Extracts of The Straits Times’ interview with Minister Lawrence Wong on 22 Jan 2018
Feb 15, 2018
MND’s priorities
Q: In broad strokes, what are the main areas that MND will be focusing on in the upcoming year?
A: MND is always a busy Ministry, because the work that we do impacts on and touches the lives of many Singaporeans. If you look at housing in particular, the sentiments certainly have improved over the past five years.
There are day-to-day concerns, and we will deal with them and we will continue to fine-tune our policies and schemes. But it’s important that we do not get overwhelmed by just the day-to-day issues. Because for MND’s work, particularly when it deals with infrastructure, it takes a long time to build, so we have to cast our eyes over the horizon and look at how we can build a better Singapore to leave behind for our children.
So that’s one key priority for MND. I’ve said before that we are not done building Singapore and indeed there’s much more work that needs to be done. But it’s not just about building more, we also need to build differently. We need to achieve a qualitative difference in the way we go about building our next phase, and there are several areas of qualitative difference. Firstly, we will need to build more productively, especially in the construction sector. Second, we need to build more sustainably, to continue to enhance our greenery and biodiversity, to achieve savings in resources, be it water or energy and to do our part to tackle climate change. Thirdly, we need to build in a more connected and integrated way. Because as Singapore gets more developed and built-up, you cannot just optimize individual parcels of land. We have to look at it at the broader district level, and see how we can achieve better connectivity seamlessly, how we can achieve better integration of utilities, services, and infrastructure, at the entire district level. If you look at some of the projects that we are launching, the new ones in Punggol and Jurong, you will get a sense of what we are talking about to get that whole-of-district integration.
Finally, we have to build a more distinctive city, in the sense that we want to build a city that has a distinctive Singapore character, culture, heritage and identity. Because there’s no shortage of cities in Asia trying to be world class. There are hundreds of cities in Asia trying to overtake Singapore. We want to be a global city. But we don’t just want to be a city like any other global city. We want to be a global city with Singaporean characteristics, that Singaporeans can identify with. So that’s our aim, to be a global city where every Singaporean is proud to call home. So those are some of our key priorities for the future.
Q: In terms of developing Singapore into a global city, can I get you to talk about your vision for that, and what is MND going to do to work towards that goal?
A: I just talked about some of the things we do when we are trying to do better, to build a better city for the future. So those are the areas we want to achieve qualitative change, not just continuing with the same, not just building more, but really achieving a difference in the way we build our future city so that it will be truly better. In terms of strengthening our economic competitiveness, giving Singaporeans a high quality of life, and really giving Singapore the best chance to succeed in an uncertain world. In terms of concrete projects, they are not new, you would have heard many of them and that’s why we do have a pipeline of projects coming up over the coming decade and those are the things we will continue to work on.
New families, low-income, elderly
Q: Can you share the schemes or plans the Ministry has, to improve the lives of new families, low-income families and the elderly?
A: We already have many schemes for housing, across the life cycle. If you talk about new families and young couples in particular, many of them want to get their flat as soon as possible. So, we have started to build flats with shorter waiting time, not by compressing the construction, but by bringing it forward so that the applicants don’t have to wait so long to get the flats. This year we will launch 1,000 such flats with shorter waiting time, and next year we will see whether we can do more.
We also have various schemes to help families live near one another or live together. We have 3Gen flats, Multi-Generation Priority Scheme, and Proximity Housing Grant. And that’s something useful as we do know that families want to live near one another or even live together in order to provide mutual support. We will see how we can enhance our schemes to better achieve this.
For the lower-income groups, we have again done quite a number of things over the years. The queue for public rentals has come down, it’s a much shorter waiting time now. We launched the Fresh Start Housing Scheme to give families in the rental flats a chance to get a flat of their own. But for many of these cases, it’s not just about solving a housing issue, you really need a whole strategy to support the family, especially the children. So I’m very happy that my Second Minister Desmond is now the Minister for Social & Family Development, because we really need to work together, to see how we can better bring together housing plus social services.
In the same way, our approach is similar in looking at seniors. Because for seniors we have a range of housing for them, including the 2-Room Flexi flats that are provided for them, and we have schemes to help them right-size. But for the seniors, very often it’s not just about housing, it’s about the community support, it’s about family support, it’s about helping them to stay active, and then to access services, be it senior care or physiotherapy when needed. So again we are working with MOH, to see how we can coordinate better and provide better solutions for the elderly.
Infrastructure spending / Upcoming infrastructure projects
Q: Looking at government spending on infrastructure over the past few years, it’s been steadily going up; even this year’s projections. Why is the trend such that we are spending more today?
A: If you look at the trend historically, infrastructure tends to be cyclical, and tends to be lumpy. For example, you just look at the data over the past years on construction spending on the public sector side, these are public information, you will see an increase in the 80s, it came down in the late 90s, and early 2000s it went up again.
So now as we look forward, we have again another pipeline of infrastructure projects in the coming years which we have to spend on. That’s the nature of infrastructure, from time to time you will need new projects, new spending in order to refresh and update your infrastructure.
In the longer term, far longer term, we also need to plan for asset replacement. Because we are in that sense relatively young as a nation, many of the infrastructure that we put in place in the early years, will have to be replaced over a period of time. From a longer term perspective, we do also need to plan for asset replacement of existing infrastructure, beside spending on new projects.
So all of these reasons explain why in the coming years and perhaps even beyond, we will see more spending on infrastructure. But it’s not new, because we have been through ups and downs in infrastructure spending before.
Q: In terms of asset replacement, is that something that’s built in for spending from the beginning? Which areas are we looking at in terms of having to replace assets?
A: When you look at infrastructure; every agency, asset owner and regulatory agency that oversees that particular area – be it for building, for utilities, be it for water and power plants – will have to plan for asset replacement.
You have to first of all make sure you work through the life cycle of the existing asset. Ideally you can stretch it for as long as you can, but at some point in time you have to replace. That will certainly have to come in and to the extent that some of these infrastructure that are due for replacement are public sector infrastructure, then we will have to factor that into government spending as well.
Q: In the outlook for the next couple of decades, you mentioned that there are a lot of projects in the pipeline, such as the HSR (High-Speed Rail) etc., what is the government’s projection for spending? Do you foresee it continuing to go up?
A: We already know the infrastructure projects that are coming up, not the detailed estimate so it’s hard to give you a figure beyond next year because for each project you will have to do design, you will have to tender; you wouldn’t know the actual cost until you get down to working on that particular project.
But we know what the projects are, we have announced these. So we know there is this pipeline of projects that are coming up. We will work on these projects and to the extent that these projects are coming through in the pipeline, then we will see the increase in public sector spending for infrastructure purposes, this year and perhaps coming up through the next few years.
Q: How disruptive is it to the policy maker if a big ticket item does not pan out? Over the last year we’ve seen plans like the underground ring road system shelved. Is there a cost to disruption like that?
A: To some extent it’s an opportunity cost. If there are some preliminary design work or feasibility studies then yes, those are cost. But we have to do our due diligence; we have to study all options. We have to consider all possibilities as we go about planning for the future. When we do that, you may not want to embark on everything. Sometimes you need to phase out the project, so we go in knowing that we study the different possibilities from a planning point of view, but before we actually activate and make that decision to launch that project, there are multiple considerations that go behind it.
Q: Including if it doesn’t happen?
A: Yes, possibly. And then of course if it doesn’t happen, it will not happen for good reason. In many other countries, infrastructure projects get shelved for a range of reasons. Political gridlock – there’s disagreement at the political level – all sorts of opposition. NIMBY (Not In My Backyard) is another very common reason why infrastructure doesn’t get done in countries. It’s planned for but it keeps getting shelved because of NIMBY effects. Thirdly, fiscal constraints, because they know they have to do it but they can’t find the money to do it. And these are the three big reasons you see happening in other countries, which is why in quite a number of developed cities, the infrastructure gets older, it doesn’t get replaced, it doesn’t get renewed. New infrastructure doesn’t come in and as a result, it does have a significant drag on productivity, on competitiveness and it ultimately impacts liveability. We must never allow that to happen in Singapore.
Q: What’s our insurance against that possibility?
A: There’s no insurance policy that you can take. Ultimately, you just have to get all the factors in place. You need good government, you need to plan well, you need to ensure that we are responsible and deliver on projects. You need [the] public to understand too, because with NIMBY effects and if there is strong opposition to do anything in my backyard, it will be very hard to keep rejuvenating our city. So there is no single insurance policy. But you need government, people, the whole of society to work together to share that same vision of wanting to build a better Singapore for the future.
Q: Mr Wong, you talked about how, once a while, you come across very major projects that go into the billions. Off the top of my head, you have the High-Speed Rail, you have Tuas mega port, Changi Airport Terminal 5, DTSS (Deep Tunnel Sewerage System), RTS (Rapid Transit System Link). Are there any other major projects that have not been announced yet that the Government is mulling over?
A: Those that we have announced are major projects. As long as we’ve identified something that we think is suitable and important for us from a developmental point of view, be it for economic reasons or for quality of life for Singaporeans, we will announce these projects and we have done so. As you’ve rightly said, we already have quite a bit to do in the coming years.
Q: Any others that you all are looking at for the longer horizon?
A: Once we have something in mind and we’re ready to share, we will share it. And we have – for the projects that need to be staged over the coming years up to 2030. Beyond 2030, we have also highlighted some very broad plans but in very preliminary stages. Mainly, the movement of the Paya Lebar airbase to Changi and the development of the Greater Southern Waterfront – when the city ports move to Tuas - the whole land area, waterfront land, that can be developed as an extension of our current downtown. We don’t have very concrete plans yet for these, because these are indeed very long-term, but we know that we want to do these things from an urban planning point of view. We have already put that into motion, and over the course of the years, we will continue to concretise the plans.
Q: In terms of spending, how is the spending on various projects prioritised, in terms of needs? What kind of safeguards or measures are in place to ensure that as far as possible, the right calls are made for these kinds of infrastructure projects?
A: On the spending side, with infrastructure, there’s a range of methods to finance an infrastructure project. Some of it is through government spending but some of it can be through user charges, and to the extent that there are revenue sources to underpin the project, that part of the project is bankable, which means that you can finance it through borrowing or debt. That is also helpful because it enables us to smoothen out the expenditure over the tenure of the borrowing instead of doing it all in one lump sum.
So for each individual project, first of all, there is a high level of scrutiny at the Ministry level to see if we want to do it – is it beneficial, what are the outcomes, what are the benefits versus the costs. Then at the MOF level, it is scrutinized again, and then we work out the financing of it. Not necessarily everything has to be borne through government revenues because, depending on the nature of the project, there are different ways to finance and get that project done.
For the bigger projects, there’s a whole range of checks and processes to go through – the design, the quantum, the size of the project, the scale of the project, as I described, at the Ministry, at the MOF level. For bigger projects above $500 million, we have in place a gateway process. The gateway process is one where we approve in stages, and then we convene a technical panel to review the project at every stage – the design, the scope of works and the cost effectiveness. So those are processes we have put in place to make sure that every project is done in a way that achieves value for money.
Asset renewal / maintenance of infrastructure / lifts
Q: But there could be unexpected things that appear that require sudden attention, for example lifts – it’s not something that you’ll expect – new lifts to break down. Suddenly you’ll have to factor in a certain replacement cost. What do you think about [this]?
A: If you look at maintenance, first of all, we do have to expect as infrastructure assets get older, you will have more issues. All of us have to be mentally prepared for that, and anticipate and respond to the issues and rectify them. It’s no different from when we buy a household appliance or buy a new car – first few years, it’s new, you don’t expect a lot of issues.
As that equipment or whatever it is gets older, it’s only natural that you may have more wear and tear, deterioration, so you will have more repair work, you may need more replacement of parts. At some point in time, you replace until you decide, actually I might as well get a new one, then you buy an entirely new asset. This is a typical asset life cycle. It applies at the individual, at the household level; it applies at the national level as well. We just have to have a good maintenance regime and uphold that over the life cycle of the asset and ultimately replace it.
At the national level, I would say we’re not doing too badly. Look at lifts – yes, there are incidents that happen, it is of concern to the affected residents and we want to rectify them and make sure that we address any concerns there are. But at the overall level, the breakdown rates have been coming down. And so I would say, at the national level, if you look at our assets, infrastructure as a whole, we’re not doing too badly. We shouldn’t be too hard on ourselves. Compared to many other cities, we’re not doing too badly.
But still, we should work hard to improve. There’s always scope for improvement and that’s our attitude. So what do we do? First, we want to build capabilities. We need to have much stronger and deeper capabilities for maintenance work across the whole range of assets – whether it’s lifts, whether it’s trains, whether it’s utilities, we just need better capabilities. A lot of the maintenance work today is done by private sector contractors. These may be the OEMs (Original Equipment Manufacturers), or it may be third party contractors. But we do need to ensure that we have enough technicians, skilled workers, train them well and anchor these capabilities within Singapore. So we need to strengthen that.
And second, where it is necessary, we may need to look at our regulatory regimes and see if they need to be enhanced from time to time. You’ve got to strike a balance with regulations because it’s easy to say everything has to be regulated, but it does add additional cost which in the end, the individual will pay for. So where we think it’s necessary, we review, and if indeed there is a need to, we will update and enhance regulations, as we have done for lift maintenance, and now we are looking at building facades as well.
I should also say technology can help with building capabilities. Because very often, you hear of maintenance that’s done on a reactive basis, or there is a standard maintenance where they do the standard check list and updates, but then something happens, and you call in the guy to do repair or to do a replacement. But we can do a lot better with preventive or even predictive maintenance, and that’s where technology can help – where if you have condition monitoring systems in place, you can analyse, you can understand and you can predict before the problem happens and anticipate it. So building capabilities include harnessing technology to help us improve our maintenance regime.
Thirdly, we do want to continue the push for incorporating maintainability at the upstream, when you do the design and the building of the project. We have a design for maintainability guidelines for architects and engineers and we will continue to mobilise the industry around this set of guidelines so that from the very outset, when we design the project, we design it with easy maintenance in mind.
Q: Of course for the people who live in buildings that have no working lifts or people who take public transport every day to work, they expect things to work. They don’t see this broad picture that the Ministry has planned or penned up. How do you think people should think about things that break down; are Singaporeans prepared to accept the idea that things are ageing and will spoil?
A: Part of it is recognising that as assets get older, this is bound to happen. But even though we know that this would happen with older assets, we’re not simply saying there’s nothing we can do about it. We’re not saying – everybody, you’ve got to live with more faults. Rather, we’re taking a proactive approach to updating, strengthening our capabilities, going beyond just reactive maintenance to predictive, preventive maintenance and if necessary, doing more with our regulations. And for new infrastructure, making sure that they are done better from the outset. So we do have measures in place and over time, if we work on these three fronts, we can continue to have good outcomes. And, at the overall level, if you look at where we are today, just look at different asset classes, we’re not doing too badly. But we will continue to improve.
Kampung Admiralty / integrated developments
Q: Let’s talk about our ageing population. By 2030, our aging population will nearly double to 900,000. There are government-run retirement villages like Kampung Admiralty, which opened last year. Are we looking to build more of such government-run retirement villages?
A: Kampung Admiralty is not government-run. Kampung Admiralty is really a case where we are integrating services around the HDB development. So we have built the 2-room flexi flats for the elderly. But as I have said earlier, for the elderly, it’s not just about housing, it’s about access to services. So what we have done in Kampung Admiralty is to better integrate the range of social services, so that it is very convenient to the residents there – be it hawker centres, eldercare services, even childcare services. I mean not for their children because their children have grown up but for their grandchildren. So when their grandchildren come or many of them may be looking after their grandchildren when their parents are at work. So they have easy access too.
So that is what we have been doing – to integrate social services around HDB [flats]. I think it is a good model, because the feedback has been very positive. To the extent that we can do that kind of integration, we will do more of it, be it for new estates which we are planning - like Tengah - or where the site permits. Because you can’t do it all the time. For mature estates, you might not be able to do it all the time. But where the site permits, we will do more of such integration.
Q: So with Kampung Admiralty, it is a development level kind of integration. But when you talk about Tengah, you are talking about it being an older town, where your services are scattered. Are we looking at more integrated developments like that appearing across Singapore in the future?
A: For the older estates, we will make sure that we do better at integrating services, certainly. For the estates where the BTO development is just part of an existing area, the scope for integration of services will depend on the site itself. If we have a bigger site, if the site, for example, is already near an MRT station like the one in Kampung Admiralty, then the potential for integration is far more. But if the site is small, then we may build a new flat but how much services can you can pack into that small site? You are already constrained by the site limitations.
Residential property market
Q: Last year, you issued two statements on the HDB resale market, and the en-bloc sales trend. How do you gauge market reactions to these statements?
A: It is in the nature of asset markets to go through ups and downs. We are very clear that the Government cannot control prices, nor do we pretend that we have any ability to do so. But it is our duty and responsibility to put out information, so that participants in the market, be it buyers or sellers, have the right information, and can make informed choices when they transact in the market. So that’s what the statements you highlighted were about – we want to put out correct information and keep the market informed of what the facts are. In fact, in both statements, on the HDB front and on the private front, there is nothing very new in what I said. They have been said before. But you know, memories can be short and it’s the nature of the market that when there is a certain market dynamic, people get carried away.
So from time to time, we put out these reminders. But beyond the statements alone, we do have policy levers. We do have a range of policy levers. So what we do is that we will continue to stay vigilant, we will continue to monitor the market movements, be it on the public housing side or on the private property market. And we will use our levers, wherever necessary, to ensure a stable and sustainable property market.
Short-term accommodation
Q: Moving on to short term leases, we have seen the first case in which the new law was enforced; this happened recently. But the sharing economy is still holding out hope for a new framework to appear. When can this be finalised? Are we heading in the direction of more regulations instead of more opportunities?
A: We want to have a framework to allow short term home sharing, with the right controls and safeguards. So we will put out something to allow for this to happen. And in fact this is no different from what all other cities are doing. Every city that allows for short term home sharing has safeguards and controls. It may differ from city to city but they all have appropriate safeguards and controls because it is a disruption and it can cause dis-amenities to the homeowner.
In our case, the situation is complex, and it is also made more complex because we are a very high density, urban population. And the majority of people who live in private estates live in strata titled properties. So it is not just what one person wants to do. The individual may want to do home sharing but how about his neighbour? And his neighbour is also a strata owner, so they also have a right and they should have a say in this. So how do we go about ensuring that each individual owner in a strata titled property has a say in deciding what to do for the entire condominium. And what role does the MCST play in this? And also there is a need for proper regulations over the platform operator. There is a range of home sharing operators. I think they should be properly regulated and they also have a part to play. So these are the issues that we are working out. Since then, we have been working through some proposals that can form part of this regulatory framework and we will be quite ready soon to put out a consultation paper, so that we can get inputs and feedback on the proposed regulations before we go about finalising them.
Q: What’s the timeline for this?
A: We have something that we should be able to put out soon for consultation. It has taken a bit longer than I had expected. I had hoped to put it out earlier but anyway we will be able to get the consultation out soon.
I think certainly within the next two, three months. Thereafter, depending on the feedback, we still need to fine-tune, we may need to make legislative changes. And then the timeframe depends on what feedback we get, what responses we get, and then the timeframe for legislative changes if there is a need to do so. And then we will put in place the necessary frameworks for short-term home sharing to happen.
Reclamation
Q: For land reclamation, there are different considerations to balance, such as the need to provide enough space for people to live in, and the potential impact to the environment from the reclamation works. How do you balance such concerns?
A: We have already identified where are the potential areas for reclamation. Those are the areas we have identified, which we think can be done. In a way, they provide us with important strategic options for future developments. And given our limited land size, these are important buffers for us, and we maintain these options. We don’t activate all of them at once, because before we embark on a project, we will look at whether or not we can accommodate that particular developmental project with existing land. And if so, then it can be done within the existing land be it through redevelopment or though intensification … a whole range of possibilities. But if we are clear that there is developmental need, and there are development reasons for us to expand, for example, in Tuas where we are doing reclamation or in Changi where we are also doing reclamation for the relocation of Paya Lebar, then yes, we will embark on reclamation and we will activate that particular reclamation project. And in doing so, we make sure that we do all the necessary impact assessments, environmental impact assessments and whole range of studies to make sure that whatever we are doing is sustainable.
Q: Beyond reclamation, you said that there are other tools, for example, taking back land, redeveloping them. Are there others as well?
A: We always look for alternatives. Because we know that land is limited and one of our strategic objectives is to preserve our options for future development, so that we have different ways of making better use of limited land for future developmental needs. Even with reclamation, there are new ways of doing reclamation, which is the polder that we are doing in Pulau Tekong. I think that looks very promising. We are embarking on it and we expect that we can achieve around 40 per cent in savings in terms of sand volume and construction costs, which is significant. The other possibility is also to look at just reusing materials, excavation materials for example, that we do from tunnelling, good earth that is excavated. We could reuse that for some of the reclamation requirements as well. So those are some options that we have beyond the traditional methods of reclamation. And we will continue to do R&D, to see if we can develop new techniques, new methods, that are even better than what we have today.
Beyond that, we also have the option of existing land, intensification. Some of the things I talked about earlier about integration could yield considerable benefits. Because instead of optimising individual plots, if you are able to integrate at the district level, you can potentially do a lot more things.
And thirdly, we can go underground, and I don’t think we have fully exploited the opportunities of underground space. Going underground doesn’t have to be people living underground without sunlight. There are many things which we can put underground, which we can free up existing land for developmental purposes. Utilities can be pushed underground, which is what we are doing for district cooling and pneumatic waste systems, and even potentially for power sub-stations. These are things that we can do more of, which we are already starting and embarking on. If we can build more of these services underground in future, it potentially allows us to use surface land for a lot more things.
Q: People do not want to live underground. There’s no chance of that happening, right?
A: You can’t predict the future and whether or not there will be innovations in the future, but transport and utilities can certainly go underground. There are different things that can be used which we are still not fully taking advantage of. Before we start talking about people going underground, let’s pluck the low-hanging fruits first. There are many things we can do. We do have work being done on the Underground Master Plan, which is still being fleshed out and we hope to see how more of that can be done over time.
Q: In terms of the Underground Master Plan, would it mainly be under URA, MND, or various agencies? You mentioned a lot of underground works, with various strands of projects all criss-crossing. How close are we to tying that together and having a comprehensive survey of all the underground infrastructure projects and also a broader vision of what goes where, and what we want to do.
A: It’s still work in progress. There are different strands of this work – one is to take stock of what is underground – all the whole array of pipes and power grid and everything. We have to take stock and have a good database of information, which is being done. We already have it, but are compiling it as a central repository so that we have a good basis to plan.
Secondly, to start planning for new items. That would require us to look at not just individual building provision, because the benefits come when you plan at the district level, at the bigger level. Where it comes to new districts, we already are very consciously and deliberately planning for how underground areas in these new districts can be utilised, like in Jurong Lake District as well as in Paya Lebar.
Thirdly, when we talk about laying new infrastructure, be it utilities, there is scope for doing more with common service tunnels, so that you don’t necessarily have to lay your own tunnels for new projects, but you can share, and ride on the same infrastructure like a common service tunnel. That requires coordination. That’s work that URA does. Any new plan has to come through a planning process by URA. When URA sees these plans, they can coordinate across different agencies and look at getting agencies together. Individual agencies may not know – each will lay its own tunnels, grids and pipes, but they may not know that other agencies may be doing something similar. But URA does know that, as it all comes through their planning process. And that is where we can coordinate better through URA and MND.
Q: You earlier said last year that expanding Pulau Tekong for SAF training would free up land on the main island for development. Could we get a timeline for this, which areas will be freed up and what purposes they will be used for? Are there other tracts of land besides Tengah which could be freed up, and which areas are these?
A: The one immediate area is something we’ve already been working on, which is Tengah New Town. The MINDEF training area in Tengah has already been freed up, so that HDB can start working on development of Tengah new housing estate. This is made possible because SAF will have land in Tekong for training through the reclamation.
There are a whole range of different needs for land – be it military, commercial, industrial, residential, … and we are always in discussion with agencies on what is the best way to optimise their land use. So the thing is we ensure as many options as we can in terms of maximising our space for development, be it through reclamation, underground, optimisation of land, and then through the planning process, we have constant dialogue with all of the agencies to constantly check and look at whether the land that’s allocated to them can be better optimised; to see if there are competing needs, other priority needs, and whether we can free up some for other areas. That is part of the URA work, and it is ongoing work that happens all the time.
Planning for the future
Q: Moving forward, if we look to the population numbers by 2030, we are expecting to hit 6.5 (million) to 6.9 million, is that still the case? And how do we make sure that we stay ahead of this curve to have enough land for population growth, to have enough housing; in terms of infrastructure, transport as well. We have all these demands. How do we make sure that we are always ahead of this future demand?
A: I would say that we have a very robust planning system. It’s comprehensive, it’s whole-of-Government, and we do it on a long-term basis. We plan out the different scenarios, and we provide for options to cater to these different scenarios. The issue is not just about planning, though. The issue is about implementation and execution. Because, you see, if you build housing for example, and you build ahead of demand, you may well get under-utilisation, under-occupation, and potential wastage. If you wait till demand is there before building, you will minimise the wastage, take-up will be very good, but because infrastructure takes time, you may be behind the curve.
So we have been on both sides of this before, in our past. Earlier, we had homes which were vacant. HDB knew of flats which were vacant and could not be sold. At the same time, we have the other side where demand picked up very quickly and we were not able to respond in time, and we had to ramp up – after that, we were catching up, which we did after 2011.
We know it’s a difficult balance to strike. How to get that balance right, and that implementation and execution right – it’s not easy. But we’re always working to see how we can improve our processes. We have not gotten it right in the past, we have not been perfect in the past. But it’s not just a planning issue. Planning, when you activate and start building, it’s not such a trivial matter, because [if] you do it too early, you may end up with wastage; [if] you do it too late, you’re trying hard to catch up with the demand. So getting that right is not easy, because the market moves in cycles and we can’t predict exactly when is the right time. We just have to understand that this is part of the dynamics for the market, and try to get the balance right.
Q: Is that why we always somehow manage to miss our estimates for construction spending and things like that?
A: Because in the nature of these things, when you think of construction spending, a delay in one project – such as the North-South Corridor – it is easily over a billion dollars. Just one delay, and the delay can be due to a whole range of reasons – because we do want to scrutinise projects a lot more carefully and make sure we get value for money in spending. We don’t just want to say “go ahead”.
The delay may be due to tighter project scrutiny, it may be due to a lot more time spent these days on environmental impact, on noise impact, on a whole range of analyses, assessments and mitigation that we have to do before construction. And rightfully so. We have to do all of these things to get broad support for new projects. So, yes, projects are taking a bit more time, but we understand the reasons why and these are measures that we’ve put in place in order to ensure that whatever we build is done in a way that’s practical and that achieves a specific need.
And I would say that’s why, at the end of the day, we believe our infrastructure strategy works. We are not here to build for the sake of building; we are not going after the biggest, tallest, fanciest projects.
We are building for practical needs. We are building in the areas of our ports – sea ports and airports – and our land links, HSR and RTS. We are really building to enhance our hub status to attract more investments and create more jobs for Singaporeans.
That is what we are trying to do. And it’s not a new strategy, because infrastructure has always been a key part of our economic strategy. We started out with very little, but we made bold moves in the past. Dr Goh made a big move to convert Jurong from swamp land to Jurong Industrial Estate. People at that time called it “Goh’s Folly”, but he proved the critics wrong. We made bold moves to move the airport from Paya Lebar to Changi, including writing off the investments in Paya Lebar. That was a very bold move, but it paid off, and it made Singapore an aviation centre. We made bold moves in creating a port – from shipping port to a very successful container port today, and making Singapore a maritime centre.
So I would say in today’s context, when we look around the world and the uncertainty around us, at new ports and new routes that are being created, at the more intense competition, at the threat of others by-passing Singapore as a regional hub, I would say all the more we have to be prepared to think big and make decisive moves, not just incremental changes. That is what our infrastructure strategy is about – it’s about giving us the best possible chance of attracting investments, remaining a competitive, attractive regional centre, and giving Singapore the best chance of success in an uncertain world.