HEAD T - MINISTRY OF NATIONAL DEVELOPMENT

Column: 1610

Head T - Ministry of National Development

3.00 pm

The Chairman: Head T - Ministry of National Development. Amendment No. (1), Dr Teo Ho Pin.

Affordable Public Housing

Dr Teo Ho Pin: **** Sir, I beg to move,

That the total sum to be allocated for Head T of the Main Estimates be reduced by $100.

Sir, the introduction of a flexible wage system and the increasing uncertain job security will affect the affordability of Singaporeans to purchase HDB flats in future. I understand that our Government is fully committed to help Singaporeans own their flats. That is why new HDB flats are priced at a level based on certain percentages, namely, 90% and 75%, of Singaporeans that can afford a 3- or 4-room flat respectively. With increasing volatility in household income, HDB must revise its formula for pricing new HDB flats.

Column: 1611

Since HDB flats are transacted in the resale market at market prices, we should be consistent and price new HDB flats according to the market conditions too. But, the Government must continue to provide the necessary subsidy for first-timers and upgraders to purchase these new flats. In this way, the prices of HDB flats will be more stable and will move in tandem with market conditions.

Sir, I wish to ask the Minister the following questions: (1) Will HDB revise the pricing formula for new HDB flats? (2) What will be the impact of flexible wage system on the affordability of flat buyers? (3) How can we reduce the construction cost of new HDB flats to make them more affordable to Singaporeans?

Mdm Cynthia Phua (Aljunied): With the fast changing global economy and with the flexi wage system, we would like to appeal to MND to provide more choices of housing to cater to the needs of the middle and lower income earners. The higher income has the alternative of going to the private sector housing. Although recently HDB has released its scheme for HDB heartlanders to sublet their flats totally, this is still limited. The queue for HDB rental flats is long and there are stringent conditions to be met. Households with a salary range of $1,000 to $2,000 are finding difficulty to pay the current loan instalments, especially with the lower income and also the flexi wage system.

Presently for the sale of shophouses, HDB has already provided the alternative of a 30-year lease, in addition to the 99 years to help the small retailers. My questions are: (1) Can the Minister update the House on what is the Government doing to continue to make HDB flats more affordable? I also concur

Column: 1612

with Dr Teo Ho Pin's concept of reviewing the percentage attached to affordable housing. Is the Ministry reviewing its criteria for assessing affordability?

(2) I would like to urge HDB to provide short-term leases for housing, be it 99 years, 60 years or even 50-year term tenancy. This would allow for more choices and affordability for the different types of households to have a shelter over their heads. Presently, the short-term leases are not popular, as the banks are not providing loans for short-term leases. However, if there is sufficient market for this type of houses, I am sure the Ministry of Finance, or the Monetary Authority of Singapore overseeing the banks, can review the present policies of the loan structure and provide the persuasion power to the banks to accept shorter leases.

(3) Can the Minister give an update on the demand for rental flats? Has there been an increase in the demand of rental flats in view of the downturn of the economy over the past few years, and what are the sizes of the flats in demand?

(4) With the introduction of variable wages, how will this impact on the policy of making HDB homes affordable? And how will flexi wage owners be assessed to qualify for loans under HDB schemes?

Mr Gan Kim Yong (Holland-Bukit Panjang): Sir, the Housing and Development Board has played a critical role in the early years in providing public housing for Singaporeans. It also ensures that the cost of housing remains reasonable and affordable. Today, almost all Singaporeans own a flat or a private property. Furthermore, over the years, the private sector developers have gradually matured and have taken on a bigger role in the housing market here. Therefore, I think it is timely for us to review the priorities of the HDB.

Column: 1613

I notice that, in recent years, the HDB has stopped building the smaller 3-room flats and instead focus more on the larger 4- and 5-room flats. Sir, I think this is wrong. I feel that HDB should continue to build more 3-room flats to cater to the lower income group. There are mainly three types of people who need lower cost housing. Firstly, those who are facing financial difficulties. They have to sell their flats in order to repay their debts. Some of them have become bankrupts. Some feel it prudent to downgrade to a smaller flat to reduce their exposure. Firstly, they would be debarred from purchasing or renting another flat for a period of time under HDB rules. Next, if they are given permission to purchase a flat, they would not be able to afford a large flat. Secondly, those who have undergone divorce, as a result, most of them have to dispose of their matrimonial flat. The women who often have the custody of the children would have difficulties supporting a large flat, at least in the immediate future. Thirdly, those who are starting a family and young couples who are also starting a career, would not want to over-stretch themselves by buying a large flat.

Sir, I think it would be wrong for us to push this group of people who are already stretched to go beyond their means by insisting that they take on a big flat. I would therefore urge the Ministry to review HDB's policy and consider offering more 3-room flats. Alternatively, I would like to suggest that the HDB offer shorter leases, such as 20 or 30-year leases, so as to keep the costs low and allow tenants to extend later if their financial position has improved. I believe shorter leases are already available for the senior citizens under the neighbourhood links programme. Perhaps, it can be extended to people who fall within these three categories.

Column: 1614

Mr Zainul Abidin Rasheed (Aljunied): Sir, a growing number of Singaporeans are worried that they and their children will not find HDB housing affordable anymore. Quite a number of Singaporeans are turning to MPs to seek help. At my Eunos MPS, and I am sure at other MPSs too, many have appealed to downgrade because they could no longer afford to pay mortgages. Could MND give us a fuller picture about this request to downgrade at the national scale?

Sir, we know MND has assured before that HDB housing would remain affordable. But could the Minister explain how MND measures affordability? How does MND ensure that affordability will remain true despite the financial crisis, economic restructuring, the end of our high wage era, jobs lost because of economic slowdown, the effects SARS had on the economy, CPF cuts and greater application of the flexi wage system? Does the Minister agree that the profile of affordability has changed and what effect does it have on MND and HDB's policy and development? For example, like my other colleagues from MND GPC requests, would HDB review its policy and build more 3-room flats? Finally, Sir, what effect does these changes have on the recent HDB's policy to divest the provision of market rate loans to commercial banks? For downgraders and bankrupts who might not be able to obtain such loans from banks, would HDB grant them concessionary loans?

Housing Policy

Dr Amy Khor Lean Suan (Hong Kah): Sir, last year, the Minister had said that the massive restructuring of HDB is to enable a leaner HDB to react to market conditions more efficiently. The Minister also noted that the days of high demand for HDB flats are over and, with growing

Column: 1615

affluence, more Singaporeans will aspire to own private housing. The Government is thus scaling back its public housing programme and its medium term aim is to adjust the ratio of public to private housing to a ratio of 75:25. I would like to ask the Minister, since HDB's restructuring, what plans have been implemented or are afoot to enable HDB to better react to changing demand conditions, scale back its public housing programme and work towards the 75:25 housing mix and open up the public housing market to private sector developers.

Within the public housing sector, the trend towards upgrading to larger flats has reversed in the last couple of years. HDB had stopped building 3-room flats on the ground that our citizens' housing aspirations have risen. But there is now a current glut of several thousand unsold HDB flats, many of them larger ones. HDB's building programme had halted because of a steep fall in demand. However, the resale market has been very active, especially for the 3- and 4-room flats. This is a clear reflection of the downgrading trend.

While the current economy has been a major factor in this process, it is very plausible - with the tightening of CPF rules for housing purchase and the requirement to use increasing amounts of cash for downpayment - that this downgrading phenomenon may be entrenched for a long time. Our ageing population can also exacerbate this phenomenon.

So besides this downgrading phenomenon, there are also more people desiring to rent a flat. At my meet-the-people sessions, almost without fail, there would be appeals related to downgrading and rental housing. In view of what appears to be a significant U-turn in

Column: 1616

demand preferences, I urge the Minister to undertake a comprehensive study to better understand Singaporeans' preferences and the need for the various housing options.

At the appropriate time, the Ministry should consider reviving the building of 3-room flats, perhaps starting out as a small percentage of the total stock. This will provide families with tighter budgets an option to own a smaller flat that is more affordable. Furthermore, as Singaporeans begin to think of housing more in terms of consumption than investment, there is room for a larger and more active rental market. Besides catering to the lower income groups, there could also be young Singaporeans who do not wish to be tied down by a housing mortgage.

Mr Othman Haron Eusofe (Marine Parade): Sir, in January 2003, the HDB implemented the bank origination of HDB market rate loans. This has brought many benefits, for instance, it has given HDB flat buyers more choice in their mortgage financing and also with relaxation in the HDB rules, the HDB flat owners have flexibility in the resale and use of flats. And also banks and other financial institutions are now competing to provide more attractive loans to HDB buyers. However, there is a group of HDB flat purchasers who are unable to obtain bank loans to purchase their flats because of what is considered poor credit standing and this includes many downgraders, like what my colleagues mentioned just now. They want to downgrade because they want to deal with their financial problems more effectively.

So I would like to ask the Minister to ask HDB to be more sympathetic when considering appeals for HDB loans, especially from those who are downgrading to smaller flats. Many want to downgrade to the smaller 3-room flats - I think this was also raised by my GPC colleagues - as they cannot afford to

Column: 1617

purchase 3-room flats from the open market. Will HDB also review its policy to allow existing flat owners who are downgrading to purchase 3-room flats directly from HDB? In this connection, I also support the call for HDB to consider building more 3-room flats, either for rental or for sale.

Mr S Iswaran (West Coast): Sir, public housing policy has three dimensions. The policy function is to determine what type, how much and where to build in response to demographic and social trends. Then there is the development function and there is the financing function which is pertaining to the subsidies and so on. Sir, the key issue is the separation of the policy and the development function. I think last year, through the major restructuring and the setting up of HDB Corp, the Government has taken steps, with the Ministry in particular, to separate the policy function from the development function.

Sir, the second aspect pertains to the focus of public housing policy. In particular, what I would like to ask is whether in fact public housing should be focused on smaller and entry level flat types and not span the whole spectrum, as it does today, right up to 5-room and even larger flats sometimes. In particular, Sir, should public housing be confined to 4-room flats and 3-room flats, as many of my colleagues have indicated, and to ensuring that there is an adequate stock of rental housing to cater to the needs of those who are perhaps in the lower income groups and are unable to afford their own homes?

3.15 pm

The third key issue I would like to raise is whether in fact we can decouple the subsidy that the Government gives for public housing from the purchase of HDB flats. This sounds like a contradiction in terms. What I mean by this is that the

Column: 1618

only way you can enjoy your subsidy today from the Government for housing is if you go and buy an HDB flat, and that encourages an over-consumption of public housing. Individuals who, in the normal course of their decision making, would probably opt for different types of housing, today artificially go and buy a 5-room flat, hold it for five years or whatever in order to realise the capital gain. If we could change that methodology to say that public housing is priced at market or at the cost that is required to build it, and then provide a stream of benefits through a voucher scheme or some other loan subsidy by a stream of financial benefits, then individual Singaporeans can make the choice whether they want to buy a smaller flat built by the Government or best outsourced to the private sector, or to go into the private sector and buy a home of their choice. In that sense, the Government would also have discharged its obligation or promise to Singaporeans in terms of assisting them with their first home purchase.

So, I would like to ask the Minister for clarification and expansion on what the Ministry's thinking is on housing policy, going forward in this regard.

Dr Mohamad Maliki Bin Osman: Sir, I would like to echo the calls by many of my colleagues in the House about the plight of those downgraders. The reality is that the economic downturn that we have just experienced forces a lot of Singaporeans to really downgrade or ask for greater options in terms of housing possibilities. Many of them do not have good ratings, that is why they want to downgrade. But HDB's policy really does not allow them to do so. They are allowed to downgrade but they have difficulty getting HDB loans. They cannot get bank loans because of their credit ratings. Yes, they may get some proceeds from the sale of their existing flats, but they cannot go anywhere if they

Column: 1619

cannot get loans from any party. So, we can actually tell them to stay put in their current flat and make use of HDB assistance plans, but this also incurs costs. Deferring payments is not without cost. Refinancing is not without cost. In that sense, they are trying to reduce costs, but the options make them incur further costs.

Sir, I want to find out what is the real intent of HDB, whether it is merely to stop being a lender for Singaporeans and for Singaporeans to be more prudent in their housing spending. To some, comments have been made that HDB's new financing policies are just like that of commercial banks. They give you the umbrella when it is really sunny, like when you want to upgrade, and then they pull back the umbrella when it is raining heavily, when you need it most, when you need to downgrade. In this regard, I would like to ask if HDB has really studied the real impact of the new housing policies. As we encourage Singaporeans to be homeowners, what do we do when their capacity to be home owners diminishes?

HDB Flexibility in Policies

Mr Zainul Abidin Rasheed: Sir, allow me to congratulate the HDB for being flexible in rescheduling payments when residents appeal. Does HDB see this as a transient or a major exercise with long-term consequences? What has HDB's feedback been on the need to be even more flexible when faced with Singaporeans who are out of jobs? What are the kinds of flexibility asked for by Singaporeans other than downgrading and rescheduling of payments? What kind of flexibility was exercised by HDB? Will HDB allow those who have successfully obtained permission to downgrade to be allowed to obtain 3-room rental flats? My experience shows that while HDB allows

Column: 1620

downgrading, the same residents will be told that they will not be allowed to rent or purchase a flat for the next 30 months.

Sir, in the light of these changing circumstances, would HDB relook at the older policies which were introduced during boom times, to prevent too much speculation and Singaporeans having too many bites of the public subsidy? Gone are the days when Singaporeans would buy for speculative reasons, hoping to reap huge margins to pocket profits when they resell their flats. Nowadays, many are caught in the changed market when they are strapped for cash and cannot manage their mortgage when out of job or suffering from chronic illnesses.

Home Ownership

Mr Ahmad Khalis Bin Abdul Ghani: Sir, last year, the HDB introduced bank origination loans for certain categories of flats. Affected owners worry that their homes might be forfeited if they default in repayment of loans. Owners of private property have always understood the logic behind this and accepted its risks. Recently, we had the replacement of windows issue. The immediate reaction of many flat owners was that the HDB should pay for it. Private property owners, on the other hand, would understand that no other party would pay unless it is their fault, legally speaking, otherwise they pay for the replacement themselves. The reactions of the HDB flat owners suggest that many, though not all, are still grappling with what home ownership means in their context.

May I ask the Minister whether there are systematic efforts made to assist Singaporeans better understand this issue. There are many HDB rules which seem to contradict the notion of home ownership, such as restrictions on subletting, reselling, even rebuying, and others. HDB flat owners are understandably not fully convinced that they own their flats,

Column: 1621

because there are too many restrictions on ownership rights. Could the Minister comment? Further, what is the long-term direction of the Government as regards home ownership of HDB flats? Are we to move towards more genuine home ownership a la private property ownership? To do, Sir, is to be consistent with efforts to encourage entrepreneurship, risk-taking and less state involvement in commercial transactions. But we have to balance this against the present need for affordable public housing and, perhaps, the social mission of HDB as well. Could the Minister comment?

Supply and Demand of Public Housing

Dr Teo Ho Pin: Sir, with an ageing population and changing patterns in Singapore households, the demand for public housing will change. Some older Singaporeans prefer to move to smaller flats near their children and cash out their savings for retirement. Some younger Singaporeans will prefer to live near their parents or in-laws to provide care for one another. First-timers also have different aspirations when choosing their first HDB flats. With a more matured built-up environment, we need to develop a long-term plan to rejuvenate older housing estates, develop in-field developments, and build new towns. The key solution in fulfilling the housing aspirations of Singaporeans is to provide more flexibility and choices. HDB must study the housing mix of all its estates and analyse the population movements over the years. Understanding the housing needs of people is crucial in ensuring that Singaporeans live in harmony and enjoy a good quality of life.

Sir, I wish to ask the Minister the following questions:

(1) How does HDB project housing demand?

Column: 1622

(2) Are there plans to facilitate Singaporeans ageing within the community?

(3) What more can be done to further encourage families to stay near one another?

Mdm Cynthia Phua: Sir, the Ministry of National Development aims to develop Singapore into a tropical city of excellence, with distinctive identity and a quality physical environment. In order to achieve this vision, development plans must keep pace with the needs of Singapore's changing economy and the growing aspirations for a better quality of life. Can the Minister give an update on the supply plan for public housing, including executive condominiums. With limited land resources and nearly 90% of the population living in HDB flats, can the Ministry review its plans on how it is going to achieve to supply a variety of private and public housing types to meet the aspirations of the people?

The Duxton Plain development has been seen as an icon for the future kind of public housing. Why has the development been withdrawn? Does this mean that HDB will continue to provide only the standard public housing for the people? Has MND established clear guidelines for the supply and development of Small-Office Home-Office (SOHO) concept of housing in our commercial areas? This concept has been mooted in the last Master Plan. Till this review of the Master Plan, there has been no development of this type of housing in the city area. Has the Ministry done any survey to get inputs from Singaporeans on the types and choices of housing that they wish to have? We are getting a different set of future generation that is well travelled and Internet-savvy. What is the projection of the demand for public and private housing? There has been a change in the

Column: 1623

composition of the demand for private and public housing since the introduction of the executive condominium. Is this scheme still relevant and has it served its purpose?

The current provision of the public housing programme is based on Build-to-Order. The demand is thus always very dependent on the current economic scene. If the MND is to supply these flats purely based on current demand, there will be future consequences of not meeting the objective of the Ministry in providing choice and affordability of housing. Recently, we noted that HDB has been building precincts of 4-room flats only. If we do not provide the variety of housing types in the new estates, we would not be able to meet the future needs and aspirations of our impending increasing number of elderly citizens and younger generations.

Flat Allocation

Dr Amy Khor Lean Suan: Sir, I appreciate that the Build-to-Order (BTO) system of housing allocation is intended to be a more responsive way of housing provision by limiting the building of new flats to estates or blocks in which a minimum number of applications have been received. But this has the unfortunate consequence that those who are keen in a particular location cannot have a flat if the total applications fall just below the minimum target set by HDB. HDB then becomes the target to blame. The most recent casualty of the system is the much-touted 50-storey HDB blocks to be built at Duxton Plain. Additionally, this system brings uncertainty to applicants, many of whom are young couples planning to get married, as they cannot be sure when the estate will receive the minimum number of applications to trigger construction and, hence, when they can expect to get their flats. This could cause

Column: 1624

inconvenience and disruptions to their plans to get married, start a family, and so on.

I would thus like to ask how the Ministry intends to overcome such problems arising from the BTO system. Besides closely monitoring the demand for the different types of flats and changing the mix, if required, to ensure good take up, the Ministry could also peg the minimum percentage of applications needed to trigger construction based on market conditions and responses. It could also provide applicants with more definitive target date of completion of the project, to accord some certainty and transparency to the applicants. Perhaps the Ministry can additionally consider one of the ERC's Land Work Group's recommendations that a reverse tender system be initiated to allow more suppliers and spread the risks that HDB faces from over-building.

A reverse tender works like this: selling prices of HDB flats in a particular estate are predetermined, and private developers are invited to bid for the development. This would be like a variation of the present EC scheme. The developer's profit stems from how efficiently and effectively they build and launch these units. This ensures that public flats are still affordable while giving home buyers a wider variety of design choices.

As regards the walk-in selection system implemented by the HDB for its surplus flats, I urge the Ministry to consider selling these flats on a daily basis, as each day that these flats remain vacant represents a wastage and misallocation of resources and costs to taxpayers. For instance, one of the estates at Jalan Bahar, which is within my constituency, has a high number of vacant flats, due primarily to noise pollution from the Tengah Air Base. In fact, in one of the blocks completed some

Column: 1625

five years ago, only two of the 80-odd units in the block are occupied. The HDB should adopt a more aggressive pro-active, pro-market and pro-customer approach to sell these flats, say, by allowing applications on a daily basis ---

The Chairman: Wrap up your speech, please, Dr Khor.

Dr Amy Khor Lean Suan: --- as well as reducing the price to attract more buyers.

Rental Flats

Mr Andy Gan Lai Chiang (Marine Parade): Sir, many a time, I have received appeals during my meet-the-people sessions from residents facing financial hardship, especially senior citizens who face difficulties making payments for their flat instalment plans. This averages about three cases per week. They all wish to rent a flat from the HDB after selling their properties. I am aware that the HDB has many assistance schemes to assist those who fail to keep up with HDB instalment plans. One is to defer the housing payments for an initial period of six months, with a further extension of another six months, if necessary. But this only offers the residents temporary reprieve from their financial problems. Many hard-hit residents who have no means to maintain the HDB financial instalment plans would always choose to sell their flats to raise money to pay off what they owe to the HDB, which can run up to an amount beyond their reach. Their next course of action would be to ensure that they secure a rental flat from the HDB, as a private flat would be too much for them to afford. Unfortunately, the 30-month restriction rule bars them from renting a flat from the HDB.

For a more permanent solution, can HDB review the 30-month restriction and consider shortening it? HDB should also consider building flats for short-term purposes, so that families which are

Column: 1626

facing domestic difficulties as a result of family problems or financial hardship can resort to such services to have a roof over their heads. Such services should also be open to singles who may need short-term accommodation before they obtain their purchase flats. Public housing programmes must be flexible enough to meet the rapidly changing needs of our population, especially when the affordability factor in home ownership is becoming a greater burden with more uncertainty in the earning power for the majority.

3.30 pm

Mr Zainul Abidin Rasheed: Sir, I share the same concern raised by hon. Members Mdm Cynthia Phua and Mr Andy Gan and that is the question of whether there are enough rental flats available. I will not repeat those issues. But I just wish to add that I notice a new trend, that is, there are quite a number of senior citizens having bought a flat, maybe even upgraded, and then find that they now no longer need those flats or the flats are too big because their children have grown up, got married and moved on. For such people who would like to now go for rental flats, which they feel is a wiser thing to do, would the policy allow that? What are the encumbrances and are there enough flats available for rental?

Dr Mohamad Maliki Bin Osman: Sir, I would like to congratulate HDB for changing its rental policies which resulted in more Singaporeans being eligible for rental flats.

Sir, it was in this House last year that we saw a slight confusion with regard to the issue of demand and supply of rental flats. While we are told that there are 55,700 rental flats currently available, we are also told that there is a long waiting list. Can I get a clarification from the Minister? What is really the size of this waiting list that resulted in this delay in

Column: 1627

people getting the flats? Is there a system that differentiates between those who urgently need the flats versus those who are just merely being choosy? I would like to also ask the Minister what is the trend of Singaporeans asking for rental flats. Is there an increasing trend? If there is, what is MND's assessment of the matter? Is it a temporary surge in demand such that it will not do anything? If this is so, at what point will MND decide that rental flat is a living option that Singaporeans may actually prefer?

Sir, I am not advocating for us to make a U-turn on our home ownership policy. But given the current experience of the economic downturn, some Singaporeans may feel that renting a flat is a better option. Yes, rental flats are heavily subsidised but if we can have a tiered system of charging in "C" class wards, we can also look into a system for rental flats, that is, allowing Singaporeans a choice in housing types just as we allow them to choose the wards that they want when they are hospitalised. In that sense, they pay the rental based on their income rather than forcing them to buy flats all the time.

Sir, related to this issue of supply of rental flats, I would like to ask the Minister if there is any plan to offer those purchased flats that are not taken up, just like what Dr Amy Khor talked about. I see many vacant flats in my area and some of them have been vacant for five years. Certainly, it is better to rent them out to gain some income for HDB rather than to leave them vacant all the time. Can I seek the Minister's clarification on whether MND is planning to look into this matter?

Mr Ong Kian Min: Sir, I would like to share the concerns brought up by many Members of the House who have spoken

Column: 1628

about the plight of downgraders. These residents have seen their income reduced drastically by the economic downturn and now, they even face structural unemployment. Their income has been reduced to the point where some even face difficulties meeting their daily household needs, not to mention their housing loans. The cost of living remains high and they have accumulated arrears of HDB loan repayments, electricity bills, S&CC, schools fees, etc. Of course, the ultimate solution is for them to retrain and upgrade their skills and get a good income. But as we all know, some simply cannot get out of the rut. So what are we doing to help them?

We have assistance schemes to restructure their HDB loan repayments for a few months or to provide them with short-term financial assistance, subsidies for schools fees, and short-term measures like that. These small hesitant measures are unlikely to solve their problems. They need to downgrade to a smaller and more affordable flat. Even if they want to sell their flat at the present market value, they will not get much back after repaying the loan. And even if they sell their present flat, with their present low income and with the new rules on housing loans, it is unlikely that they will get a loan from HDB or a commercial bank to buy the next flat.

Realistically, what can we do to get them out of this rut? How can we help them to downgrade, wipe their slates clean and lighten their burden so that they can start afresh and move on?

Assoc. Prof. Chin Tet Yung (Sembawang): Sir, many have spoken about downgraders and their plight. I do not pretend to understand the intricacies of HDB financial rules. I just like to ask a simple question: who is going to help the downgraders?

HDB says that they will give loans only for upgraders but I fail to see the

Column: 1629

logic. Those who want to upgrade, most, if not all the time, have the means to do so. And if they do not have the means to do so, they probably could obtain loans from private banks. The opposite is true for downgraders. I do not want to ask the Minister to answer any questions but I just like to propose four things.

Firstly, can we reverse this policy of granting loans only to those who are upgrading and to give loans to those who are downgrading? They are not asking for handouts. They are prepared to pay market rate of interest but they are not being given the loans.

Secondly, can we have, as many MPs have said, more three-room flats? DPM Lee has explained that we no longer can see the growth rates that we have seen before. It is obvious that many residents now will think that they have over-spent and they want to downgrade. I genuinely see that they do want to downgrade and it is not that they are trying to make a profit from having HDB flats. Can we build more three-room HDB flats?

Thirdly, can we review our rental rules because they have been the cause of many MP letters in their meet-the-people sessions, asking for accommodation simply because even downgrading is not an option - for those who are unemployed, for those who have lost their jobs, retrenched and as someone has said just now, structural unemployment?

Finally, increase the number of flats for rentals. As Dr Maliki has put it, there are many flats that are vacant and can be used for rental purposes. In Woodlands, I already know of two blocks where nobody is staying there and they were actually reserved for, at one stage, SARS emergency. But right now, nobody is using the flats. Why can we not use them as rental flats?

Column: 1630

HDB Pro-family Policies

Mrs Yu-Foo Yee Shoon (Jurong): Sir, listening to my parliamentary colleagues just now, we can hear that we try to express two key words - flexibility and choice.

Sir, young Singaporeans are getting married at an older age. One of the reasons is that they need to save up for their dream homes. Would MND be prepared to make available the option of additional rental housing or studio apartments for young Singaporeans who want to get married but have not saved up enough for their HDB flats?

I must applaud HDB for implementing the Staggered Downpayment Scheme. I would like HDB to consider reducing the downpayment from 20% to 10% for young married couples, similar to the Confirmed Government Officers Scheme.

Sir, I would like also to ask HDB how many young Singaporeans buying resale HDB flats near their parents are successful in applying for the HDB housing grant. Would HDB consider increasing the quantum of the housing grant to encourage more young Singaporeans to live near to their parents? I actually know that my colleagues in this House - Mrs Lim Hwee Hua, myself, Lily Neo, Halimah and Cynthia - we all live together with our own parents or parents-in-law. They really help us a lot.

I would like to make another suggestion: HDB should try to develop pro-family programmes. Regulators like URA, BCA and NParks must ensure adequate provision of family-friendly equipment and facilities in public places, parks and gardens. This should be barrier-free with ramps provided and lifts installed for the benefit of expectant mothers, young children and the elderly. I am sure we have observed some of the

Column: 1631

hawker centres are on the second floor. We must help the young children, expectant mothers and the elderly to get into these places.

Shopping centres and other places should be required to provide breast-feeding rooms for mothers or diaper changing stations which both mothers and fathers can use. After all, we are talking about shared responsibilities.

Will MND also consider increasing the planning norms for childcare and infant care centres so that these facilities are more accessible in the HDB neighbourhood, shopping area, business area and workplace? By doing this, I am sure the Ministry of Community Development and Sports can develop more childcare centres in the business and shopping areas.

The Minister for National Development (Mr Mah Bow Tan): Sir, I thank the many Members who have spoken and taken such a keen interest in the various public housing issues. Before I respond specifically to their questions, may I have a few moments to give a quick overview of the public housing policies.

Over the last few years, we have seen a few major changes in public housing policies. For a start, with the implementation of bank origination, HDB farmed out its market rate loans to commercial banks. So now, flat buyers who take bank loans have a much wider choice of loan packages, but, of course, at the same time, they have to be subject to the credit assessment rules of the banks which are not a bad thing in the sense that they encourage financial prudence. Also, in the same spirit of giving the owners more choice and encouraging greater self-reliance, we have relaxed the rules at the same time to make it easier for them, amongst other

Column: 1632

things, to resell or sublet their flats in order to monetise this very important asset. This is exactly in line with what Dr Maliki mentioned just now about the concept of home ownership - a person having a stake and being able to make use of that stake.

Another major change took place in July 2003 when we corporatised HDB's Building and Development Division to form a company known as HDB Corp. As a result of this restructuring, HDB today is a much leaner organisation with a clearer focus on the core functions of being a public housing authority, as Mr Iswaran mentioned just now. It has, at the same time, allowed HDB Corp to export its expertise which it is beginning to do, and it has paved the way for greater private sector participation in our public housing programme, something which I will elaborate on later in response to Dr Khor's questions.

Sir, these changes are significant and major, and I am pleased to note that they have been implemented smoothly. I attribute this mainly to the very harmonious relations between the management and the unions of HDB. I would like to place on record my appreciation of board members like Mdm Halimah who was instrumental in helping us to implement these very major wrenching changes in a relatively smooth manner.

Sir, in the years ahead, we are going to consolidate these measures and focus on their implementation in order to ensure that our public housing programmes remain relevant and in tune with other changes in the economy and our society.

One of the major outcomes of our review is to re-focus HDB on its core function - to deliver quality, affordable housing to our people. As part of this review, we have examined the public-private housing mix in Singapore . Dr Amy

Column: 1633

Khor mentioned just now that the target for public-private housing mix is something like 75:25. This is a long-term objective. Currently, the proportion of public housing is something like 80-81%. So to drop from 81% to 75% may seem small in percentage terms, but, in actual fact, it is an extremely big drop. Because if we look at the stock of public housing in Singapore,

800,000 units, you will see that this is a very major task and, therefore, it has to be done gradually over a long period of time and at a pace which the housing market can absorb and such that the housing needs, the demands, the aspirations of Singaporeans can be met at the same time. So this change will be gradual.

3.45 pm

Sir, our immediate focus is to phase in the private sector participation in the development of public housing from July 2006 onwards. Members will recall when I announced the formation of HDB Corp, I indicated that, in the first year of liberalisation, 2006 onwards, 10% of HDB's building programme will be opened up to the private sector, and thereafter it will be followed by 30% in the second year and 50% in the third year.

MND is currently studying ways to open up the public housing market to the private sector. One way is to just outsource the design and consultancy part of the project. This part is currently undertaken by HDB Corp and we can just outsource this part to the private sector. In other words, a straightforward transfer. Another option is to use the design and build method. This design and build method is not something new. This has been practised in some HDB projects already. Under this option, private companies will undertake the design and build works for HDB as one package. A third option is to allow the private sector to take over the whole development of HDB flats. In other words, design, build

Column: 1634

and sell the new HDB flats. This means that private sector developers will tender for the land, build the flats, and price the flats for sale. And, as a result of that, they will bear the market risk in the process. This is along the lines of what Dr Khor mentioned just now, the reverse tender process, whereby the developer sets the price, except that in the case of a reverse tender system, the price will actually be fixed by the authority - by HDB. There are some problems associated with this option which I will elaborate on later.

The outcome of this study is going to have a very significant impact on the nature of public housing in the years ahead. It is, therefore, very important for us to take our time to study carefully the implications before we finally take a decision on this. But, whatever the option we choose, with greater private sector participation in the public housing market, I believe that Singaporeans can look forward to more choice, greater variety in public housing, and I think that is for the good and that is something we should go for.

Sir, many Members have spoken about the issue of affordability of HDB flats and I think this is particularly relevant in these last few years when there have been economic uncertainties, CPF cuts and now flexible wages. Sir, affordability is always a contentious issue and Encik Zainul Abidin Rasheed said just now that public perception is that HDB flats are not cheap. HDB always responds that, "No, public housing is affordable. Cheap and affordable." Are we talking about the same thing?

Sir, recently I visited a public housing flat in Hong Kong . This was a 55 sq metre flat, smaller than our 3-room flat, close to a studio apartment. The elderly couple who had just bought the flat paid HK$1.5 million. Roughly it is about S$320,000 for a 55 sq metre flat. But

Column: 1635

when I spoke to them they were very, very proud. In fact, they said they were very lucky to get this flat. Why? A private flat of that size in Hong Kong would cost much more. Was that flat cheap? To the owner, it was very affordable. They were obviously very house proud. The house was very well furnished, just husband and wife. Then they also told me that their son had emigrated to Singapore, I think something like seven years ago, working with the SMRT, and recently bought an HDB Executive flat (130 sq metre), more than twice the size of the parents' flat in Hong Kong. Price - about the same - $320,000. And, they said that their son was even luckier than them - to be able to buy such a nice flat in Singapore for the same price.

So what does this tell us? The Hong Kong couple's 55 sq metre flat is not cheap by Singapore 's standards, but it is very affordable to them, because the wages there are higher. The son's flat in Singapore , which is cheap by Hong Kong 's standard, but not by Singapore 's standard, is also affordable to him. In other words, what is affordable varies from place to place and, indeed, from time to time as well. And it is dependent on many factors, like the cost of living, income levels, people's expectation of what kind of quality of life they want, what kind of flat they want to buy. So it can be rather subjective.

So a better and a more objective way of trying to assess affordability is to take the monthly mortgage instalments that a household has to pay, and compare that with the gross monthly income. This is known as the debt-service ratio. So you take the mortgage instalments and you divide that by the household income, what is the percentage of your household income that you spend on housing to pay off your loan. At last year's prices, those

Column: 1636

who bought 3 and 4-room flats from HDB needed to use, on average, less than 20% of their monthly income to service their monthly mortgage loans. In other words, they had a debt-service ratio of less than 20%. A debt service ratio of 20%, I submit, is reasonable and affordable by any standard. Buyers would generally be able to service their loans, this 20%, using their CPF funds alone. In other words, they do not have to come up with any cash, even after the cut in the CPF ordinary account rate in October last year.

It is well within the debt-service ratio guideline of 40% which is adopted by financial institutions when they do credit assessment for granting of mortgage loans. It is also in line with international benchmarks of household expenditures on housing, which are typically between 25% and 30%. So, Sir, in answer to many Members' concerns, there is really no need to be worried that HDB flats are today not affordable to the majority of Singaporeans.

Dr Teo Ho Pin and Mdm Cynthia Phua were concerned about the impact of the flexible wage system on buyers. Sir, HDB monitors wage trends very closely and, as I have said in this House, if it is necessary, they will adjust the prices to ensure that they remain affordable. But individuals must also exercise prudence and choose a flat that is well within their means, bearing in mind that buying a home is a long-term commitment.

Dr Teo asked whether we can, through reducing the construction cost of flats, make HDB flats more affordable. Let me emphasise that the affordability of households, and not construction cost, is the key consideration when we price HDB flats. In other words, we look at the resale flat prices and as resale flat prices move, the new flat prices will also move in tandem, in such a way that they will remain affordable. 3-room flats, we have undertaken to make them affordable to as

Column: 1637

many as 90% of Singaporeans; 4-room flats, 70% of Singaporeans. But, having said that, it is still important for us to make sure that construction costs are kept as low as possible. And I want to assure the Member that HDB does that through many means - through the use of construction technologies, like prefabrication, using value-for-money materials, and so on. But I just want to add that while we can ensure that new flats are affordable, we cannot ensure that prices of resale flats are affordable. It is something that has got to be determined by the market and based on willing buyer and willing seller. But for new flats, they will be made affordable.

Yet, another point on the issue of affordability, some Members have suggested that HDB consider offering shorter leases - 30-year leases. Those who are familiar with valuations know, and here Dr Amy Khor may be able to bear me out, there is no straight line correlation between the length of the lease and the price of the flat. So, if you were to say, shorten the lease, from 99 years to 60 years, it does not correspondingly reduce the cost of development by one-third. In fact, the valuers say it will just reduce the cost marginally, say, by about 10%. The reason is because land cost and property prices do not vary proportionately with the length of the lease. on the other hand, there are also some major shortcomings with shorter leases. Those who have properties with short leases would know that such flats depreciate in value very quickly. And, when you try to sell them, it is very, very difficult to do so. When you try to obtain financing for them, it is also very difficult. So, I think, in view of these concerns, my view is that shorter leases would not be well received by most Singaporeans. Yes, we do offer shorter leases. Studio apartments are on 30-year leases for the elderly. Shops are on 30-year leases. But

Column: 1638

I would hesitate to extend such short leases across the board to other flats, without careful consideration.

Sir, let me now touch on the issue of 3-room flats. Many Members have asked whether and how Government will ensure that there are sufficient 3-room flats available because such flats are more affordable, and they are in greater demand now from various categories of people. We have reviewed our policy on 3-room flats as part of the overall review of the role of the HDB, and let me now share with the House our key conclusions.

Over the years, the profile of flats sold by HDB has changed, as many Members of Parliament have observed, and this is in tandem with changes in Singaporeans' expectations and living standards. In the 1960s, HDB built predominantly 1- and 2-room flats and that was primarily to ease the very acute housing shortage at that time. Later, HDB started to build 3-room flats, then 4-room flats, 5-room flats and even Executive flats as people wanted better and better housing, bigger and bigger flats. In 1985, HDB stopped building 3-room flats because there was simply very little demand for 3-room flats. Everybody was going for 4-room flats, 5-room flats, and bigger. Subsequently, in 1995, HDB stopped building the top-end Executive flats, preferring to let the private sector build ECs instead.

Since 1985, HDB has built 3-room flats only in selected SERS replacement sites, and this is to cater for the 3-roomers who still have a preference for these 3-room flats. So to meet their rehousing needs, we have continued to build 3-room flats for the replacement sites. Now, only 4-room and larger flats are offered for sale to the public.

To meet the housing needs of low-income families earning $2,000 per month and below, there is a 3-room flat buy-back scheme, whereby HDB buys back 3-room flats

Column: 1639

from the resale market, then resells them at subsidised prices to these low-income eligible households.

4.00 pm

Sir, I relate this history to reinforce the point that the situation has changed over the years - demand has changed, aspirations have changed. And HDB has had to keep pace with those changes.

In recent years, the prices of 3-room flats have risen sharply, in part, due to the growing demand from singles and also from downgraders. Last year alone, the average valuation of 3-room flats increased by 17.6%. At the same time, the proportion of 3-room flats in our housing stock has declined as a result of a stop in the building programme in 1985. So today, our stock of 3-room flats consists of 220,000, which is about 27% of all HDB flats. When we stopped in 1985, 3-room flats accounted for more than half, or 52%, of the total housing stock.

MND has been monitoring these trends carefully. Although the demand from downgraders may abate once the economy picks up, it is also possible that there will be sustained demand for 3-room flats in the future, due to our changing demographics or aging population, as older lessees may opt to downgrade to a 3-room flat so that they cash out and have more to meet their retirement needs.

Sir, I am pleased to inform the House and the Members who have spoken in support today that HDB will resume building 3-room flats for sale to the public. This is in line with HDB's core mission of providing affordable, quality housing. The new 3-room flats will be offered for sale under the Build-To-Order (BTO) system, and this is to avoid over supply because we try to match the supply and demand as far as we can.

Column: 1640

Under the BTO system, a contract will only proceed to tender if demand is above a certain minimum benchmark level. The first contract will be launched in the second half of this year, and more details will be released when the flats are ready for offer. We will assess the response and then adjust the supply accordingly.

At the same time, we will continue to build new 3-room flats in SERS replacement sites. And those balance units that are not taken up by the SERS lessees will then be offered for sale to the members of the general public.

The income ceiling for the purchase of these new 3-room flats will be set at a higher level than the current income ceiling for the sale of 3-room buy-back flats. It will be set at $3,000. This is higher than the ceiling of $2,000 for the same 3-room buy-back flats, but this is still lower than the $8,000 for the purchase of 4-room and larger flats. The reason for this is that we want to ensure that the 3-room flats that we are building will continue to be kept for those who are in the 50th percentile and below, which is what the income ceiling of $3,000 represents. All those who have household incomes higher than the 50th percentile should, strictly speaking, go for the 4- and 5-room flats. All the other eligibility conditions, such as citizenship, household nucleus, etc, will continue to apply.

Sir, I now turn to the question by Dr Teo on the supply and demand of HDB flats. Dr Teo asked how HDB projects housing demand. This is a very difficult task, I assure him. Housing demand is very dynamic. It is affected by many factors - state of the economy, employment outlook, confidence level, the demographics, such as household formation, the profile of the population and so on. Demand can also change quickly due to unforeseen circumstances. The SARS crisis last year had a significant and immediate impact and housing

Column: 1641

demand fell sharply, both new as well as resale and, of course, in the private sector as well.

Therefore, it is very essential for HDB to have a flexible and yet responsive flat supply and allocation mechanism. What HDB has implemented last year, Build-to-Order system, meets this objective, as flats are only built when there is sufficient take-up and demand. Yes, it does create some uncertainty, as Dr Khor pointed out, but I submit that that is part and parcel of letting people be aware that we cannot simply be building ahead of demand, having flats ready waiting for buyers. And if the buyers, for one reason or another, change their mind, we have those flats just sitting on the shelf. That is an untenable situation and this is the reason why there is a need for us to better match supply and demand through the BTO system.

But that is not the only way we allocate flats, as the last few years have demonstrated. Other than the BTO system for new contracts, we have also implemented the Balloting Exercise (BE), whereby surplus SERS flats in mature estates that are no longer needed for rehousing the SERS lessees are put up for balloting for members of the public. We use the balloting method because these flats in the mature estates are in very high demand and is always over-subscribed many times. So, we need to allocate them by ballot.

The third method of allocation is the Walk-in-Selection ( WIS ) scheme. This is used in situations when there is ample supply of flats. In the non-mature estates, for example, in Jurong and Woodlands where there is ample supply, applicants can walk in and literally pick a flat off the shelf. They can buy it at any time. This is even better than what Dr Khor was suggesting -- to have a WIS every day. This is more than every day. This is 24

Column: 1642

hours if you use the Internet. This is a very effective system for clearing surplus flats in non-mature estates.

Has this been successful? Has HDB been proactive, pro-consumer, pro-market? I believe it has and I think the results show for themselves. It has started to build show flats. It has conducted tours of the estates in which they are trying to sell the flats, to try and interest buyers, to show the buyers what a wonderful estate they are moving into. This is where, I believe, the work of Members of Parliament and the work of the Town Councils have an impact. Because where the estate is well maintained, well provided in facilities, that is a great plus for buyers. The HDB has also taken up television advertisements and advertisements in the newspapers. Last, but not least, and very importantly, they have also adjusted their pricing. Obviously, they cannot keep their prices fixed and expect buyers to accept whatever they sell those flats at. Yes, HDB has been able to learn from the private sector and has adjusted its practices accordingly, with success.

Mdm Cynthia Phua asked about the number of flats that have not been taken up. Currently, HDB has about 10,000 flats available for sale - about 8,000 in the non-mature estates and 2,000 in the mature estates. They are continuing to market them and to sell them to people through the various allocation systems.

Now, let me respond to Mrs Yu-Foo's questions about pro-family policies. I think HDB's policies are very pro-family. For example, under the balloting exercise, couples are given priority allocation if they want to buy flats near their parents through some weightage system. Although it is a balloting exercise, they are given additional weightage. So far, the records show that about 40% of all applicants have taken advantage of this

Column: 1643

scheme. So, it is a very high percentage of people who have benefited from such priority allocation scheme.

Those who choose to buy a resale flat near their parents also enjoy a higher housing grant of $40,000, instead of $30,000 for the others. Again, more than 50% of couples take advantage of this. This is already very generous and we do not have any plans to increase the housing grant any further.

For the public rental scheme, those who are earning $1,500 monthly and above, we have liberalised the subletting rules, again, allowing more young couples, if they so wish, to rent. If they do not wish to rent from HDB, they can rent from the open market. Again, we have relaxed the subletting rules.

HDB estates are also designed to be family-friendly, whether it is in terms of ramps, void deck space for elderly care or childcare facilities, or whether it is in terms of elder friendly features in their flats. The provision of sufficient elderly care, infant care, childcare facilities in the HDB estates is something that is looked at very closely.

I recall every time I visit the branch offices and I get a briefing from them, one of the main briefing items is on the provision of facilities, especially facilities for children, elderly, kindergarten facilities, social day-care facilities and so on. And there are planning norms in place for each of these facilities. Where the facilities are not up to the norm, additional facilities are provided. I would like to assure the Member that these pro-family policies will continue to be in place and monitored closely.

Sir, finally, let me move on to an issue which has attracted the attention of many Members of this House and rightly so, and

Column: 1644

this is the concern about providing assistance to households who are in financial difficulty.

As a general guiding principle, the Government will help those who are prepared to help themselves. In this regard, Members know that HDB has put in place a wide array of financial assistance measures to help flat lessees who have difficulty paying their mortgage loan instalments. They can extend their loan repayment. They can defer in certain cases. They can reduce their local instalments in other cases. By and large, I think these schemes have come in very handy and there are many flat owners who have taken advantage of these schemes to tide over their temporary financial hardships.

But, as always, there are those who cannot be helped by these schemes. They are in severe financial hardship. And I agree with Members that downgrading to a smaller flat, a more smaller flat, a more affordable flat, would be effective in alleviating their financial burdens. Dr Maliki, Mr Ong Kian Min, Mr Zainul Abidin Rasheed and Prof. Chin have also asked whether HDB can grant concessionary loans to downgraders purchase another flat, whether we should change the policy. According to Prof. Chin, I am not supposed to answer, but I will anyway.

This is something that has occupied the minds of the Ministry and HDB. Ever since we ceased the granting of concessionary market rate loans for flat buyers, since 1st January 2003 , we have had a considerable number of requests or appeals from people wanting to continue to have a market rate loan from HDB because

they cannot get one from the bank.

4.15 pm

Let me explain, first of all, that when we implemented this policy, we wanted

Column: 1645

to ensure that subsidised loans are given to those who need them most. There was a time when you could actually go to HDB to get not just the first subsidised loan, not just the second subsidised loan, you could even get a third subsidised loan from HDB. Obviously, it is not tenable for us to continue to have such a generous loan policy. Not only does it encourage over consumption, but I think there is a limit as to how much money we should put aside for housing loan subsidies. And we should really target those who need it most, ie, the first timers and those who are able to upgrade as to encourage them to better themselves. Those who have already enjoyed a concessionary loan, or who are buying a flat of the same or smaller size, are not eligible for a loan because, generally, when they sell their bigger flats, they have in hand a considerable sum of money as a result of the sale of their flats. So the proceeds from the sale of their flats are sufficient for them to either buy a smaller flat or to rent a flat. This is the reason why we have limited the second loan and not allowed them to take a second loan.

The majority of flat buyers who have approached the banks and the financial institutions for a second loan have been able to do so successfully. But, of course, again the small numbers who are not able to do so for a variety of reasons have come back to HDB for concessionary loan. I explained in this House last year that HDB would exercise flexibility and would grant another concessionary loan to downgraders who are in severe financial hardships, and these include retrenchment or severe pay cuts, or business failure, illness, death of the breadwinner, and so on. This is a temporary measure. It will help lessees to cope with the CPF changes that were implemented last year as well as the economic downturn.

I wish to inform the House that so far, we have processed more than 600

Column: 1646

appeals for such concessionary loans. We have approved about 12%, about 80 of them. And the majority of the unsuccessful appeals were rejected mainly on two grounds. The first was when the lessees were deemed to be able to finance their flat purchase from the sales proceeds of their existing flats. So when you consider the proceeds from your flats and you net off the outstanding loan, in many cases, they would have quite a large sum of money which would enable them to buy or rent another flat. But the second category are those who are really not financially ready to buy a flat in the first place. In other words, they did not meet HDB's credit assessment guidelines either because they did not have a job or they had already extended themselves in other areas.

Nevertheless, HDB will continue to exercise flexibility during this period. It will take into account buyer's economic circumstances and, of course, if MPs come across such cases, I would urge them to either write to the Ministry, myself, my MOS or my SPS, and we will consider their requests for concessionary loans taking into account, as I said, their individual circumstances. But the policy on not granting concessionary rate loans to those categories of people will remain.

Sir, let me now turn to the issue of rental flats or, more correctly, the issue of home ownership versus rental. Again, many Members have asked what are our plans to meet the increasing demand for rental flats. They have brought up this very fundamental issue which is whether we should continue with our home ownership policy or whether we should move towards some kind of a rental policy. Which is better for us? Sir, home ownership is the foundation of our public housing programme. It has been a success. Over 85% of Singaporeans live in HDB flats and the majority of them, almost 95% of them, own their flats today. This is something that I believe is

Column: 1647

to be proud of. Because I do not believe there is any other country in the world, developed or developing, that is able to claim this.

Should we deliberately restructure our public housing policies and subsidies so that a higher proportion live in subsidised rental housing permanently or for a long period of time? Public housing is more than just providing a roof over people's head. It plays a very critical social role in getting people rooted to the country. It gives people a sense of belonging and to own a home is to own a part of Singapore . It is what makes Singapore worth contributing to and worth defending.

We remain committed to encouraging home ownership. Social cohesion is critical, especially for a young and small country like ours, and to give Singaporeans a stake in the country, a stake in the nation, through home ownership is, I believe, the critical bedrock upon which we have achieved social stability and engendered a sense of community and belonging to Singapore . So I would like to urge Members to continue to support the home ownership policy. But, nevertheless, I agree that as our economy restructures, there will always be some low income households who may have difficulty sustaining home ownership. There will always be those, like the young couples that Mdm Yu-Foo mentioned, who are not ready to commit to home purchase. So for these people, subsidised rental housing may be a better option until they are ready and able to buy a HDB flat. For the low income, we have the Public Rental Scheme and October last year, the Government made subsidised rental housing more readily available for the lower income households by raising the monthly household income ceiling, from $800 to $1,500. So far,

Column: 1648

about one quarter of the 300 rental applications every month - about 70 to 80 of them come from families earning between $800 and $l,500, and these were families which hitherto had not been able to rent from HDB.

Then for those who do not wish, not that they cannot afford, but do not wish for whatever reason, to buy a HDB flat. HDB has relaxed the subletting rules last year to allow more flat owners to sublet their whole flats. I hope that through this way, and over time, a thriving viable rental market in public housing will be created. So far, more than 700 flat owners have rented out their whole flats. They have moved in with their children or they have moved to other properties. But it has been a win-win, they have been able to get rental income, at the same time some of these young couples would have a chance to rent some of their flats.

We have no plans to provide rental housing for the better off, for those whose household incomes exceed $1,500. The reason is very simple because, based on current HDB prices, HDB flats are actually very affordable. You consider that your mortgages actually can be paid out from CPF whereas your rental cannot, then I think you will realise that it makes very good sense, not just from the investment point of view, but also from the cashflow point of view, to actually buy rather than rent.

Now, I come to the 30-month debarment policy, many Members again have asked whether we can relax this policy of 30-month debarment for HDB lessees as well as private property owners from renting a flat. Why is this policy necessary? We really want to prevent the existing property owners from competing for subsidised rental housing with other low income families who may have more pressing housing needs. Our housing stock for rental flats is limited and we

Column: 1649

really need to make sure that it goes to those who are in greater need for those flats.

Having said that, again, HDB does exercise flexibility on a case-by-case basis and we do waive the 30-month waiting period if the persons are in severe financial hardship and they are not able to afford alternative housing after the sale of their property. Again, I urge Members of the House to bring any cases that they may have to our attention, in case some of these cases may have slipped through the cracks.

I wish to assure Members of the House that HDB will continue to ensure that there are adequate rental flats to meet the demand for such flats among the low income families. But even as we make subsidised rental flats more available to more people, we have to be careful that we do not give rental subsidies to all and sundry. We need to target the rental subsidies to those who need the most. And those whose financial situations have improved, those who are renting flats and have improved their financial status should be encouraged to take home ownership instead. This would then free up the rental flats for those who are truly needy. I think I had mentioned this to Members of the House previously. HDB intends to convert all those rental tenants, existing tenancies, which are open ended, to term tenancy and to implement income-based rental. But, of course, it would take into account the economic situation before doing so and any adjustments would be done in phases.

[Mdm Deputy Speaker (Mrs Lim Hwee Hua) in the Chair]

4.25 pm

Madam, in conclusion, let me say that I do understand why many Members of this House consistently and continuously

Column: 1650

ask HDB to exercise greater flexibility in the implementation of these rules, whether you are talking about the 30-month debarment rule or you are talking about granting of additional concessionary loans. These rules were introduced to curb excesses and to prevent over consumption and they are still appropriate and necessary. But I wish to assure Members of the House that HDB will exercise flexibility at the margins, will be sympathetic and will assist those who are in genuine hardship. Even so, I hope Members will understand that not all the cases that they bring up, or appeal for on behalf of their constituents, will be approved.

Madam, as I said at the start, we have made several significant changes in our public housing policies and this is necessary to keep pace with the changing economy and society. Going forward, even as we consolidate the measures that we have implemented, we will keep on reviewing our policies and programmes to ensure that they remain relevant to Singapore and Singaporeans. But our commitment remains unchanged, and that is, we will provide quality, affordable housing to the people.

HDB Upgrading Programmes

Dr Teo Ho Pin: Madam, the HDB Upgrading Programme is funded by our budget surpluses. It has benefited many HDB residents over the years. But the cost of upgrading has posed some financial strains on some residents, especially during very difficult times. The upgrading work has also caused much disruption and inconvenience to

residents, such as noise and dust pollution. Furthermore, town councils are facing an increase in maintenance costs to upkeep the additional facilities provided by the upgrading programme.

Madam, while I support the HDB upgrading programme, there is a need to

Column: 1651

review the scope of works for upgrading, especially the addition of new facilities and features. Some of these features do not provide much benefit to the residents. One example is the architectural features for facade treatment which make it difficult for town councils to access and maintain the facade of buildings. This has increased the cost of maintenance drastically. I wish to ask the Minister the following questions:

(1) What are the future plans for the HDB upgrading programme, if there are no budget surpluses?

(2) How can we prioritise the needs of the residents for upgrading?

(3) Will the Ministry review the scope of work for the HDB upgrading programme?

Mr Ong Kian Min: Madam, a few years ago, the Government introduced the HDB Main and Interim Upgrading Programmes as our older estates built in the previous era were in need of improvement. Compared to the newer estates, these older estates looked rundown and there was a danger of them turning into slums. A few years later, the Lift Upgrading Programme was introduced so that lifts stop at every floor to serve the residents who were getting older and less mobile. These programmes were launched during the years of plenty when we enjoyed strong growth, rising property prices and budget surpluses. Now we have to tighten our belts and cut back on non-productive expenditure, and sensibly so. As DPM and Minister for Finance has emphasised, we have to live within our means.

However, the need for upgrading remains the same, if not even more urgent, as our older estates are getting older with the passage of time, and our

Column: 1652

residents are also getting older and, hence, more in need of having the lift stopping on their floor. In every housing estate, there are some precincts that are fortunate to be upgraded and others that are still waiting their turn. I would like to ask the Minister whether the plan is still to upgrade them all. If that is still the plan, at the pace forecasted, over what timeframe will we be able to achieve this?

Dr Amy Khor Lean Suan: Madam, the highly publicised stalled upgrading works at Marine Terrace has caused many HDB residents to be wary of upgrading whereas they had previously eagerly awaited their turn for the precinct to be called "Yet Another HDB Upgrading Precinct". But despite the hiccups, such as the falling windows, delays and complaints of poor workmanship, all things being equal, upgrading has generally improved the value of HDB flats and the living environment for residents.

However, for the MUP projects that receive the go-ahead, I urge the Ministry to review the upgrading package, cut away the frills and concentrate on the truly important components. In these days of belt-tightening and keeping in view the need for economy for long-term maintenance, the improvements planned need to be practical and useful to the residents. This will also help to make the cost more affordable to residents who have to co-pay more in the case of MUP. In one estate, the voting went narrowly against the upgrading programme to the chagrin of those who supported it. This is unfair to the majority. Presumably, this occurred because the dissenters do not wish or do not have the means to pay for their share. Having a more basic package could help make this more affordable and reduce the risk of this occurring.

In the case of IUP-Plus, where lifts are added to every floor, with affected residents paying only a very small share, the majority of residents welcomed the

Column: 1653

initiative. In this case, the perennial bugbear is the exclusion of the 4-storey walk-up flats in the Lift Upgrading Programme. The reason given by the Government for the exclusion has always been the high cost of adding lifts to these flats for a relatively small number of beneficiaries. However, with an ageing population, having lifts on each floor is fast becoming a basic necessity and not a choice. I would, therefore, urge the Ministry to adopt this new attitude of never-say-never to reconsider adding lifts to such walk-up flats. Advancement in technology and innovative designs could help to minimise costs. Otherwise, another option would be to tear down these blocks and consider alternative uses for the vacant site.

Mr Ang Mong Seng: (In Mandarin) : Madam, I support Minister Mah Bow Tan's announcement to have more Interim Upgrading Programme and less Main Upgrading Programme.

The present package of Interim Upgrading plus Lift Upgrading is still much cheaper than the Main Upgrading Programme. The cost of one MUP precinct is equivalent to four or five IUP plus LUP precincts. With this saving, many more precincts can now enjoy IUP plus lift access to every floor in the older HDB estates.

The Minister said that there were some 3,000 blocks of flats that qualified for IUP, and it would take about 10 to 15 years to complete the programme. Some old folks told me that by 15 years they most probably would not be around to enjoy the benefits of such upgrading. I would like to ask if the Minister would speed up these projects to finish all the upgrading programmes in, say, five years. This will also help to boost up the presently depressing building industry.

With our ageing problem, lift access to every floor would be a great convenience

Column: 1654

to our older folks. I also urge the Minister to consider extending the Lift Upgrading Programme to the low-rise four-storey blocks as well. I understand that the cost of installing lifts to the four-storey blocks is only $5,000 per unit. For the high rise blocks, the cost is about $12,000 per unit. I hope that the Minister would consider this favourably.

Mr Iswaran: Madam, the most pressing need in the entire upgrading programme is really with respect to lift upgrading. Many Members of this House, and I can attest to this personally, those of us whose constituencies have a large number of older flats especially, we see this request repeatedly from the older residents. They bought their flats at a time when there was more spring in their stride, and not having a lift on every floor was not as big an issue. But, today, it has become a major problem. And it is small comfort to them to say: "Wait your turn, bide your time, lift upgrading will come to you in due course." Neither is it satisfactory or reasonable, in my opinion, to tell them, "Why do you not sell your flat and find another that is on a floor with a lift?", one particular reason being that they have lived there for the last 20 to 30 years, this is part of their community. To ask them to upheave and relocate because of a simple matter of a lift seems quite unnecessary and also not consistent with our own policy of trying to preserve communities.

I would like to ask the Minister: can we not re-allocate resources away from the more grandiose MUP and IUP-type projects towards these basic upgrading programmes like the Lift Upgrading Programme? This way, we can broaden the scale, accelerate the pace and, I think, bring benefit to those who really need it most when we are trying to rejuvenate these older HDB estates in our area.

Madam, I would also like the Minister to respond to a point I raised under the

Column: 1655

housing policy section on whether in fact the Government would consider decoupling the subsidy to housing from the purchase of public housing itself. That is one means of discouraging over-consumption of public housing.

Dr Tan Boon Wan: Madam, my residents who have enjoyed the upgrading of their estates, and in particular lift access to every floor, have asked me to convey their thanks to the Government. Those families with members who are less mobile, especially aged parents, have found the universal lift access to their flats most useful. Other residents, especially those with aged parents or who are themselves ageing, having seen the benefits of universal lift access, have asked for the upgrading of their flats to be expedited. I join my fellow colleagues to urge the Government to, amongst the various upgrading programmes, give priority to the Lift Upgrading Programme. Can we hasten lift access to every floor?

Dr Tan Cheng Bock (Ayer Rajah): Madam, there are three upgrading programmes that I want to look into, and I hope the Minister too: the IUP, MUP and LUP. I will leave out SERS, as I will want to talk only on these three subjects. I am asking for a review of IUP, MUP and LUP. IUP is an interim upgrading and only involves the external features; MUP, the internal and the external features; and, of course, lift upgrading - we all know we have to really improve on the lifts. We should marry all these three and just have only one upgrading package. This is to save cost of recurrent upgrading and to avoid too much disruption to the flat owners and also to the environment.

We should ask ourselves: what do the residents really need? They need, I think, the lifts to be upgraded; they need the ceiling and interior cracks to be mended; replace the leaking pipes, the electrical

Column: 1656

wirings and, of course, the windows and walkways. These are what the residents want. So, what I am proposing is that we have a new upgrading package to deal with only all these items. The town councils can come and do the external upgrading, such as the gardening and all these nice environment features. Of course, there is a caveat here: we do not allow them to just do all these changes freely. The Government should give the Town Councils a little bit more of funding for the maintenance and the very essentials. I am sure the Town Council Chairmen would not ask too much. We just want to make sure that the environment looks pleasant for all. So, this is the point I want to raise.

However, with regard to lift upgrading, I think it should be given free. Why? Because, if you accept my proposal, then there will be a lot of cost saving from the cutting down of the upgrading programmes and this cost saving that I have proposed should go to this lift upgrading.

Lift Upgrading Programme

Dr Ong Seh Hong (Aljunied): Madam, yes, I support Dr Tan's call to actually give this lift upgrading free to all residents, because our population is ageing and the main purpose of the LUP is to really provide this 100% barrier-free access to all residents within a block. Lift, being a common facility used by every resident as well as people visiting the block, should actually be treated like IUP items and be given free.

Secondly, I also urge the Ministry to add this new selection criterion for LUP, using the proportion of the ageing population within a precinct, because the single most important item that elderly residents always ask for is lift accessibility. So, the older precincts should have a higher priority for LUP.

Column: 1657

Thirdly, the requirement of obtaining 75% yes vote should be changed to a simple majority. We should not penalise those who really support the programmes.

Fourthly, I also support the call by Mr Ang Mong Seng and Dr Amy Khor to also consider giving LUP to low-rise apartment blocks.

Lastly, for those blocks which have failed the IUP voting criterion, they should be given a second chance.

Mr Mah Bow Tan: Madam, many Members have spoken on this issue of upgrading. Some, like Dr Tan Cheng Bock, have questioned the relevance of the upgrading programmes and suggested that we review them. Others, such as Dr Tan Boon Wan, Mr Ang Mong Seng and Dr Amy Khor, have asked whether we can do more, especially lift upgrading.

Let me first reiterate the importance of upgrading. Upgrading is critical in our efforts to keep our housing estates young. As Members rightly pointed out, our estates are ageing. It is like our population, and we really need to renew the older estates, give them a new lease of life. And if you do not have upgrading, over time, very quickly, HDB estates will deteriorate and will become slums, and I do not think any of us wants to see that happen. If that were so, it would defeat the whole purpose of our home ownership programme, which is to provide good quality, affordable housing for our people. So, by improving the living environment, upgrading gives our residents a sense of ownership and pride in their estate, encourages them to remain, maintain the existing ties in their community, and we are also able then to attract new households to come into those estates and give those estates a boost, greater vitality. But,

upgrading is not only about aesthetics, renewal or rejuvenation. It is also part of the asset enhancement

Column: 1658

programme, which gives residents value-for-money and gives them a chance to rejuvenate their homes and their surroundings.

4.45 pm

HDB regularly conducts surveys on the upgrading programme. It asks several questions of residents who have lived in completed upgrading precincts. Its latest survey was conducted last year and covered nearly 60,000 households whose flats were upgraded between 1996 and 2002. 95% of the households indicated that they were satisfied with the Main as well as the Interim Upgrading Programmes (MUP/IUP). This satisfaction level was higher than the previous survey conducted in 2000. HDB also asked them what were the items that they found most useful and most appreciated - covered linkways, upgraded lifts, letterboxes and improved toilets within their homes, these are things that were most appreciated.

The overall support level for upgrading is very strong. The overall support level in all the nine precincts that were polled last year for the Lift Upgrading Programme (LUP) was over 85%. For the MUP, apart from Teban Gardens which did not meet the 75% requirement, the other six precincts that we polled in 2002 were all well supported, with "Yes" votes ranging from 82% to 95%. In fact, three precincts received more than 90% for upgrading.

So the message for us is loud and clear - that upgrading, especially lift upgrading, is still very relevant, very welcome, and still desired by residents. That does not mean that we do not review from time to time the scope of upgrading.

Why do we need to have co-payment for upgrading? Why do we need to poll for upgrading? Dr Ong Seh Hong, Dr Tan

Column: 1659

Cheng Bock and others have asked why residents have to pay for lift upgrading. Why not treat it like IUP?

Madam, contrary to what Members have suggested, lift upgrading is an expensive programme. It is very heavily subsidised by Government. In fact, for some blocks where there are certain physical constraints, the cost of providing lift access to every floor is exceptionally high. If we do not have a co-payment element in it, a lot of our budget for upgrading will be taken up by the Lift Upgrading Programme. Rather than speeding up the programme, we are going to delay the programme even further. Having residents poll and co-pay for the programme actually ensures that the upgrading proceeds at a pace in which people are happy with and gives them a sense of ownership of the programme. It makes them appreciate the programme and realise that if they ask for it, they are prepared for it, then they can have it. On the contrary, if it is free, everybody will be asking for it and it is going to be much more difficult for us to try to assess what is the real need.

We have also decided that there must be a high threshold of 75% before we implement the programme. Again, this is because there is a co-payment element. If we just have a simple majority, say, 50%, since all residents have to pay their share of the cost, I think it is not a high enough rate. We have set it at 75%, the same rate for the MUP programme. If we can garner 75% "Yes" votes, then I think that 25% or less who did not vote for it, will not feel aggrieved, as it is an overwhelming majority that has chosen to go for lift upgrading.

Dr Ong suggested that the proportion of elderly residents is a criterion for lift upgrading. I agree with him. In fact, this criterion is implicit in the choice of many

Column: 1660

of the precincts for Lift Upgrading Programme, although I hope he understands that we also need to have other criteria as well. Otherwise, if we just go for the older precincts based on age, many of the not-so-old estates will not be able to enjoy the upgrading.

Mr Ong Kian Min asked whether upgrading itself will continue. The answer, of course, is yes. It is a long-term commitment of the Government but it is subject to our fiscal position, whether we can afford to continue to have upgrading and, if so, at what pace.

So far, 310,000 flats or 60% of the flats which are eligible for upgrading have received some form of upgrading, whether it is MUP, IUP or LUP. Considering that we started the upgrading programme in 1990, I think this is quite an achievement, it is quite a rapid pace. As to how quickly we can upgrade the rest, it will largely depend on the resources that we have available. We need to prioritise our budget, so we cannot upgrade all the remaining flats at the pace that Members would like. But I assure the House that we will certainly do as much upgrading as we can, to as many precincts as possible, within the budget allocated for upgrading in my Ministry.

Dr Amy Khor and Mr Ang Mong Seng, amongst others, asked for lifts for low-rise blocks. I empathise with their call. But, again, it is a question of priority. There are still more than 3,000 high-rise blocks that are eligible for lift upgrading that have not yet received this upgrading and have lifts on every floor. Funds earmarked for lift upgrading are finite. Our priority now is on high-rise blocks, where more residents can benefit. As we make further progress on upgrading the high-rise blocks, we can certainly consider bringing some of the low-rise blocks in at some stage. As has been famously said, "Never say never".

Column: 1661

Mr Iswaran has several questions. First of all, I apologise for not answering his questions earlier on the issue of decoupling of subsidies from purchase. I will touch upon this later on if I have some time. He asked if the MUP budget is well-spent. We recognise that the MUP is a programme that needs to be constantly reviewed to ensure that they remain relevant. In fact, in the whole upgrading programme, if we trace it from 1990 to today, we will see that there have been many changes. We introduced LUP in 2001. We introduced IUP Plus in 2002. We reduced the MUP budget per flat in 2002 by something like 30%, so the Standard Package today is about $29,000 where it was about $40,000 before. We reduced the Standard Plus Package from $67,000 to $47,000. Today, we see less of the not-so-essential items like amphitheatres, facade works and extensive landscaping and so on which town councils have fed back to us are more difficult to maintain and therefore to hold off such works if we can. As a result of the reduction in the budget, some of these works have been dropped off the list of things that can be done.

We are sensitive to feedback from Advisors and HDB residents when we decide what kind of HDB upgrading programmes to offer. In FY2003, we did not select any new precincts for MUP partly because there are still some precincts that have not yet been polled. We selected 16 IUP Plus and eight LUP precincts, the same as in FY02.

I agree with Members, going forward, that careful prioritisation in the upgrading programme will become increasingly important, especially in the context of tighter budgets. I have asked HDB to review the upgrading programmes to see how we can make upgrading even more cost-effective and more beneficial to residents.

Column: 1662

Madam, I have answered the questions on upgrading. Since I have some time, I will respond to Mr Iswaran's question on the decoupling of subsidies from the purchase of flats. Madam, in principle this is a good idea. It makes economic sense. In fact, we have already implemented such a scheme in the form of a housing grant. If you want to buy a resale flat, if you are a first-timer, you can make use of a housing grant - $30,000 if you are buying a flat anywhere and $40,000 if you are buying a flat in close proximity to your parents. You can also use the housing grant for ECs. So, it is not something new.

But the question that Mr Iswaran is asking is whether we can do so universally and to apply this housing grant for all flats and also for private flats. These are very important and serious questions to be asked and to be studied. If we are going to allow the use of the grant for new flats, then obviously, the pricing of the new flats cannot be at a subsidised rate. It would have to be at the market rate. Then again, do we allow the housing grant to be used for private developments? There are several serious questions involved there. If you can afford a private flat, do you really need a grant? These are questions which need to be asked and will be studied, especially in the context of our plans to open up the public housing sector to private sector participation through various options, as I have explained earlier. This is obviously one of the areas that we will be looking at. I would like to ask Mr Iswaran if he has got any views on this, to pass them on to the Ministry.

Madam, I believe I have answered all the questions on this particular section.

Dr Tan Cheng Bock: Madam, can I ask the Minister whether he agrees to my one-package upgrading programme?

Column: 1663

Mr Mah Bow Tan: Madam, in fact, the MUP programme today already incorporates many of the upgrading repair items that Dr Tan Cheng Bock mentioned, whether it is in the changing or the repair of leaking pipes, or whether it is changing of windows, etc. It also incorporates the lift upgrading.

If, for example, Teban Gardens had voted in favour of the MUP, within the flat, the repair works would have been carried out. So, I believe the review of the MUP package that we are undertaking today is along the line of what he suggested. Whether we continue with the MUP package as is currently constituted or whether the scope is narrowed further to just concentrate on those items which Dr Tan mentioned, that is something the HDB will be studying.

The Chairman: Dr Tan, just one last clarification.

Dr Tan Cheng Bock: Maybe the Minister did not quite get me. I think it is important because I am trying to save costs and I am trying to make sure that there is less disruption during the construction phase. So, instead of IUP, MUP or LUP, why not we just lump them together, have a single package and do all the upgrading programmes that the residents want? I have mentioned them, but I do not think I have the time to go through them all over again.

Mr Mah Bow Tan: Basically, in the hierarchy, the MUP is the one that encompasses everything. It encompasses the IUP, LUP, everything. So, basically, what Dr Tan is asking for is to have MUP for everybody. That is, essentially, what had been happening in the past until we introduced IUP when Members of this House urged a sort of MUP-minus to be implemented because obviously not everybody could wait for MUP. That was the genesis of the IUP. Then came the Lift Upgrading Programme, which is a stand-alone package, separate from the

Column: 1664

MUP. But, to put it very simply, what Dr Tan is asking is: can we implement MUP for everybody? Keep it to a trimmed down version of the MUP, where you do lift upgrading, works within the flat, some works in the precinct. I think essentially that is what he is asking for. And, yes, as I said, that is part of the review that we are undertaking. He may think that it may be cheaper, but I just like to explain to him that if we put all those items in the list, and the menu starts to get longer and longer, it is not necessarily as cheap as what we are doing today.

Maintenance of HDB Flats

Dr Teo Ho Pin: Madam, in Singapore, more than 50% of our buildings are over 15 years old. As buildings get older they require more maintenance. The maintenance of buildings requires a holistic approach where both maintenance organisations and its building owners or users take responsibility to upkeep their buildings in an acceptable condition. At present, there is no maintenance guide or standard to assist both maintenance organisations and owners to exercise their duties to maintain their buildings properly. Very much is left to the maintenance organisations and contractors to carry out these activities. This is not desirable as our buildings get older and may be less safe to its users. Madam, there is a need to emphasise the importance of building maintenance to building owners. The recent window falling incidents clearly show a lack of understanding of responsibility of various stakeholders in the installation of windows. I hope the Ministry could do more to increase awareness of building owners on maintenance.

Madam, I wish to ask the Ministry the following questions:

(1) What are the plans to educate all stakeholders of buildings to take

Column: 1665

responsibility in maintaining their buildings?

(2) Can BCA provide a centralised database to provide information on life-cycle cost of building components?

(3) Can BCA review the safety standards for maintenance such as periodic inspection of key building components and services?

Dr Wang Kai Yuen (Bukit Timah): Madam, in the repairs of ceiling leaks and spalling concrete in old HDB flats, HDB has funded such repairs on a 50-50 basis on the ground of natural deterioration of the material used. HDB is now funding the rivet replacement programme using the same 50-50 principle. During Question Time recently, Minister Mah stated that the rivet problem arose because of three problems - the design, during construction, and maintenance of the windows. It seems that he has assigned a weight of one-third to each of these factors. Madam, the material used in the rivets is aluminium. Enough aeroplanes have fallen off the sky, that even the man-in-the-street would have known that aluminium suffers from the characteristic known as metal fatigue. HDB's decision to switch to stainless steel is a clear admission of the wrong choice of aluminium as a material for window rivets. In fact, it is possible that no amount of maintenance could prevent the ultimate failure of these aluminium rivets. We should put the problem and the responsibility where it belongs, that is, at the design stage when the decision of choice was made.

Madam, when a car manufacturer needs to recall cars because of a design fault, he recalls the cars at his own cost and not at the consumer's cost. The most famous case recently involved the A class cars developed by Mercedes Benz which has a tendency to turn turtle taking corners at a certain speed. Similarly,

Column: 1666

Madam, as a matter of principle, should not HDB bear 100% of the replacement cost instead of getting residents to co-pay for the mistakes it made way back in the design stage?

Windows of HDB Flats

Mr Chiam See Tong (Potong Pasir): Madam, I have a cut on the falling windows from HDB flats. The last time this House debated on falling windows of HDB flats, the Minister, I believe, gave the assurance that in the legislation which shall be enacted this year, he shall make provision to allow householders to inspect their own windows. Can the Minister confirm this?

On this point of inspection of windows I hope that the Minister, for this time round, at least, can waive the $40 inspection fees on the HDB flat owners. Dr Teo Ho Pin was right when he said it was better to legislate upstream. He said that you need only to legislate to have windows safely designed and safely installed. If you get it right in the beginning, there is no need to legislate downstream. In the light of what Dr Teo said, I would suggest that instead of using casement windows, the HDB should use sliding windows. One architect said that the casement windows, once they are open, act like sails catching the wind. In the high floors, the wind-load increases. I would say that even if the best steel rivets are used, the constant buffeting of the windows shall definitely make the screws come loose. There are about 817,000 HDB flats, not counting private flats, condominiums and commercial office buildings. I shudder to think the number of casement windows that shall be falling in the few years to come. It is safer to replace casement windows with sliding windows.

As regards the replacement of windows, I would say that this round the HDB should pay the full cost as advocated

Column: 1667

by the previous speaker and not let the flat owners pay. Legally, the HDB should be responsible for all fixtures, because they are the land owner. Windows are fixtures and they are the landlord's liability. Be that as it may, it is a bad time to ask Singaporeans to pay more money as many of them are out of jobs. In any event, it was the HDB that initiated the changing of the windows which are now starting to come loose and falling to the ground.

Mdm Halimah Yacob (Jurong): Madam, I have three points to make. The HDB is currently looking into legislation to make it compulsory for home owners to have their windows checked and made safe. Although this legislation is well-meaning because of the serious problem of falling windows, I think there is concern down the ground that the approach may be too drastic. I personally do not expect this law to be arbitrarily invoked against a home owner. As I see it, it is a last resort fall-back position in case there are really errant home owners who refuse to maintain their windows. Nevertheless, I would like to suggest that instead of just falling back on legislation, the HDB should also adopt the softer approach first, of educating home owners on their responsibility to maintain their windows as well as other parts of the flat so that these do not pose any danger to others.

In fact, this process should be an on-going one and not surface only when we have a problem of falling windows. It is true that most home owners sign the lease agreement which stipulates this as their responsibility. But the truth is that not many home owners really read, or even fully understand, all the terms in the lease that they signed.

My second point is that I wish to ask the Minister what help or assistance will be given to those who cannot afford to

Column: 1668

replace their windows. HDB has agreed to pay for half the cost for 43,000 flat owners who had their windows with aluminium rivets installed between 1987 and 1998, but no help for all the others. Other flat owners have to pay their own. The average cost of $190 is still quite hefty for low income, smaller flat owners, some of whom are struggling with unemployment. Could the Minister at least explain what help will be given to them and where can they get this help from?

The third point is that at the last Parliament sitting, the Minister had said that HDB may agree to allow affected home owners to do their own inspection so that they do not have to cough up the $40 to get a contractor to do the inspection. Can the Minister confirm whether this is indeed now possible?

Quality of HDB Flats

Mr Tan Soo Khoon (East Coast): Madam, why are there increasing complaints about the quality of HDB flats? And I am not talking about old flats, but of new ones, where defects seem to appear almost right from the day you get your keys. In recent months there has been a spate of letters to newspapers from new home owners with complaints ranging from cracked tiles, faulty doors, doors that do not close properly, leaks from walls, ceilings, peeling paintworks, choked toilets, etc.

When a home owner makes a complaint, it can be a very frustrating wait for rectifications to be made. And, even more so when it upsets their plans to move into their new home. Of course, HDB would refer the complaint to the contractor, but then you will find that the contractor would sometimes make all kinds of excuses. If there is a leaking ceiling the contractor might say that it is due to the renovation works going on upstairs. In fact, one writer complained,

Column: 1669

when he was told that the reason why the paintwork in his apartment peeled off was that it was due to heat from the sun, but then the sun does not even shine into his flat.

Another contractor told a new home owner that the reason his toilet bowl choked was because someone must have thrown something inside. But then the family had not even moved in! And when it was finally fixed, the silicon seal was not applied and the matter was not properly done. When asked why, the contractor said, "Well, this is a HDB flat. What do you expect?" But, Madam, why not? Why cannot HDB flat buyers expect a reasonable quality? They are not talking about high-class condominium quality, but HDB flats today are not cheap either, and surely it is fair to say that when you put in your life-time savings into a dream home, you do not expect to have quality defects from day one. So while there is a 12-month defects liability period, it can be very frustrating if problems keep cropping up, especially when you are nearing the end of this period.

While HDB has assured the public that all flats are subject to quality checks, the question is whether the checks are stringent enough, and whether there is, in fact, adequate supervision. I suspect too that the problem may have to do with our tendering system. Having won the tenders, because they submitted the lowest bids, and faced with rising costs, contractors may be forced to cut corners. And with the construction industry in the doldrums, I would not be surprised that this is the case. Given the fact that HDB builds far less flats today and, if I am not wrong, it is going to be less than 10,000 units this year, surely it would not be too onerous a task to tighten on the quality control.

Mr Mah Bow Tan: Madam, first of all, falling windows. This topic has been the subject of much public debate recently.

Column: 1670

Members have asked why HDB residents should bear half, or indeed, all of the cost of retrofitting their windows. Let me first of all explain why we are taking such an apparently drastic action, as Mdm Halimah put it.

The number of falling windows has risen sharply in recent years. I quoted some statistics in Parliament. In 2001, 17 cases; 2002, 48 cases; 2003, 106 cases. We have been lucky so far. Only three minor injuries have been reported due to falling windows.

In spite of the increased publicity since BCA and HDB had a joint press conference on 20th February, we have not seen a drop in the number of windows falling. In fact, we have had another 10 new cases since then - three a week. Do we have to wait for somebody to get killed or hurt before we take this seriously? I hope not.

5.15 pm

The next question is: whose responsibility is this? Is it the designer's responsibility, the installer's responsibility or resident's responsibility? To answer that question, I think we have got to go back to why windows fail. They fail due to poor design at the start, poor workmanship when they are installed or poor maintenance.

Architects, developers and contractors have a duty to ensure proper design, manufacture and installation. I agree with Dr Teo, as endorsed by Mr Chiam, that we have to legislate upstream. In other words, we have got to make sure that the architects design it properly; contractors install it properly; the developers make sure that they have the right standards. All these will ensure that we tackle one part of the problem, but this is only part of the problem. Because even with proper design and installation, even if it is designed to the highest standard and here I must say - it is very well to say that everybody should know that

Column: 1671

aluminium does not last very long and that we should have switched to stainless steel - but at the time when these windows were installed, the industry standard was aluminium, not just in Singapore, the PSB SPRING standard, but internationally. Everybody installed aluminium casement windows with aluminium rivets. So, even with proper design and installation, windows can become unsafe over time, because you cannot expect the window to be installed and last forever and ever. Windows can become unsafe because they are subject to constant usage and to high wear and tear, like all things. And without regular maintenance and repair, screws, rivets, even stainless steel rivets can break or become loose, causing windows to fall.

The majority of windows which have fallen in HDB flats are between 8-13 years old. It is not as if they were installed and they start falling overnight or within a few years. Three quarters of the windows that fell have been installed by lessees themselves. They were not the original windows. So, it is clear to me that the windows did not fall due to poor design or installation by HDB. HDB has been following the industry's standard. It has installed the windows according to the prevailing quality standards of the time, both new and upgraded flats.

Between 1987 and 1998, aluminum rivets were used because they were the accepted industry standards. Where standards have risen, HDB has followed suit. In fact, HDB was ahead of the industry standard when it switched to stainless steel rivets in 1998, although the revised industry standard was adopted in the year 2000. So, when we talk about apportioning responsibility, we have to accept that it is not entirely the responsibility of the window contractor, developer or installer, but also the

Column: 1672

responsibility of the owner. I think this is one fact that has to be established. It is not the same as designing a car wrongly, whether it is a Mercedes A class or whatever, and then having to recall those cars. These are things that have been designed according to the standards and yet have failed after many, many years. I think it is fair for all the parties involved to take some responsibility. It is certainly not correct to say that owners are not responsible at all. It is the responsibility of the home owner to maintain his windows and other fittings in his flat in good condition. Whether it is stated in the lease or not, I think it is common sense. To argue, therefore, that HDB should continue to pay for the full cost of retrofitting the windows, because they fitted them in the first place, irrespective of how long that has been - five years, 10 years, even 20 years for some of the cases - I think does not make sense.

Nevertheless, to help those flat owners improve the safety of their windows, HDB will carry out a one-off goodwill rivet replacement programme for the casement windows that were earlier installed by HDB, and it will co-share 50% of the cost. And this is strictly on a goodwill basis. Those who are in financial difficulties, as Mdm Halimah asked, can approach HDB Branch Office for assistance, and there can be some consideration made to allow them to pay the retrofitting cost by instalments. But it is not tenable for HDB to pay for those who have retrofitted their windows themselves. The question was asked: what if they cannot afford it? My question is: why could they afford to change the windows in the first place? I think in such a circumstance, it is also necessary, if there is a need to, for them to also look at their own windows, inspect them, and if it is necessary to change, they would have to bear the full cost of changing. But where it is a HDB-installed window, then the 50% co-sharing paying kicks in.

Column: 1673

Madam, even while we are standing here arguing about who is responsible and who should pay, I would like to appeal to all high-rise residents to act now and minimise the danger of falling windows. Act now, check your windows straight away. If they are not in safe condition, get them fixed before they fall off and hurt or kill somebody. HDB residents who are in doubt can approach the Branch Office for assistance.

At the end of the day, what is this all about? It is not about creating jobs for contractors, as some members of the media have mentioned. It is not about HDB ducking responsibility or the Government ducking responsibility. It is about getting residents to play their part in making sure that our high-rise living environment in Singapore is safe and a pleasant one. It is about minimising risk to life and limb. It is about saving lives, and the lives that we save could be our neighbours, friends, loved ones, or even ourselves.

Madam, I turn now to Mr Chiam's question about window inspection fee and also the banning of casement windows. Yes, BCA had earlier proposed mandatory periodic inspection of windows. The reason behind that was that they wanted to make sure that the windows are absolutely safe, and there is a certain minimum standard of safety. But as I informed the House last month, I have asked BCA to consider the alternative of allowing home owners, if they so wish, to check the windows themselves, provided they accept this responsibility of ensuring that their windows are in good condition. In other words, if you wish to save $40 and you want to do it yourself, or if you have friends, neighbours or you yourself can do it, by all means. But please make sure that if something is not quite right, you get it fixed.

On the question of whether we should ban casement windows above the 10th

Column: 1674

floor, I am not an expert on windows, but my experts tell me that casement windows are good for ventilation compared to other types of windows and, that is the reason why they are so widely used, not just in HDB flats but also in private apartments. Indeed, the issue is not really casement windows versus sliding windows. The issue really is whether you take care of your windows, whether you have installed them properly, and whether you have maintained them properly. Even sliding windows have been known to fall if they are not properly maintained.

Finally, I come to the questions raised by Mr Tan Soo Khoon about complaints of quality in HDB flats. Why are HDB flats of such poor quality? First of all, I must agree that it is totally reasonable for somebody who buys a HDB flat or any flat for that matter to expect to have in his possession a flat which is of reasonable quality. I think that is a given. I do not think we should make any excuses for that. Having said that, there will always be flats that are not as well built as others.

HDB has been building flats for the last 40 years. By and large, most Singaporeans would acknowledge that the flats that have been built and that they have lived in all these years have been of good quality. This is not a mean feat. Public housing all over the world has been a big challenge for many cities, whether it is developed or developing. In many cities, public housing is seen to be lower quality housing, low-class housing, not built to such high standards, but not in Singapore .

The HDB has, over the years, put in place a comprehensive quality management system to check and to maintain quality, whether it is the design or the construction of the flats. What HDB is doing now is to let BCA separately assess the quality of its flats through

Column: 1675

what they call the CONQUAS system. This is an acronym which stands for Construction, Quality and Assessment System. This CONQUAS system is a system that has been used by private sector developers to assess the quality of their flats. It is a very detailed assessment of internal quality of the flats - finishes, doors, windows and so on. And there is a score at the end of the day. The score for public housing has gone up from 71.9 in 1997 to 79.3 in 2003, and this is on par with the score for private housing which is 79.4. So, on an objective overall basis, one can say that, over the years, the quality of housing has gone up.

But notwithstanding this, I think we all must expect that defects in individual units do occur - poor workmanship, improper installation, etc - and that is the reason why we have a defects liability period. And all defects within this defects liability period are repaired and rectified free of charge.

Has there been an increase in the complaints of quality among HDB flats? The answer is yes. There has been an increase. Is it due to a decrease in quality? If you take the CONQUAS' scores as an objective measure, the answer is no. So, what else could be the reason? I asked the private sector developers this question, because I too am concerned about the increase in the complaints. They told me, yes, they have also received an increase in the number of complaints from private buyers. The buyers are getting much more fussy. They check every little nook and cranny and they make sure that everything is perfect. Marble is not the right colour and marble of the wrong grain are also not accepted. And they attribute this to the drop in private property prices. What they told me was that when prices are going up, buyers did not care what the flats

Column: 1676

look like. They just bought so that in a few years' time, they sell, make money and go off happy. But now they actually look at the flats in minute detail. And when they do so, they find all sorts of things going wrong - some serious, some not so serious. But the fact is that complaints of quality in private sector flats have also gone up. Part of this, I suspect, is also due to the issue of the type of construction workers that we have been getting. So this is where BCA has got to do something to raise the quality of construction.

5.30 pm

So private condominiums do have problems as well. The difference, of course, is that owners of private condominiums do not write to newspapers to complain and Members of Parliament do not raise their issues on their behalf in this House. But for HDB flats, they will either threaten to write to the newspapers or they will bring it up to the MPs, and the MPs will obviously bring this matter up in the House. That is why you are here for. But it does not follow therefore that HDB flats are actually poorer in quality. And this is the point that I would like to make.

Mr Tan Soo Khoon: Can I just make a point? Madam, the Minister may have missed a point that I was trying to make, and that is, whether we can ensure that there is tighter supervision at the construction stage. And since we are building so far less HDB flats today, could that not be possible?

Mr Mah Bow Tan: The Member is correct to say that we are actually building much less flats. But when it comes to the supervision, I think it is the same whether we are building more or less flats because, ultimately, each flat or each project is built according to certain standards, certain specifications at certain prices, and by certain contractors using

Column: 1677

the same kind of construction workers. So I think there has got to be a much more concerted effort industry wide, not just for HDB flats, and certainly not because we are building less flats. But industry wide, we have got to make sure that the construction quality goes up and this is where I will mention, if you will permit me, some of the things that BCA is doing.

Just last year, there was the launching of the Quality Mark for Good Workmanship Scheme whereby they will supervise more closely the workmanship standards of individual flats, in other words, putting pressure on the contractors to ensure higher quality. How the contractor does it - by putting more manpower, by increasing supervisors - it is up to them. But this Quality Mark Certificate is something that the private sector developers have received well because it obviously gives them another selling point. So 6,000 units in 30 projects have actually applied to be assessed, be voluntarily assessed under the Quality Mark, and there will be about 3,000 obtaining certain certification. So, really, it is a construction industry-wide issue - the question of construction quality. It goes all the way down the value chain, from designing flats so that it can be easily built, and all the way down to building it. And this is a subject which, I think, will be discussed in another cut on the issue of construction quality.

But I want to assure Members that HDB flats are not inferior in quality to private sector flats. They are cheaper in price not because they are lesser in quality but because they are subsidised by the Government.

Singles Home Ownership Policy

Assoc. Prof. Chin Tet Yung: Madam, may I first apologise to Minister Mah for saying that he need not answer my question. It is not intended to be like

Column: 1678

that. What I meant to say was that I hope that the answers will lead to positive actions and he has actually mentioned that he would build more 3-room flats and at the same time act flexibly, in terms of application of HDB policy, and I think these are very satisfactory answers.

I would like to ask for more flexibility, again, this time in relation to the rules on single occupation and purchase. Currently, HDB only allows those who are single and aged 35 and above to purchase a 3-room HDB flat. But, recently, there has been an increasingly disturbing trend of Singaporeans becoming single after a divorce, even before the age of 35. It seems that many of them are marrying young and divorcing young. A few of them have come to MPS, and so on, and I asked them why they married young. They said that this was to qualify for a flat. In other words, many youngsters seem to want to get married because they want to own a flat. Upon divorce, these youngsters find that they have to give up the flat because they are either not eligible to do so, or have no means to do so. One young lady, in fact, came to me and insisted that if she was not allowed to retain her flat, she was willing to end her life. And the reason for wanting to end her life is not because she lost her spouse but she is likely to lose her flat.

This attitude actually puts in perspective the success of this home ownership policy that we are trying to implement. Encouraging Singaporeans to marry young is one thing, but, as the hon. Member Mr Leong Horn Kee said in the Budget debate, we have to be aware of the butterfly effects. I think this is one of them.

The other group of singles that has come to my attention is those who live in big families that have grown bigger and as a result, have been pushed out by their own families to find accommodation. Sometimes, these also include those who

Column: 1679

are estranged from their families. So in such cases, it looks as if they are caught in a bind. They are too young to apply for a flat under the Singles Scheme. But, at the same time, they actually can afford it because they have good jobs. They think that they can afford to buy a flat. So, in cases like this, I wonder whether HDB is willing to be flexible and allow such cases to benefit from the purchase of singles flats.

Housing for an Ageing Population

Dr Amy Khor Lean Suan: Madam, the granny flats or studio apartment experiment which started in 1998 has been quite successful, though take-up had initially been slow. I am pleased that the HDB will be building new studio apartments which will be integrated with other HDB flat types in the same block. This will definitely encourage some degree of social interaction between the seniors and families at earlier stages of their life cycles and promote the "ageing in place" concept and perhaps make these granny flats even more attractive.

But, better still, if the children of these senior citizens requiring such flats are allowed to pay for all or part of the price of the flat using a portion of their CPF. To further encourage family responsibility, perhaps children who own a flat near their aged parents and who are looking at buying a granny flat nearby to accommodate them be allowed some form of a discount.

I also urge the BCA to develop a Code of Best Practices on housing for the elderly so that both private and public house builders could incorporate such elderly-friendly features into their designs. We have a Code of Accessibility for the Disabled. We need barrier-free access for the elderly, not just within the block, but also between blocks within the precinct,

Column: 1680

between buildings and, say, across roads and other administrative boundaries.

We create a seamless elderly friendly environment. The ageing population could, in time to come, overwhelm the rest of the population. We thus cannot ignore its impact. We need to give our senior citizens a sense that they are not a liability despite their age, that they are a part of our society, and that their interests are looked after.

HDB Apartment Blocks

Assoc. Prof. Ngiam Tee Liang (Nominated Member): Madam, following my parliamentary colleagues' "upgrading" requests, I would also like to add another request, what I term the "neighbourliness upgrading programme". Let me elaborate.

Over the decades, HDB has greatly improved its designs of residential blocks of flats, in terms of the corners, lift landings, and other common areas, in keeping with changing environmental conditions and expectations of residents. Generally, this has helped to provide, to some extent, the opportunity for fellow residents living in the same block to interact with each other.

However, I think more can be done to improve the layout of the common areas for residents to come together as neighbours in small groups. For instance, a principle could be adopted that for a small cluster of families, say, between 8 and 10 units each sharing a common corridor, we could have a neighbours' corner built into or along the corridor. The neighbours' corner could be a common space for residents living around it to use as a neutral ground for various interactional and social activities for their mutual benefit. For example, children from different units can play together outside their flats in this neighbours' corner and, yet, are within earshot and the watchful eyes of their parents or

Column: 1681

child-minders. Teenage neighbours can also gather together to discuss study matters or hobbies. In the evenings, their parents and grandparents can chat with each other also. During festive occasions, the neighbours' corner can be a lively scene as neighbours celebrate the occasion and tuck into meals they have cooked and shared with each other. I am sure we can see the value of facilitating cross-neighbourly interaction in this way, and this can form the basis of enhancing social networking, mutual support and promoting better multi-cultural ties of HDB dwellers.

I would like to ask what are the Ministry's plans to research and pilot new forms of block designs that can further enhance community living in our high-rise environment.

Aging HDB Flats

Mr Zainul Abidin Rasheed: Madam, I have lived before in an HDB flat for about 15 years, and I find it is not bad actually, with very little complaints. I enjoyed living in HDB flat. And now that I am an MP, I do receive quite a lot of complaints like quality, design and structure. But each time we have complaints, we will refer them to HDB or the town council. We do get quite good response. But I would like to raise two points. One is the question of spalling, ceiling leaks and many other complaints, and whether they have to do with aging of the HDB estates. About 85% of flats are 10-year old, and maybe half of that are 15 or 20 years old. I shudder to think what will happen in the next 10 or 20 years as most of the flats are on 99-year leasehold. I wonder whether HDB would like to look at this policy, in terms of ownership and leasehold.

The other is the question of governance. What kind of governance do we want? We are told, in fact, that once

Column: 1682

you get a flat, HDB is liable for about one year for repairs and other complaints. But, on the other hand, when we have this ceiling leak problem, I am not sure about spalling concrete, we were given a kind of goodwill, sharing of cost at 50-50 responsibility. So residents have come to expect that, in fact, HDB is actually partly responsible. And now when it comes to windows falling, they also expect that, and we cannot say that since they have already got 10 years, it is their responsibility. So I think the question is: what kind of governance do we want? How do we educate the HDB dwellers about their responsibility? As this is public housing, they think HDB must be responsible. But, on the other hand, they must equally be responsible and be made aware of the question of shared responsibility.

Dr Vivian Balakrishnan: Madam, I thank Prof. Chin for his observations. I want to stress, first of all, that whilst we want to encourage marriage, we want to encourage families, we must not put the cart before the horse. We do not expect someone to get married just because he wants an HDB flat. Our reason for giving priority to families is because it is a question of relative need. We hope that when they get married, they will have children and, therefore, they will have greater need for space and for privacy.

On the issue of divorce, if a couple breaks up and they have children, the divorcee with his or her children will constitute a family unit and can certainly retain the flat. If they are young and they are singles, then I think you would agree with me that, from the point of view of fairness, they should be treated no differently from any other single who is under 35. For the argument as to why 35 years, why not shift it, I think, again, let us come back to the fundamental principle of relative priority. Top priority is for families, and second priority for older

Column: 1683

singles. For younger singles, the options are to stay with the families - we hope they will have good relations with their families - or to consider renting

or make other alternative arrangements. This is a system which we have run successfully so far, and we will continue to do so.

5.45 pm

As far as families which have grown too large, the options there are for families to upgrade, and that is why, for instance, we also provide a second concessionary loan for families to upgrade to larger flats.

As far as estrangement is concerned, you will agree that, beyond a certain point, the HDB and the Government cannot be the provider of last resort and the resolver of all family problems. We want to help, but there is a limit to how much we can help.

Let me move on to Dr Amy Khor's points. I am glad she agrees with our latest move to have studio apartments integrated with other housing types and, as she said, this will allow ageing in place. I will take her suggestion about using the children's CPF to pay for the flat. It is something which we will have to consider, but consider carefully. There, again, I would hasten to add that there are implications and we will have to be very careful before we proceed in that direction.

BCA already does have a guide on best practices to ensure barrier-free access, not just for older residents, but also for others who are handicapped or disabled. For instance, in HDB flats, I think you are all aware - you will see a proliferation of ramps and covered walkways. Within the flat itself, we try to make sure that there are non-slip tiles and, in some cases, hand-hold grips which

Column: 1684

are at lower levels so that the elderly can use them. So, to the maximum extent that it is possible, practical and viable, we will continue to ensure that both in HDB flats as well as indeed even in private housing, the features cater to the older residents and to others who are disabled.

I next move on to Prof. Ngiam's points. I agree wholeheartedly with him that when we build flats, we are not just building a household, but we are hoping to build communities. I also agree with him that the design of the flats and of the precincts can make a difference. He has made many useful suggestions which we will certainly take back to study. But having said that, I also want to share with Members that HDB has actually been doing rather well so far. For instance, in the old days, we used to have these large slab blocks. To some extent, that could also replicate a kampong corridor but, of course, as time has moved on, people wanted more privacy and we have to have fewer units per corridor.

In addition to the common space on each floor, do not forget that HDB does provide areas for interaction and activities, both at the block level and precinct level. For instance, we have void decks, playgrounds, landscaped areas, social/community facilities, child and student care centres, and these cater to the residents of all ages, both young and old. It also allows for residents from different floors and blocks to congregate and interact. In addition to that, we have also constructed precinct pavilions, landscaped roof decks, and the latest thing which HDB is trying out is the new community mall concept where community facilities, such as the Residents Committee Centre, childcare centre, etc, can all be clustered together. And we will continue to look for ways to optimise the design and, as I said earlier, we will take the Member's suggestions on board as well.

Column: 1685

I am glad Mr Zainul Abidin agrees that, on the whole, the quality of our HDB flats has been good. I want to emphasise that HDB blocks are built to last. We sell purchasers a 99-year lease, and I can tell you categorically that, as far as the structural components of the blocks are concerned, they should survive well past that. However, this is predicated on appropriate maintenance. And maintenance, as the Member has quite rightly said, is a joint responsibility. HDB has to play a role and will continue to play a role, especially when it comes to upgrading. As far as routine maintenance is concerned, the town councils have to play their role. But, as the Member has rightly said, there is a joint responsibility in which the residents, the owners of the HDB flats, have to play their role, whether making sure that the place is painted, that cracks are sealed, that spalling concrete is addressed and treated before it becomes a major problem, maintaining their windows, and so on and so forth. I am afraid this is something which we will have to repeat and repeat ad infinitum .

The Member has quite rightly identified that, sometimes, because we do too much, a sense of entitlement creeps in. I think we have two choices. We can either give in to that sense of entitlement and do more and more, in which case, we will then end up in a situation where less and less responsibility is borne by the residents, or we can take the harder route which we have taken, which is to honestly and openly share with residents that, yes, maintenance is a joint responsibility; yes, maintenance costs money, we will help on a goodwill basis for some measures and, for those who really cannot afford, there are other means to assist them. But let us accept the fundamental point that this is something which we do together and, if we do it properly, we will have HDB blocks, communities which survive the test of time.

Column: 1686

Estate Maintenance

Mr Low Thia Khiang (Hougang): Madam, we all know that HDB estates built in the early period have many inherent defects and maintenance problems. It is, therefore, unfair to ask the town councils to shoulder the full liability of maintaining the flats due to poor workmanship and design.

In the past, I could not unfairly accuse the Government of abrogating its duty and passing the buck to town councils, as the HDB did provide some help to town councils for certain costly repairs to HDB estates. Of course, the Government does not want to admit that it is its responsibility. So, these helps are called "goodwill". However, the town councils were informed that these goodwill repairs would be withdrawn. So, now there is no goodwill, but "badwill", bred by the HDB as owner and builder of the HDB flats, with inherent maintenance problems conveniently dumped to the town councils. I would like to highlight two examples below.

One, sunken apron and manholes. Hougang Town Council frequently comes across instances of sunken aprons and poorly graded sewer lines in our estates. HDB, in its most typical fashion, will say that these are common properties managed by the town council, and thereby the town council should make the necessary repairs and pay for the repair bills. What the HDB conveniently forgets is that these aprons and manholes are not, in the first place, designed and constructed with supports which will prevent them from sinking with soil settlement. In contrast, the aprons constructed in new HDB estates are supported now. However, the HDB was unwilling to carry out repairs for the town council when aprons are badly sunken and sewer lines below are also badly damaged. But, Madam, this is now withdrawn.

Column: 1687

Two, dislodged ceiling boards on pitch roofs. Members may think what is the big deal with ceiling boards. It should be relatively low cost to repair. But the ceiling boards are located on the roof of 18- and 20-storey highrise buildings with no access from inside the building. In my constituency, there are seven such blocks which are relatively new developments, with similar design and with the problem of falling ceiling boards. The total cost to solve the problem, based on our quotation, was about $0.5 million, with about half of the cost being the need to install horizontal platforms and scaffoldings with boomlift to access the ceiling. I wonder why they design such flats that will result in high maintenance costs. Subsequently, the town council established the problem of falling ceiling boards was due to the detailing and fastening systems used. The HDB was good enough to want to rectify the problem and, in November 1988, notified us in writing that the HDB contractor would carry out the work. However, despite numerous verbal communication, nothing happened and, in June 2003, Hougang Town Council wrote to the HDB to remind them that the matter was still outstanding and, currently, it is still outstanding. Now, the HDB has also withdrawn this category of goodwill repair. So, it is a case of promised repair on specific work by the HDB and then withdrawn.

The other problem, Madam, concerns the recent restructuring of HDB. The privatised part of the HDB is now called Surbana, which sounds like the name of a holiday resort. On matters of estate maintenance problems, in the past, when the town council dealt with the HDB directly, at least we had a clear answer and guidelines on repair matters. Now, we are like a ping-pong ball, played between HDB and Surbana, being referred

Column: 1688

here and there. To give just one instance, the Hougang Town Council recently repaired some external wall finishes and, based on established cost sharing principles, submitted a claim for reimbursement, first to the HDB, then Surbana. It was not a big amount, but it took more than six months, and the matter is now still pending. My question really is whether these are fair deals which the HDB metes out to town councils, or are these only special deals that HDB metes out to Hougang Town Council simply because we are an Opposition town council.

Sporting and Recreational Facilities in HDB Estates

Mr Chiam See Tong: Madam, at Potong Pasir, there are two HDB estates. One is at Lorong 8 Toa Payoh estate, and the other is in the Potong Pasir estate. Together, these two estates house about 50,000 residents. Other than providing residents with a roof over their heads, the residents in these HDB blocks are provided with little else in terms of sporting and recreational amenities. The HDB has built only two basketball courts, two badminton courts and one sepak takraw court, and four table tennis tables and five children playgrounds. These facilities are wholly inadequate for a population of about 50,000 in the two HDB estates. My estimate is that the HDB should have provided at least three times the amount of sporting and recreational facilities.

Human beings are not like workhorses, which only work and do little else. Singaporeans do work hard, but it is also important that they should play hard. For that to be possible, there must first be amenities or facilities to take part in sporting and recreational activities. There are no such sufficient recreational facilities. I hope that the HDB shall build more sporting and recreational facilities in

Column: 1689

these new housing estates and also take steps to provide more such facilities in existing estates.

Capital Grant to HDB

Mr Steve Chia Kiah Hong (Non-Constituency Member): Madam, in the Budget Command Paper, I read that there is a capital grant of $422 million given to HDB to finance its operating deficit. But according to the HDB's Annual Report, it was also stated that HDB still has investments in bonds and instruments amounting to $150 million, comprising $16 million in investment properties, $10 million in quoted shares, $91 million in quoted and unquoted bonds, $33 million in unit trusts and others.

Madam, I do not understand it. Why is HDB asking for $422 million in capital grants to finance its deficit when it still has $150 million in investments? If the investments are held in an investment subsidiary, then the funds should be returned to the HDB so as to reduce the budget funding for HDB and help to reduce the budget deficit. Further, I would like to seek clarification from the Minister on the following two questions:

(1) For an entity that lost $773 million in 2003, $997 million in 2002, $952 million in 2001 and received accumulated Government grant of $11.5 billion since 1960, HDB has an equity of capital gains reserve of $4.9 billion and $8.2 billion in asset revaluation reserve. Can the Minister explain how a money losing entity like the HDB can accumulate such a huge reserve? Is it correct for us to assume that the HDB has been selling flats at higher inflated prices than the actual cost price to Singaporeans and then reporting it as a paper loss on the profit and loss statement? Is this how it resulted in an annual transfer of more than $100 million to the asset revaluation reserve and a slightly smaller amount into the capital gains reserve?

Column: 1690

(2) Loss in rental of flats is similar to upgrading of flats, as reported in the 2002/2003 Annual Report statement. I recall that in Parliament, Mr Mah Bow Tan, Minister for National Development, had said that about 60% of the available flats are not being rented out. So, what is HDB waiting for? It is interesting to note that while the HDB waits to rent out the rental flats, we are losing more than $200 million in accounting loss a year.

I thank the Minister in advance for his answer.

6.00 pm

Civic Community

Dr Tan Boon Wan: Madam, of every hundred of our people, over 85 live in high-rise HDB flats. They live close to one another, sharing common facilities and space. To live in harmony, we have to cultivate a community culture, a respect for each other, tolerance of our differences, caring for one another and helping to protect and maintain common properties and facilities. We need to evolve into a civil society. We are still a long way from this. We have neighours who hang dripping mops outside their flats, throw litter and curry out of their windows, create irritating noises late into the night, urinate in lifts, clutter up the common corridors, discard unwanted fliers in the void decks and vandalise common properties - just to name a few examples of uncaring behaviour. It appears that such unpleasant incidences are on the rise. What can we do about this? How do we go about creating a civil caring society? This is a multi-faceted issue. But as the HDB, under the purview of the Ministry, is the agency in charge of most of our houses, I hope that the Ministry could look into the matter and facilitate our evolution into a civil caring society.

Column: 1691

The Senior Parliamentary Secretary to the Minister for National Development (Assoc. Prof. Koo Tsai Kee): Madam, first, I want to assure the Member for Hougang that the rules on the withdrawal of the goodwill repair on sunken apron and the manhole apply universally across all the Town Councils, not just to Hougang or Potong Pasir, but also to all PAP Town Councils. It is fair that he came here to complain, but he did not hear the screams of some of the PAP Town Councils' Chairmen - Dr Teo has been very angry at the withdrawal of these goodwill repairs and so did many other Chairmen like Mr Othman Eusofe and even Dr Tan Boon Wan.

Firstly, let me explain why the goodwill repair was extended some 10 years ago. That gave the impression that it was a defective construction project - I am referring to the sunken aprons and manholes. The goodwill repair was extended some 10 years ago because at that time, Town Councils were a new entity. We recognised that many Town Councils did not have the expertise to do such repairs or the resources, ie, money. So HDB extended the goodwill repairs. Over the years, in the last 10 years, Town Councils have accumulated substantial experience, and they know what to do. Secondly, they have accumulated substantial reserves. For example, in the case of Hougang, they have something like $15 million in the sinking fund which they could use to do such repair works.

How did these sewage pipes sink? Because over time, there is soil movement. Sewers rest on the soil, so when the soil sinks, the sewage pipes could sink - not everywhere because we do not know where the soil will sink to. This is part and parcel of the maintenance process which my Minister of State was talking about - maintenance over a long period of time, which is the responsibility of Town Councils. All these items fall in

Column: 1692

the common area - manholes, aprons and sewage pipes.

On top of that, over the last 10 years, the Government has also provided S&C grants to all the Town Councils. In fact, the sinking fund that Hougang has accumulated, $15 million or so, came almost entirely from the S&C grants because over the last 10-11 years, the Government extended to Hougang Town Council something like $14 million S&C grants in total. It means that they are eminently able to carry out these repairs.

The Member also mentioned other items like ceiling board. Ceiling board again is an item that falls in the common area and it is a wear-and-tear item that we need to look into. Regarding the promise by HDB to complete the project and then withdrew that promise, I will have to look into that. If the Member has any correspondence on this, please let us know. If it was a commitment by HDB before the withdrawal, then we will have to honour that. But we will have to look at the allegations carefully.

On Surbana's performance, as far as we are concerned, Surbana must deliver on what they can do. Surbana should not be doing a postman's job of passing claims onto HDB. We will have to look at that because Surbana has only been corporatised not so long ago. We believe that Surbana is still trying to find its feet, but we believe that this could be an isolated case where Surbana is delaying some advice as to how to carry out these repairs. We appreciate the Member's feedback. Certainly, we will look into this allegation.

On the provision of facilities in Potong Pasir. Potong Pasir is a political division. Like any other political division, it is not a big town. Potong Pasir is part of the Toa Payoh Town. If we look at Toa Payoh Town itself, there are more than enough

Column: 1693

recreational and sporting facilities for everybody. In Toa Payoh Town itself, it has got a very good sports centre, swimming complex, a beautiful Toa Payoh park and a neighbourhood park that links Potong Pasir along the canal to Toa Payoh Town. So the residents in Potong Pasir are welcome to use the facilities in the Toa Payoh Town because we do not stop them from coming just because they are Potong Pasir residents.

If the Member complains about Potong Pasir, I have more to complain about Tiong Bahru, for example. There are no facilities there. There are no basketball courts there - the Member said there are two in Potong Pasir. Because Tiong Bahru is part of the Queenstown estate, so my residents are encouraged to use facilities in Queenstown Sports Stadium which is built for that purpose. Of course, that does not mean that the Potong Pasir MP cannot use the money that they have in the Town Council to build some local facilities. They could have built more table tennis courts in their void decks using their surplus. They can also write to HDB to allow their money to build basketball courts on the common property. I do not think we will object if they use their own money. I think the Member for Potong Pasir can well afford simple projects like these.

If we look at the facilities in Hougang, we will find that facing the same constraint, the Member for Hougang has done remarkably well. He has not complained of a lack of recreational facilities. In fact, the last time I went there, I found that it is quite well-endowed with simple but adequate recreational and sporting facilities.

On Mr Steve Chia's questions, first, I want to commend him for reading the Budget Book, the estimates report and the HDB Annual Report. But I think he has missed out important items. I want to point them out. This is important. So I

Column: 1694

read from the statement here: "HDB does not have accumulated surplus. HDB is not a profit-making organisation. It is a loss-making operation because we subsidise most of the operations we do, especially in the sale of flats." This can clearly be seen from HDB's financial statements published in the annual reports.

Contrary to the Member's earlier question, HDB does not have any investments in bonds and other financial instruments. They are short of money. They used to borrow from the Government. Government is not going to lend them now. So they issue bonds - they are borrowing money from the public. These bonds are, what we term, medium-term notes - 10 to 25 years. To-date, they have issued something like $3.4 billion worth of bonds, with outstanding bonds for $3.1 billion, which are money that HDB owes the public.

For financial year 2004, HDB is projected to have an operating deficit of $422 million, mainly from the subsidised sale of HDB flats and the provision of CPF housing grants which the Minister talked about earlier on. Hence, a capital grant of $422 million is necessary to cover this deficit.

Mr Steve Chia said that HDB has a lot of money, it has investments in bonds and equities. These bonds and equities are actually held by HDB's subsidiaries, not by HDB. If we look at the HDB Yearbook , if we look at the balance sheet on page 119, we will see investments. This is the latest yearbook. The one that is coming out should be for 2003/2004. This is the 2002/2003 yearbook. If we look at the balance sheet, there is an investment item (item 7). If we look at the notes - on one side is HDB, and on the other is HDB group - HDB has nothing here. We have no investments in equities, bonds or anything like that, but HDB subsidiaries do. There is some money there but they are not all in cash. The subsidiaries have

Column: 1695

turned the money into working capital - some of it they have bought equipment or things necessary for their operation. HDB does receive dividends from them which are considered part of income and will be offset against expenditure. But in spite of that, HDB will suffer about $422 million estimated loss this year. HDB does not have any money.

Mr Steve Chia suggested that HDB should quickly rent out all its rental flats instead of losing money. HDB reviews all the applications for rental flats very carefully. When the Minister suggested sometime ago in Parliament that X% of flats were waiting to be rented out, it was because the people who have applied to HDB, do not qualify for these rental flats. We have stringent requirements to rent out rental flats. Basically, they must be low-income, they must have a friend to co-share the flat with them, and they must not have sold the flat within 30 months. These are requirements. It is not that we do not want to rent out the rental flats. It is that people who come to us, in large numbers, do not qualify for these rental flats.

Mr Low Thia Khiang: Madam, I would like to ask the Senior Parliamentary Secretary whether he agrees that the cause of sinking aprons and sewer lines is a result of improper construction method, ie, it was not properly supported and that is the result. Does he agree with that?

Assoc. Prof. Koo Tsai Kee: Madam, aprons do sink over time. Actually, the aprons do not sink - but the soil sinks, and the apron rests on the soil. In a flash flood like what happened a few days ago in some areas, the earth could have eroded, and these flash floods happened maybe one in 30 or 50 years. They are unexpected catastrophes. When these events happen, localised soil could be removed and the aprons could sink.

Column: 1696

Therefore, that is where the sinking fund comes into play.

Mr Steve Chia Kiah Hong: I thank the Senior Parliamentary Secretary for his answers. He may not have heard me correctly when I said that if the investments are in the HDB subsidiaries, HDB should ask the subsidiaries to return the money back to HDB so as to reduce the overall budget funding for HDB. There are $10 million in quoted shares, $91 million in quoted and unquoted bonds, $33 million in unit trusts and others. That is a lot of money that could be used, instead of sitting in the subsidiaries.

As for the rental of the HDB flats, the criteria seem to be so strict that there are a lot of excess empty flats waiting to be given out for subsidised rental. Maybe the criteria are too strict. Am I right to say that?

Assoc. Prof. Koo Tsai Kee: Madam, the subsidiaries are doing a good job. They need the working capital and much of the money is not in cash form anymore. They got their investments in equipment or something else. So long as the subsidiaries are doing a useful purpose that fits the mission of HDB,

the HDB should not ask them to liquidate their working capital or ask them to sell their assets, so that HDB can recover the cash, because whatever they earn, depending on the shareholding, part of that belongs to HDB.

The Chairman: Mr Low, one last clarification.

Mr Low Thia Khiang: Thank you, Madam. The Senior Parliamentary Secretary failed to acknowledge whether or not it is due to the aprons and the sewer lines not being supported at the construction stage, and not so much of the soil. And sinking fund is not used to "sink" into the soil. I think it is not in accordance with the Government's policy

Column: 1697

or with the Ministry of Finance's policy. Madam, I would like to draw the Senior Parliamentary Secretary's attention to a letter, which was written to Hougang Town Council on this matter, and I quote -

The Chairman: Mr Low, please do not bring up new material. Just seek your clarification.

Mr Low Thia Khiang: I just want to clarify and let him know, because it is on the matter of sunken aprons. It says, "The apron in the house sewer was constructed to rest directly on the compacted soil in 1980. Therefore, when the soil beneath the apron further consolidated over the years, they will gradually subside. In 1990 onwards, the design guideline is that the sewer and the aprons are supported by the building." This is the problem. I think it is not fair that it pushes everything to the Town Council.

Assoc. Prof. Koo Tsai Kee: Madam, I forgot to answer Dr Tan's question. I treat the PAP MPs with less priority than the Opposition MPs. Madam, civic mindedness arises from an individual's care and concern for the wider community. In this regard, HDB has played an important role in community bonding by providing places in HDB estates for social interaction and activities for age groups. These include communal spaces, void decks, sky-rise gardens and a variety of other social and recreational facilities. However, Madam, community bonding is not just about hardware but also about software. Grassroots organisations, community development councils, town councils and Government agencies like the Ministry of Community Development and Sports and the People's Association, have also played a critical role in helping to strengthen the bonds between the residents and the community. For example, town councils have various programmes to involve

Column: 1698

residents in the community. One example is the recent "Singapore's OK - Our Town Sparkles" campaign, to encourage residents to care for their environment. Others hold carnivals and promote social responsibility.

Madam, if I have time, I just want to answer Mr Low Thia Khiang's question. He insists that the aprons sunk because of the defective design and, maybe, he is trying to imply also defective construction. My answer is that, no, it is not defective design because of the standards at that time and we were talking about over 10 years ago - the aprons rested on compacted soil. Over time, the compacted soil could erode because of other factors. The foundation is a dynamic environment. We really did not pile the soil to put the aprons in a way we anticipated that they would need some maintenance over the years, and that is the reason why we have these goodwill repairs. We allow the town councils to build up their sinking funds and operating fund. We also provided S&C grants. So the key issue is: do you have the means? Yes. Do you have the expertise? Of course.

The Chairman: Mr Chia, is that a clarification?

Mr Steve Chia Kiah Hong: The Senior Parliamentary Secretary has not answered my question.

The Chairman: And what is your clarification?

Mr Steve Chia Kiah Hong: It is about how a money-losing entity, like the HDB, can accumulate such a huge asset valuation reserve of $8.2 billion.

Assoc. Prof. Koo Tsai Kee: Madam, a lot of the capital grant reserves that we see in the HDB Annual Yearbook were acquired over a period of time, many of which belong to the previous

Column: 1699

governments. HDB is obliged to lock them up. So what you see is not what we can get. It is just a book figure. The HDB cannot spend it because the money belongs to previous governments.

Downtown at Marina Bay

Dr Teo Ho Pin: **** Madam, the URA Masterplan has laid out the development of the Downtown at Marina Bay. As Singapore is presently facing an over-supply of office spaces, I am concerned that the Marina Bay development may turn out to be a white elephant. Madam, I wish to ask the Minister the following questions:

(1) What is the status of development of the Downtown at Marina Bay?

(2) What are the key planning considerations to achieve "live, work and play" balance in the Downtown?

(3) What would be the impact of the Downtown development on Raffles Place offices?

Underpass Construction

Madam, in the URA sale of land tender, it is normally specified that, "The successful tenderer shall, at his own cost and expense, be responsible for the construction of pedestrian underpass" to connect the proposed development to its surrounding buildings. This requirement has posed undue financial burden and constraints on developers as the construction of underpass is costly. Furthermore, as the underpass is underground, it faces high uncertainty due to different soil conditions. Thus, it is unfair for developers to bear such risk when tendering for a land parcel. In some instances, the developer is unable to obtain a Certificate for Statutory Completion due to difficulties encountered

Column: 1700

with the construction of the underpass. Underpass provides a means to connect buildings for pedestrian traffic, but many Singaporeans do not prefer to use the underpass when moving between buildings. They usually choose to use surface road pedestrian crossing instead. As such, underpass is usually under-utilised, thus wasting resources. We should provide more flexibility for developers to consider other alternatives to connect buildings, such as covered-linkways. Madam, I wish to ask the Minister the following questions:

(1) Can URA review its land sale requirements to construct underpass?

(2) How many underpasses were constructed due to URA's land sale?

(3) Will underpasses pose any security threat?

Car Parks

Mr Ang Mong Seng: (In Mandarin) : Madam, at the moment there are two agencies in charge of car parks, the HDB and the URA. Both these agencies come under the Ministry of National Development with Minister Mah in charge. It is like one country, two systems.

As far as I am aware, the HDB is in charge of car parks in the HDB residential estates and URA is in charge of all the car parks in the city area. In my constituency, there is a stretch of road where the HDB is in charge of the car parks on the left-hand side, and the URA is in charge of the other car parks on the right-hand side. There are actually two car park divisions in charge of the same function. May I suggest that we merge these two car park divisions so that we can save on administrative cost.

I would also like to suggest that an electronic payment method be used to replace the present coupon parking

Column: 1701

system because by now, our motorists are all familiar with the ERP system and electronic means could cater for different rates at different times. This way, we could save on parking coupons.

Safety of Shopping Centres

Mr Steve Chia Kiah Hong: Two points. First, many shopping centres recently converted car parks and public spaces into more leasable shop floors. Are there specific rules and proper monitoring on such conversions? What if the conversion seems to block fire hose access points, eg, the one in Basement One of Chua Chu Kang, Lot One Shopping Mall? I have a resident who emailed me to raise this concern as she sees that the fire hose access points are totally covered, blocked by the new to-be-converted shop space and will no longer be visible to the public eye. I hope there will be more ground supervision of fire safety by the authorities as permits are being granted for greater conversion of public spaces into leasable areas in shopping centres.

Second, what is the Government's position of tents and promotion booths that are supposed to be temporary but are, in fact, becoming a fixed permanent feature in some shopping centres? Will it become a fire hazard when it becomes especially crowded with shoppers and display of goods on weekends when there are many people who go to the shopping centres? Is fire safety precaution taken when planning for such semi-permanent tents and promotion booths?

Mr Mah Bow Tan: Madam, let me address Dr Teo Ho Pin's question concerning the developments in the Downtown at Marina Bay . He asked whether the developments are on track and I am happy to inform him that they are on track. In fact, the Downtown at Marina Bay will be our key focus for

Column: 1702

development of our City in the next 15 to 20 years.

The Government's intention is to develop the area around the Marina Bay to provide prime office space for global businesses as well as financial institutions, complemented by a full range of residential, shopping, dinning, cultural and entertainment facilities. So the Downtown at Marina Bay will not be just a place for work, it will also provide a total live, work and play environment. That is why a number of land parcels in the Downtown area will be zoned for residential and also "white uses", in other words there will be a mix of uses which will help to create vibrancy and buzz within the city. In fact, developments in the area are already underway. NTUC has the NTUC Centre just completed. Two sales sites launched in 2001 and 2002 are now in the various stages of construction and, of course, we will be launching the sale of our Business and Financial Centre (BFC) in May this year, through the Reserved List System.

Madam, the Downtown at Marina Bay can be one of Singapore 's key competitive advantages for the medium term. Cities all over the world are investing heavily in state-of-the-art facilities, infrastructure, developments to attract investments, trade and tourists. So, cities like Dubai , Shanghai , London and Tokyo , they are all channelling a lot of effort and money to new areas to keep abreast of changing requirements of business and financial institutions. Developers and investors can now choose from a wide array of attractive locations globally. In the midst of such competition, Singapore needs to plan for, and invest in, the necessary infrastructure and software to create an equally, if not more attractive environment. So we are fortunate to have available to us such a large tract of unencumbered land, right in the heart of the city, in a prime waterfront locale, and

Column: 1703

this gives us a tremendous opportunity to create a unique business, financial and residential hub, as a seamless extension to the existing CBD.

We will adopt a pro-active approach to realise the vision for Downtown at Marina Bay. As a start we will be putting in place key infrastructure and facilities to open up the area, to make it more accessible, more attractive. The Government's initial investment in key infrastructure in the Bay area will amount to $300 million and this will go towards developing a waterfront promenade around the Bay, a new pedestrian-cum-vehicular bridge to link to Marina Centre, as well as an extension of the common services tunnel, and road and sewer networks to bring utilities to serve the new developments. The URA will be calling for consultancy studies for the design of the promenade and pedestrian bridge because this is in a prime location and we want to make sure that such works are well-designed and relate well to the surrounding area. To activate the Downtown at Marina Bay early and to ensure vibrancy, we will also introduce low-density developments around the Bay for recreation and lifestyle related uses. And this can be for shorter leases, for up to 30 years.

We will also be releasing land for residential users in the next few years to bring life to the area. The development of the Downtown will require the effort of all agencies. So to further lend impetus to the effort, the Government has appointed URA as the development agency to champion and focus actions for development of the area. What this means is that URA will spearhead and coordinate development efforts and also carry out active promotion, marketing and

Column: 1704

place management for the area. Of course, URA will work closely with other agencies as well as with the private sector to make sure that the plans are market-oriented and are attractive to investors. I will chair a Ministerial Steering Committee comprising senior representatives from MOF, MTI, MinLaw and relevant agencies to provide strategic directions, facilitate decision making and steer development efforts for the Downtown at Marina Bay.

I would like to assure Dr Teo that the release of any land at the Downtown at Marina Bay, such as for the BFC, will factor in the supply of space in the existing CBD, which is the Raffles Place, Shenton Way area, and will not be neglected. ****

The Chairman: Order. It is 6.30 pm.

Thereupon, Mdm Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Mr Mah Bow Tan: Mdm Deputy Speaker, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2004/2005, and ask leave to sit again on Monday, 15th March 2004.

Mdm Deputy Speaker: So be it.