(Paper Cmd. 2 of 1997)
Sir, I would like to thank all Members who have spoken on the first cut this afternoon. Sir, with regard to Mr Heng Chiang Meng's first cut, I agree with him totally that there is tremendous potential for Singapore to develop into a regional centre for environmental technology. Last year, Dr Tan Cheng Bock had brought up this topic too and, contrary to Mr Heng Chiang Meng's and Dr Tan Cheng Bock's perception, actually the Government has been doing quite a fair bit on this area. Let me explain. First, the EDB, TDB, the Productivity and Standards Board and the National Science and Technology Board (NSTB) have been actively involved in promoting the development of the environmental technology (ET) industry. Some of the major steps that have been taken so far are, first, the NSTB has set up the Environmental Technology Institute (ETI) last year. The ETI costs an initial sum of $30 million and its role is to help enhance R&D capabilities of the ET industry. It also allows the industry to develop a high level of skills and expertise which is important because this is an industry that is highly technical and technology intensive. The Government has also made available fiscal incentives, tax incentives, grants as well as low-cost financing schemes to enable the companies in this industry to either set up in Singapore or to expand as well as to venture into niche ET sectors. They can also use the grants to upgrade their manpower capabilities as well as to embark on R&D activities. Today, there are more than 100 ET companies in Singapore. Several branch offices of very well known international environmental technology and environmental engineering companies have employed very competent and very experienced staff in their Singapore offices for work in the region. We also have a lot of local companies but these are mainly made up of training companies as well as a number of local companies with project management expertise and a few engineering firms. With respect to that, I agree with Mr Heng that we still need to add depth to our environmental technology industry. We need to help strengthen the industry and we need to build up a comprehensive range of core expertise that will enable the companies to actively go into the region, bid for projects and take advantage of the increasing consciousness about the need to protect the environment in the region. Some of the efforts which my Ministry is taking with MTI and its agencies are, firstly, to attract more foreign consultants and environmental engineering companies to base their operations in Singapore and to use Singapore as their regional base. Secondly, to encourage our local companies, especially those with engineering capabilities, to tie up with renowned foreign consulting and engineering companies. Thirdly, to encourage companies to set up pilot plants in Singapore using new environmental technology. Sir, tying up with well-known foreign companies is useful because there are mutual benefits. If the Singapore companies have the regional links and contacts, it will make it easier for foreign companies which are not used to the region to obtain business. My Ministry will also continue to concentrate on the promotion and endorsement of major ET trade exhibitions. In the last two years, we endorsed eight major trade exhibitions and conferences. We will also host regional seminars and workshops as well as run training programmes. In the last three years, my Ministry conducted some 50 training programmes and hosted 10 regional environmental seminars. Sir, we will therefore continue to work at it. With regard to the Science Park analogy, the Science Park is actually open to the entire industrial sector. I think some of the environmental technology companies will find it useful to base their operations in the Science Park because they can then have synergistic tie-ups with other scientifically based companies that are located there. So we will also continue to encourage those that are interested to locate in the Science Park and I think over time the core will grow and the sector will also strengthen. Mr Heng brought up the example of the financial sector. Sir, the Asian dollar market was started in 1968. It took many years for it to be established, as Mr Heng well knows. I am sure, with the support that the Government is giving to the ET industry, that it too, over time, will continue to strengthen and become a significant player in the Singapore industrial field. Sir, on educating the public on environmental awareness and protection, I agree with Mr Heng too that it is important to start the education programme while Singaporeans are young because once you get that concept, the mindset of the need to protect the environment well entrenched in their thinking, as adults, that same habit will carry through. And this is exactly what the Ministry of the Environment has been doing. We have worked with the Ministry of Education and now the environmental topics are included in many topics, for example, in the syllabus of social science, general science, biology and geography, and these topics are taught in both the primary and secondary school levels. We also have a standing arrangement with the schools to visit my Ministry to view our exhibits on the environment, watch environmental videos and learn the importance of protecting our environment. We also organise visits for school children to refuse incineration plants, sewerage treatment works and other facilities. Last year, more than 300 such visits were organised. And many schools today also have environmental clubs where students come together to take part in activities like promoting waste recycling, adopting beaches for annual clean ups, etc. Sir, on his suggestion to provide fiscal incentives to promote environmentally friendly practices, this is being done now on a selective basis. For example, tax incentives to promote the use of more water and energy efficient industrial processes. What Mr Heng has suggested is giving incentives to the individuals. We will definitely explore the feasibility of this, including all the suggestions that have been made by Mr Heng this morning. However, while we want to protect the environment, we should also be careful to support the use of technology or equipment which is economically viable. Otherwise, we would be subsidising waste inefficiency, and in fact be counter productive in terms of protecting the environment. Also, if these practices apply to the economic sector, this would then lead to wastage and undermine our long-term competitiveness. Sir, we will continue to find ways to strengthen the public education programme and we look forward to the support of the entire community for our collective efforts to make Singapore truly clean and green. Sir, on the environmental management and production techniques, I agree with Mr Heng that the concept of sustainable development is more than just a passing fad. The concept recognises that manufacturing processes that are environmentally sound benefit not just the environment but also the companies involved. This is because processes that generate a lot of waste end up polluting the environment in the first place and, second, the waste comes from resources that the company has to put in. Therefore, it costs the company money to provide that raw material and to clean up the waste. It is thus beneficial for both companies and the environment to adopt sustainable development systems. The Government recognises that in time ISO 14000 will definitely become an important international standard. Not only that, as pointed out by Mr Heng, environmentally conscious consumers in some developed countries may insist on buying only goods that comply with ISO 14000. Sir, we are now working with the private sector to promote ISO 14000. There is a committee now led by the Singapore Confederation of Industries together with public sector representation that is actively encouraging local companies to adopt these standards. In support of ISO 14000, the Government has already made available several financial assistance schemes. For example, we now have financial grants for local companies to engage consultants to help them attain certification. We also have a special group assistance scheme to help small and medium-sized enterprises obtain ISO 14000 certification at a lower cost. I am sure all these efforts will help to increase the number of companies that are able to comply with ISO 14000 requirements in the years to come. Let me move on to the points brought up by Mr Low Thia Khiang. Sir, Mr Low proposes that the Ministry of the Environment do more to encourage households to recycle or reduce their waste as well as to encourage companies to reduce the amount of materials used in the packaging because, in terms of household waste, this constitutes quite a fair bit. Sir, the household waste, as Mr Low pointed out, actually comprises a wide range of materials, food waste, packaging materials made from different materials and waste paper, the bulk of which is actually old newspapers. This makes recycling of household refuse a little bit difficult. The exception is waste paper and here, we have a very well-established system. As Mr Low has pointed out, this karang guni man goes round from flat to flat to collect old newspapers. In the old days, the farmers also used to collect our food waste to feed the pigs. Unfortunately, we do not have farmers any more. So the food waste is now also thrown together with the other household waste. We have been working with various town councils to implement recycling projects in the public housing estates. Town councils encourage their residents to bring their newspapers and old magazines down to the collection points so that they can be brought for recycling. It is not very successful because few residents could be bothered. What the town councils found was that, quite often, the collection bins also have other things thrown in as well. So we still have to rely on the karang guni man. Nonetheless, my Ministry will continue to explore other recycling options and we will contact the town councils as and when these alternatives are worked out. 2.00 pm The other thing that we are working on, as suggested by Mr Low, is to work with companies to encourage them to use less packaging materials. This is something that we have also been doing, because it is not only good in terms of reducing household waste, but I think it is also good for the companies. When they use less packaging materials, it also results in cost savings for them. So this is something that we can work together with them and we will continue to encourage them to do so. Let me now move on to Mr Chew Heng Ching on the question of introducing competition on the domestic refuse collection scheme. I agree with him that it is the Government's philosophy that we introduce competition wherever possible, because competition tends to promote more innovative thinking, more productive schemes and methods and, therefore, result in lower costs, which eventually will also benefit the consumers. This was indeed the reason why we corporatised the ENV's refuse collection unit last year. The target is to introduce competition into the domestic refuse collection system in April 1999. To meet this deadline, my Ministry will be calling for tenders for the first domestic refuse collection zone in the second quarter of next year. This is to give the successful companies enough lead time to acquire the equipment, because the domestic refuse collection system requires a lot of very expensive equipment, and the zones are going to be quite big. So the successful company will have to invest in quite a fair bit of equipment. We are now working out the details of the tender and it will, of course, contain stipulations that will avoid the possibility of the successful companies defaulting on their contract subsequently. I would encourage companies that are interested, including Mr Chew's, to get ready for the tender, because there are only about 6-9 months more to go. Dr Wang Kai Yuen spoke on the sanitary appliance fee. Yes, I note that he also raised it last year. And that is why in the recent announcement of the new schedule of fee revisions, we only revised the water borne fee, which is volume related, and this ties in with our efforts to promote water conservation. The more you use, the more waste you are going to generate, the more you have to pay also. I agree with him that the sanitary appliance fee should be abolished, because it was introduced a long time ago when it was valid. Today, it no longer ties in with our philosophy. But the difficulty is that the sanitary appliance fee now is a major component of our total waste water fees. Reducing the sanitary appliance fee will require us to adjust the water borne fees very significantly to make up for the loss of this component. By the year 2000, when the recent schedule of fee revisions has been fully implemented, the sanitary appliance fee will then form only about a quarter of the total waste water fees. This will allow my Ministry to gradually reduce the sanitary appliance fee in subsequent revisions after that. After the year 2000, we will definitely be taking steps to reduce the sanitary appliance fee. Mr Kenneth Chen asked about the privatisation scheme or sale of hawker stall scheme and whether we are monitoring on the standard of hygiene and prices, and asked that we should retain some of the rental stalls throughout the island. Since June 1994, we have offered 1,749 stalls in 12 hawker centres for sale to the sitting stallholders. The acceptance rate for the cooked food stalls was very, very good. 99.76% accepted the offer. And for market produce stalls, the acceptance rate was 89.1%. We are selling the fourth batch of stalls soon. Sir, he asked whether we have been monitoring. Yes, my officials have been monitoring both the food prices and the standard of hygiene in the 12 hawker centres that have been sold. In terms of prices, less than 30% of the cooked food stallholders increased their prices. And even then, we found that the increase was quite marginal, and the final price actually was comparable to the prices in centres that were not sold. That means they just adjusted the prices to be level with their other competitors. In terms of hygiene, we have also been monitoring, and I am happy to say that, in fact, the stallholders in the sold stalls, because they now own their stalls, are likely to be also more conscious about the need to maintain their reputation and image. So they have been maintaining the hygiene as well. In terms of food prices, contrary to some fears, the food prices have remained competitive for several reasons, despite the fact that the instalments now are much higher than what they were paying as subsidised rentals before. The main reason is that they are now able to make more efficient use of the stalls. Previously, when they were renting the stalls at subsidised rates, the stallholders were actually subjected to a lot of restrictions. For example, they cannot sub-let the stalls. Not only that, they had to be personally present at the stall during operating hours. This means that most hawkers either operate in the morning and afternoon, and they go home and rest from late evening onwards and they do not open at night. They open for lunch and dinner, but they do not open for breakfast. It is physically not possible for them to be at the stall for 24 hours. As stall owners know, these restrictions no longer apply. They can operate longer hours by employing staff to operate for them when they are at home resting. They are also able to sub-let the stall either half the day and operate on their own the other half, or they can even sub-let the whole stall without any problems. This has allowed them to operate the stall more optimally and because of that, it has helped to keep their costs down and enable them to retain their old prices. Sir, on the need to retain some stalls for rental, this is what we are, in fact, going to do, and a significant number of stalls will remain unsold, and these are stalls in centres which are likely to be redeveloped in the coming years. So there will still be competition from a large number of rental hawker stalls to keep our food prices reasonable and affordable. Sir, he has asked about the relocation of Newton Hawker Centre. The Newton Hawker Centre is in a very prime area. Eventually, the piece of land that the hawker centre is sitting on will be redeveloped. The timing has not been fixed yet. We will make the announcement in due course. Mr Peh Chin Hua asked the Ministry not to compel hawker stall operators to use disposable crockery. I would like to clarify that it is not the policy of my Ministry to insist or compel stallholders to use disposable crockery. We believe that this is something which is best left to the market to decide. Hawkers will have to decide whether it is cheaper to use disposable crockery, or whether it is cheaper for them to employ somebody to collect the used dishes and to wash them. We will leave it to them. The economics will work out differently for each hawker. Those with a very high turnover of sales can probably afford to use disposable crockery. Others may not wish to. But we will leave it to them. I think it is useful for hawkers to note that they will find it increasingly difficult to employ hawker assistants in the years ahead, because of our tight labour supply. Not only that, even if they can find the hawker assistants, I think they are going to be more expensive as well. Those who are unable to hire assistants will then have to look for other options. And the possibilities would be to operate as self-service hawker stalls where customers come and collect their food themselves, and also to get the customers to clear their own crockery after they have finished eating, exactly like what happens in the fast-food restaurants. I think the challenge is to get Singaporeans to cooperate and to get them to change their mindset, that when they go to a hawker centre, the food gets delivered to them. They eat and run, leaving the table in a mess. We have to convince them that actually it is in their own interest for them to eat and clear. Because if everybody eats and clears his own dishes, then when you go to a hawker centre, you sit down, the table is clean, instead of having to wait for the table to be cleared by others. As a result of this thinking, my Ministry decided to test whether Singaporeans can be encouraged to self-clear the table after eating. We found that at Taman Serasi and Adam Road Centre, many of the hawker stalls were already using disposable crockery. We discussed with the hawker associations there and the hawker associations decided, yes, it is worth their while to give it a try. So we tried out the concept of self-clearing at these two hawker centres. All that we require the hawker associations to do was to provide two sets of bins - one bin for disposable crockery and another bin for hawkers that are using the non-disposable crockery, because we do not want them to get mixed up. Those hawkers who are using non-disposable crockery were not asked to change. I think many of them are still continuing. We will identify other centres that are feasible and work with the hawker associations to see whether they want to try out this concept too. Let us see whether the concept succeeds in the first two hawker centres, and we have added another two hawker centres to the scheme. If the concept succeeds at these four hawker centres, I am sure other hawker centres will also follow suit. We will leave it to the market. Mr Peh also asked about the sale of stalls. His feedback is that the hawker stalls are too expensive and the hawkers cannot afford to pay the high prices. But yet at the same time, they are afraid that if they do not buy, they also end up in trouble because rentals will go up, or they may have to leave. Sir, let me clarify that the valuation of the hawker stalls is done by the Chief Valuer. In valuing the stalls, the Chief Valuer would take into consideration certain factors, eg, the location of the hawker centre, the popularity of the hawker centre, the location of the actual stall itself and its rental potentials. The Government has been very conscious of the need to keep the selling prices affordable, and that is why we have capped the leases to 20 years, so that the selling prices will be affordable, because longer leases inevitably mean higher selling prices. In addition, we have given the stallholders a generous discount of up to 30%. Again, that has lightened their load. And to further assist them, we have also arranged for the financial institutions to provide loans up to 100% of the selling price. They are allowed to repay the loans over 15 years. Not only that, for stallholders who have problems, they can include up to three family members as co-owners to facilitate the financing of the stall. As a result of all these efforts, the response to the sale of stalls programme has been very good. As I mentioned just now, over 99% of the cooked food stalls were bought over. I think this shows that the selling prices were reasonable and attractive. 2.15 pm Another factor which confirms this is the resale of stalls. In our monitoring, we found that a third of the cooked food stalls have been resold. Based on the feedback from the hawkers themselves, they have told us that the profits from the resale ranged from $50,000 to $200,000. This shows that the Chief Valuer has been very conservative in his pricing. The other matter is, of course, the stallholders find the scheme attractive because all the restrictions are lifted. As a result, now the instalment payments from the stallholders are still lower than the tendered prices for rental stalls as well as the rental prices set by the food courts and coffeeshops. There is a good comparison there. He asked about those stallholders who do not wish to buy over the stall. There are several options open. One, the hawker can still stay on his present stall if he does not want to buy it. But the rentals would be gradually increased to the market rental over a period of five years. So there is a phasing-in period. He can also give up his stall and receive a cash grant if he qualifies for one. Third, he can request to be given a subsidised stall in another hawker centre that is not due to be sold yet. There are options open for him.