SUZHOU PROJECT (Financial statement)

Mr J. B. Jeyaretnam asked the Deputy Prime Minister whether the Government will present a full comprehensive financial statement on the Suzhou project for debate in the House, showing clearly where the monies for investment by the Government and the Government-linked companies were taken from.

BG Lee Hsien Loong: Mr Speaker, Sir, in my replies to Mr Jeyaretnam on 3rd August 1999 and earlier on 14th January 1998, I provided full details of the investments made by our statutory boards and GLCs in the Suzhou Industrial Park (SIP) project. To date these investments amount to US$147 million. The amount invested by each statutory board and GLC is small, compared to the size of its operations. They financed these investments in the normal commercial manner, from reserves accumulated in the course of operations and from bank borrowing. They did so based on commercial considerations, after critically evaluating the project's viability. Ten Singapore companies that are not GLCs, and four non-Singaporean multi-national corporations, also similarly invested in the project.

Mr Jeyaretnam also suggested that the full financial statement of the project be presented for debate in this House. This is not appropriate. It is for the companies which have invested in the project to examine the project's finances, not for Parliament. These are mostly listed companies, answerable to their shareholders for their own financial performance. For this House to debate the project's budget is to change a commercial undertaking into a government one. This is unjustified and unwise.

Mr Jeyaretnam: But does the Government not owe a duty to the people whose money the Government itself, either directly or through GLCs, has invested in the project? Does this House not need to have a full audited statement of accounts?

BG Lee Hsien Loong: Sir, statutory boards and GLCs are set up specifically to have greater operational flexibility than Government departments and to be able to make commercial and business decisions like other companies. The responsibility of ensuring that they are competently and honestly run rests with the supervising Ministries of statutory boards. In the case of GLCs, it rests with their board of directors and ultimately their shareholders, including the Minister for Finance who is answerable to Parliament. If any MP has reason to believe that a statutory board or GLC is not being competently or honestly run, he should raise the matter directly in the House either by filing a Question or moving a motion, and he will receive a full answer, as the Member has received very full answers on the question of Suzhou Industrial Park. However, it is counter-productive for Parliament to second-guess commercial and business decisions which are properly the responsibility of the management and boards of the statutory boards and GLCs.

Mr Jeyaretnam: Does the Deputy Prime Minister accept or not that he is playing with the people's moneys and he has a duty to account to them for every cent?

BG Lee Hsien Loong: Sir, the game is not over. I have explained several times in this House why we went into this project, what the difficulties have been, how we have tried to turn the project around and what solution we have now arrived at. The solution will take several years to work out. The final accounting is not done and the project has to run its course. There is no suggestion that the officials or the companies involved have been derelict in their duty, that they have done this without due diligence and without making proper commercial considerations. They have gone in on a proper commercial basis. These are statutory boards and GLCs which have to be assessed as statutory boards and GLCs, and not on the basis of individual projects. It is not Parliament's business to become a deputy auditor of these companies. They have auditors to make sure they have done things honestly. They have boards to make sure they have acted commercially in a wise way. I think if he looks at the track record of the statutory boards and the GLCs which have invested in Suzhou, he will find that overall they have done well. These are not bankrupt, broken-back companies. So I think we should leave them to do their business.

Mr Jeyaretnam: May I ask why was Parliament not informed and its sanction sought before the Government entered into this memorandum of understanding and gave up a substantial part of its equities?

BG Lee Hsien Loong: Sir, I do not understand. We have not given up any equities.