Thursday 12 July 2012

Parliament Highlights - 10 July 2012

Government accepts responsibility for December MRT incidents
Transport Ministry, LTA could have done more and better, says Lui
By Christopher Tan, The Straits Times, 11 Jul 2012

THE Transport Ministry and its regulator for land transport must shoulder some of the blame for last December's two massive MRT breakdowns, the minister in charge said yesterday.

The COI, which released its 358-page report last week, found rail operator SMRT's maintenance and incident response standards wanting.

Still, the Land Transport Authority (LTA), as the regulator, has the responsibility of holding the operator accountable for delivering a reliable system for commuters, Mr Lui said.

'LTA fell short in this regard. It must do better,' he added.

He said the Government accepted the COI's findings and recommendations. He also listed steps LTA will take to address its shortcomings. These include re-looking at how to better regulate a rail operator's maintenance and service standards.

Both LTA and SMRT have set up a Joint Team comprising engineering and maintenance experts to improve the reliability of the North-South and East-West lines - the oldest in Singapore's metro network.

One immediate goal is to reduce the number of trains withdrawn from running by 30per cent by next year.

In the first six months of this year, 3.9 trains were withdrawn because of faults per 100,000km operated. This compared with 3.19 last year, 2.22 in 2010 and 1.65 in 2009.

Mr Lui said LTA will require operators to track certain indicators so that problems can be detected early, and preventive action rolled out more speedily.

LTA will also require SMRT to engage independent experts to audit its maintenance processes every three years.

'I have also asked SMRT and LTA to work with and consult their counterparts overseas who have to operate and regulate older MRT systems, to see what preventive measures we should put in place... to cope with an ageing rail system,' Mr Lui said.

In case of a major breakdown, plans are now in place to minimise inconvenience and discomfort to commuters.

SMRT will also be required to submit its Rail Incident Management Plan to the LTA for approval. This is an extensive protocol to deal with a variety of incidents that can affect rail service.

Underpinning these measures is a plan to ensure the rail system is upgraded as it ages. Mr Lui noted that the components which hold up the power-supplying 'third rail' are more than 20 years old and there are now 'better and more robust designs'.

LTA is due to announce the findings of its own investigation into the December breakdowns soon, including penalties.

Under the current framework, SMRT can be fined up to $1 million for a disruption.

Mr Cedric Foo, chairman of the Government Parliamentary Committee for Transport, said not only does the LTA have to be fair in this, but 'it has to be seen to be fair'. He said there has to be a separation of its roles as the provider of rail infrastructure and as operations regulator.

Among the questions MPs posed to Mr Lui was whether the costs of improving the network's reliability will be passed on to commuters.

No, he said, noting that fares were set by a formula that did not include maintenance costs.

On moving forward after the 'painful lesson' of December's disruptions, Mr Lui said: 'We know we must work hard to restore confidence in the MRT system.'

LTA to improve as a regulator
It will supervise SMRT more closely and strengthen regulatory process
By Maria Almenoar, The Straits Times, 11 Jul 2012

THE Land Transport Authority (LTA) will supervise SMRT more closely and strengthen the way it regulates train operators.

Among other things, it will demand that operators closely track certain faults, set stringent standards to minimise delays, and lay down what must be done during breakdowns.

Transport Minister Lui Tuck Yew spelt out what the LTA planned to do in Parliament yesterday, while admitting that it had fallen short on its role as a regulator and could have done more.

The authority must do better, and has accepted all the key recommendations by the Committee of Inquiry (COI), he said.

He noted that given the strain of increased ridership on the ageing North-South and East-West lines - now 25 years old at their oldest stretches - preventive maintenance was now, more than ever, a critical aspect of the train system.

Rather than relying on a 'corrective approach' to fix problems, SMRT and the LTA will together adopt a pre-emptive approach to identify potential trouble spots.

Such an approach will be extended to the other train lines as they age.

The authority and SMRT will also consult operators of older MRT systems internationally to find out how to cope with an ageing rail system, said Mr Lui.

With SMRT's maintenance regime highlighted as one of the reasons for the disruptions in December last year, operators will soon have a slew of new requirements to abide by.

For example, they will need to keep a log of the number of incidents involving dropped 'claws' and misaligned third rails.

The two massive breakdowns of last December were caused by the dropped 'claws', part of the structure that holds up the third rail, which led to the third rail sagging. This rail supplies power to the trains.

With the new maintenance regime, Mr Lui said operators must keep records on the robustness of these structures, analyse the data and put in place improvement plans with specific timelines.

These records will in turn give the LTA a better sense of the operator's maintenance efforts.

The LTA will also require SMRT to engage independent experts every three years to audit its maintenance regime.

Changes will also be made to the regulation of operators, with the LTA being more 'prescriptive' and looking more closely at areas that affect reliability and commuter comfort.

'We will strengthen today's regulatory framework so that the operator is held more accountable,' said Mr Lui.

Operators will have to abide by stricter Operating Performance Standards, with more stringent standards set on the frequency and number of delays.

The LTA has also already issued a Code of Practice on incident management to the operators earlier this year.

This new code sets out standards on how to manage an incident, including the disembarkation of commuters, announcements and bus services to ferry affected commuters.

Operators will also now need to seek the LTA's approval for their Rail Incident Management Plan. This is the plan activated by operators during a major train breakdown.

As disclosed by LTA chief executive Chew Hock Yong earlier, penalties are also being reviewed, including the maximum fine to be meted out to errant operators.

Mr Lui said this is to ensure that they are more commensurate with the severity of incidents.

Currently, operators may be fined up to $1 million.

Mr Lui also noted that it was not the purpose of the COI to determine accountability and penalties. As such, the LTA will separately complete its own investigations into last December's incidents soon. Its report will include penalties to be meted out, he said.

Commuters won't bear rail improvement costs
By Royston Sim, The Straits Times, 11 Jul 2012

THE costs of improving the reliability of the train network will not be passed on to commuters, Transport Minister Lui Tuck Yew promised yesterday, as he addressed MPs' concerns over this issue.

He also told the House that he will ask the Land Transport Authority (LTA) to look into a 'compensation regime' for commuters affected by future service disruptions.

He was responding to Nee Soon GRC MP Lee Bee Wah, who had asked who would bear the cost of adopting the recom-mendations of the Committee of Inquiry set up to look into last December's two major train disruptions.

She had also asked whether, aside from imposing fines on the transport operators, there was a way to compensate commuters more directly - such as by offering them a free train ride on the day of a breakdown.

The LTA donates the fines it collects to the Public Transport Fund, which helps poor families with transport fares.

In his response to Ms Lee's question on bearing the cost of improvements, Mr Lui said the ongoing review of the current fare formula was based on inflation, wage increase and the productivity of the two train operators.

'There's no formula or factor in the formula that says that if they spend more on maintenance or whatever it is, that comes out as part of the fare review,' he said.

'So I don't expect that the cost - additional costs they spend on claws or whatever it is - is going to be passed on to the commuters as a result.'

He added that he did not know how much it would cost to adopt the committee's recommendations.

As to Ms Lee's question on a way of compensating inconvenienced commuters, he said the LTA would look into this; the Government will have to look at what is being done elsewhere in this area, he said.

Non-Constituency MP Yee Jenn Jong wanted to know how the LTA and SMRT would split the bill for making improvements and replacing infrastructure.

Mr Lui said: 'We're still discussing what the exact apportionment of the costs between SMRT and the Government will be.

'But there's a responsibility from the point of view of the Government, and we have to bear part of the cost.'

How LTA called in help
By Christopher Tan, The Straits Times, 11 Jul 2012

FORMER SMRT chief executive Saw Phaik Hwa got it wrong when she said the operator could not rope in help from agencies such as the police and Singapore Civil Defence Force in a major rail incident.

Transport Minister Lui Tuck Yew said in Parliament yesterday that there is a standard operating procedure (SOP) that allows an operator to seek external help. He said this SOP was in place even before December.

The minister was responding to a question from opposition MP Sylvia Lim (Aljunied GRC). Ms Lim cited an interview Ms Saw gave The New Paper, in which she said SMRT could only call on these agencies if there was a fatality.

Ms Lim asked Mr Lui if that was true.

The minister said SMRT might have been too preoccupied during the two incidents on Dec 15 and 17; and so the Land Transport Authority called for support from the other agencies.

Eventually, the police arrived to assist.

'So there is an SOP in place,' Mr Lui said. 'I do not believe that she (Ms Saw) had gotten the account accurate.'

The former CEO, who quit a month after the two massive breakdowns, is now helming retailer Auric Pacific.

She was not contactable for comment yesterday.

Referring to the first breakdown on Dec 15, Ms Saw said in the interview that the incident was wrongly classified as Ops Red 2, when it should have been the more serious Ops Red 1.

Besides these, there were four other classification levels for incidents: Orange 1 and 2; Green 1 and 2. She said as much when she testified at the Committee of Inquiry on May 10.

The former chief explained that the inability to garner help earlier from agencies, such as the police, had hampered efforts to render assistance to stranded commuters.

For instance, because of traffic congestion (the breakdown happened during the evening peak period), buses sent to affected spots took some time to arrive. The first arrived 33 minutes after activation, Ms Saw noted.

If the police had been called in earlier, they could have helped to stop or redirect traffic so as to give buses quicker access to the stranded MRT passengers.

Following the breakdowns, SMRT's classification of incidents has been simplified to be more in line with the LTA's: Level 3 (minor incident, for example isolated to one or two stations); Level 2 (major, section of whole line affected); Level 1 (national crisis, such as a terrorist attack).

The LTA said external agencies can be called in even for Level 3.

Transport operators have to 'strike a balance'
By Royston Sim, The Straits Times, 11 Jul 2012

FOURTEEN MPs rose to ask Transport Minister Lui Tuck Yew about issues related to the Government's response to the Committee of Inquiry report. Here is a summary of the exchange:

Who polices the regulator

Nominated MP Eugene Tan asked who would regulate the Land Transport Authority (LTA), which is both the regulator for the rail sector and the provider of rail infrastructure.

Mr Lui said the pool of talent to draw from for both types of work is limited. The question is if it would be better to divide a limited talent pool into two or house it centrally.

The LTA has a clear separation between its design, development and regulatory arms, and 'there is a great deal of value' in rotating staff between the different departments, Mr Lui said.

He added that his ministry is ultimately responsible for ensuring that the LTA meets expected standards in both its operational and regulatory roles.

Profits versus engineering

Mr Low Thia Khiang (Aljunied GRC) and Non-Constituency MP Gerald Giam of the Workers' Party asked if SMRT had focused too much on making profits and neglected its maintenance.

Mr Christopher de Souza (Holland-Bukit Timah GRC) sought assurance that SMRT would focus on its operations instead of retail.

Meanwhile, Ms Denise Phua (Moulmein-Kallang GRC) asked if there was a risk of focusing too much on engineering and neglecting commuters' needs.

Mr Lui said transport operators will have to strike a balance between being a commercial entity and an engineering company providing an essential public service. He reiterated that a profit motive pushes operators to be more efficient and productive.

He added that the Government will need to remind operators not to pay undue attention to either aspect and neglect the other. SMRT's management is also paying far more attention to its engineering and maintenance regime, he said.

Responding to Ms Phua, Mr Lui said engineering is only 'the means towards an end'. The emphasis is to have a more reliable system with fewer breakdowns and train withdrawals so that commuters are assured of a predictable journey, he added.

Maintaining financial viability

Mr Cedric Foo (Pioneer) asked if it was important for transport operators to ensure that they are profitable, so they can set aside funds for adequate maintenance.

Mr Lui said the Government, taxpayers and commuters would be the ones suffering if transport operators are inefficient and loss-making.

It is thus critical to give operators an incentive to be efficient and productive, and the productivity extract in the fare formula provides that, he said.

Engineers in top management

Ms Lee Bee Wah (Nee Soon GRC) and Non-Constituency MP Yee Jenn Jong asked about bringing in more people with engineering expertise to SMRT's board or top management.

SMRT has been doing this over time, Mr Lui said, noting that an engineering representative has attended its board meetings since 2010.

Mr Lui believes the operator also seeks 'expertise outside of the board that may be able to advise them on specific issues related to engineering or other aspects'.

Funds for maintenance

Mr Png Eng Huat (Hougang) asked Mr Lui to consider mandating that SMRT set aside a certain amount of money for repairs and maintenance.

Mr Lui said the key is to ramp up the standards that operators are held to, as this would require them to place more emphasis, resources and funds on meeting those guidelines.


'It's significant that the LTA has been deemed to have fallen short... There will be legal penalties meted out to SMRT. My question relates to, what sort of penalties will there be for the LTA? And we have a classic question now of who regulates the regulator?'
- Nominated MP Eugene Tan


'May I ask the minister what gives him the confidence that LTA will correct all its shortcomings? Also, what gives him confidence that SMRT will from now on improve its maintenance culture and regime?'
- Mr Cedric Foo, chairman of the Government Parliamentary Committee for Transport


'Well, I would say that I'm less interested in heads rolling. I'm more interested in heads being fixed and focused on the problems and the issues - which are, carrying out thorough checks, doing systematic analysis and doing a proper follow-up.'
- Transport Minister Lui Tuck Yew, in response to MPs' questions about changes to SMRT's top management

Govt collected $1.1b in casino taxes in 2011
By Ng Kai Ling, The Straits Times, 11 Jul 2012

THE Government collected $1.1billion in taxes from the two integrated resorts in fiscal year 2011 and $900 million in the previous year, Minister of State for Finance Josephine Teo told Parliament yesterday.

This was on top of what the Singapore Totalisator Board collected from casino entry levies, which totalled another $288 million - $195 million last year and $93 million in the first six months of this year.

Singaporeans and permanent residents pay $100 for 24-hour access, or $2,000 for unlimited access for one year.

Ms Teo gave the numbers in response to a question from MP Ang Wei Neng (Jurong GRC), who also asked how much was being spent to address problem gambling.

When he heard that the Government had spent $9 million on such programmes last year, he compared it to the taxes collected and called for more to be done.

'I urge the Ministry of Finance to allocate more funds to help society to combat the gambling ills,' he said.

In her reply, Ms Teo gave assurances that the Government would set aside sufficient resources to address problem gambling. It has more than doubled its expenditure on this, she noted - from $3.8 million in fiscal year 2009 to $9 million in 2011.

The money was used to set up the National Council on Problem Gambling, implement public-education programmes, and support organisations such as family service centres that provide counselling to heavy gamblers.

She added: 'Yes the casino operators have made more money, but at the same time they've contributed to our tax revenues. And through these tax revenues the Government is able to provide support to Singaporeans in many areas and expand our resources in terms of care for Singaporeans.'

Ms Teo explained that casino levies are used to benefit the community at large, while measures to contain gambling ills are funded separately.

The exchange came just days after the Government proposed amendments to the Casino Control Act to further protect vulnerable groups from gambling and ensure that the two integrated resorts remain attractive tourist destinations. It is currently seeking feedback on the changes, which include setting a limit on the number of times a financially vulnerable person can visit the casino.

Ms Teo added, however, that it was not just about throwing more funds at the issue. She said: 'It's not just putting aside the monetary resources - it's really about identifying the interventions that will be most effective and helpful in curbing gambling addiction.'

Officer charged with neglect over 2 runaway expats
By Phua Mei Pin, The Straits Times, 11 Jul 2012

A POLICE investigation officer who handled a case in which two expatriates charged with assault jumped bail has been charged with neglect of duty.

This was disclosed in Parliament yesterday by Second Minister for Home Affairs S. Iswaran, who, however, did not disclose the identity of the officer.

Mr Iswaran was replying to Ms Tin Pei Ling (Marine Parade GRC), who had asked for an update on the police inquiry into the matter.

When asked, he also declined to spell out what the officer had neglected to do, saying the officer's case is before the police disciplinary board.

The case involved three expatriates: Australian business development manager Nathan Robert Miller and two options brokers, New Zealander Robert Stephen Dahlberg and Briton Robert James Springall.

They were charged in court with assault in July last year following a brawl at Suntec City in 2010.

Miller pleaded guilty and was sentenced to three weeks' jail in February. But the two brokers fled Singapore while out on bail.

Dahlberg fled in July last year and Springall in December.

The duo are now on Interpol's wanted list.

Their flight from Singapore, however, is not indicative of 'any systemic shortcomings', said Mr Iswaran. 'The lapse was due to the error of an individual.'

He added: 'In general, the framework for the management of investigations is sound.'

Mr Ong asked if the Criminal Procedure Code could be tightened, while Ms Tin suggested making it mandatory to impound the passports of these suspects.

Replying, Mr Iswaran said the ministry is reviewing its processes. 'We will see what else can be done to strengthen the framework and the procedures.'

At the same time, he stressed that two key considerations are weighed when the courts set bail conditions: ensuring justice can be served, while respecting the presumption of innocence and the right to free movement of the individual until proven guilty.

Govt open to ideas to spur dads towards bigger role
DPM Teo didn't dismiss suggestion of paid parental leave for both parents
By Phua Mei Pin, The Straits Times, 11 Jul 2012

DEPUTY Prime Minister Teo Chee Hean yesterday indicated that the Government was open to ideas to get fathers more involved in parenting - which could include having paternity leave.

While Mr Teo, who is in charge of population matters, did not say whether the authorities were considering paid parental leave for both fathers and mothers, he did not dismiss the suggestion from Dr Intan Azura Mokhtar (Ang Mo Kio GRC).

'I do support having some signal and some practical measures in which men are encouraged to take a greater role in parenthood,' he said, but did not elaborate.

His comments come after a call he made last month for ideas from the public for the Government's ongoing review of marriage and parenthood policies.

Yesterday, Ms Lee Bee Wah (Nee Soon GRC) and Dr Intan asked what else Singapore could do to raise its birth rate, and what it could learn from Nordic countries.

In his reply, Mr Teo said that as there was a large range of fertility rates in the West, it was not easy to link expenditure or policies to birth rates. He also noted that Nordic nations had higher tax rates and a larger proportion of the population paying tax to support such policies.

Besides, he added, it was not up to the Government alone to affect the birth rate.

'Getting married and having children are very personal decisions that reflect broader social values and attitudes... Employers, family members and society at large all have a part to play,' he said.

When Dr Intan suggested extending maternity leave or having parental leave for both parents, Mr Teo said he was open to ideas on how to do so while balancing other concerns. He noted that the Government had had to consider the impact on women's employability when the Government raised paid maternity leave from 12 to 16 weeks in 2008.

Apart from maternity leave, mothers and fathers can now each take up to six days of paid childcare leave a year until their child turns seven.

Mr Seah Kian Peng (Marine Parade GRC) too made a push for paternity leave to be legislated.

'Legislating it even for as short as one day is an important signalling effect from the Government,' he said.

'Having talked to many residents and young couples, many of them have cited that paternity leave is something that is important to the family.'

Such ideas resonated with the head of the Centre for Fathering, Mr Peter Quek, 48, who also hopes to see more measures to encourage fathers to be more involved in childcare.

He told The Straits Times: 'Many young fathers tell us that they wish there's paternity leave available to them.'

Boosting birth rate, but at what cost?
By Jeremy Au Yong, The Straits Times, 11 Jul 2012

EVEN before the suggestion left her lips, Non-Constituency MP Lina Chiam knew that it was a radical one.

'I'd like to ask a very controversial question,' she said when Deputy Prime Minister Teo Chee Hean was fielding questions on how Singapore was planning to deal with its flagging birth rate.

'Will he (DPM Teo) consider baby drop, since Malaysia is doing that and we are having this population problem of not having enough babies?' she asked, referring to the baby hatches that have been deployed in Malaysia to rein in baby dumping.

Young mothers can leave their babies anonymously in the hatch, which is about the size of a regular crib. The reasoning here is that by having such a hatch, unwed mothers would have their babies rather than abort them, and they have a better chance of survival.

Thus in theory, at least, having a baby hatch would increase the actual number of babies born to Singaporean mothers and raise the birth rate. Of course, Singapore has a very low rate of abortions and baby-dumping cases, so this would not prop up the numbers by that much.

Still, every little bit helps, right?

DPM Teo did not reject the idea outright, but stressed the need to be cautious about the kinds of measures Singapore takes to increase the birth rate.

'I think we must be very careful when we implement such measures, whether or not we end up inadvertently encouraging sort of unwanted pregnancies and births, causing greater problems as a result of that,' he said.

The reminder was a timely one, given that the quest to boost the sluggish birth rate appears to be growing increasingly urgent.

Singapore's birth rate last year was 1.2 children for each woman of child-bearing age, well below the required replacement rate of 2.1.

This was the result of an across-the-board decrease in birth rates for all ethnic groups in the past decade. All this despite the Government pumping increasing amounts of money to try and prop up the birth rate.

The budget for marriage and parenthood measures is now $1.6 billion, more than three times the $500 million it set aside in the year 2000.

Last month, the Government appeared to go back to the drawing board. DPM Teo said it would review its policies again, and urged members of the public to contribute suggestions.

If yesterday's parliamentary sitting was anything to go by, baby hatches aside, the review might end up going over a lot of new ground.

Many of the MPs who spoke up talked about ideas like making childcare more accessible and legislating for paternity leave. These are well-worn ideas that have been discussed numerous times before.

The concern here - borne out by the willingness of Mrs Chiam yesterday to contemplate a baby drop - is that we have tried so many things without success that we may now have to resort to unthinkable ideas. There is a sense that we cannot be choosy about how we get our babies.

Nominated MP Janice Koh expressed a similar, if more restrained, version of that sentiment during the same debate yesterday.

Like Mrs Chiam, she too seemed acutely aware of the precarious turf she was venturing into.

She was so cautious in the way she phrased her question that some members had trouble understanding what she was really getting at.

'Irrespective of marital status, just looking at whole-country statistics, can't Singapore continue to model after the Nordic countries in terms of employing strategies that could also work in Singapore, irrespective of how we calculate the stats, whether it's out of wedlock or within the family context?' she asked, to some puzzled looks.

The crux of her comments was that Singapore should not rule out strategies that worked in the Nordic countries just because a large number of babies there are born to unwed mothers. DPM Teo reiterated his point about side effects in his reply.

The exchanges between DPM Teo and the two MPs hold important questions over the next phase of our pro-family efforts.

To what extent should we compromise on our values in our pursuit of babies? Should we pursue more births as an end in itself, or do we also need to care about what kind of society we end up with?

Singapore appears to have come to a difficult place in its efforts to boost the birth rate. We seem to have now exhausted all the obvious means, plucked all the low-hanging fruit.

The next step forward would logically need to be different, bolder.

But it also needs to be anchored in the knowledge that a healthy birth rate is not the only thing that matters.

One in 3 successful job-seekers aged 50 or above
By Toh Yong Chuan, The Straits Times, 11 Jul 2012

ONE in three job-seekers who found employment through job centres last year was 50 years old or older, Minister of State for Manpower Tan Chuan-Jin said yesterday as he outlined continuing efforts to help older workers.

Last year, the Singapore Workforce Development Agency's (WDA) career centres and the union movement's Employment and Employability Institute found work for 14,200 job-seekers, of which 35 per cent were 50 years or above.

'We believe that more can be done for this group,' Mr Tan said, as he spelt out various measures taken to boost such workers' job prospects, such as encouraging companies to hire them through the Special Employment Credit programme.

However, he rejected a suggestion by MP Denise Phua (Moulmein-Kallang GRC) to set up a dedicated job placement centre for older workers. The Manpower Ministry, he said, prefers to stick with its 'functional approach' where the centres keep serving all workers but are 'sensitive to the needs and requirements of older workers too'.

Still, he did not close the door on doing more. 'We can... look at whether there are practical measures that can be put in place over and above what we have today,' he said. WDA and the National Trades Union Congress (NTUC) together run seven centres that help workers find jobs.

According to the Ministry of Manpower's latest labour force report, three in 10 in the local workforce are 50 years and above.

Last year, they bore the brunt of retrenchments in some sectors. In the production and related sector, which had the highest number of job losses, about 45 per cent of the 4,750 workers who lost their jobs were 50 years or older.

MPs yesterday also called for more to be done to promote flexible work arrangements. Ms Foo Mee Har (West Coast GRC) asked whether more measures are being considered, while Nominated MP Mary Liew asked for data on the number of women being hired under flexible work terms.

Replying, Mr Tan stressed that it was ultimately up to employers to take the lead in providing flexible work arrangements, but added that the Government would encourage more firms to do so.

Employment issues were clearly high on the minds of MPs yesterday.

Mr Gan Thiam Poh (Pasir Ris-Punggol GRC) also asked whether Singaporeans had benefited from high value-added jobs created.

Yes, replied Second Minister for Trade and Industry S. Iswaran. While the Government does not set specific targets on how many new jobs must go to Singaporeans, most do, he said, and statistics show this.

Some 75 per cent of new jobs for professionals, managers, executives and technicians last year went to locals, as did the majority of the 167,300 skilled jobs created by the Economic Development Board over the last 10 years, he said.

Foreigners, firms now form 7% of home buyers
Figure down from 20% last year; market moving to 'more stable path'
By Yasmine Yahya, The Straits Times, 11 Jul 2012

COOLING measures have slashed the proportion of private homes bought by foreigners and companies and largely driven speculators out of the market.

National Development Minister Khaw Boon Wan stated that foreigners and firms account for just 7 per cent of total private home purchases now.

This is a striking drop from last year when the proportion was 20 per cent.

The minister, who gave a written response to a question from Nominated MP Tan Su Shan, also noted that 'the market is moving towards a more stable and more sustainable path'.

But Mr Khaw did not rule out further measures, saying: 'We continue to monitor the market closely, and remain ready to revise and enhance the policy, if ... the situation demands it.'

He said the ramp-up of public and private housing supply and the cooling measures have yielded encouraging results.

The latest cooling measure included the additional buyer's stamp duty introduced in December, which imposed an extra 10 per cent stamp duty on foreign and corporate home purchases.

Mr Khaw said the various moves 'have helped home buyers, including those at the middle and low end of the market'.

The growth of mass market home prices slowed to 0.4 per cent in the second quarter this year, compared with 1.1 per cent in the previous quarter.

Overall, private home prices also moderated significantly, up just 0.3 per cent in the first six months of the year. Last year they rose 6 per cent.

The relatively low volume of sub-sales indicates that short-term property speculation has also plunged.

In another helpful move for home buyers, a significant increase in new HDB flats means most first-timers now have a chance to select a build-to-order flat if they apply.

While Mr Ku Swee Yong, chief executive of International Property Advisor, noted that the proportion of foreigner and company purchases have fallen significantly, he said that local demand has surged in areas such as West Coast, Hillview and Punggol.

More locals buying could be another factor for the fall in the proportion of private homes bought by foreigners, Mr Ku said.

Citi economist Kit Wei Zheng reckoned that 'the sales volume and prices continued to climb in the second quarter, so we can't say there will definitely be no more (cooling) measures, but I believe any additional measures will not be as aggressive... barring a very sharp rise in prices'.

In a separate question, Ms Tan asked how the National Development Ministry would address potential conflicts that could arise from its dual role in land sales and public housing.

Mr Khaw said that there are no conflicts, as the Urban Redevelopment Authority (URA) and the Housing Board are merely agents when carrying out land sales for the state. 'Revenue accrues to the past reserves, not to the National Development Ministry, the URA or HDB,' he stated.

Housing subsidies bigger than they seem: MND
Ministry explains that Housing Board generally incurs loss on BTO projects
By Rachel Chang, The Straits Times, 11 Jul 2012

FLAT-BUYERS receive subsidies that are bigger than they seem at first glance, said the National Development Ministry (MND).

This is because the Housing Board generally makes a loss on its build-to-order (BTO) flat projects, it said in a written reply on Monday to a parliamentary question from Ms Ellen Lee (Sembawang GRC).

Ms Lee had asked a series of questions about the cost of building an HDB flat and how housing subsidies have changed in the last 10 years.

Using the example of Waterway Banks (right), a BTO project in Punggol launched last November, the ministry said the 1,016-unit development cost HDB $279 million to build, while sales proceeds totalled $240 million.

HDB therefore incurred a loss of $39 million, it said, by pricing the BTO flats substantially below the market price of comparable resale flats in the same area.

So, each family actually receives 'a much higher subsidy' than the cash grants HDB hands out.

The ministry also noted that these cash grants have more than doubled in the last decade, especially for lower-income families.

Two extra grants - Additional CPF Housing Grant and Special CPF Housing Grant - were introduced in the last six years.

Together, these give households earning $1,500 or less a month and buying their first flat from HDB a total grant of $60,000.

Previously, no grants were available.

As for first-timers who buy resale flats, subsidies of up to $80,000 are available.

A decade ago, only the CPF Housing grant of up to $40,000 was available for these buyers of resale flats.

Replying to Workers' Party MP Muhamad Faisal Abdul Manap (Aljunied GRC), the ministry said 7,400 households sold their flats to settle their HDB mortgage arrears in 2010.

This represented 1.8 per cent of all outstanding HDB loan cases in 2010.

In 2011, the number of such households fell to 3,300, or 0.9 per cent of all outstanding HDB loan cases.

For families who can no longer afford their flats, HDB 'will try to render practical help', by getting them a public rental flat or offering them another loan if they want to buy a smaller flat, the ministry said.

In some cases, HDB has directly allocated a flat from its stock to these families at market rate, it said.

Building industry 'can meet demand for new flats'
By Daryl Chin, The Straits Times, 11 Jul 2012

THE National Development Ministry is confident that the construction industry can deliver on the large infusion of HDB flats promised in the coming years without compromising on quality.

It said the industry should have enough capacity to meet all construction demand, which it does not expect to exceed the peaks of the past.

Still, the Housing Board will continue to monitor closely the process of building new flats, the ministry said, in a written reply on Monday to Ms Lee Bee Wah (Nee Soon GRC).

She had asked a string of questions on the industry's ability to cope, amid tightening labour laws, with the Government's plan to offer 50,000 flats in two years. She asked if quality would suffer.

The ministry pointed out that annual construction demand is not projected to exceed $27 billion this year, nor in the next two years.

This is below the industry's peak demand of $36 billion in 2008.

Also, private-sector construction is expected to slow down, so there 'should be sufficient capacity to deliver new public housing flats, which account for about

20 per cent of the overall construction demand', it added.

As for quality, it said a rigorous system is in place to monitor flat construction.

This includes monitoring contractors, having quality assurance processes and audit checks on the works before the flats are handed to their owners.

It acknowledged that stricter labour laws will affect the industry, but added that it is coping through programmes to upgrade and retain higher-skilled workers, as well as scholarships to attract newcomers.

As for the long wait at dumping grounds for excavated materials, the ministry said the HDB has extended operating hours and increased the handling capacity at the Changi site.

Several factors in rental flat wait
THE waiting time for a HDB rental flat is dictated by several factors such as the location, ethnic quota and type of flat.

Chinese, on average, wait four months, Indians, six months and Malays, seven months, said the National Development Ministry in a written reply to Nominated MP Mary Liew's question.

It also said the number of rental flats will reach 50,000 by the year's end.

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