1. Mr Speaker, I would like to thank the
Members for their support and comments on the Public Utilities (Amendment)
Bill. Let me run through the queries and
concerns raised topically. I will begin
by addressing coastal and flood-protection issues first.
AMENDMENT #1: CONFER NEW COASTAL PROTECTION FUNCTIONS AND
ESTABLISH THE COASTAL AND FLOOD PROTECTION FUND
2. Er Dr Lee Bee Wah and Mr Gan Thiam Poh
asked about the Government’s plans to ensure that there are sufficient funds in
the Coastal and Flood Protection Fund. Climate
change and rising sea levels will not only affect our current generation but future
generations and beyond. Coastal
protection requires hefty upfront investments. But once built, they benefit many
generations of Singaporeans. This is a complex, significant, and long-haul
effort, and we need to distribute the share of funding more equitably across
current and future generations.
3. The $5 billion injection from this
term of Government represents our generation’s contribution towards
safeguarding Singapore’s continued survival. Setting up the Coastal and Flood Protection
Fund now provides us with a longer runway to build up the Fund, and allows the Government
to save up across successive terms. The
Government will top up the Fund whenever our fiscal situation allows.
4. Given the significant outlay required,
the Coastal and Flood Protection Fund will not be the only source of funding. We have to use a combination of funding tools
– the Coastal and Flood Protection Fund, borrowing, budget from the
Government-of-the-day, as well as Past Reserves for measures such as land
reclamation. PUB is working with
agencies to refine our modelling and develop more detailed plans on the type of
protection measures required and the costs. This will allow the Government to
better assess the funding required and financing options.
5. Mr Gan Thiam Poh asked what measures will
be in place to ensure strict oversight and prudent utilisation of the Fund. First,
it will be ring-fenced through this legislative amendment to fund the
expenditures relating to coastal and drainage flood protection measures. Second,
PUB will have oversight over the management and withdrawal of the fund. PUB
will publish the fund utilisation annually in a separate section in its
financial statements. Third, like any other large scaleand complex
development projects the Government undertakes, coastal protection and drainage
measures will continue to be subject to MOF’s evaluation and prevailing
approval processes. Finally,
the Government will also employ competitive tendering processes to ensure that the
costs of the coastal protection and drainage measures implemented are
6. Mr Gan Thiam Poh asked for examples of
the uses of the fund. Ensuring our flood resilience will require careful
planning and seamless integration of protection measures in our infrastructure.
First, to prevent sea water from flowing inland, we will need to construct
structures such as sea walls, revetments, dykes, tide gates or barrages to
serve as coastal defences and physical barriers. We will study the suitability of all these
options for our coastline. Where feasible, we could even integrate nature-based
solutions, such as the planting of mangroves to break wave energy. While structures such as tide gates and
barrages stop sea water from flowing inland, they will likewise prevent stormwater
from flowing out into the sea, especially when intense rainstorms coincide with
high tides. As such, we will need to install outlet pumps at some of our
waterways to pump floodwaters into the sea. Finally, our vast network of inland drains
must also be expanded and upgraded to cater to more intense and frequent
7. Er Dr Lee Bee Wah rightly pointed out
the extent of infrastructure works required to protect our coastline. She asked if we will tap on local resources
and companies in this journey. Coastal
protection is a new area in Singapore and capabilities will need to be built up.
We will indeed have to tap on the best
engineering capabilities available. Where
they are not available in Singapore, we will have to bring them in, even as we grow
our own talent and capabilities. The Government and industry will have to work
hand in hand. We are confident that over time, we will grow a strong and
vibrant local industry, just like what we did with our water sector. We hope
that our local firms will proactively build up their capabilities in coastal protection,
hydraulic modelling, and flood risk forecasting just to name a few areas, and
to tap on these opportunities when available.
AMENDMENT #2: LEGISLATIVE SAFEGUARDS OVER DBOO PLANTS
8. I will next address the questions on
safeguards over PUB’s DBOO plants.
9. Mr Gan Thiam Poh asked about the
feasibility of the DBOO model and whether other operating models for water
plants have been considered.
10. Besides the DBOO model, PUB also
employs other models. For example, PUB employs the Design-and-Build model,
where it partners the private sector to design and build the plant, while PUB
owns and operates the plant.
11. As I explained in my opening speech,
the DBOO model has been useful in allowing us to tap on private sector
innovations and cost efficiencies to deliver water services more effectively.
By combining design, build, own and operate functions in the same DBOO
contract, it gives the private sector a strong incentive to ensure that the
project design takes into consideration operational and other lifecycle
12. The DBOO model also strengthens the
capacity of the private sector. When companies undertake DBOO projects, they
develop a track record that allows them to grow in our region and compete on
the world stage.
13. Mr Gan Thiam Poh asked about PUB’s
ability to maintain oversight over concession companies which are struggling.
14. As I explained in this House in April
2019, even though PUB does not interfere with the business decisions made by
the concession companies, PUB monitors the performance of the plants under the
DBOO model to ensure that the concession companies can meet their contractual
obligations to PUB. Concession companies are required to submit financial
reports to PUB on a regular basis.Where there are issues, PUB will require the
concession companies to rectify them; failing which, PUB may exercise its
rights to terminate the DBOO contracts and take control of the plants. This
contractual oversight will continue and with the new legislative mechanisms, we
will have greater assurance and oversight
over our DBOO plants.
15. Er Dr Lee Bee Wah rightly pointed out
that PUB has been partnering with the private sector under the DBOO model for
over 10 years. The majority of these
partnerships have been successful. Given
this, why the decision to introduce legislative levers over DBOO plants now?
16. Allow me to explain. As part of our regular review of the
safeguards over DBOO plants, we observed that unlike other critical
infrastructure, the Government did not have legislative safeguards for critical
water infrastructure under the Public Utilities Act. We concluded that it would
be prudent to put in place similar safeguards, especially as more DBOO plants
are being completed.
17. Er Dr Lee Bee Wah also asked if the
legislative levers over DBOO plants are triggered by the Hyflux situation.
18. The review to enhance our oversight
over DBOO plants started before the Hyflux situation emerged. That said, the
Hyflux situation was a reminder that we need to exercise proper oversight over
our DBOO plants which are a key part of our water supply infrastructure, and
have effective levers to intervene when necessary in order to ensure
Singapore’s water security. As mentioned in my opening speech, PUB has in place
robust contractual safeguards which allowed us to successfully execute the contractual
remedies for the Tuaspring Desalination Plant.
19. With the additional legislative
safeguards introduced under this Bill, we will further strengthen our oversight
over critical water infrastructure and enhance our levers, in case it is
necessary to intervene.
20. Er Dr Lee Bee Wah and Mr Gan Thiam Poh
also asked for elaboration on when and how Special Administration Orders will
be invoked, versus the existing contractual safeguards.
21. PUB’s interest is in safeguarding
Singapore’s water security. The grounds
under which the Minister can impose Special Administration Orders are: first,
the designated party is, or is likely to be, unable to pay its debts; second,
the occurrence of a public emergency; third, the Minister considers it
in the interest of the security and reliability of the supply of water in
Singapore; and fourth, the Minister considers it in the public interest.
These are similar to those found in the Special Administration Order regimes of
other essential services.
22. I would like to assure the House that
the power to issue a Special Administration Order would not be exercised
lightly. Such Orders are meant to ensure Singapore’s water security, and would
be used only under exceptional circumstances.
PUB will continue to rely on existing contractual remedies under the
Water Purchase Agreements as far as possible.
23.Mr Speaker, Sir, as I have said in my
opening speech, PUB’s role continues to evolve. This Bill is an important step forward as PUB builds
up its Coastal and Flood Protection role, strengthens its oversight over water
concession companies, implements smart water meters, and enhances the security
of water tanks.
Sir, with that, I beg to move.