PUBLIC UTILITIES (AMENDMENT) BILL

Order for Second Reading read.

The Minister for Trade and Industry (BG George Yong-Boon Yeo): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Public Utilities Act empowers the Public Utilities Board (PUB) to discharge its roles as the Water Authority and as the Regulatory Authority of the electricity and piped gas industries in Singapore. This Act was last amended in 1995 when the electricity and gas operations of PUB were corporatised. In the last four years, we have gained experience in the regulation of the electricity industry and some amendments to the legislation are needed.

The amendments proposed are mainly to:

(a) put in place further regulatory measures in the evolving electricity industry and to address the industry's need for high quality electricity supply;

(b) increase the penalty for the offence of damaging a high-voltage electricity cable;

(c) protect the property rights of the Board and facilitate the maintenance of water mains; and

(d) protect the interest of consumers.

I will first go through the amendments that are required in the Board's function as the Regulatory Authority for the electricity and gas industries.

Regulation of Supply

At present, there is no provision in the Act to regulate the supply of electricity generated outside Singapore to any person or premises in Singapore, or the supply of electricity generated in Singapore to any person or premises outside Singapore. It is proposed that the present definition of "supply" in section 2 of the existing Act be amended to enable the PUB to regulate such supply of electricity. With this amendment, without being licensed by the PUB to do so, no person may supply electricity generated outside Singapore to any person or premises in Singapore, and no person may supply electricity generated in Singapore to any person or premises outside Singapore.

Power Dips & Cable Damage

Feedback from industry indicates that companies, particularly those in high-tech industries which rely heavily on sensitive computerised control systems, have been adversely affected by voltage dips in their power supply. Voltage dips, unlike power outages or blackouts, are momentary reductions of the voltage levels in the power supply system, which can disrupt the functions of sensitive computerised control systems.

Voltage dips occur some 25-30 times a year. They have a severe impact on some industries, particularly high-tech, process industries like the wafer fabrication industry. According to the Economic Development Board (EDB), voltage dip-related losses suffered by five high-tech companies between August 1997 and November 1998 amounted to some $3 million. This figure does not include the cost of production downtime, labour and delayed product deliveries. The production downtime can amount to as much as 10% of the monthly output of a wafer fabrication company.

In 1998, 57% of voltage dip complaints arose because of cable damage. Although the number of voltage dips caused by cable damage is relatively small (5 out of 36 in 1996, 2 out of 21 in 1997 and 4 out of 30 in 1998), the effect of such damage to high-voltage cables can be major. For Singapore to continue to attract high-tech, knowledge-based activities like wafer fabrication, we must ensure the high quality and reliability of our power supply.

To minimise damage to high-voltage cables in the course of construction work, section 95 of the Act will be amended to differentiate the requirements for earthworks in the vicinity of low-voltage electricity cables from those in the vicinity of high-voltage electricity cables.

A new section 95(A) is proposed to require PowerGrid Ltd, which is the owner of high-voltage electricity cables, and contractors to work together to prevent damage to cables. This new section will regulate earthworks and cable detection work within the vicinity of any high-voltage electricity cable which belongs to or which is under the management or control of a public electricity licensee. Offenders face a fine not exceeding $100,000, or imprisonment for a term not exceeding five years, or both fine and imprisonment, if they do not follow the legislated procedures.

The serious consequence to the economy as a result of damage to high-voltage cables makes a severe penalty necessary. A deterrent penalty of $1 million is therefore proposed for damage to a high-voltage cable. Section 107(3) will be amended to enhance the current fine of $200,000 to $1 million. The enhanced fine is the same as that provided under the Telecommunication Authority of Singapore Act for damaging telephone cables. At the present level of penalty, some contractors are tempted to risk hitting a cable rather than suffer project delay and payment of liquidated damages. A fine of $1 million will deter such irresponsible behaviour. With the amendments, offenders will face a maximum fine of $1 million, imprisonment for five years, or both. The maximum five-year term of imprisonment for high-voltage cable damage remains as before. At the same time, section 95 as amended will reduce the maximum term of imprisonment for damaging a low voltage cable from three years to 12 months, as this is less serious.

Apart from a deterrent penalty, we will require reasonable precautions to be taken against damage to high-voltage cables. These are covered in the amendments to section 69. Firstly, a public electricity licensee which lays any high-voltage electricity cable on any private land or premises will have a duty to:-

(a) insulate and encase the electricity cable in such a manner as to effectively protect it and prevent it from constituting a source of danger;

(b) mark the location of the electricity cable in the prescribed manner; and

(c) notify the owner or occupier of such private land or premises of the location of the electricity cable and the precautions to be taken if any earthworks are to be carried out on such land or premises.

Secondly, it will be an offence for any person to obliterate, remove, damage, alter or tamper with any mark placed by a public electricity licensee wilfully and without reasonable excuse.

Administrative Amendments

There are two other amendments of an administrative nature pertaining to the electricity industry. A new subsection (3A) is added to section 47 to ensure that a public electricity licensee authorised to generate, transmit or supply electricity, does not or omits to do any act, whether directly or indirectly, to jeopardise the security and stability of electricity supply. A new subsection (4A) is added to section 50 making it the duty of a public electricity licensee to comply with any direction that the PUB may give to it from time to time for the purpose of regulating the prices to be charged by the licensee to any person.

Access to Water Mains

For more effective management of Singapore's water supply system, a new section 32A will facilitate the speedy repair and maintenance of water mains. This new section 32A will empower the PUB to require the removal of any structure or substance that is likely to hinder or obstruct access to any water main or connecting pipe belonging to the PUB. The proposed amendments to the Public Utilities Act will give the PUB the scope to perform better its functions as Singapore's Water Authority and as the Regulatory Authority of the electricity and gas industries.

Sir, I beg to move.

Question proposed.

Mr Ahmad Mohd Magad (Pasir Ris): Mr Speaker, Sir, I rise to express my support for the Public Utilities (Amendment) Bill presented by the Minister for Trade and Industry.

Allow me first to declare my interest that I am a board member of the Public Utilities Board. One of the main objectives of the proposed amendments is to minimise the number of incidents of damage to underground high voltage electricity cables. It is my understanding that the damages to the cables in the past have been largely caused by earthwork contractors in the course of construction work.

Damage to these cables would cause voltage dips to be felt over large areas and the effect is felt island-wide when the damage is to 230 kv cables. The extent of the impact is evidenced by the disproportionately large number of voltage dip complaints received relative to the incidents which give rise to the voltage dips.

As the Minister has explained at length, the impact on high-tech industries due to such voltage fluctuations is particularly severe. Feedback from industry indicates that the production facilities of high-tech companies such as wafer fab companies, sensitive micro-electronics component manufacturers and others are highly susceptible to voltage dips caused by damage to underground cables. The interruptions of electricity supply upset these companies' production schedules and delivery commitments and result in costly losses in production time and work in progress items which often have to be discarded.

Sir, for us to be able to continue to attract high technology and high value-added investments into Singapore, we have to ensure that the quality of our electricity supply remains consistently high. The proposed legislation as presented by the Minister is therefore necessary and timely. It would require the earthwork contractors and PowerGrid Limited which owns the electricity cable network to work together to proactively prevent damage to the electricity cables.

On that note, Sir, I support this Amendment Bill.

Mr Chuang Shaw Peng (Nominated Member): Mr Speaker, Sir, in the light of deregulation of electricity supply in our nation, it is inevitable that the regulations are changing to suit the new operating environment. Hence, I can see this new Public Utilities (Amendment) Bill will serve to provide more precise definition and to place more duties and responsibilities on the public electricity licensees.

Section 3A in particular requires the licensees to ensure that they would not do any act that would adversely affect, directly or indirectly, the security and stability of electricity supply. As the Minister presented earlier, this is an important point because Singapore is a modern nation which cannot afford to have major voltage dips or blackouts.

The Bill goes further in section 69 to ensure that the public electricity licensee maintain the cables with due care and protection and to mark out the location of electricity cables in some prescribed form. And this is a very positive step forward towards more manageable and predictable underground excavation and earthwork as broadly defined in this Bill. Until now, there have been grievances that the location maps of the underground cables, especially those laid a long time ago, during the British days, are very big and inaccurate. Mishaps often occur when excavations took place at locations not suspected of underground cables. The prescribed manner stated in section 2B(b), I hope, would be akin to something like a chartered survey map, and not those that would make reference to, for example, the nearest tree or fire hydrant. This latter method suffers from the shortcoming of losing the location of the cables when the so-called reference tree or fire hydrant is removed. Hence, it follows naturally that in new section 95, it is a requirement to have cable detection works carried out prior to any earthwork at the low and high voltage cable areas.

This Bill particularly spells out a new procedure for excavation near high voltage cables. It requires a proper notice to be served on the licensee before commencing excavation and to get information from the licensee on the locations of the high voltage cables. Of course, it is a requirement to engage licensed cable detection workers to perform detection work.

The new section 95A(5) further requires a licensee to promptly give the location of the high voltage cables to the person who serves the notice and to advise on the precaution to be taken to avoid damage to the cables. With this provision, it now becomes reasonable for the person performing the excavation to follow the procedures set out in section 95A and he now has a defence in court when charged for damaging a cable. This is well and good.

However, I have four queries. The Bill requires one to serve notice on the licensee if he is to carry out excavation near high voltage cables. But how would he know that it is a high voltage cable area? Secondly, which licensee does it belong to? And thirdly, what if the licensee disclaims the accuracy of the information he gives to the person who carries out the excavation, and this is often done? Fourthly, how capable are the cable detection workers and what kind of liabilities do they have? What would be considered reasonable performance of a cable detection worker? This amendment would be more complete if it can answer the above four questions, especially the last one whereby a person performing the earthwork may be deemed not to have taken reasonable precaution and exercised due diligence to avoid the offence, should a cable detection worker be found negligent in carrying out his work.

The deterrent penalty for damaging a high voltage cable is raised to $1 million. The jail sentence remains the same at five years. It would only be reasonable if the Bill would further define this area to avoid any doubt or any presumption of guilt.

Mr Speaker, Sir, please let me now switch from speaking on electricity cable to water mains. This new Amendment Bill introduces a new section 32A which basically requires one to remove any structure, object or accumulation that exists in the vicinity of a water main or connecting pipe if the Board deems that it hinders or obstructs access. I think this clause is far too broad. It does not define the word "vicinity" nor the words "hinder access". If an underground pipe is to burst near an existing home and the easiest access can be obtained by demolishing part of the house, then it appears that this amendment would apply and the poor house owner will, at his own cost, move out of the house or hold on to the house to facilitate access. Another possible scenario here is this. When a house owner engages an architect whose design happens to infringe this condition, because of the weakness of this clause, then who is responsible for the removal of the structure? Is it the architect or the house owner? Would this clause be precise enough for insurance purposes if the architect is to carry a professional liability insurance policy?

Having made the above comments, I wish that the Minister would consider them before legislating the Bill.

Mr Low Thia Khiang (Hougang): Mr Speaker, Sir, I just want to make a short clarification. I understand the Amendment Bill is to severely punish contractors who damage high voltage cables. How about a power supply company that causes a voltage dip which is equally damaging to the economy and the company concerned as well? I would like to know what is the penalty. I believe that it is in the Bill. How about for those voltage dip cases which the Minister cited just now that were not caused by damaged cable? For those cases, was penalty imposed on PowerGrid and, if so, what was the penalty imposed?

BG George Yong-Boon Yeo: Mr Speaker, Sir, I would like to thank the Members for their support of the Bill.

Mr Chuang Shaw Peng asked how would an earthwork contractor know that he is in the vicinity of high voltage cables. He has to find out from the licensee, which means, PowerGrid Private Limited and PowerGrid is under an obligation to speedily provide the detailed information and the information must be detailed to enable the cables which are in the vicinity to be accurately marked out by licensed detection workers. Which licensee? There is only one right now which is PowerGrid. They own all the high voltage cables in Singapore.

Mr Chuang asked what happens if the licensee disclaims the accuracy of the information he provides to the contractor. He cannot. Under the law, he is required to provide accurate information. As for the training of cable detection workers, this is done by PowerGrid. In fact, under its licensing conditions, it is responsible to provide training on cable detection and the person would only be granted a licence as a cable detection worker if he has successfully completed the prescribed course conducted by PowerGrid and holds the required qualifications and relevant experience. Mr Chuang then asked what if the licensed cable detection worker was negligent. I think, if this can be established legally, that should be a defence for the contractor.

As for the amendment to the section on water mains, to begin with, structures or objects should not in the first place be built or positioned in such a way that water mains cannot be maintained or repaired. When we talk about "in the vicinity of water mains", it is with respect to whether it affects the ability of PUB to maintain or repair these mains. Mr Chuang also asked in the event that the architect designs a structure which causes an obstruction, then who should be liable? That really is a private matter to be resolved between the owner and his architect. Equally, whether insurance should cover such liabilities is also a private matter, defined in contract.

Mr Low Thia Khiang asked whether the power supply company is under an obligation to provide reliable power. Yes, they are. As to what the penalty involves, I do not have them with me here now. And as to the past incidents, and follow-up action PUB has taken with respect to voltage dips not caused by cable damage in the past, I do not have the details here. But if he submits a question on this, I would be very happy to answer him.

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. - [BG George Yong-Boon Yeo].

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