PUBLIC UTILITIES BILL

Order for Second Reading read.

The Acting Minister for Trade and Industry (Mr Peter Chen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

In 1995, the electricity and gas functions of the Public Utilities Board (PUB) were corporatised as a first step towards introducing competition in the electricity and gas industries. PUB was then restructured to regulate the electricity and gas industries, while retaining its responsibilities for ensuring safe and reliable water supply in Singapore.

Currently, PUB comprises two parts: the electricity and gas Regulator and the Water Department. But the PUB Water Department is not the only agency dealing with water. The Ministry of the Environment (ENV) also deals with water, through its Drainage and Sewerage Departments.

This Public Utilities Bill is to respond to the changes in the water industry. Allow me to explain. In the early days, drainage systems were meant to drain away rainwater quickly to prevent flooding. At the same time, sewerage systems were put in place to control pollution in order to protect public health. Hence the Drainage and Sewerage Departments come under ENV.

Today, pollution is well under control in Singapore and all our water catchments have been cleaned up. All used water is now channelled into our sewerage systems and all solid wastes are collected and treated before disposal.

With clean catchments, our drainage system is no longer just for flood prevention but has, in selected areas, become means to channel rainwater into our reservoirs.

Meanwhile, water treatment technology has advanced considerably, making it economical to treat and recycle used water in a significant way. The used water from our wastewater treatment plants can today be treated to standards much higher than the WHO's drinking water standards, even meeting the stringent requirements of those industries requiring ultra-pure water, as in the wafer fabs.

This has enabled us to construct a robust water supply system by tapping on several economically viable sources, thereby diversifying our water sources. Thus, even as we continue to develop more of our local sources of water and buy water from Malaysia, we are also exploring buying water from Indonesia. And with the opportunity now available through advances in technology, we will also develop seawater desalination plants and recycle used water more.

In order that we can fully exploit our domestic water resources, we cannot continue to manage the water cycle under separate agencies. To reduce wastage and to exploit synergies, we need a PUB that has the mandate and the resources to manage the entire water cycle optimally; in other words, we should integrate the separate agencies together into a sole water authority for Singapore.

The Government has therefore decided to merge the existing PUB Water Department and ENV's Drainage and Sewerage Departments into a restructured PUB. The restructured PUB will then be placed under ENV. At the same time, the electricity and gas regulatory functions of the existing PUB will be taken out to form a new statutory board, the Energy Market Authority of Singapore or EMA under the Ministry of Trade and Industry.

Mr Speaker, Sir, to effect these changes, this Bill which I move today seeks to repeal the Public Utilities Act (Cap. 261) to be re-enacted as the Public Utilities Act 2001. The re-enacted Act will enable the Sewerage and Drainage Departments of ENV to be integrated with the Water Department, forming the restructured PUB. The responsibility for the restructured PUB will then be moved from MTI to ENV with effect from 1st April 2001.

The Water Authority

The restructured PUB will become the sole water authority in Singapore. The Bill retains, with modifications, the provisions of the existing Public Utilities Act with regard to the functions, duties and powers of the PUB in relation to water. The Bill will also empower the restructured PUB to directly administer the Sewerage and Drainage Acts, which were hitherto administered by ENV.

The functions and duties of the restructured PUB will include providing an adequate supply of water, regulating the supply of piped water for human consumption, supplying industrial and treated used water, and operating the public sewer systems and storm water drainage systems.

Main Provisions in the Bill

Mr Speaker, Sir, I shall now touch briefly on the main provisions in this Bill. Clauses 6 and 7, together with the Second Schedule of the Bill, set out the functions and duties of the restructured PUB. Briefly, it will provide, construct and maintain the infrastructure for the collection, supply and use of water for public and private purposes; secure and provide an adequate supply of water for Singapore at reasonable prices; and regulate the supply of piped water for human consumption. It will act as an agent of the Government in the management and maintenance of public sewerage systems, public sewers and storm water drainage systems, drains and drainage reserves belonging to the Government. It will also regulate the construction, maintenance and improvement of sewerage and land drainage systems, and the discharge of sewage and trade effluent.

The existing powers of the current PUB to regulate and implement the supply of water for human consumption are retained in Parts IV and V of this Bill. At the same time, more stringent measures over water service installations are being introduced in view of the experience gained from the recent water contamination incident in Bukit Timah Plaza. Currently PUB requires water installations to be checked once every year by licensed plumbers. This measure will remain in force. The Bill will in addition require such installations to be inspected by a professional engineer and certified fit and safe once every five years. Any party convicted of contravening this requirement will be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months, or to both. The Bill will also hold parties responsible for causing contamination to water supplied by PUB. Responsible parties will have to ensure regular and adequate checks on their water installations. The penalty for contravening this requirement is $50,000 or to imprisonment for a term not exceeding three years, or to both.

Transfer of Assets and Protecting Terms and Conditions of Service for Staff

In restructuring the PUB, we will need to ensure the proper transfer of staff, properties, rights and liabilities related to the Sewerage and Drainage Departments of ENV, to the PUB. Clauses 60 to 66 provide for the transfer to the PUB of property, assets and liabilities and of employees in the Sewerage and Drainage Departments and the protection of their terms and conditions of service on transfer.

Conclusion

Mr Speaker, Sir, water is a strategic resource. Technology advances, both in seawater desalination and in the treatment and recycling of used water, have enabled us to considerably enhance our water strategy. These developments open up more choices and allow us to diversify our sources of water. The restructured PUB will be able to take advantage of these developments and deliver to us a more robust and secure water supply in a holistic and optimal way.

Sir, I beg to move.

Question proposed.

Mr Ahmad Mohd Magad (Pasir Ris): Sir, in speaking on this Bill, let me first declare my interest that I am a Board member of the present Public Utilities Board. I note that the new Public Utilities Bill will bring the water undertaking portion of the present PUB, together with the Sewerage and Drainage Departments of the Ministry of the Environment (ENV), to form the sole water authority in Singapore. At the same time, the current power and gas regulatory functions of PUB will be retained under the Ministry of Trade and Industry, under a new statutory board. The new restructured PUB will come under the ambit of ENV.

Sir, after listening to the various clarifications on water related issues by the Acting Minister for the Environment who spoke during the Committee of Supply deliberations yesterday and also studying the chart on the future thrust of the Environment Ministry, distributed during the session, and also as asserted by the Acting Minister for Trade and Industry just now, I am convinced that bringing the water management function of the current PUB into one sole authority will provide the needed focus on all aspects of water regulation and management. Its integration with the Ministry of the Environment's Drainage Department (which constructs and maintains drainage systems for water collection and its channelling into reservoirs or seas) and the Sewerage Department (which collects and treats waste water to acceptable standards before re-use) closes the water loop which will bring about optimal deployment of resources to enable us to maximise the use from our water inventory.

Among several water topics, the Acting Minister yesterday also spoke at length about how Newater is produced, employing the latest in membrane technology, Newater's future usage plan and how it will benefit the wafer fabrication industry in terms of purer water and lower cost. With only 5% of the water now being recycled and 95% discharged into the sea, we have enormous potential to do more to exploit ever improving technologies to reclaim and recycle used water from a multitude of sources. This very fact alone provides for strong justification to bring together the entire water management chain from water collection and processing to reclamation and recycling to achieve not only economies of scale but also efficiency maximisation in water distribution.

However, Sir, as we move forward with new initiatives to harness our water inventory, it is important that assurance be given to the public that the water supply delivered to our homes remains of high quality as we have them today. Any major change in the elemental composition should properly be communicated to prevent unnecessary alarm. Public trust must always be maintained in whatever we do.

Sir, as Singaporeans, we all know how precious water is to all of us. It is imperative that we continue to concern ourselves with finding new and innovative methods in how we can collect and re-use as much of the water as possible in our country. Doing this will decrease our dependence on our neighbours who often enough have threatened to cut our water supply or have used it as a bargaining chip when negotiating issues of strategic importance. As we discover new and cheaper techniques to do this, there must be no let-up in continuous public education of the preciousness of water. The current PUB has done a terrific job in bringing about this consciousness to the public. And it is my hope that the new PUB will continue the good work of its predecessors.

Sir, while I applaud the retention of the acronym "PUB", which is indeed a familiar household name, the PUB as we know it today deals with all aspects of public utilities, not only water but also electricity and gas supplies to our homes. Could the Minister please explain why this name is retained, even though the new PUB will be concerned with water only? Also, what will happen to the PUB bills? Will we in future have separate bills for water, electricity and gas? If so, will this not make it more cumbersome for the public to deal with so many bills?

Another question I have, Sir, is with regard to the water facilities in Johor, Malaysia, which is managed by the present PUB. I would like to ask the Minister whether the newly constituted PUB will embrace the entire Malaysian operation as it is, and whether it will directly inherit all the people involved in the Malaysian operation?

On this note, Sir, I support the Bill.

Mr Peter Chen: Sir, I thank Mr Ahmad Magad for supporting the Bill.

At yesterday's Committee of Supply debate on the Ministry of the Environment, the Acting Minister for the Environment had spoken at length about water, its security, and so on. So I would not touch on that now.

But let me address the reason why the name "PUB" is retained. As Mr Magad has said, this is a household name today. It has got international repute and accolades from many countries as well. In fact, we have considered the alternative of, perhaps, calling it the "Water Authority of Singapore". But it would seem a great pity to consign a household name, a very well-known and familiar name, to the archives. In any case, water is a public utility and it is by no means a misnomer.

I would also say that proper management of water, whether it is rainfall, used water or drinking water, is very, very much a matter for the protection of public health. This is one of the reasons why we would have also put it under the Ministry of the Environment. But although we say that water is an important resource not only for domestic use and it affects public health, the Ministry of Trade and Industry (MTI) would still continue to have a very, very strong interest in that because water is also a factor of production in the economy. We would be keeping a very close watch, as the whole of Singapore would.

A question was also asked on whether the restructuring of PUB will affect the employees working in Johor now. The answer is that the Water Department of PUB would be kept intact and all the employees would not be affected.

Mr Ahmad Mohd Magad: Clarification, Sir. Can I ask the Minister what will happen to PUB bills, as we all know it today, which encompass water, electricity and gas?

Mr Peter Chen: As far as I know, the bills would still be consolidated, unless I am advised otherwise. I could not give him a definitive answer.

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 Peter Chen].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clauses 1 to 72 ordered to stand part of the Bill.

Clause 73 -

The Chairman: Amendment No. (1), Mr Peter Chen.

Mr Peter Chen: Sir, I beg to move,

In page 38, to leave out line 6 to the end of line 18, and insert - "(6) Notwithstanding the repeal of the Public Utilities Act, as from the appointed day and for such period as the Minister for Trade and Industry may determine - (a) section 2, Parts IV, V, VII, VIII, IX and X of that Act and the subsidiary legislation made under section 130 of that Act for or in relation to the supply or use of electricity and gas shall, with the necessary modifications, continue in force as if that Act has not been repealed; (b) all licences granted before the appointed day under section 38 and Part VIII of that Act shall continue to be valid and in force; (c) for the purposes of this subsection, the references to the Minister and the Board in - (i) section 2, Parts IV, V, VII, VIII, IX and X of that Act and the subsidiary legislation made under section 130 of that Act for or in relation to the supply or use of electricity and gas; and (ii) the licences granted before the appointed day under section 38 and Part VIII of that Act, shall be read as references to the Minister for Trade and Industry and the Energy Market Authority of Singapore respectively; and (d) for the purposes of this subsection, the Minister for Trade and Industry may make regulations to provide for any other transitional, incidental and consequential matters arising from the repeal of the Public Utilities Act. (7) Notwithstanding the repeal of the Public Utilities Act, as from the appointed day, sections 62 to 65 of that Act shall continue in force and to apply to the successor companies mentioned in those sections as if that Act has not been repealed.".

Sir, transitional arrangements are provided for under section 73(6) of the Public Utilities Bill for the provisions regulating the electricity and gas industries in the current Public Utilities Act to remain in force until the changes to these industries are implemented later this year. The provisions governing the current market will therefore also continue to apply.

Although the provisions governing the current market continue to apply, the EMA, which will be the regulator from 1st April 2001, will need to be empowered so as to continue to administer the current market and issue new licences during the transition period, until the new industry structure is put in place.

Amendment agreed to.

The Chairman: Amendment No. (2), Mr Peter Chen.

Mr Peter Chen: Sir, I beg to move,

In page 38, line 35, after "Minister", to insert "charged with the responsibility for the environment".

Sir, this is a consequential amendment to provide clarity to the authority empowered to make regulations for any transitional matters relating to the functions and duties of the reconstituted PUB, arising from the repeal of the Public Utilities Act.

Amendment agreed to.

The Chairman: Consequential amendments will be made in page 38, lines 19, 25, 29 and 35, to renumber subsections (7), (8), (9) and (10) as subsections (8), (9), (10) and (11), respectively.

Clause 73, as amended, ordered to stand part of the Bill.

Clauses 74 and 75 ordered to stand part of the Bill.

First Schedule to Fourth Schedule inclusive ordered to stand part of the Bill.

Bill reported with amendments, read a Third time and passed.