PORT OF SINGAPORE AUTHORITY (DISSOLUTION) BILL

Order for Second Reading read. 4.45 pm

The Minister for Communications (Mr Mah Bow Tan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Background

Sir, in January 1996, I came before this House to seek approval for the setting up of a statutory board called the Maritime and Port Authority of Singapore, or MPA in short. At that time, I also made known the Government's intention to corporatise and eventually privatise the Port of Singapore Authority (PSA).

On 2nd February 1996, MPA was formed. In addition to taking over the statutory functions of PSA, MPA is responsible for economic regulation of the port industry after PSA's corporatisation. Over the last one and a half years, MPA has worked out a regulatory framework and built up the necessary expertise and standing to perform its role as regulator and promoter of the port industry.

The setting up of MPA was the first step towards the corporatisation and eventual privatisation of PSA. Today, we are about to take another step towards reaching this goal.

Sir, the Bill before this House seeks to dissolve the Port of Singapore Authority and to repeal the Port of Singapore Authority Act. The Bill will transfer PSA's existing property, rights and liabilities to the successor Company, the Government or the MPA, and make the financial arrangements for corporatisation, and eventual listing.

Reasons for corporatisation

Mr Speaker Sir, first allow me to explain the reasons for corporatising PSA.

Singapore has been the world's busiest port in terms of shipping tonnage since 1986. PSA operates the world's largest single container terminal, with a throughput in 1996 of nearly 13 million boxes in terms of twenty-foot equivalent units, or TEUs. To put this in perspective, apart from Hong Kong, which handled 13.5 million TEUs with three terminal operators, the next largest port Kaohsiung handled 5.1 million TEUs, less than half. Next in line were Rotterdam, Pusan and Long Beach, which handled 4.9 million, 4.7 million and 3.1 million TEUs respectively.

Singapore is also one of the major transhipment hub ports in the world. Mainline vessels from all parts of the world call at Singapore, where cargo is collected from and distributed to the rest of the region through an extensive network of feeder ships. On a typical day, PSA handles about 40,000 boxes, or TEUs, which come from about 25 mother ships and 30 feeder ships. The complexity of transhipment operations is not only because of the large volumes of boxes handled, but also due to the large matrix of connections. To give the House an idea, typically, say, a modern third-generation container vessel would load boxes from 45 other ships and discharge boxes to another 60 carriers. So it is an extremely difficult and complex process. Despite the complexity of this process, PSA is able to handle a large volume of containers within a short vessel turnaround time because of its very highly automated and computerised operations. For example, third generation container ships are serviced at an average rate of 86 containers per hour, which is the highest service rate in the world.

Transhipment has brought to the region benefits which would not be possible if each country were to operate its own port, serving its own cargo. Transhipment allows shipping lines to lower their costs by operating fewer but larger vessels. Shippers enjoy greater frequencies of calls, more choices in shipping connections and therefore more flexibility in terms of carriers, routes and time-tables. Manufacturers and traders in the region also have more frequent sailings and faster transit times and this translates in turn into lower inventory costs, shorter time-to-market, and increased competitiveness.

Lloyd's List, which is an authoritative shipping newspaper, had a recent article, 29th May 1997, and it summarises the situation in this way, and I quote, "Singapore's predominance as the main gateway has been a fact for decades and not just because the Lion City is clearly the natural port at the tip of the Malay Peninsula, but also because it has historically provided the most efficient manner of entry and exit.". But history and geography are not the reasons why Singapore will remain the region's preferred port. It will only be so because, and I quote again, "of sound commercial reasons like the fact that cargo is still shifted much faster there and finds its way into the global transport chain more quickly than from anywhere else in the region."

So by consolidating cargo and putting them into the global transport chain more efficiently and quickly, PSA not only brings substantial commercial benefits to shipping lines and shippers, but also contributes significantly to the economic prosperity of Singapore and the surrounding region.

The PSA's efficiency and status as a world-class port has been recognised both locally and internationally. This year, at the Asian Freight Industry Awards, Singapore was given the title of "Best Seaport in Asia" for the tenth consecutive year. PSA was voted the "Best Container Terminal Operator" for the eighth year.

However, all these awards and PSA's long and continued history of success should not lull us into a sense of complacency. Neither should it blind us to the challenges ahead. Our past achievements and our traditional way of doing things are not a guarantee of our future success, especially in a future which is not a straight-line extrapolation of the past. The shipping industry and the environment in which we operate are no longer the same.

First, the shipping industry has been undergoing a major restructuring and rationalisation in recent years. Due to falling freight rates, profit margins for shipping lines are narrowing. For example, the average freight rate for the Singapore/Europe trade today is about one-third the rate in 1991. To cut costs, shipping lines are re-aligning themselves into large consortia and alliances. Naturally, these major consortia will have greater bargaining power to negotiate lower port rates and better terms of service with all ports, including PSA.

Second, competition from other ports for a share of the booming container transhipment business in the region is increasing. Existing ports in the region are expanding their facilities and urging shipping lines to make direct calls. New ports are being planned or are being built. Some of these ports have plans to ship cargo direct to their destinations, instead of transhipping through PSA. Others have openly declared their intention to challenge PSA as the transhipment hub in the region. The competition is not confined to regional ports. Ports further afield are also competing with Singapore for calls by mainline vessels.

These are fundamental changes in the industry. We must recognise their impact. We must respond to them boldly if we are to maintain and consolidate our position as the leading hub port in the region.

One way to do this is to change the fundamental way we manage our port. We must free PSA from whatever encumbrances that a Government statutory board might have to face the new challenges boldly, flexibly and creatively.

The corporatised PSA will have to be more customer-oriented and market-oriented. It must provide value-for-money services to all customers with even greater speed, quality, reliability and flexibility. It must be more nimble in responding to competition. It must be quick to seize overseas opportunities with good growth potential, by leveraging on its experience and expertise gathered over the past decades.

The promise of corporatisation has already resulted in many positive developments. Recently, PSA successfully concluded long-term contracts with several major alliances and shipping lines. PSA has also ventured overseas, starting with port investments and development projects in China and Indonesia.

In 1996, PSA set up a joint venture company with Dalian Port Authority. In February 1997, PSA signed a MOU to develop the Cigading Port in Indonesia. In April of this year, it signed another MOU with the Fuzhou Port Authority, again to manage and operate container terminals. And just recently in June, PSA signed a contract to build a container terminal in Aden in the Republic of Yemen.

Plans for the corporatised PSA

Mr Speaker, Sir, I would now like to describe briefly the plans for the corporatised PSA.

The corporatised PSA will be known as PSA Corporation. Its core business will be the operation of the container terminals in Singapore.

In addition to this, PSA Corporation will expand into two new strategic areas: one, investment, development and operation of international port terminals and related harbour-front developments; and two, warehousing and logistics where PSA already has relevant expertise. Based on its track record, PSA was recently appointed the manager of the new exhibition centre "Singapore Expo" at Changi. In addition, PSA Corporation will continue to manage the World Trade Centre, or the WTC, as well as the existing cruise centre and ferry terminals.

The Government has allowed PSA to retain the WTC because over the years, PSA's successful development and management of this harbour-front complex has built up PSA's brand name. The international maritime community has come to identify the WTC with PSA. Allowing PSA to retain and re-develop the WTC as a world class project will enhance PSA's credentials and boost its chances of securing other harbour-front projects, which may be integrated with port and cruise centre developments.

Although PSA owns quite a few properties as a statutory board, it will be returning to the State properties which are not germane to its core businesses. At corporatisation, PSA will only retain properties related to its businesses in container and cargo handling, warehousing and logistics, harbour-front development, facilities for its own staff, and properties for essential services which it will have to continue to provide after corporatisation.

Economic regulation

Mr Speaker, Sir, to ensure the provision of adequate and cost-effective services at good service levels, and to safeguard the introduction of new operators where appropriate, some form of economic regulation will be put in place. MPA, as the regulator of the port industry, will license the port and marine services provided by PSA Corporation. MPA will not regulate the tariffs of transhipment cargo since there is sufficient international competition to provide the necessary checks. However, MPA will regulate the tariffs of local cargo until such time as competition is introduced in the local port industry. This is to ensure that tariffs for local cargo remain competitive to safeguard the interest of local exporters.

In view of strong external competition, the Government sees no need to introduce another operator in the container port industry as yet. PSA is already operating at a high level of efficiency and PSA should continue to have the flexibility to operate at maximum efficiency with economies of scale. However, as the industry and the operating environment continues to evolve and the future is uncertain, it is prudent that we keep our options open. Hence, there will be no exclusivity clause in PSA Corporation's licence or in any public listing document.

However, in areas where liberalisation will enhance Singapore port's competitiveness, MPA will allow services to be offered by other operators besides PSA to create competition. One example is the provision of tug services at our port and shipyards. In July this year, MPA permitted shipyards to order tug services from operators other than PSA for servicing internal movements in the shipyards. Tomorrow, MPA will announce plans for the further liberalisation of tug services. The liberalisation will take place in phases over a few years and should bring about more competitive pricing and higher service standards in the industry.

Mr Speaker, Sir, PSA Corporation will first operate as a wholly Government-owned company for a period of time. It will be listed some time later on the Stock Exchange of Singapore as part of the Government's plan to build up the assets of our citizens by giving them a stake in one of the country's major assets.

The PSA (Dissolution) Bill

Sir, let me now address the key provisions of the PSA (Dissolution) Bill.

Clause 1 of the Bill anticipates the setting out of the operational date of corporatisation. The Minister for Communications will appoint the date at which the Act will come into operation and PSA dissolved.

Clause 3 provides for the transfer of property, rights and liabilities from PSA to the successor Company, the Government or MPA.

Clause 4 provides for the issue of securities in the successor Company to a wholly-owned Government company, on terms as directed by the Minister for Finance. Clauses 5 to 7 describe the financial structure of the successor Company and the terms of issue in relation to the Companies Act and Trustees Act.

Clauses 8 to 10 provide for the transfer of PSA employees to MPA or the successor Company, as appropriate, on terms no less favourable than those they enjoyed immediately before their transfer. The rights of former and present employees of the PSA under past or present pension, gratuity or allowance schemes will be preserved. PSA's liability to pay the same will be transferred to MPA or the successor Company, as appropriate.

The Bill allows for the continuity of existing agreements and pending proceedings involving PSA at the operational date. It also makes the necessary provision for continuity of port tariffs and rates fixed under the repealed PSA Act until such time when new tariffs and rates are fixed by the successor Company.

Conclusion

Sir, in conclusion, let me say that the corporatisation of PSA is part of a fundamental shift in the way we manage our port and this is in response to the fundamental changes in the industry. This shift is necessary in order to ensure that Singapore remains a major transhipment hub in the region. It represents many months of intensive work by officers of various Government Ministries, MPA and PSA. I am confident that PSA Corporation will grow from strength to strength, and transform itself from being an operator of a world class container port to a world class corporation and a leader in international port terminal operations, management, and in logistics services.

Sir, I beg to move.

Question proposed.

Mr Chay Wai Chuen (Tanjong Pagar): Mr Speaker, Sir, I would like to speak in support of the motion in the name of the Minister for Communications.

This Bill seeks to dissolve PSA which its predecessor, the Singapore Harbour Board, has been running our port for decades. As we have learned from the Minister, it also seeks to enable the privatisation of the successor Company. We read very often in the papers and, I believe, in the news that the port has been facing very severe competition, not just in the region but also from as far as North or East Asia. And I believe, with this formation of MPA that the Minister has mentioned, that the organisation has been gearing up for this privatisation and corporatisation effort.

I think the time is now really crucial in the face of globalisation of the world economy and this competition that we are facing today is quite different from what the competition that we have been hearing about for years. This is because the regional economies have been making good progress and there are economic developments over the last decade or so with foreign trade and investment growing. The governments and the port authorities have become more and more confident of their expertise and they have continued to invest and build up this expertise.

In the face of globalisation now, the competitive element is really crucial, and this is where all shipping companies and freighters are looking at. In the past, we used to exploit our locational advantage as an international port in the sea route and the trade route fully. But today, cost competitiveness is fast becoming the decisive factor in the face of telecommunications and other facilities which enhance information flow.

Hence, we should be mindful that the goal of privatisation effort that comes with this dissolution of PSA should really be looking at competitiveness and efficiency. It must not be just a privatisation in form but of necessity be one in substance. Downstream services which the Minister has just now mentioned should rightfully be open to private sector firms to compete in providing such services. He has just mentioned tugs and barges but there can be many others in warehousing, distribution centre, logistics, and so on, and, of course, not forgetting the possibility of berth operations so long as these private companies or private sector firms can do it cheaper, faster and better. Otherwise the privatisation effort of state charters in such a case runs a danger of substituting bureaucracy for an old boy's network of subsidiary company's interest.

I am sure the Minister is aware of this pitfall which has happened in many cases of privatising statutory agencies in overseas countries in Europe. In Rotterdam, for example, berths are privatised and run by different companies. Just now, the Minister mentioned that he does not want to implement this separate company for berth operation as yet. Therefore, he has included a non-exclusivity clause in the provisions. I think this is the right approach that we should take to ensure competition and to do better even within the different business units of the organisation is important. I am sure there are other services that can and could be open to private sector business to contribute and compete. Only through this process can efficiency and lowered cost down the line in the port service be engendered. I hope the Minister will consider this when setting the perimeters and the organisation and structure of the privatisation process.

It is important at this stage to take a long and hard look at this issue while we are at this crossroad in dissolving the Port of Singapore Authority which has run the port so effectively and efficiently for so long. The Minister may consider requiring the successor Company to re-engineer its business process and benchmark itself against the best practices and productivity performance indicators of other efficient and well-known ports elsewhere in special niches of their activities - not just overall, we know that overall the Port of Singapore is one of the best ports, it is probably the world's best port - in order to face this coming serious regional challenge.

In this regard, I must say that I have every reason to believe the successor Company will be up to the challenge. After all, the people who run this port here do not achieve the world class organisational standing that they have been having for years.

There are three points that I would like to comment on this Bill. Clause 7 of the Bill is on the application of the Trustees Act in relation to investment in the successor company. I am not really fully apprised of the rationale of why it is necessary to deem the investments in securities of the successor Company during the financial year to have paid dividends for the past three years when, in fact, there is no such successor Company. Why can we not have a provision where the Minister can waive certain requirements if the aim of it is actually to satisfy some contingent requirements later on, maybe for listing, and so on?

Clause 9 is on the pension and gratuity of transferred employees. I am glad that the Minister has just now mentioned that such liabilities to pensions and gratuities which the Port of Singapore Authority has will be novated to the new successor Company. But specifically, I would like to ask about the other benefits of retirement, perhaps medical or housing, which there may be such outstanding issues. I am not sure but perhaps the Minister can clarify.

The third point is on retiring workers or near retirement-age workers. How are they going to be treated? Have provisions been made for such a group of people who are near retirement that they can be novated to enjoy the continuing terms of benefits that they have been working and their service to the PSA in the past will be fully recognised even when they are nearing their retirement age? There has been some experience with corporatising efforts in the past where people, who have a long service and who are nearing retirement age, were conveniently asked to retire early and they might not get the full benefits of their retirement. I would like the Minister to comment on this.

Mr Zainul Abidin Rasheed (Cheng San): Mr Speaker, Sir, may I first declare that I am currently serving as the Executive Secretary of the Singapore Port Workers' Union and also serving on the PSA Board.

Sir, we have heard what Prime Minister Goh Chok Tong said about Dalian last night at the National Day Rally. Notwithstanding what the Mayor of Dalian, Mr Bo Xilai, said about the beautiful people of Dalian, for me, Sir, Dalian reminds me of the PSA flag flying high.

Yes, Sir, PSA successfully wooed Dalian's port business. I felt indeed very proud of Singapore and PSA last April, first, in Beijing when Premier Li Peng and Mr Goh witnessed PSA exchanged documents with the Chinese shipping company and then when PM Goh officiated PSA's topping ceremony at the Dalian container port.

PSA indeed has come a long way from its early humble beginnings. Almost as old as modern Singapore, present day PSA started as Tanjong Pagar Dock Company (TPDC) in 1864 and only in 1912, it became known as Singapore Harbour Board and 100 years after the Tanjong Pagar Dock Company took shape, it finally took the name of Port of Singapore Authority (PSA), the name it will continue to carry proudly as it sails forth to become a world class corporation.

Sir, listening to Dr Yeo Ning Hong, the Chairman of PSA, talking to his staff last month on vision PSA 21, one cannot but be convinced that not only is PSA in good hands but the leadership at the helm knows what it is doing.

Sir, I agree with the Minister that the 7,000 management and non-executive staff handling 770 million tons of shipping and 12.9 million TEUs or boxes last year is a no mean feat. Singapore after all is the world's busiest port. Despite that, PSA, like SIA, as what Prime Minister Goh told us last night at the National Day Rally, cannot rest on its laurels. The challenges of globalisation can make PSA vulnerable.

PSA will have to be nimble, as stressed by the Minister just now, as it searches for its new niches. Corporatisation, and eventually privatisation, will be the answer if PSA wants to remain competitive and successful. It cannot wait for the boxes here. It has to go where the boxes are and serve the three billion in Asia and in fact we should also search for the six billion people in the world to serve.

Dalian in North East China, Fuzhu in Central Eastern China, perhaps five or six more ports in ASEAN, in South Asia, the US$187 million contract to build a port in Aden, and I am sure more to come, will testify to this need for PSA to prepare itself for the challenges of competition and globalisation.

As more and more people and countries progressively go for outsourcing, PSA will also grow in terms of logistics handling as a new niche. PSA's confidence in its core competencies, as in handling large volumes of container boxes, will also stand in good stead.

I am glad to note that PSA will get customer-focused, through team work, innovation and open communication within PSA, as again emphasised by the Chairman of PSA last month.

Allow me to take this opportunity to say that the Singapore Port Workers' Union (SPWU) and its members are whole-heartedly behind any move to strengthen PSA's position. They are geared to face the new wave of challenges in globalisation squarely.

The relationship between management and the union has been excellent and SPWU looks forward to working together with management to make a success of corporatisation. However, the workers also expect equitable and fair sharing of the returns.

Fortunately for PSA, it is not the first statutory board to corporatise. PSA can learn from the experiences of those who have been through this process. The SPWU has been exchanging notes with the Health Corporation of Singapore Staff Union (HCSSU), the Union of Telecom Employees of Singapore (UTES), Union of Power and Gas Employees (UPAGE) and the Singapore Union of Broadcasting Employees (SUBE) to learn from their experiences too. At the end of the day, I am confident PSA's process and product out of this corporatisation will be a model for others to follow.

Nevertheless, with any major change, there are anxieties and concerns which need to be handled sensitively. Among others: will there be retrenchment? Job security is indeed uppermost in the minds of the workers. What will liberalisation and deregulation mean? Will greater competition mean displacement and major redeployment of staff? What will restructure mean? However, I am most glad to note that the management and the union have had dialogues to manage the changes and concerns together.

Sir, PSA is not short of creativity. It has had to be bold to come to where it is now, as No. 1. I trust it will also be bold, creative and generous when it comes to handling staff concerns related to corporatisation. PSA needs staff goodwill and should do all it can to motivate staff to face the challenges of corporatisation together. After all, they are in the same boat sailing full steam ahead towards PSA 21 and the world class corporation it deserves to be.

Sir, I support the Bill.

Mr Mah Bow Tan: Mr Speaker, Sir, I thank the Members for speaking in support of the Bill, particularly for their understanding of the competition that is facing the Port of Singapore Authority.

Mr Chay Wai Chuen is totally correct in saying that the competition that PSA is facing now and in the future is quite different from what it used to face in the past. PSA has grown on competition. In fact, I would like to make a point that in the transhipment business, PSA is not a monopoly. It has to fight very hard for each and every transhipment box that comes into the port of Singapore, because this box could easily have gone to another port or it would not have been transhipped in the first place. So PSA is not operating as a monopoly. And it is this very reason that has motivated the Government at this point in time not to invite other port operators into Singapore. However, as I have said in my speech, we do not rule out the possibility that we will do so in the future, as and when the situation changes.

The new Pasir Panjang Terminal is going to be built as a long-term project over many, many phases. And if the port grows, as we expect it will, there will be, in the future, room for other players in the market. However, at this stage, I repeat again, there is already competition. The competition is there. It is keen. It is strong. As a first step in the life of PSA Corporation, we do not intend to subject it to any competition in terms of port operations.

However, there will be opening up and deregulation in downstream activities. For a start, we have done so in tug and pilotage services, and MPA will be looking into other areas where such downstream services can be further liberalised and deregulated for greater efficiency in the port of Singapore.

In terms of benchmarking for best practices, I would like to assure the Member that this is what PSA is currently practising. In fact, I receive a report on a regular basis comparing not just one criterion but many, many facets of port operations; how does PSA compare with the other ports in the world, in terms of speed of loading of containers, in terms of productivity of quay cranes, productivity of land use, and productivity of manpower and equipment. It is this kind of meticulous benchmarking against best practice throughout the world that has made the PSA the most efficient port operator on most, if not all, the benchmarks in the world today. And I say this having looked at other port operators and looked at the way they run their ports and looked at the facilities that they have. This is something that PSA has every reason to be proud of. I do not see that it will forsake this practice and, in fact, the process of corporatisation is going to motivate it to search for even greater and more innovative ways of improving productivity.

Mr Chay asked some very specific questions about two of the clauses. I would like to enlighten him, first, on clause 7 as to why we have deemed the investment in securities of the successor Company to have paid dividends for the past three years. This clause is necessary in order to immediately qualify investments in the successor Company, in this case PSA Corporation, as permitted under the Trustees Act.

Without this provision in clause 7, trustees would not be able to invest in PSA Corporation's shares until the shares meet the criteria stipulated in the Trustees Act. And one of the criteria stipulated in the Trustees Act is a requirement that a company must have been paying dividends in the previous three years. So what this clause does is really to give the Government more flexibility in terms of privatisation, which is the next step of the process. If we decide to privatise PSA Corporation, we would need to have this particular requirement. Just for the information of the Member, this stipulation was also carried in the Act when we corporatised Singapore Telecom and Singapore Power.

Mr Chay also asked about other benefits including medical, housing, etc. As I mentioned in my speech just now, the transfer of employees from PSA, the statutory board, to PSA Corporation, the company, will be on terms which are no less favourable than what they are currently enjoying. This applies to all the various terms and conditions of service pertaining to the employee at that particular point in time. It means pension, gratuity and all the allowances. It means medical benefits, etc. Pensionable officers, for example, will not lose any of their pension benefits or their seniority when they are transferred to this company.

For future pensioners who also have a right which is guaranteed under the present statutory board's Act, PSA's liability towards them will also be preserved and will be transferred to PSA Corporation. In other words, PSA Corporation will be responsible for their medical benefits and all the other benefits.

Mr Zainul Abidin spoke very eloquently about the progress of PSA. I think all Singaporeans should be and, in fact, all Singaporeans are proud of the achievements of PSA. When PSA celebrated its centenary a few years ago, I attended the ceremony and when I saw what the original Harbour Board was like in the old days, I could not help but feel a tremendous sense of pride and achievement, and a sense of gratitude to all the men and women who actually brought PSA to where it is today. In particular, the men and women who worked in the unions and who worked in the management at that point in time. The way that they worked together to achieve this transition, from Harbour Board in the old days to PSA today, speaks volumes. In fact, not too long ago, we saw the operations and we saw pictures of how Harbour Board used to run these operations, the amount of manpower that was involved, the kind of machinery that was employed. When you see the PSA of today, when you compare and contrast the two, one cannot help but feel, as I said, a tremendous sense of pride and gratitude to all the people who made it possible. So I think Encik Zainul Abidin's tribute to PSA is well founded, not just because he is a member of the Board or Executive Secretary of the SPWU. I wholeheartedly endorse his comments. In fact, I think we have, in PSA, the potential for another Singapore company to become a world class corporation, to be a recognised world class brand name in the mould of SIA, for example. And this is a promise which I am sure the new PSA Corporation will fulfil in the years ahead.

Of course, there will be anxieties on the part of the staff concerned. The members of the union and the management committees have been working together over the last 1(r) years in order to explain the purpose behind this move, in order to allay the anxieties and fears that the Member spoke about, and these anxieties and fears are quite natural. Any organisation undergoing such a fundamental change will elicit such fears among its staff. But I am very pleased to say that after a long process of explanation and consultation, there is a very, very strong team spirit in the organisation. They want to make this new company succeed. They know that this is a move that is necessary and essential, and they want to be part and parcel of this process. I think there is absolutely no doubt in my mind that the level of cooperation and understanding of this move among management and union is extremely high. However, having said that, I think the management will have to demonstrate in concrete terms that after corporatisation and eventually privatisation, the interests of the members will be protected.

In this respect, I would like to assure the Member that all the staff of PSA will be retained at the point of corporatisation. There will be extensive retraining and upgrading programmes put into place. I think the management will, in all fairness, not be able to preserve or keep every single person in his or her job because the nature of the industry is changing. It is precisely because of this that the corporation will have to change. So Members will have to accept that there would be some dislocation in terms of jobs, but the staff would be retained. They would be given adequate training and skills upgrading programmes in order to prepare them for the new PSA Corporation. Of course, over time, the terms and conditions of service of PSA Corporation will have to be readjusted in line with the terms and conditions of service in the private sector. But if, as we all expect, and I am confident that it will, as PSA grows, the terms and conditions of service will similarly be enhanced. So I hope that those assurances will serve in some way to allay the fears and anxieties of the men and women of PSA.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Mah Bow Tan].

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