DISCONNECTION OF UTILITIES SUPPLIES (Assistance schemes for affected households)

Dr Mohamad Maliki bin Osman asked the Minister for Trade and Industry (a) what is the breakdown of the number of households whose utility supplies have been disconnected in the last six months, by flat size and the average period and amount for which these households have been in arrears; (b) whether SP Services Ltd will work with the Community Development Councils (CDCs) in making a proper assessment of the family's situation before deciding to disconnect their utility supplies; (c) whether for genuine financial hardship cases as assessed by the CDCs and social service agencies, SP Services Ltd will consider deferring their payments for the arrears and allow them to only pay the current charges until their financial situation improves or a reasonable period of time has elapsed; (d) whether SP Services Ltd will consider introducing a stored value system like those in the US and Britain to help Singaporeans take personal responsibility for their utility usage.

The Minister of State for Trade and Industry (Dr Vivian Balakrishnan) (for the Minister for Trade and Industry): Mr Speaker, Sir, for water utilities, PUB's policy, since late 2002, has been to thimble the water supply instead of disconnecting it. There have therefore been no disconnections for occupied households in the last six months. This practice will be extended until the economic situation improves.

For electricity utilities, from January 2003 to June 2003, there have been a total of 24,786 cases of electricity disconnections. This works out to an average of 4,131 cases per month. The House would be glad to note that households in 1- and 2-room flats make up a very tiny proportion of these disconnection cases. In fact, they constitute only 0.06% of those that have been disconnected. This reflects the fact that such families are helped, to a very large extent, by the various community assistance schemes that are already in place and act as a safety net for them.

On average, electricity accounts get reconnected after 12 to 15 days. This happens when households make arrangements with SP Services to pay up on their accounts. Households will get reconnected when they pay off their current bill. Previous arrears can then be repaid through instalments.

Working with CDCs

SP Services takes disconnection of the utilities seriously. Before disconnection, SP Services delivers at least two reminders (pink notices) and a final notice of intended disconnection. SP Services works very closely with the CDCs. When customers inform SP Services that they are facing financial hardship and are unable to make any payments, SP Services will recommend them to their respective CDCs for financial aid.

Deferring Payment for Genuine Hardship Cases

After CDCs or social agencies have assessed cases as facing genuine hardship, SP Services will not disconnect but allow deferment of payment of the arrears, up to a maximum of three months, until the household's financial situation improves. However, households must pay their current charges. This is to prevent a snowballing of debt. At the end of the day, the arrears in utilities charges have to be paid. The crux of the matter is that households in difficulty will have to make attempts to reduce their consumption of electricity and water. Those in hardship should seek assistance either from within their family circle or from the CCCs and CDCs.

The Government has multiple schemes to help low income households in financial hardship to pay their utility bills. The Rent and Utilities Assistance Scheme (RUAS) helps households renting 1-, 2- and 3-room flats. The Interim Short-Term Financial Assistance Scheme (IFAS) is applicable to households owning 1-, 2-, 3- and 4-room flats. If eligible, the CDCs administering the schemes will help households pay for up to six months of the households' utilities.

Stored Value Metering System

The stored value meter system which Dr Maliki proposed has in fact been considered in the past. It is a very expensive system. The average cost of a normal electricity meter for individual households is $35. In comparison, a basic stored value metering system will cost about $500 per household. For stored value water metering system, a normal water meter costs an average of $18; a stored value water meter would cost more than $1,500. If the cost of the stored value metering were to be borne by only those households opting for it, it would be an expensive burden for them. If the cost is spread across the whole system, we will be raising the overall system cost and electricity tariffs will have to rise as a result.

Nevertheless, we will continue to track developments on this and if there are other cost-effective solutions, we will certainly be prepared to re-consider.

Dr Mohamad Maliki Bin Osman (Sembawang): Sir, point of clarification and supplementary question. The Minister of State mentioned that SP Services is prepared to defer payment of arrears by a period of three months if the cases are assessed to be in genuine hardship by the CDCs. The CDCs usually take an average of two months to process a case. Would SP Services withhold any action with regard to disconnection or impending disconnection until the CDCs have completed their investigations and assessments and made their recommendations?

Dr Vivian Balakrishnan: Sir, once a household has made contact with the relevant agency and is being evaluated, SP Services will not rush in to disconnect. The crux of the point here is to ensure that efforts are being made to moderate usage and to restructure their finances so that this debt can be repaid. As long as genuine attempts are being made in that direction, SP Services has been and will continue to be very forbearing.