan: Sir, Singaporeans' desire to own a car has continued to increase despite rising COE or car prices. This is because, firstly, owning a car has become a status symbol and, secondly, and more importantly, because of the lack of integration of the bus system with the MRT. I have spoken in this House before on how Hong Kong has successfully integrated its public transport system and about how much Singapore can learn from the Hong Kong system.

SBS and TIBS run all the bus services in Singapore. TIBS has only a small share of the routes. While we understand that SBS has to run both profitable and the not so profitable routes as part of the requirement, I think this monopoly situation does not give sufficient incentive for SBS to critically examine its cost structure as much as if it faced stiffer competition. A good example where competition has helped consumers is in the computer industry where the manufacturers have been forced to reduce prices while producing very innovative and smarter value-added products and services.

Sir, the recent increase in bus fares has made many workers very unhappy. Many unionised workers working in industrial estates have expressed their anger at the increase in the prices and they say that SBS is obsessed with making a lot of profit and that is why SBS has gone into properties.

Sir, I think the time has come for the Ministry to re-examine this monopolistic situation and liberalise the bus services and allow other players to come in. Big and small one-man operated companies will find a certain niche. Even in the areas where they may appear to be non-profitable, one-man operated companies can come in and make a profit out of it, and help fill the gap that exists in our present public transport network. Also, cooperatives should be allowed to come in as they are not motivated by profit but only need to break even and serve their members.

As the Government moves to discourage private car ownership by shifting the cost of ownership to the cost of usage through the ERP and other measures, the very competitive and integrated public transport system will make the cost differentials more stark, more vivid and more wider so that Singaporeans not only have an option to own cars but also have a cheaper option that also gives them a smoother and time efficient ride to their destinations.

Mr Ong Ah Heng (Nee Soon Central): ( In Mandarin): Sir, first of all, I would like to declare that I am the Executive Secretary of the National Transport Workers Union. I am also one of the founding members of the Comfort Taxi Drivers Association and the TIBS Taxi Drivers Association.

In realising our dream of having a world-class land transport system, apart from extending the MRT line, the implementation of LRT and expressways, we cannot neglect our buses and taxis, because buses and taxis are indispensable means of transport in the daily lives of our people. Whether or not our buses and taxis can provide rapid, comfortable and safe service to the commuters in our very busy roads depends much on the drivers. So their working environment and work conditions should not be neglected.

I would like to suggest that we should increase the number of air-conditioned buses. The Public Transport Council stipulates that air-conditioned buses can only take up not more than 60% of the total fleet. The reason is that fares on the non-air-conditioned buses are cheaper so that the people of lower income group can afford it. This is understandable. But the fact is: do we need to maintain 40% of non-airconditioned buses? Singapore is close to the equator and, as we all know, the average temperature is 32-34 degrees in the day time. Every time when the bus driver makes a trip on the non-airconditioned bus, he will be sweating all over. And in the hot temperature, he gets tired very easily. Once he loses concentration, he is prone to accidents. On the other hand, passengers in non-airconditioned buses feel very uncomfortable because the wind that blows in is hot wind, and it is very dusty too. It is worse when it rains because you have to close the windows and inside the bus it is very stuffy. Passengers begin to complain why the bus is not air-conditioned. Therefore, I suggest that we should increase the number of air-conditioned buses to 80% of the fleet. Let 20% more drivers enjoy the comfort of driving an air-conditioned bus and more commuters would enjoy a pleasant bus journey. I feel that maintaining 20% quota on non-airconditioned buses with cheaper fare is reasonable. 4.45 pm

Secondly, I would like to recommend to the Minister that we should review our diesel tax. Our taxi drivers earn about $1,500 a month. They have no annual increments, no annual leave, no medical leave and no CPF. For those who are 35 or below, they have to contribute about 6% of their annual income to their Medisave account whenever they renew their taxi driving licence. For those who are 36 and above, they will have to contribute 7% of their annual declared income to their Medisave account. At the time when they have to renew their licence, they may have no money. Then they have to borrow from their friends and may even have to borrow from the loansharks. Every year, when the time comes for them to renew their taxi vocational licence, they cannot help feeling sore about the $6,600 diesel tax that they have to pay. Frankly, almost all the taxi drivers do not understand why the Government has to levy the diesel tax of $6,600 on the taxis. Personally, I feel $6,600 is too high.

I would suggest that the Minister consider setting aside part of the diesel tax and use it as an incentive by paying into the Medisave accounts of the drivers. This would be a sort of incentive to reward those full time, hardworking taxi drivers who have no bad driving record. When I say "full-time" drivers, I mean those who drive about 286 days a year, computed at 5(r) days a week.

Thirdly, I would like to talk about the statutory life-span of buses and taxis. Just now, Dr Michael Lim had already spoken about the statutory life-span of buses and taxis. All buses and taxis have to go for two mandatory inspections a year. Only those which have passed the inspection could ply on the road. For buses which are 12 years old, they have to sell them to other countries. In fact, the buses which were sold and exported to other countries could still be used for another 10 years. In New Zealand we can see some former TIBS buses, and in Hong Kong we can see old SBS buses plying there. In some European countries, their inspection is only once a year and buses are allowed to be used for 20 years. According to a member of my union who has been working in the workshop for more than 20 years, our buses are very well maintained. It is a waste to scrap them after just 12 years. So I suggest that the statutory life-span of buses should be extended from 12 years to 15 years.

Similarly, taxis have a statutory life-span of seven years and they are inspected twice a year. Sir, one COMFORT driver told me that five years ago he scrapped his taxi and it was then re-registered in Malaysia. Up till now, the same taxi is still plying between Johor Baru and Singapore. Since our taxis are regularly maintained and inspected, why do we not allow them to have a longer life-span? I suggest that the life-span of a taxi should be increased from seven years to 10 years. Increasing the life-span of buses and taxis may on the surface appear to be a saving for the company in their operational cost. But I feel that it would also be beneficial to our bus workers too because once the operational cost is saved, it can be shared with the workers. For example, we can reduce the taxi hiring charges, increase the workers' welfare and also the commuters will not have to worry about the fares being raised.

Mr Seng Han Thong (Ang Mo Kio): ( In Mandarin): Sir, we want to realise the dream of having a world class transport system. I think we have to pay more attention to the contributions of our bus drivers and taxi drivers. There are three things we have to look into. First, increase their income. Second, improve their image. Third, raise their morale.

In recent months, I have frequent exchanges with the taxi drivers and I feel that the most unhappy thing they have is the figure 6600. "6600" may appear to be a beautiful number but taxi drivers have a lot to say whenever they think about it. As Mr Ong has said just now, most taxi drivers feel that in order to offset this diesel tax, taxi operaters have to increase their rental charges. This affects the income of our taxi drivers. They are also afraid that with the implementation of ERP, their income will be further reduced. They feel that when we give rebates on road tax to car owners, these taxi drivers have no share, yet they have to pay more for road usage. It is not fair to them. I suggest that in future when the Ministry of Communications adjust their charges, they should think in terms of the benefits of the taxi drivers. "6600" diesel tax is an old problem. I think we have to use our political wisdom to resolve this matter.

The most effective manner to solve this problem is to have a comprehensive review of the background and reason for the levy of this diesel tax. Under the present circumstances, do we need to remain at 6600? We must also consider that taxi is also an important link in our public transportation system. So we have to review the "6600" policy. Our workers from various industries have their incomes increasing every year, but for the taxi drivers, when they get older, they travel less mileage and their income is reduced. So we should have a long term plan to provide training for taxi drivers to boost their morale so that they will be able to upgrade themselves, and maybe turn to another profession in the latter part of their life.

Normally, when taxi drivers obtain their vocational licence, they would not think in terms of upgrading. The only training they have received is to cope with the radio taxi service. I feel that we can provide some training for taxi drivers, such as languages, current affairs and general knowledge courses. Every year, Singapore receives seven million visitors from all over the world. Our taxi drivers are like our ambassadors on the road. If we provide courses for them in Japanese, English, Chinese or Malay, it would boost their confidence when they receive their visitors. Also, with a better knowledge of current affairs, they would be able to correct the misunderstanding they have on some Government policies, and even convey the right messages to their commuters. On general knowledge, it will make it easier for them to converse with their commuters. I feel that if taxi drivers can go through this sort of courses, they will have better confidence in themselves and would also create a better image too. If he is driving a passenger to a concert, he can talk to him about music. If he is driving a passenger to HDB for the application of a flat, he can discuss with him the trend of the property market.

We know that in every profession, there are bound to be some black sheep. But usually when a taxi driver makes a mistake, people will think that all taxi drivers are the same. People are in the habit of citing taxi drivers as examples when they make some critical comments. We often hear people saying things like: even the son of a taxi driver can go to the university, and even a taxi driver can afford to buy such a thing, etc.! I do not think we should use taxi drivers for such examples. In order to improve their image, I feel that taxi drivers should wear neat uniform and present themselves in a more presentable manner. As Mr Ong Ah Heng has said just now, in China, we always address the taxi drivers as "shifu" ( ), or master. Perhaps there will come a day when we address our taxi drivers as shifu and give them the respect they deserve.

Dr Michael Lim Chun Leng: Sir, liberalisation of the telecommunication services has resulted in a better range of services and lower cost for the consumers. In licensing up to two more cellular mobile phone operators, will Singaporeans be expecting newer and better services? Will aggressive marketing of these cellular phone services result in an increased consumption of these services by young teenagers who have yet to earn a salary but feel that it is a status symbol to own a cellular phone?

Competition has also resulted in a proliferation of services provided by cellular phone operators. It is difficult for the lay public to sometimes understand whether it is necessary to have some of these extra services. The providers should educate the public so that they only consume the services that are required. Excessive unnecessary consumption of these services may be an unhealthy trend. Furthermore, with increased market penetration of cellular phones, what is being done to prevent cloning of cellular phones? At the end of the day, with more services, what measures are being taken by the Ministry to ensure that the consumers' interest will be looked after?

The Minister for Communications (Mr Mah Bow Tan): Sir, there have been many questions pertaining to the proposals in the White Paper that was put up by the LTA to realise our vision of a world class land transport system. May I take this opportunity to give the House a progress report on the White Paper since it was presented to Parliament last year.

Sir, last year this House had a very extensive debate on the White Paper, at the end of which the House overwhelmingly endorsed the White Paper. In the White Paper, we spelt out our vision for a world class land transport system for Singapore and we said that we target to achieve this in the next 10 to 15 years. If I may recap, during the debate, I emphasised that we can only build a world class land transport system if we take a comprehensive, integrated, holistic approach, an approach which involves four major policies, first of which is integration of land transport with land use planning, in a way that will, at source, reduce the need for people to travel and at the same time to maximise accessibility of public transport. The second pillar was to expand the road network, not willy-nilly, but where it is sensible to do so and where it makes economic sense to do so. And after doing so, to apply the appropriate technology to maximise its use. The third pillar was to manage the population of vehicles and the demand for usage of these roads. Last but not least, and the most important of all, the last pillar is to provide quality public transport choices in order to attract more commuters to use public transport. I reiterate this because it is important for us to understand that all these measures have to be taken together and they inter-relate with one another and just doing one alone will not do the trick.

I am pleased to inform the House that significant progress has been made since the release of the White Paper in January last year. I must add that this document has not gathered dust on some shelf somewhere. It is very much a roadmap, a guide, a reference manual on the various policy measures that we intend to take over the next few years to achieve our objective. 5.00 pm

First of all, on transport and land use planning. The LTA and URA planners are working together to ensure that the design of our transport infrastructure is well integrated with the physical developments of our city. Mr Sinnakaruppan rightly pointed out that a good example of this is in Hong Kong where transportation and city development integration is highly developed. It is one of the models that we are looking at. In Singapore, one such development that we are currently working on is the commercial development above the Dhoby Ghaut MRT Station. And when that station is completed, I believe it will be a showcase of what integration of transport facilities and commercial development can achieve in terms of convenience and accessibility to people who live and work there.

Next, on road building. We have continued to expand our road network to meet the growing demand for road usage. If Members were to pay attention as they drive around, they will observe the numerous road construction projects that are currently taking place throughout the island. I name just a few here: The Jalan Ahmad Ibrahim upgrading, which is going to be completed by the end of this year. The Seletar Expressway extension, which was already completed. The widening of the ECP and PIE over the next two years, and in fact some of the additional lanes have already been completed, so that some of the traffic congestion, for example, on the PIE towards Marine Parade has now been alleviated. The Adam Road/Farrer Road Interchange - work has been going on for the last three or four years, and the completion date is in sight. By January 1998, we should have a very smooth flow of traffic in that busy interchange. The Holland Road/Farrer Road/Queensway Interchange also will be completed around that time. The Marina Bay Bridge which we will open later this week. These are some of the road building projects which LTA is currently undertaking.

In terms of road management, all traffic junctions on the island have been computerised and are now linked together under the GLIDE system so that traffic flow along these roads can be further improved. The LTA's traffic studies show that the improvements as a result of this linkage have been quite dramatic and significant. New technologies, like expressway monitoring and advisory systems; new ideas like left turn on red, pedestrian countdowns - these are also being tried out.

But, Sir, I must at this stage pause to say that no matter how much we increase our road space, there is a physical limit to how much we can build. Today, we have already utilised something like 12-13% of our land on roads. To give you an idea of what 12-13% of our land means, the amount of land that is used for housing is also about 12-13%. That is the magnitude of the thirst for land that roads have. So we just cannot depend on road building alone. We must continue to rely on vehicle ownership and vehicle usage restraints.

The Vehicle Quota System, in place in 1990, has allowed our vehicle population to grow at the rate of 3% per annum. Managing traffic congestion using the Vehicle Quota System has worked, and worked reasonably well. But for this to work, we have to apply this generally across all vehicles. I know that the recent rise in COE prices has caused some concern among certain quarters and this is understandable. The LTA has been monitoring the situation and finds that overall, car prices have been stable even though COE prices have gone up. While some have gone up, they have not risen to the same extent as the COE prices.

The fluctuation in prices depends on many factors. The lack of information on the supply of COEs is one of them and it contributes to the anxiety of car buyers. So what has happened thus far is that LTA announces the results of the vehicle quota one year in advance. In order to provide more information, I have asked LTA to provide information on COE - the number of COEs, the total, and the breakdown into each category - instead of one year in advance, to do so two years in advance. So what this would do is to provide potential vehicle buyers with more information so that they can better plan their purchases and do not over-react to short-term changes.

I have asked the House to circulate a chart (Cols. 1183-1184) which shows the number of COEs available this quota year as well as the estimated number available in the next quota year, which is from May 1998 to April 1999. If you look at this chart, you will see that we expect to release a total of close to 44,000 COEs for next quota year. And this is based on the replacement of deregistered vehicles as well as the 3% growth. It is based on just these two factors alone - the replacement due to deregistration of vehicles 10 years ago and the 3% growth. In addition to these, if the ERP is successful in controlling traffic congestion, as we expect it to be, there will be scope for Government to release even more COEs. So if you look at the chart, you will find that the number of COEs available this year is higher than last year and the number available next year will be higher than this year. chart - Projected COE Quota for 1998/99, COE Quota for 1996/97-1997/98 (Cols. 1183 - 1184)

I have announced before that potentially we could release something like 15,000 to 20,000 more COEs over the next three to five years. We have released the first lot of 5,500 additional COEs in this year's quota, in conjunction with the extension of the RPS scheme to the expressways. I expect that we will be able to release a similar number of additional COEs next year as we start to implement ERP. So I repeat. The more successful we are in using ERP to control congestion, the more COEs we can release so that more Singaporeans can own cars.

I have also asked the LTA to look into other ways to try and smoothen out the COE supply as this will help to stabilise COE prices. But, ultimately, I think all of us must recognise that COE premiums can only go as high as the vehicle buyers are willing to pay. In other words, there must be a genuine buyer behind every COE bid. The recent rise in COE prices for cars is therefore a reflection of the strong demand for cars and the willingness of car buyers to pay for it.

I come now to road pricing, a subject which is of great current interest at the moment. Sir, relying on the Vehicle Quota System (VQS) will not give us much scope to allow more vehicles on the road. As Members have pointed out just now, Dr Michael Lim, Mr Sinnakaruppan, Mr Chay Wai Chuen, after you have paid so much to buy a car, motorists have little incentive to limit usage, since the cost of usage is marginal. We have stated that in the long term, by long term I am talking about, say, 2010, which is only 12 years away, we can allow a car population ratio of 1:7, one car for seven people. And this is better than the ratio of one car for 8(r) people today, which is already comparable to many major cities in the world. To achieve this 1 in 7 target, which we believe will be the stable target by that time, we need to employ a judicious mix, a proper mix, of both ownership and usage measures, if we want to control congestion at the same time.

Transport economists all over the world agree that the best way to tackle traffic congestion is to use some form of road pricing. What road pricing does is to make you aware of the true cost of using that road at that particular point in time. So, when you are aware of the cost, you make informed decisions, whether you should drive, how you should drive, when you should drive; indeed, whether you should actually switch to other forms of transport, whether you should share car pool with others. If you cannot do all those things, you choose to pay, and in return for that you get a smoother ride, you do not get caught in traffic jams. This is the philosophy behind road pricing. By spreading out the usage when road pricing is successful, roads can accommodate more vehicles without being jammed up.

Singapore has had a very long experience and history of road pricing. We started road pricing in 1975 when we implemented the ALS. So we have had 22 years of experience with road pricing. This is not something new. And in those 22 years, first with the ALS and recently with the RPS, the results speak for themselves. There is no doubt that road pricing is effective in relieving traffic congestion.

Sir, I come now to the specific questions that have been asked by some Members.

Dr Michael Lim asked if we are intending to impose tolls at the second link when it is opened next year. Sir, under the inter-government agreement for the construction of the second link, each government may levy tolls on vehicles using it. Malaysia has announced its intention to do so. We will do likewise. To ensure that the collection of tolls at the second link will not divert traffic to the Causeway and therefore cause it to be congested, we will also collect tolls for the Causeway. The collection of tolls at the two crossings will be tied in with our road pricing policies. My Ministry is now working out the details and we should be able to announce the toll rates as well as the mechanism for collection towards the end of this year.

Mr Chay Wai Chuen has asked about our plans to adjust the current usage and ownership costs, and so has Dr Michael Lim. What we have stated in the White Paper on land transport is that we will rationalise the current vehicle tax structure, as we introduce ERP. As Members have pointed out, first of all, quite obviously, the current tax structure is a rather complicated one. It has evolved over the years, it has been added to, subtracted from, revised, adjusted. Road tax, for example, now is based on engine capacity, if you are talking about cars and motorcycles. If you are talking about goods vehicles, they are based on maximum laden weight. If you are talking about buses, they are based on capacity, number of seats, and so on. It is quite a complicated hotchpotch of various criteria. So it is a good opportunity for us to do a total review of this and arrive at a fairer and a more equitable basis for charging road tax. So that is the first reason.

But the second and probably the more important reason that Members have alluded to is the need for us to correct this imbalance. I say it is an imbalance between ownership cost and the usage cost of a car. Just to give you an example. A typical medium-sized car, if you are talking about, say, a 1600 cc car, if you calculate all the upfront annnualised ownership costs (ARF, custom duty, COE), all that is three times the usage cost. By usage cost, I am talking about road tax, road pricing charges, fuel cost, and so on. So having invested heavily in a car, having paid so much for a car, the motorist has little incentive to cut down on road usage, particularly when you are talking only about essentially the cost of petrol, which is directly visible to the motorist. Of course, wear and tear, externalities, and so on, are not visible to him. As a result of this, we did a recent comparison and we found that the Singapore motorist clocks an annual average mileage of nearly 20,000 kilometres compared to 14,000 km in France and 10,000 km in Japan. So we will have to rationalise our tax structure to shift or to correct, as I said, this imbalance. 5.15 pm

We will rationalise our vehicle tax structure based on five basic principles. The first principle, as has been pointed out, is to shift more of the fixed statutory charges, like road tax, to discretionary usage cost, like road pricing charges, RPS charges, ERP charges. By making more of the costs usage based, drivers will be made more aware of the cost of motoring. They will be encouraged then to consciously plan their trips and hopefully be persuaded to take other alternatives, including public transport.

Currently, for a typical medium-sized car, the annual discretionary usage component makes up about 30% of the total annualised cost. It is our intention in the long run to shift this to something like 50%. So 50% of the total annualised cost is direct usage cost. This would be achieved through a reduction in the road tax and by providing road tax rebates as we expand ERP coverage and as we increase ERP charges to more fully reflect the cost of congestion. Over the next five years, we will give road tax rebates to help motorists adjust their travel patterns. I do not have the exact figures now because we are still working on it but I can say that this package of rebates will be more generous than the road tax rebates given this year for the RPS extension. That is the first principle.

The second principle is to levy road tax based on a vehicle's contribution to traffic congestion and road damage. There are some who suggest that, with ERP, we can abolish road tax. I am afraid that we cannot do so. Not all roads will be covered by ERP. We are talking in the first two phases of ERP, something like 60 gantries, and these will be located at major congestion points. So not all the roads in Singapore will be priced and indeed not all need to be priced. Road tax will therefore still be necessary to reflect the general usage of vehicles on the roads, with road pricing then levied at selected spots depending on the level of congestion. If I can use an analogy, you can say that the road tax is something like the regular subscriptions that Members pay for their clubs to make use of common facilities. If they want to use specialised, more popular facilities, bowling alleys, tennis courts, and so on, they get charged extra. So it is similar to that.

In terms of usage of road space, we will be using what traffic engineers call the Passenger Car Unit (PCU), as a proxy to the vehicle's contribution to traffic congestion. So in that formula, the passenger car will be one PCU, regardless of engine capacity, the goods vehicle or the bus may be 1(r) or 2 PCUs, depending on the size, the motorcycle will be something like 0.7 of a PCU. So therefore the road taxes of all these various vehicles should be in direct proportion to their respective PCU ratings in order to reflect the contribution to congestion on the roads. That is one of the criteria. Over and above this PCU element, we will add a progressivity element. The progressive nature of our road tax structure has been in place since the beginning and it has been well accepted. It is like income taxes. So while we restructure our vehicle taxes, we will preserve this progressivity element in the road tax structure.

On top of these, we will then take into consideration the amount of road damage caused by heavy vehicles. It is a well known and proven fact that the heavier the vehicle, the more the contribution to road damage. In fact, traffic study shows that road damage increases exponentially with the weight of the vehicle. So we will have to factor this into account. But after taking all these factors into account, factoring in the contribution to congestion due to vehicle size, road damage, progressivity, etc, I expect that after the review, overall taxes to be paid by commercial and goods vehicles will be lower than what they are paying today.

As for motorcycles, from the transport and traffic management point of view, as I said earlier, motorcycles should be paying something like 70% road tax of cars. Again, this is based on well-known and well-proven studies that a moving motorcycle occupies something like 70% of the space of a moving car. What this means if we apply immediately is that motorcycles will be paying higher road taxes. However, because, as we all know, they are currently paying very low taxes, we will gradually phase in the increase to give motorcycle owners, especially those who own smaller bikes, sufficient time to adjust to those changes.

The third principle I want to announce today is that we will continue to grant tax concessions to taxis and scheduled buses in recognition of their public transport role. Taxis today enjoy substantial tax concessions. They pay very low ARF. They pay low road tax and they pay Category 2 COEs even though many, if not all of them, are actually Category 3 vehicles. Although taxis occupy the same road space as a car, they actually generate more traffic congestion because of the high mileage that they clock. A lot of that travel, what is known as empty cruising, ie, looking around for passengers, is as high as 30%. Once a taxi is on the road, it is no different from a private car. In fact, one could say that it is a chauffeur-driven private car offering a door-to-door personalised level of service. So strictly speaking, taxis should pay at least the same taxes as cars. However, as I said, in recognition of their role as a form of public transport, we will continue to accord taxis some tax concessions. One day, when we are able to tax taxis like a private car, or almost like a private car, we can let market forces determine the supply and the fares of taxis.

So we will do an overall review of taxes for taxis and in this review I would like to assure Mr Seng Han Thong and Mr Ong Ah Heng that we will also take into account the review of the diesel tax. The outcome of the tax rationalisation exercise should be that taxis' operating cost will remain at around the current levels so that taxi drivers will not be worse off. And if as a result of this review there are any savings, we will make sure that taxi operators pass on such savings to the taxi drivers. This should reassure Mr Seng Han Thong, for example, that tax rebates that have been given will go to the taxi drivers.

Scheduled buses have always been given tax concessions because they are the backbone of our public transport system. I think all Members in this House would agree with this philosophy. They are efficient people movers. So we will continue to exempt them from COEs in order to keep fares affordable. Road tax for scheduled buses will be rationalised taking into account ERP charges. Again, I expect that the net effect of all these changes will be favourable to the bus operators and this will enable them to keep fares at an affordable level, allowing them also to improve service levels.

The fourth principle of our vehicle tax rationalisation exercise will be to remove as many anomalies in the tax treatment of different types of vehicles as we can. Presently, the tax structure of company cars, rental cars and tuition cars are all very complicated. We will take this opportunity to clean it up.

On statutory lifespan, many Members have asked for a review of this, and I am pleased to announce that we will review the statutory lifespan of taxis as well as scheduled buses. Currently, they are set at seven years and 12 years, respectively. We will take into account the developments in vehicle technology that have taken place since these lifespans were legislated many years ago.

The primary purpose of all this is to allow the operators to maximise the economic use of the vehicles, again, to help their bottomline, to keep operating costs low, therefore to keep fares affordable. But I would like to assure Members of this House that the LTA will continue to make sure that such vehicles are roadworthy, well-maintained and safe to use on our roads.

The final principle, the last and very important one, is that we will seek to achieve revenue neutrality in this exercise. The aim of this exercise is not to increase Government revenue. As we shift from ownership to usage charges, we will offset the increase in usage cost through a reduction in vehicle tax and a package of road tax rebates so that overall, on average, we will be revenue neutral. I said overall and on average because not every user or every class of vehicle will be revenue neutral because obviously, it depends on each vehicle's usage pattern. But overall, we will try to be revenue neutral.

We expect that most vehicle owners who do not use ERP roads excessively will benefit from the road tax rationalisation exercise and the five-year package of road tax rebates. The less they drive, the more they can save. The more we can move to ERP, the more we can reduce the other charges and the more additional COEs we can release so that more Singaporeans can own cars. The LTA will work out the details and unveil the new vehicle tax structure by the end of the year after discussions with various interested parties and feedback from the public.

Sir, I turn now to public transport improvements. Sir, while we seek to restrain private vehicles, we need to actively work to improve public transport and to provide alternative transport modes. The White Paper on land transport mentions that public transport will be the cornerstone of a world class transport system. Already today, our public transport system offers much more capacity than, say, 10 years ago. In terms of the generally recognised indicators like place kilometres, overall capacity of bus and MRT has increased by more than 60% from 1986 to 1996. And it is projected to increase further by the year 2002 when NEL and other rail projects are ready. In other words, there will be more places available on our buses and trains in the years ahead. 5.30 pm

Specifically, Mr Yeo Guat Kwang asked about the progress on various MRT and LRT projects. First of all, on the NEL. Work on our North-East line has begun in earnest. The LTA has already awarded nine contracts for the 13 stations and one depot, worth a total of $2.3 billion. So almost half the total contracts have been awarded. Another two contracts for the remaining two stations will be awarded by the end of this year. Actual construction work on the North East line is scheduled to begin very soon, in November.

As for the Bukit Panjang LRT, the construction is proceeding smoothly and we expect to be able to open LRT in Bukit Panjang for operation by 1999.

We are also extending the MRT system to Changi Airport, and the Sengkang LRT is now in an advanced stage of planning. They are expected to be operational by the year 2001 and 2002 respectively.

Implementation of the Punggol LRT will be done in phases, in tandem with the development of Punggol 21. And when these MRT and LRT rail projects are completed, our rail network will extend to something like 130 km, 50% more than our existing network.

We will also be looking for other potential sites for future LRT and MRT developments. These include an LRT for the Marina area and we are also looking at other housing estates. LTA will not only build new lines. It has recently completed a study on the feasibility of retrofitting additional stations on the existing network. The LTA has assessed that it is now feasible to operate a station outside the Singapore Polytechnic, in between the Clementi and the Buona Vista MRT stations on the East-West line. I am pleased to inform the House that Government has decided to go ahead and build this station to serve the students of the Polytechnic and residents in nearby housing estates. This station will be ready by the year 2001.

Mr Goh Choon Kang asked about the disruption and the traffic congestion that will build up along the Upper Serangoon Road area during the construction of the North East line. As Mr Goh knows, recently LTA has awarded a contract for the construction of the Serangoon station, and this contract includes the road improvements works, including the construction of the pair of 3-lane flyovers with two interchanges along Upper Serangoon Road. This is the junction of Upper Serangoon/Braddell/Bartley Roads and the Upper Serangon/Paya Lebar Roads, two interchanges very close to one another.

Yes, residents in this area can expect some inconvenience, some traffic diversions, during the construction phase. What the LTA will do will be to arrange for briefing for MPs and grassroots leaders in the area once the construction details are available. In this briefing, we will be providing details about the diversion programmes, how residents will be affected during the construction works as well as the phasing of the road improvement programmes in the area.

I must add at this point that the contractor is required by the terms of the contract to provide traffic diversions of a very high standard during this construction period. So what the LTA will do is to work closely with the contractor to minimize any disruption and inconvenience to residents. But I expect that there will still have to be inconvenience. So I would like to ask for the residents' support and understanding during the construction of the North East line. I think the results will be well worth their patience and understanding.

Mr Chiam See Tong asked five specific questions. I am happy to tell him that the situation remains the same this year compared to last year. Nothing has changed. Basically, he asked about the funds to be set aside for building Woodsville and Sennett stations. Yes, we have, in the overall budget, provided for funds for eventually building the Woodsville and the Sennett stations. So funds are available for that.

He asked whether these two stations will be constructed. As I have explained in this House to Mr Chiam several times, what determines the building of the Sennett and the Woodsville stations will be the level of usage, and the level of usage will in turn be determined by the developments around the area. At the moment, one station, Woodsville station is surrounded by cemeteries. The other station is surrounded by low-rise residential units. Obviously, the density of development at this stage is low, and it will not generate sufficient traffic to justify the stations at this point in time. But we have, in the planning of the North East line, provided for these two stations.

He asked about demolition of houses and shops in the area. The contractor will start demolishing some of the buildings affected by the MRT within a year or two. It has not been scheduled yet. I am not familiar with the schedule, but I will be happy to provide him with the details if he is interested. Nevertheless, before any work is carried out, we will make sure that the residents in the area are given ample notice.

The Chairman: Order. Mr Mah, you are five minutes past the sub-guillotine time. So you may want to expedite.

Mr Mah Bow Tan: Thank you, Sir. If you will allow me to finish answering all the questions.

Mr Low Thia Khiang asked some very specific questions. I have some of the answers but not all of them. I will give him what I have available and again, as I said, if he files a Question, I will be happy to provide the answers.

Mr Low Thia Khiang: Rate of fares.

Mr Mah Bow Tan: The rate of fares has not been determined yet. It is still early. The year 2002 is still some way away and the actual cost of operation and the final projections are not available as at this point in time. In principle, we have said that if it is necessary, we may have to adjust. But as at this point in time, there is nothing specific yet.

Mr Low Thia Khiang asked some questions about Sengkang and Dhoby Ghaut stations. All the various phases of the North East line will be ready some time during the year 2002. It will not all obviously be ready at once, but it will be ready during the course of the year.

Mr Low Thia Khiang: What about construction of Hougang station?

Mr Mah Bow Tan: For the construction of Hougang station, the contract has been awarded.

Mr Low Thia Khiang: What about the time of completion?

Mr Mah Bow Tan: The time of completion will be the same time as the rest of the line.

The Chairman: Order. Mr Mah, is one more minute enough?

Mr Mah Bow Tan: I have just one more topic on the Public Transport Council, Sir. Dr Michael Lim and Mr Chay Wai Chuen have asked about the Public Transport Council. I will be happy to consider their proposals to make more transparent the deliberations of the Public Transport Council. Indeed, we are currently looking at the composition of the Council and if there are any suggestions as to how to expand the Council and how to make the work of the Council more transparent, I will be happy to consider those suggestions and to pass them on to the PTC Chairman for consideration.

Mr Chay Wai Chuen: Sir, I thank the Minister for his answers to our questions. I think he has given us more than we bargained for. I am sure we need a lot of time to digest his answers to the specific questions on usage and ownership costs. Nonetheless, I must say that the principles he elaborated on revenue neutrality on charging on usage rather than ownership are very sound principles to go by.

Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Chay. We will try and finish this amendment in 20 minutes.

Mr Chay Wai Chuen: Sir, I beg to move,

That the sum to be allocated for Head I of the Main Estimates be reduced by $10 in respect of Code IA 1500.

Sir, after the corporatisation of PSA, will it basically have the same structure and control, organisation, the same ambit of operational efficiency? Or is there a thinking of injecting into this exercise of privatisation some element of competition and dynamism? This can be done by forming subsidiaries and associate companies, and exposing them to competition with other commercial organisations. For example, we can begin with two or more subsidiaries to operate different sectors of berths of the port. Such examples can be found, for example, in Rotterdam and so on where there can be more than one company operating sectors of the berths.

Another subsidiary can, for example, provide logistics and supply functions, competing with other private sector organisations. And it should be clear that the subsidiary companies are expected to be run as such, and not as some kind of old boys' network organisation. I think this is only the true meaning of corporatisation and competition that we should introduce.

At the second stage, would the Minister consider allowing international or other local operators to tender and bid to operate such facilities which corporatised PSA might have? Or other services so that they can get the true benefits of competition, and benefit from the technologies and the work processes which will enable us to stay ahead of the regional competition. Of course, we realise that in talking about the port, we should not lose sight of the strategic issue of it.

Mr Goh Chee Wee (Boon Lay): Sir, before I speak, I would like to declare my interest as a director of the Comfort Group.

Sir, the Area Licensing Scheme (ALS) was introduced to control traffic flow into the city. Motorists who wish to enter the restricted zone during certain hours have to pay a charge. The measure is intended to reduce congestion and make motorists who wish to enjoy free flowing traffic to pay for it. It is for the same purpose that the Road Pricing Scheme (RPS) along the expressways was introduced. But the scheme does have an adverse impact on the taxi operators and the taxi drivers. By right, all taxi commuters who wish to enter the CBD or use the controlled expressways should be asked to pay the ALS and RPS charges. The taxi drivers should not be made to bear the burden. But, in practice, taxi drivers find that in order to secure business and attract commuters, they have no choice but to purchase the ALS licence themselves and, for convenience and to save some cost, most of them would buy the monthly licence instead of the daily one out of their own pocket. Today, many taxi commuters do not pay the ALS charges when they enter the CBD. They would look for a taxi which already displays the ALS licence. Similarly, they do not pay the RPS charges too. It is the taxi drivers who are paying for it. This, I believe, is not what the Government has intended. I would therefore suggest that we fine-tune the present system. I am all for the control measures introduced by LTA. They are necessary and I support them, but we need fine-tuning from time to time. 5.45 pm

Currently, taxi drivers are not allowed to charge commuters over the ALS licence which the driver has already purchased on his own. Perhaps, we should allow the taxi drivers to levy a small charge on the commuters so that part of the ALS and RPS charges could be passed on to the commuters. "By a small charge", I mean 50 cents or so. This, I believe, is more equitable.

The proposed ERP system would modify or replace some of the existing schemes like the ALS and RPS. But it would be still some time before the ERP is fully implemented. I would therefore request the Minister to consider my proposal in the meantime.

With your permission, Sir, I propose to speak on the next subject.

This is on the Certificate of Entitlement (COE). Since the introduction of the COE scheme, taxi companies have to bid for COEs when they wish to add new taxis to their fleet and pay the Prevailing Quota Premium (PQP) when they replace their seven-year old taxis. The PQP prices have risen more than 15 times, from $3,000 seven years ago to almost $50,000 today. Today, the pro-rated PQP, which taxi companies have to pay to replace the taxi, is more than the capital cost of the vehicle itself. The increased cost would have to be borne by the taxi companies, but eventually by the taxi drivers and commuters. No doubt the Government has granted special tax concessions to taxis. That is why taxi fares in Singapore are still very affordable compared to those in other major cities.

But while the taxi fares are regulated, an important cost element in acquiring and operating the taxi, which is the COE, is determined by market forces. The COE and PQP prices have escalated over the years. The Government has to decide to what extent the taxi industry is to be regulated or deregulated. The present regime where fares are regulated but a key component of cost is subject to the vagaries of supply and demand for COE is untenable.

Until such time when the taxi industry is completely deregulated, I propose that the Government fix the price of COEs for taxis in the same way that the taxi fares are regulated. We do not expect the taxi fares to fluctuate monthly, neither should the COE price for taxis. But like the taxi fares, the cost of COE for a taxi can be adjusted from time to time. It can be reviewed, say, annually with any proposal for a fare revision. I hope the Minister will consider the suggestion.

The Chairman: Dr Toh, you may take your two topics together.

Dr Toh See Kiat (Aljunied): Sir, for the past three years, motorcycle COEs have risen from $1 in January 1994 to $3,156 in July 1997. The prevailing quota premium, which is a running average of the COE prices, is now $3,022. From the charts the Minister has given us just now, it is heartening to see that the Ministry intends to increase the quotas for motorcycle COEs by about 25%. With respect, Sir, this is not enough. The Minister has said that motorcycles occupy 70% of a car's space. I think the way we drive in Singapore, we get three motorcycles into the space of one. So it is probably 33%.

Sir, the smaller capacity motorcycles are used largely by the poorer segments of our population to earn a living and not just as a means of getting around. They need to be mobile to work their small businesses and occupations, but cannot afford to buy cars for that purpose. Such users include hawkers, delivery men, despatch riders and tradesmen. The rising cost of COEs inflicts great hardship on them as it eats into their meagre incomes.

I would like to ask the Minister if he would consider giving a higher increase for motorcycles and, if necessary, fine-tune the system so that the increase is for the lower capacity vehicles rather than the bigger machines which are used for sports and recreation. Further, in the alternative, I would like to ask the Minister if it is possible to think of a way to make motorcycles more affordable for such users. Because unlike the bigger businesses and wage earners who can deduct the cost of vehicles as expenses, many of the users of motorcycles do not even earn enough to pay income tax.

The Minister has just announced some good news about COEs and a review of taxes. Further, on the subject of COE, I wonder if the Minister would also review the system of allocating COEs. Presently, we have a system which allows the successful bidders to pay the price of the lowest successful bidder. Prices of COEs are tied to the demand and supply situation, so prices have supposedly been increasing because demand has risen.

Sir, I wish to ask the Minister if he could consider some other possible reasons for the rise in the COE prices. It has been said in the market that the car dealers are manipulating prices. There is a suspicion that the major dealers act as a cartel to set prices. Some have admitted as much when they told the media that they would use their financial muscle to kill off competition by the parallel importers. Car dealers also use different techniques to force car buyers to accept their "recommended" bids, such as giving second class treatment to buyers who have obtained their own COEs. They are able to do this because there is very little information released and I think the Minister has promised that more information will be released in the future.

Perhaps it is time for the Minister also to consider a pay-as-you-bid system or other means to encourage responsible bidding which better reflect the actual amount car buyers are willing to pay and also to consider making consumers put in their own bids, as is the system when IPOs for shares are done.

Sir, may I move to my next cut?

The Chairman: Yes.

Dr Toh See Kiat: The Minister for Finance stated in his Budget Statement that this is a budget that will improve expenditure on infrastructure and tax incentives have been given for satellites and companies which can afford these things would probably capitalise on them. These are incentives, however, not Government expenditure.

I have looked carefully at the Budget book but confess that I have not been able to pin-point the exact amount that the Government is investing to improve our telecommunications and to promote Singapore as an "intelligent island" that would draw investors to Singapore. I suspect that part of the reason is that the different Government agencies in charge have become autonomous agencies. I cannot find all the figures in one place in the Ministry of Communications' budget. Another reason is that there is no single Ministry that handles all matters relating to the converged technologies of telecommunications and information processing. This has been reflected in the current debate as we have Members talking about the Internet under the heads of expenditure allocated to at least three different Ministries. With the convergence of technologies, perhaps it is important and time for us to have one Ministry of, say, Information Technology. This would plan, lead, regulate and coordinate developments in the area. Otherwise, it can be a very disconcerting and confusing situation for those who wish to invest in Singapore. Which Ministry have they got to approach? Would Ministry A approve their project and Ministry B overrule it? The bureaucratic run-around is the greatest nightmare of any investor.

In the last three years, Sir, there have been instances of massive telecommunication outages. In October 1994, a software bug affected 90% of the entire network in Singapore. In February 1995, 15,000 CBD subscribers were affected by faulty switches. Last April, there was a series of disruptions in telephone services in the Orchard Road area. In the first instance, 5,000 lines were affected and then the problem increased. The Straits Times reported that as many as 17,000 subscribers were affected in the 7th April disruption. These included hotels on our tourist belt. The disruptions are damaging to our reputation as a place where everything works. Besides, it will scare away tourists and investors, just as the frequent "brown-outs" and "black-outs" did in some countries.

Then on 5th July this year, pagers and mobile telephones had difficulty receiving calls. According to SingTel, the system was not down, but there was a congestion as one of two tandem switches was not operating. If that 50% outage is not "down", SingTel must have very low standards indeed.

Then there was the matter of SingTel's CDMA trials. When M1 complained of interference with their GSM network, SingTel vehemently denied it was their fault. As it turned out, they had relied on their supplier's say-so that there was nothing wrong with the trial equipment. We have also had complaints about their ingenuous advertisements and even more ingenuous defences of those advertisements.

The Chairman: Order. We are running very short of time. Can you try to speed up?

Dr Toh See Kiat: Yes, I need one more minute. It appears that SingTel is named after its propensity to sing its own praises and tell tall tales.

Sir, I would like to ask the Minister, firstly, are there clear standards for performance and advertising claims that the telecommunication providers are bound by? Secondly, what were the causes of the disruptions and what penalties were levied on SingTel and perhaps if heavy penalties do not work, we should be looking at other factors. Thirdly, are there enough telecommunications infrastructures that are in place? Are we making enough investments in these areas? Lastly, in connection with that investment question, are we perhaps placing enough emphasis on developing the Internet which they call Internet II using broad bandwidth technology and using this technology to launch us into the third millennium?

Dr Ho Tat Kin (Bishan-Toa Payoh): Sir, when GSM cellular phone system was introduced, consumers were told that GSM was a new digital wireless system with security features which will not allow eavesdropping, unlike the conventional analogue mobile phones used at that time. Users of GSM handphone will have their privacy protected.

But a team of well-known computer security experts in the United States has recently cracked a key part of the electronic code meant to protect the privacy of calls made on digital cellular phones. The experts claimed that the code is easy enough to crack and anyone with sufficient technical skills could make and sell a monitoring device that could be easy to use, like a police scanner.

While such devices are not commonly available yet, a thriving grey market could quickly develop for these devices. The technical details of the security system are already circulating on the Internet and instructions for cracking it will easily be picked up and used by the computer underground.

Industry executives had acknowledged that steps must be taken to address this problem, as eavesdropping into cellular messages will prove to be a new kind of electronic blackmail. May I ask the Minister what measures will TAS adopt to ensure that GSM phone service providers in Singapore will secure their digital transmission systems?

The Chairman: Mr Mah, you still have some time to reply tomorrow. Do you want to carry on?

Mr Mah Bow Tan: How much time do I have?

The Chairman: I think we will come back tomorrow.

Mr Mah Bow Tan: I think I should come back tomorrow.

The Chairman: Do I have the assent of Members that we stop here?

Hon. Members indicated assent.

Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Mr Mah Bow Tan: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Main and Development Estimates for the financial year 1997/1998, and ask leave to sit again tomorrow.

Mr Deputy Speaker: So be it.