UPGRADING OF HOUSING AND DEVELOPMENT BOARD FLATS

Mr Chiam See Tong asked the Minister for National Development (a) whether lessees, whose flats are to be upgraded under the Housing and Development Board's upgrading programme, should contribute less towards the cost of upgrading their flats in view of the drop in property prices and building costs and (b) whether there would be a slow down in the upgrading of HDB flats this year.

Mr Lim Hng Kiang: Under the Main Upgrading Programme (MUP), the amount lessees have to contribute depends on the cost of the upgrading works and not on property prices. The lessees co-pay a percentage of the actual construction cost for the upgrading works carried out in their precinct. The actual construction cost depends on the scope and extent of the improvement works. As construction cost has come down for precincts that were tendered recently, the lessees for these precincts would be expected to pay less for the same package of improvements. Lessees are not required to contribute to the Interim Upgrading Programme (IUP).

I informed the House early this year that for 1998, the MUP has been scaled down from 15 precincts to 10 precincts and the IUP from 24 precincts to between 16 and 20 precincts in view of the economic conditions. HDB already announced 5 MUP precincts in April 1998. It will announce another 5 precincts before the end of the year. HDB also announced 18 IUP precincts in April 1998.

As for the upgrading programme in 1999, I informed the House in the previous sitting that MND was preparing its FY99 budget plan for submission to the Ministry of Finance. Given the budgetary constraints that we will be facing, we have to manage our limited financial resources carefully according to the country's priorities. These priorities will take into account, amongst other things, what are the most effective measures to stimulate the economy, and will be co-ordinated across the various ministries in a concerted effort to achieve maximum impact. Whether there would be a slow down in the upgrading of HDB flats next year depends ultimately on the budget allocated to MND.