Hansard, 2004-03-15

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2004) To (2004) Mr David T E Lim 15 Mar 15 Mar Mr K Shanmugam 15 Mar 19 Mar Mr Sin Boon Ann 22 Mar 30 Mar

ABDULLAH TARMUGI Speaker Parliament of Singapore

Order read for consideration in Committee of Supply [5th Allotted Day].

Head T - Ministry of National Development (cont.) -

Resumption of Debate on Question [13th March, 2004].

"That the total sum to be allocated for Head T of the Main Estimates be reduced by $100." - [Dr Teo Ho Pin].

Question again proposed.

Head T - Ministry of National Development. Mr Mah, would you like to continue?

Sir, last Saturday, before Parliament adjourned, I announced, in response to Dr Teo Ho Pin, the plans for the downtown at Marina Bay including the development of the waterfront promenade, a new bridge and also other amenities, so that we could open up the area and make it much more vibrant, accessible and attractive. I also announced that the Government would appoint URA as the development agent to proactively develop the area.

I would now like to assure Dr Teo that the release of any land at the downtown at Marina Bay, such as the VSC land, will factor in the supply of space in the existing city. The existing CBD which encompasses Shenton Way, Raffles Place and even the Marina Centre area, will not be neglected. The existing CBD will combine with the new extension at Marina Bay to form a core business district for Singapore.

Owners of older commercial buildings in the existing central business district are refurbishing and modernising their premises in order to stay competitive and to attract tenants. There were quite a few examples recently - the Singapore Land Tower at Raffles Place, IBM Tower at Anson Road and the former Chartered Bank building at Battery Road. There are also opportunities to redevelop some buildings for complementary uses, like housing, and this will further enliven the city.

Sir, all the above will help to rejuvenate the existing CBD and enable it to remain competitive and relevant.

In the longer-term, the successful development of the downtown at Marina Bay will bring in jobs, enhance real estate values and create a vibrant and exciting waterfront area for Singaporeans and for visitors. Together with other exciting developments that were announced recently, like the proposed leisure resort complex in the Southern Islands, it will reinforce Singapore’s position and competitiveness as a regional and international business and financial hub as well as a tourist destination.

Sir, I would like to assure Members that other key areas in the city will not be neglected. Orchard Road is one such area. Orchard Road is an icon. It is a shopping street, well known overseas. It is synonymous with great shopping, good food, good hotels. But we need to safeguard Orchard Road’s position as one of Asia’s premier destinations because of increasing competition from other shopping destinations in the region. So, we have to find new ways to remake Orchard Road.

I am glad that the private sector has responded to the challenge. For example, there are some new developments, such as Wisma Atria and Paragon, which have recently repositioned themselves and revamped their developments in response to the market.

The Government is also working to improve the experience for shoppers along Orchard Road, and one of the areas for improvement, which many have been fed back, is pedestrian connectivity. What URA is planning to do is to build up a comprehensive underground pedestrian network in Orchard Road and in the CBD. To encourage developers to build these underground links, I am pleased to announce that the Government will adopt a co-funding approach and provide a cash grant to developers who wish to implement selected key linkages between developments along Orchard Road as well as in the central business district. A sum

of $59 million has already been approved for this purpose, and URA will be announcing the details of this scheme very shortly. I would also like to add that URA is now working closely with the Singapore Tourism Board to develop other plans and ideas to enhance Orchard Road and to make it even more exciting.

Let me now address Dr Teo Ho Pin’s question about underpasses, particularly, he asked whether we can provide more flexibility to developers to build underpasses. Sir, underpass construction is very much a part of land sales requirements for the city centre sites, again, to provide for better pedestrian connectivity, particularly in those high-density sites around MRT stations or in high traffic areas. These underpasses, we all recognise, serve a very useful purpose, especially when the weather is not so convenient for walking. In many areas in the city area, we cannot build overpasses or overhead connectors because of physical site constraints or sometimes because of aesthetics. Hence, the specification for underpasses.

Since 1995, there have been some 12 sites which have included underpass requirements under the sale of sites conditions. So, these underpasses, for example, Raffles Link which links the Esplanade theatres, the Marina Centre shopping areas with the City Hall MRT station are very well utilised. In other locations, developers can choose whether they want to build underpasses or overhead bridges. One such example is the Tekka corner site where they can choose whether to build one or the other.

I must say that developers generally see the benefits of these direct underground pedestrian connections, especially to the nearby MRT stations. The requirement for underpasses is stated upfront so that developers can factor in the construction cost at an early stage. I do not think that the requirements are that onerous

because of the benefits that are offered by better connectivity. So I would like to assure Dr Teo that we will continue to discuss with the developers and to make sure that these requirements are reasonable and, more importantly, are made known to them upfront.

Sir, may I now ask my Senior Parliamentary Secretary to respond to the other queries?

Sir, on Saturday, speaking on his cut on capital grants to the HDB, Mr Steve Chia noted that HDB had lost $773 million in the year 2003, $997 million in the year 2002 and $952 million in the year 2001, and had received an accumulated Government grant of $11.5 billion since 1960. Yet, HDB had equity of $4.9 billion and a capital gains reserve of $8.2 billion in the asset revaluation reserve. Mr Steve Chia wanted to know how HDB, despite its deficits, could accumulate such a large reserve.

Sir, in response, I explained in the House that these reserves refer to assets acquired under past terms of office of the Government, and that under the Constitution, these reserves cannot be drawn upon without the approval of the President. With your approval, Sir, please let me elaborate on this matter.

HDB is a key statutory board listed in the Fifth Schedule of the Constitution of the Republic of Singapore (Amendment) Act 1991. Hence, HDB is required to safeguard its assets as at the change over date of Government. These assets mainly refer to its commercial and industrial properties and car parks which are owned and managed by HDB. Sir, if HDB disposes of any of these assets, eg, when HDB sells a shop under the Sale-of-Shops Scheme, any capital gains or losses so arising must be transferred to the reserves

account, namely, the capital gains reserve, for safeguarding. This is what the $4.9 billion in the capital gains reserve refers to.

As for the assets revaluation reserve of $8.2 billion, this is an account which dates back all the way to 1985 when HDB adopted its present conventional accounting system to better account for its activities. All properties owned by HDB were valued in 1985 and 1986. The difference between this value and historical cost of the properties was recorded as the asset revaluation reserve.

Sir, the deficit in HDB’s financial statements reflects the results of HDB’s operations. As I have told the House on Saturday, HDB’s projected deficit of $422 million for FY 2004 is mainly due to the sale of subsidised flats and the provision of CPF housing grants to eligible flat buyers.

The past capital reserves which appear in HDB’s accounts are a different matter altogether, and as they are safeguarded under the Constitution, cannot be used to finance HDB’s deficits.

Sir, I would now like to answer Mr Steve Chia’s question on the safety of shopping centres and Mr Ang Mong Seng’s questions on car parks. Mr Steve Chia asked about the rules for converting car parks and public spaces and expressed concern over their impact on fire safety. Conversion of car parks and public space into shop floors requires planning permission. Approval is granted only if the developer can comply with all the technical requirements of all the Government agencies.

The Singapore Civil Defence Force, in particular, would allow the conversion only if fire safety requirements are fulfilled. For example, they must be

assured that the existing staircases and exits are able to accommodate the increased number of occupants and the necessary fire protection systems are provided. They will also ensure that the fire hose access points are not blocked.

Sir, for temporary structures which do not require planning permission, such as tents for short duration events like trade fairs, festive bazaars and carnivals, the owners are still required to obtain licences or permits from relevant authorities including the SCDF. Proposal layout with the access would ensure that they do not pose fire hazards. Fire safety is a primary concern of all the agencies. Measures and means of escape must also be adequately provided at the site. The above controls should allay the fears over the fire safety of converted space and ad hoc structures.

Sir, Mr Ang Mong Seng has suggested to merge HDB and URA car parks sections for operational efficiency and greater convenience to the public. URA and HDB car parks are located in different areas and serve different purposes. HDB car parks are mainly in HDB residential estates serving mainly residents. URA car parks, on the other hand, serve mainly commercial and recreational areas outside the HDB estates, mainly in the business area. URA car parks are primarily for short-term parking, whereas HDB car parks, on the other hand, are mostly for season parking. Given the different locations, purposes and management of car park functions of HDB and URA, it is useful to keep the two functions separate. Where it is practical to do so, both HDB and URA have adopted similar practices by using the same coupons. So his analogy that HDB and URA operate under MND is like “one country, two systems” is not quite correct. Because in one country, two systems, they carry two passports. In this system, we carry one same coupon.

Mr Ang Mong Seng also suggested that HDB and URA car parks should

switch over from the manual coupon system to the electronic parking system. This system has been implemented in some car parks. We will look into the possibility of putting the system in place in more car parks.

Sir, can I just seek one clarification from the Minister?

All right.

I think the Minister has not answered the question on the underpass security threat. Maybe the Minister can explain whether underpasses are likely to be soft targets for terrorist attacks.

Sir, obviously whenever we design buildings, and particularly under the current scenario, these designs will have to take into account security considerations and the security agencies will be involved in the design of such underpasses. But, at the same time, I think other precautions will also have to be taken in so far as making sure that these facilities are not what Dr Teo calls "soft" targets.

Dr Teo, your next cut, please.

Construction Industry

Dr Teo Ho Pin: Sir, in a dynamic market environment, there is a constant need to change the use of buildings or premises to meet changing needs of its users. This phenomenon was experienced by the United Kingdom in the 1980s where there were lots of refurbishment work in London, due to changing market conditions. One key lesson which we can learn from the UK experience is the use of fast track construction technique to meet the changing needs of building users. Many refurbishment contracts in London were complex and had a short con

struction period. As such, contractors adopted a wide variety of construction techniques such as prefabrication, fitting out or dry construction methods, to meet the tight construction schedules.

May I ask the Minister whether the Ministry has any plans to introduce fast track construction in Singapore.

Sir, the construction industry has been contracting since the Asian financial crisis. In fact, conventional wisdom is that more contractors will go belly up in the coming months.

Our construction industry has contributed much to Singapore’s physical development and would continue to play a role in the economy, albeit a smaller one. We must not forget our experience with the shipping industry which, up to just a few years ago, was considered a sunset industry destined to oblivion. Now on the back of enhanced international trade flows, it is a thriving industry again and one of the few industries able to offer jobs to our unemployed.

Whilst the Government should not interfere in the market to help poorly managed, unproductive firms, we must take care not to implement rules and practices which add to the woes of our long suffering contractors. Last year, I had mentioned in my cut on the construction industry that many contractors feel that though Government regulations are well intentioned, it is as if they are being pushed to "pai tui tiou lou" – Hokkein for "Queue up to commit suicide".

Indeed, I think the many high profile incidents of stalled work as a result of contractors going bust that took place subsequently proved this point – that many contractors had indeed submitted low suicidal bids due not only to the poor economy, but, according to many

contractors, the competition for jobs at all costs in order to meet the requirements to remain on the BCA registration system.

Besides modifying the requirements of the registration system to mitigate this problem, I would like to highlight another area that the BCA could look into. BCA should encourage Government departments to allow contractors with expertise and registration in different types of works – civil or engineering – to form joint ventures to tender for projects requiring different expertise. There should be no necessity for Government departments to require at least one of the contractors in a joint venture to have expertise in all types of work required as this would effectively bar many smaller and medium sized contractors. A case in point is the ferry terminal project at Marine Coastal Drive. I understand that for this project, even if there is a joint venture, at least one of the partners in the joint venture must have registration for both civil and building works in order to be eligible for the tender of this project.

I would like to urge the Minister to look into these issues and concerns.

Sir, under MND's guidance, the Building and Construction Authority aims to develop a technologically advanced construction industry which serves Singapore's economic needs and ensures that buildings and infrastructure are of high safety standards. One of the key thrusts is to develop a technologically advanced and competitive construction industry, able to deliver high quality building infrastructure. I have a few questions for the Minister.

Singapore's construction industry has been shrinking. What is the Government doing to expand the construction industry? The recent announcement in the Budget of the increase in the skilled labour

levy of $30 to $50 has really added to the costs to the contractors who are facing this shrinking construction industry.

The Ministry was also forced to review the tender system as well as the payment guidelines to the contractors when a few major construction companies went under water. Can the Ministry give an update on the measures introduced so far or planned to introduce? Has the Ministry also looked into the payment of the sub-contractors in the process of this review? And, if so, can the Ministry give an update of the progress of the review? This is important as in the event of default by a main contractor, there will be a domino effect on all the sub-contractors. Will the Government also look into a system where the contractors can have some protection against cost escalation? There have been drastic increases in the prices of raw materials due to the oil crisis as well as the demand for the raw materials of the growing Asian countries. For example, the cost of reinforcement bars has increased from $570 per ton in October 2003 to about $1,000 per ton in February 2004, that is, within a period of five months - a 100% increase in prices.

Will the Government intervene, just as it did for the banks, and get the construction industry to merge and consolidate so that they can face the challenges posed by the big companies from China, Korea and Japan? The recent award of large developments, for example, T3, Republic Polytechnic and mega ITE, to foreign construction companies, does not encourage the growth of the local construction industry.

Sir, the shakeout of the local construction industry since 2001 has devastated many construction companies and their sub-contractors. During my meet-the-people sessions over this period, several sub-contractors came to me, laying bare their problems under the existing contractors'

sub-contractor framework, which is viewed to be heavily loaded against them. One, in particular, complained about the novated sub-contractor system. In his case, he won a contract, an open tender, but was forced by the developer to work under a main contractor with whom he had no previous working relationship. In the course of the construction, there was a dispute and the main contractor refused to pay. Not only that, the main contractor forfeited his deposit; the bank pulled out his loan, and he was bankrupted. Soon his home will be repossessed. Sir, it was indeed heart-wrenching to see a grown man cry.

In Singapore, Sir, we have other unhealthy practices between main contractors and sub-contractors. These have been highlighted in the newspapers. I just like to point out one, and that is, the sale of headcounts of foreign construction workers. MOM controls the number of foreign workers in the industry by tying the issuance of work permits to the award of major contracts. Thus, when a main contractor gets the job, he could parcel out the foreign workers' work permits to the sub-contractors, often times, at a price. At a good time, the rate could go as high as $1,500 per worker. The sub-contractors have to submit to this because it is their livelihood. The main contractor would also squeeze the workers themselves for a significant sum through their recruitment agents. Thus, the main contractor would make money personally while their construction company could go bust.

So, we have this unusual phenomenon of contractors bidding below cost, leading the company to go bust later, but the owner of this company continues to have lots of cash in his pocket. This is unhealthy and should be eradicated. In our attempt to regulate the industry, we have instead created a maze where if you could navigate it, there is still much profit to be made. The situation reminds me of a

Chinese saying, "shang you zheng zhe, xia you dui zhe", which means for every policy, there is a counter-measure. Sir, I thought this only happens in China, but it is Singapore here.

I also echo Mdm Cynthia Phua's call regarding the rapid run-up of raw material prices, especially steel. They have delivered another unexpected blow to the sub-contractors. It is indeed the proverbial last straw on the camel's back.

I urge the Minister to take the current downturn in the construction industry to carry out a thorough multi-ministerial review of the myriad rules and regulations governing the construction industry. Hopefully, we could lay the foundation of a robust and healthy construction industry, which is indeed crucial to the continued success of Singapore.

Construction Workforce

Sir, the construction industry is often regarded as a dirty, dangerous and demanding industry. But it is also an industry which produces tough and resilient workers. Construction workers are known to be able to work under tough conditions and possess multiple skills. Due to the ease in employing foreign workers in Singapore, the Singapore's construction industry has failed to develop a local construction workforce over these years. The lack of recognition and poor image have also impeded the recruitment of Singaporeans into the industry.

Today, the bulk of workers at the construction sites are foreigners, and construction is still highly labour intensive. Sir, there are two compelling reasons why we need to reconsider developing a local construction workforce. First, it is not sustainable to rely solely on foreign workers for construction work, and, second, we must develop our own local construction workforce which can also be

our own emergency workforce in times of disasters.

There is an urgent need to review the operations of the Construction Industry Training Institute. We must provide more opportunities for Singaporeans to learn multiple construction skills and earn a good salary as a skilled tradesman. Without strong recognition from the Government, it will be an uphill task to attract younger Singaporeans to join the construction industry.

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

Are there plans by BCA to develop a local construction workforce?

How many locals and foreigners were trained by CITI yearly?

Can we train our construction workforce to be an emergency workforce for disaster management?

Go on to your next cut, please, Dr Teo.

Contractors Registry System

Sir, the revised Contractors Registry System has resulted in an unhealthy state of construction firms in Singapore. Its requirements for turnover and the need to have a mixture of public and private projects track record for renewal and upgrading have pushed many construction firms to commit "suicidal" bids. This has resulted in a large number of construction firms (some formerly G8 contractors) going bankrupt.

The recent liquidation of some MUP main contractors has caused much disruption to many residents. As for those contractors who are more conservative, they were downgraded to a much lower

grading, such as C1 and C2, for failing to achieve the required turnover. This situation is unhealthy as we are penalising our established contractors. The downgrading also retards their company's growth as they cannot participate in certain Government tenders.

Sir, I understand the intention of the revised registry system is to consolidate the industry. But the desired outcome may be a setback for the industry as more "cowboys" are graded to be A1 and A2 contractors due to their total sub-contract practices. This is what the industry calls the "Ali Baba" package. While credible and established construction firms are downgraded and cannot sustain their businesses, we need to review the contractors' registry system to ensure that the criteria will help to develop world-class construction firms in Singapore.

Sir, may I ask the Minister how many G8 contractors were downgraded as a result of the new registry system? Will the Ministry consider reviewing the registration and upgrading criteria? And in what ways has the registration improved the quality and professionalism of contractors?

Construction Projects

(In Mandarin): Sir, at the moment, most building projects are awarded to the contractors on a tender system. Normally, the contractor who submitted the lowest bid will be the successful bidder. Once they have been awarded the contract, they will sub-contract parts of the project to the sub-contractors. Many of these main contractors, upon receipt of the initial payment from the developers, would transfer the fund to other projects or other investments. As a result, they are unable to pay the sub-contractors for the work they have done. But the sub-contractors will still have to carry on the job and complete their project, failing

which they will be sued by the main contractor.

This sort of system is advantageous to the main contractor, but biased against the sub-contractors. In other countries, the funds received by the main contractor could only be used for the same project and not to be transferred to other projects.

I would like to suggest that some regulations be made requiring the main contractor to set up a special "Project Account" for every project. Any payment received for the project shall be deposited in this project account and be used only for the specific project. The main contractor would not be allowed to transfer the fund elsewhere. In this way, there is no excuse for the main contractor not to pay his sub-contactors for their dues in the project concerned. The sub-contractors will not be inconvenienced due to lack of funds to carry on with the project. As such, all projects should complete in time and the image of our building industry will not be tarnished. I hope that the Minister would look into the regulation for a special project account to be set up for each construction project.

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Construction Cost

Sir, I am going to talk about the construction cost being high in Singapore. Sir, in Kuala Lumpur, a 2 ½ storey terrace house with a built-in area of about 1,700 square feet including a 99-year lease land, is about 350,000 ringgit, which works out to about S$160,000. I asked a friend of mine who is a building contractor and he told me that a similar house, with just the building cost alone, will cost us at least S$250,000, excluding land cost. The Singapore construction cost alone, excluding land cost, is almost double the price of a similar house in

Kuala Lumpur, inclusive of land.

Sir, we are using the same workers from Malaysia or even the cheaper workers from Thailand and China. Materials like sand, cement and steel come also from the same source from Malaysia. If we want cheaper sand and stones we can buy from Indonesia. Why is the construction cost so different between the two places? In my view, it could be that the standards or specifications set by the Building Control Authority are too high and it could also be likely that there are many indirect costs that drive up the cost of construction, for example, hiring of the site safety officer, hiring of environmental officer just to make sure that there are no mosquitoes, resident engineer, clerks-of-work, security guard to prevent illegal workers from entering the worksite. All these have a factor to play in the high construction cost in Singapore. Will the Minister explain why the building cost in Singapore is so high, though we may be sharing the same source of workers and supply of material from our neighbouring countries? Is any review being conducted by the Ministry to see whether the building standard, specification and rule imposed by the Government on the construction sites are set too high which have led to the high cost of construction in Singapore?

Building and Construction Authority

Sir, I must commend the Ministry for continually revising the Building and Control Authority guidelines since 1995. The mandatory Code on Barrier-Free Accessibility (Third Edition, 2002) is clear, and it applies to offices, residential buildings, places of worship, resorts, shopping malls, hotels, F&B outlets, etc. However, the Code is deficient in not making it mandatory to create barrier-free access for the following groups: the older persons, the visually

impaired, disabled children, facilities for families with young children. The BCA guidelines do make recommendations as in the Appendixes. However, clause 1.1.6 states clearly that these are not mandatory. So, in effect, they become guidelines. I would like to ask the Minister why they are not mandatory and, if they are not mandatory, how then is the industry governed in providing barrier-free access for one and all in our country?

Dr Teo Ho Pin, can you take both your cuts together?

Building Research Institute

Sir, the concept of total building performance is new in Singapore. Many industry practitioners in the construction industry are still not familiar with this approach. As the Ministry has recently amended the Building Control Act to promote a performance based system, we should incorporate total building performance when designing and retrofitting buildings. Clear guidelines or standards on total building performance, such as energy efficiency, water conservation, thermal comfort, indoor air quality and maintainability must be set to achieve optimum performance of buildings.

The failure to address total building performance will result in sick building syndromes, loss of productivity, high operating and maintenance costs and shorter lifespan of buildings. Sir, I wish to ask the Minister the following questions: (1) Will the Ministry consider integrating the current building regulations to achieve total building performance in our buildings? (2) What are the plans by BCA to achieve sustainable development in new and refurbished buildings? (3) Are there plans to adopt total building performance benchmarks or standards in Singapore?

Building Performance

Sir, on my next cut, the performance of a building is dependent on five key factors, namely: design, construction, maintenance, usage and environmental factors. Many designs and materials used in temperate climate are not suitable for our tropical climate conditions. That is why we often see building defects in many of our buildings, such as cracks, delamination, algae growth, water seepage, water splashing and corrosion. These failures are due to a lack of research and knowledge on the performance of buildings in tropical climate conditions.

In Singapore, not much emphasis has been placed on research and development in the construction industry. Many building researchers are academics from the universities who work part-time on research projects. Both the BCA and local construction firms are also not proactive in spearheading research. They also do not receive much support from the Government or developers. In contrast, Japanese contractors invest a considerable amount on research and development to develop new technologies and systems.

In Singapore, only token efforts were put in to study certain problems in the industry. There is a drastic lack of innovation to develop new products and systems for application in the tropics. Singapore is well-positioned to be a research hub for building materials and systems. This will provide the potential for Singapore construction firms to export their services to the regional market.

Sir, I wish to ask the Minister the following questions: (1) How can BCA make Singapore a Building Research Centre for tropical climate construction? (2) How can we attract full-time researchers to develop patents and innovative products and services for export?

How can we develop Singapore into a regional testing laboratory for building materials and products used in the tropics?

Handicapped-friendly Footpaths

Sir, in this environment conscious era, there is a huge opportunity for people with disabilities to make more productive contributions to society. If we can facilitate their mobility, the social divide for people with disabilities will shrink. MRT stations, HDB flats, commercial buildings have improved tremendously over the years to provide more handicapped-friendly facilities. What is lacking are appropriate connecting facilities between buildings for better access for persons with disabilities. Just to illustrate, most of the sheltered walkways today offer little protection to wheelchair bound pedestrians on rainy days.

We should also improve access to public transport for people with disabilities. It is almost impossible for wheelchair bound persons to take a bus, the footpath from a block of flats to the bus stop and steps leading to a bus stop are really challenging deterrents, let alone getting up the bus. The current design of overhead bridges is definitely not a solution for the handicapped to use to cross the roads. In fact, the overhead pedestrian bridge over Old Airport Road and Mountbatten Road is not popular with the residents at all. And it breaks the link of footpaths within the HDB blocks. They rely mainly on taxis and rely very much on the charity of the taxi drivers to bring them round. We should progressively improve the environment and encourage physically challenged persons to be more mobile.

Designing footpaths and linkways that are handicapped-friendly will also mean that senior citizens are likely to enjoy the ease of use and being friendly and safe,

children will also benefit from such designs. I propose that MND initiate a plan to incorporate handicapped-friendly footpaths for travel to important locations within the HDB precincts where the handicapped can have easy access to critical services and public transport. This can serve as an example for private developers to follow suit as well.

HDB can work with the handicapped interest groups and the community to identify the needs and solutions and require developers to provide safe and convenient access, shelters from elements and safety features. We have to stay away from the misconception that handicapped-friendly facilities are no more than just having ramps and parking lots for the handicapped.

Sir, first of all, I would like to address the questions related to the contractors' procurement system, and then I will ask my SPS to address the other questions. Sir, we all know that the contractors have been having a hard time recently. Last few years have been particularly difficult ones mainly because the construction demand has shrunk by more than 50%. In 2003, last year, construction demand was $10 billion, the lowest in more than a decade. And if you compare that with, say, during the boom years, at its peak, construction demand was more than $20 billion. Yet, at the same time, the total number of contractors, the size of the construction industry, the manpower involved, the firms involved, have more or less remained the same. In other words, there are simply not enough jobs to go around and I think that is really the fundamental cause of many of the problems facing contractors, subcontractors and many of the ills which are confronting the industry today.

Because competition for jobs has become more intense, many firms have faced severe financial difficulties. And I

think the experience which Dr Wang recounted just now, I am sure has been faced by many other Members of Parliament as well. We do sympathise with their plight and to the extent that we can help, I think the Government will. Mr Ang Mong Seng, Dr Wang Kai Yuen and Mdm Cynthia Phua have asked what we can do about the situation. I think one of the common complaints is about subcontractors not being paid, or not being paid on time.

If Members will recall, last year, I introduced a package of help measures for the construction industry in Parliament. This was some time in October last year. At the same time, I also mentioned that BCA was looking into the possibility of introducing a security of payment legislation, or SOP legislation. Under this legislation, we would provide statutory rights to contractors to seek payment for works done.

Sir, I wish to inform Members that BCA has completed the study of the SOP legislation that are existing in other countries - Australia, UK, New Zealand - and we will be introducing a SOP legislation that will be suitable for local conditions. The key elements in this legislation will be (1) the right to progress payment for works done; (2) the right to suspend work if not paid; and (3) a fast and low cost adjudication system to resolve progress payment disputes.

11.45 am

It is a major piece of legislation. It is a complicated one and therefore BCA has to consult extensively with the industry, the key stakeholders in the industry. There is a general consensus on most of the features of the proposed legislation, including

its scope, the adjudication process, as well as setting up a suitable body to be appointed to conduct such adjudication.

However, there are also genuine concerns that need to be addressed, such concerns like the potential negative impact of the right to suspend work. The industry has suggested that work suspension should be allowed only after adjudication, and only if the adjudicated amount has not been paid. The industry has also asked that developers be allowed to make direct payment to the subcontractors in cases of non-payment by the main contractor, in other words, bypassing the main contractor in order to make sure that cash flows to the people who are doing work and to make sure that the project does not get delayed or aborted. BCA will consider these suggestions in developing the proposed legislation. I must hasten to add that such legislation is not a panacea for the payment woes that are faced by contractors and subcontractors, but it will at least facilitate the cash flow and alleviate the problem of non-payment along the value chain, as highlighted by Dr Wang Kai Yuen and other Members. I expect to table this legislation in Parliament in the latter half of this year, and further details will be announced then.

Mr Ang Mong Seng also touched on the issue of escrow accounts, ie, project accounts. This was actually studied by the group looking into the industry. Although it has some merits, unfortunately, there are many other problems associated with it. It is a complicated issue to manage and would require legislative backup. But I think, more importantly, even with such an account, there will still be payment disputes between contractors and subcontractors, and also between contractors and developers. So, we have decided that, for the moment, we will not be pursuing such an account.

I turn now to Dr Teo Ho Pin's questions on the Contractors Registry System (CRS). He expressed concerns about the registration renewal criteria, and asked what are the effects of this scheme on the quality and professionalism of local

contractors. The CRS, if I may go a little bit into the background, was set up as a centralised registry to prequalify contractors for public sector jobs. It grades and then prequalifies these firms, depending on their scale and skills, and the criteria include factors like financial strength, track record, manpower capabilities. This is necessary because projects are getting much more complicated. They are much more complex, and they require a multitude of skills, robust financial strength and manpower expertise. Dr Amy Khor asked why do we require multi-skills for certain jobs. The complexity of such jobs require such multi-skills within the contractors involved. So, if you have a firm that is registered at a lower grade, you will face difficulties in trying to undertake larger scale projects, especially those that span a long time.

Dr Teo wanted to know specifically how many G8 contractors were downgraded with the implementation of the new registry system. The BCA revamped the registration criteria in July 2002, ie, almost two years ago, and that was to better match the higher standards required in construction projects. For building works, the number of firms in the previous G8 grade was 87. In the new equivalent grade, which is A1 grade, this has come down to 38. So, basically, it has been reduced from 87 to 38, or more than half. For civil engineering works, the number was reduced from 52 to 23, again more than half.

Dr Teo also suggested that the CRS grade renewal criteria be reviewed. Again, I would like to inform him that this was done. BCA relaxed the requirements, particularly for track record for CRS grade renewal in October last year. This was at the same time as I announced the package of help measures. The qualifying period for grading has been extended from three years to five years. And BCA also allowed on-going projects to be taken into account. So, as a result of this, firms will

not be under great pressure to tender for projects at unrealistically low bids, or so-called suicide or tiou lou bids, as Dr Amy Khor calls them, in order to satisfy this required track record. At the same time, he will recall that we tightened the timeframe to submit financial accounts for A1, A2 and then, later on, for B1 firms, in order to provide more time checks on the financial status of the firms undertaking public sector projects. So, all these changes were made with a view to improving the health of the construction industry as well as to help some of the contractors satisfy the CRS requirements. But I would agree that we need to continuously review the CRS requirements regularly, and I assure him that we will do so in consultation with the industry, other Government agencies and also the GPC for National Development. We should also be mindful that we do not make changes too frequently, otherwise it is going to confuse the firms seeking registration, renewal or upgrading.

Dr Teo also asked whether the CRS has improved the quality of the local contractors. If you look at the statistics last year, more than 95% of the public sector construction projects - I only refer to public sector construction projects because the private sector does not provide such data to us - were graded satisfactory and above, and in meeting the CRS requirements, you will see that many of our larger local contractors now have more professionals in key positions, and that the management practices are now fully compliant with many of the ISO standards.

Mdm Cynthia Phua asked whether we can protect the contractors against cost escalations, particularly the rapid increase in cost of, say, steel as a result of high demand from China. I think some of these cost increases, eg, the increase in the cost of steel, are really factors which are beyond the Government's control. And construction material prices are dynamic.

They are affected by worldwide supply and demand, and the reason international steel price hikes, for example, has caused some contractors to bear unexpected additional pain. However, on the flip side, if prices had dropped, the contractors would, of course, pocket the savings. So, for public sector projects, both parties, whether it is the contractor or the agency concerned, will have to accept material price fluctuations as a commercial risk. Public sector agencies are aware of the potential impact of material cost increase on the project, and that is why some of them include a price fluctuation clause in their contracts, especially when such projects span a long period of time, or when the usage of certain materials is high. So, if there is such a clause, then the contractors would be protected. Of course, this clause is made known at the point of tender, so that contractors can price accordingly. But where there is no such provision, the agency is not contractually bound to compensate contractors for any price increases, and contractors will have to bear this cost increase. However, I do know that some agencies are looking into ways to help to ease the cashflow of contractors. In the final analysis, it is up to the agencies as to how they wish to structure their contracts and how they intend to deal with the contractors, bearing in mind of course that they have to safeguard funds.

Mdm Cynthia Phua expressed some concern about local contractors not being competitive with the big boys, ie, the big foreign firms. I just want to assure her that our local contractors are able to hold their own. I have some figures here which I would like to share with her. In the last two years, local contractors have been awarded something like 15 out of 35 public sector projects valued about $100 million and, of the 20 projects, 11 were awarded to joint ventures between local and foreign contractors. So, I would say

that, on the whole, local contractors can compete even for large projects. But having said that, I think there is still merit for local contractors to consolidate to build niche capabilities and to form consortiums or groups in order to look for overseas projects, and the Government will encourage and facilitate such consolidation. But at the end of the day, I think we all realise that it is left to the contractors to decide whether they want to consolidate or not. The Government really cannot intervene or even enforce this.

One final point, to respond to Mdm Cynthia Phua's question about expanding of construction opportunities, first of all, she will recall that the Government has brought forward some public sector projects in order to help the industry, especially the local contractors. But at the end of the day, as I indicated, the size of the local market is small; in fact, it has shrunk considerably, especially under the present economic climate. So, the only way for the contractors to grow is to venture abroad, and there are opportunities overseas. The market in India and China is growing at an average rate of about 10% annually, and there is a tremendous window of opportunity for local contractors. BCA, together with IE Singapore, has intensified efforts to promote export of construction services in the last few years. They have organised trade missions to help Singapore firms to gain a foothold in these markets, and they have also facilitated the formation of consortia, ie, joint ventures, among local contractors in order to further expand their markets overseas.

My Minister of State, my Senior Parliamentary Secretary and myself have all been involved in these promotion efforts and will continue to do so in order to help the local industry. Overseas orders for 2003, just to put this on record, reached about $1 billion, and I expect that we can grow this number even further, if

local contractors can work together and, with Government's facilitation, further expand their business overseas. In this way, we can develop an external wing, capitalise on the Singapore brand name, and we can offer value-added services to establish a significant presence overseas for our construction industry.

Sir, may I now ask my Senior Parliamentary Secretary to address the other questions.

Sir, on behalf of my Minister, I shall address the remaining questions and suggestions on the

construction industry.

12.00 noon

Sir, let me begin with the questions and comments on total building performance, building maintenance and the construction technology and workforce raised by Dr Teo Ho Pin. Dr Teo suggested amending current building legislation or introducing new legislation to achieve total building performance. Total building performance is still an evolving science without international benchmarks or standards. Initiatives for Total Building Performance should be industry-driven, with the aim to provide better buildings and better quality buildings. BCA's approach therefore is to specify and legislate only minimum performance requirements to ensure safe buildings that are fit for occupancy.

With regard to the question on sustainable development, BCA is actively promoting it in construction projects. From July this year, contractors in the A1 and A2 categories of the Contractors Registry Scheme will be required to obtain ISO 14000 Certification on Environmental Management. This aims to minimise environmental impact of their construction activities. BCA and NEA are also exploring the feasibility of introducing environmental impact assessment for existing

and new buildings.

On the building research institute, Dr Teo asked if Singapore could become a research centre for tropical climate building construction. Sir, the answer must be yes. In November 2000, BCA and NUS jointly established a Centre for Total Building Performance to promote and facilitate R&D collaborations amongst public agencies, tertiary institutions and the private sector so as to make Singapore a hub for tropical building research. The Centre's current R&D activities focuses on environment-related strategies such as sky-rise greening, air quality of indoor environment and energy efficiency. Generous funding for programmes, such as the A*STAR's Construction R&D programme and the Innovation Development Scheme has enabled research bodies and private sector companies to attract and recruit a strong group of full-time researchers.

Sir, on the suggestion of developing Singapore into a regional testing centre for building materials and products, I wish to point out that the Singapore Accreditation Council (SAC) of SPRING Singapore was established for this purpose. Since 1986, the SAC has accredited many local laboratories that may test and certify building materials and products under the Singapore Laboratory Accreditation Scheme.

Sir, on fast-track construction, Dr Teo also spoke of the need to develop our contractors' capabilities for fast-track construction. The BCA has introduced a buildable design legislation in Janaury 2001. The legislation requires buildings to be designed to allow contractors to adopt labour efficient and fast construction methods. Dry construction using pre-fab components is promoted while conventional wet trades, such as brick walling and plastering are discouraged. The outcome so far has been positive. The use of brick walls in the private residential

sector has decreased substantitally. At the same time, the use of pre-cast concrete construction has increased significantly. Pre-fab technology is also promoted through the incentives offered to contractors and prefabricators to mechanise their operations and adopt pre-fab construction methods. Tax allowance is given for a purchase of construction equipment and financial grants for upgrading pre-cast production techniques.

BCA also encourages wider use of design-and-build contracts to promote fast-track construction. The amendments to the Building Control Act, the Architects Act and the Professional Engineers Act which took effect from 1st Janaury this year, provided greater flexibility to design-and-build arrangements for improved integration of services, faster construction and cost savings.

Sir, I agree with Dr Teo on the need to educate all stakeholders of buildings and facilities to have responsibility for building maintenance. The Minister for National Development has reiterated that the maintenance is a shared responsibility. BCA intends to carry out a comprehensive education programme for stakeholders and building maintenance and management.

Sir, regarding the need to review safety standards for maintenance, BCA recently reviewed the periodic building inspection process. From 1st November 2003, BCA has required professional engineers (PEs) to refer to the structural layout plans when carrying out visual inspections.

Sir, on the questions concerning the construction workforce, the Government has been trying to encourage locals to join the construction workforce, with some success, not total success. But BCA's records show that locals prefer to take up

managerial and supervisory positions in the industry and not so much as trademan, ie, labour work. This is a physically demanding nature of contruction work. But we will redouble our efforts and try to recruit more.

Sir, in a civil emergency, such that when a building collapses, the Singapore Civil Defence Force will be activated as the lead agency for disaster management. Our resident construction workforce has the required skills to help reinstate public amenities and infrastructure.

Sir, on the cost of construction which was raised by Prof. Low Seow Chay, there is a perception that the cost of construction in Singapore is rather high. About 2-3 years ago, we commissioned a study to verify whether that perception is correct and the result is different from the perception. Our building regulations are not more onerous than those in the UK or the USA. In fact, our construction costs are lower than in Hong Kong and Sydney, though higher than in Kuala Lumpur, we concede. In short, although our construction cost is higher than in Malaysia, we are competitive and is unlikely to be unduly affected by our building codes. In any case, our building codes today are performance-based. In other words, you do not need to design to our codes, you just design to our safety standards.

On barrier-free accesibility, Mrs Yu-Foo, Ms Braema and Mr Andy Gan raised several concerns. The Code on Barrier-Free Accessibility already includes design guidelines on family-friendly facilities in buildings, like shopping complexes and supermarkets, frequented by families and young children. In addition, National Parks Board has a programme to make parks barrier-free and conducive for the elderly. Ms Braema asked why the Code is not applied to all buildings and developments. There is a good reason for that. First, it will be very costly to the owners of existing buildings to comply with the

Code. Existing buildings not designed with such provisions will have to carry major retrofitting works if the Code was applied retrospectively. Moreoever, the Building Control Act does not allow us to apply the Code backwards.

Secondly, the landed residential buildings, ie, the private domain bungalows, semi-detached and terraces, are private properties and only used by the owners exclusively for their guests or friends. The owners should be allowed to decide whether to input the necessary barrier-free features or not. We should not impose such requirements in private domain houses.

Lastly, plant equipment rooms in buildings are not meant for public access at all. Why would anybody go into an engine room or plant room? So there is no need to provide such features in these rooms. The Code is reviewed regularly every five years and involves all parties which Ms Braema and Mr Andy Gan would like us to include. They include the Handicaps Welfare Association, Singapore Association of Visually Handicapped, Asian Women's Welfare Association and all the Government agencies like MCDS, URA, NEA, HDB, LTA, NCSS and also professional bodies like NUS, SIA, IES, REDAS. Of course, we will welcome any other bodies that need to be included in this committee.

Sir, I have answered most of the questions.

Could I remind Members that we are rather behind time on this amendment, so please keep your speech short. Prof. Low, can you take all the three cuts together?

Bird Flu

The Avian influenza affecting the Asian region is almost over. Looking back, it would be

good for us to review what we had intended to do if the H5N1 Avian influenza should strike us.

First, when the positive type A flu has been detected, all birds will be culled. The announced approach is not to wait for confirmation of the H5N1 infection. Immediately, when type A positive is detected, culling action of all birds will begin. Sir, the positive type A flu does not imply the human type of H5N1 flu infection. It could be other types of flu, such as those well-reported, H7N1 and some other types of flu which are relatively minor. Some of the other types of flu are not infectious to human beings. In agricultural countries like Japan, Canada and America, they cull the birds when H7N1 is detected to prevent the spread of the flu as it will affect other farming activities. In Singapore, we are not an agricultural country. The culling of birds is mainly to prevent the infection to human beings.

Therefore, the decision to cull all the birds when we detect only the type 'A' positive flu is not well-justified. The action to cull all the birds based on type A positive flu will cost the farmers a great deal of losses. The action to cull all the birds may cost them $20 million. The farmers have sacrificed so much, but we have yet to confirm that the birds have been infected with the human-infected H5N1 flu. Therefore, in my view, we are a little bit over-reacting. The question is that when we make a decision, who pays for the cost?

On culling of the birds, all the chickens will be culled if one farm has detected the positive type 'A' flu. In other words, all the chickens in the farms in Singapore will be culled whether or not that particular farm has detected the positive type A flu. Again, is it necessary to take such a drastic action? The reasons are, firstly, it may not be H5N1 flu which we are concerned with. Secondly, the farms

could be so far away, for example, between Sungei Tengah and Lim Chu Kang, may be more than five kilometres away. Sir, drawing the infectious circle is quite an arbitrary work and is subject to a lot of arguments. A smaller effective infectious zone to be drawn would avoid many unnecessary losses.

Sir, the third point is that when all the birds in the same farm are culled, why are some other farms being spared? The place that is exempted is the Bird Park. The Minister did explain to the House that the birds in the Bird Park are valuable and their cages are further away and not so congested. If H5N1 should infect the birds near the Bird Park, why should the birds in the Bird Park receive double standards in the treatment by the Government? The birds have to be culled. Therefore, the decision of not culling the birds in the Bird Park, in my view, is technically incorrect.

Compensation to Farmers

Sir, the chicken farms in Singapore have more than a million birds. If culling action should be taken, the farms will lose more than $20 million, which is the price of the birds. The farms will also suffer a subsequent loss because of the lead time for them to develop until they are in full productive mode again. The total losses could be more than double. I estimate it could be about $50 million. The Government did mention in this House that compensation would be made, but did not say how much compensation would be offered. Judging from the case of Pulau Ubin, there are only a few hundred birds in the termination list, and the cost of which will only be about $5,000. The Government did not pay the $5,000 to the small-time farmers but instead the Poultry Import and Export Association, where I serve as its Advisor - I have to declare my interest that this Association has nothing to do with me - was asked

to pay for the birds which were taken out from the Pulau Ubin farmers.

12.15 pm

Sir, the Government announced that they will buy all the birds and incinerate them. However, it turned out that the Government removed all the birds in the island without paying a single cent and it saved completely on the cost of incineration and the cost of culling the birds. The Poultry Import and Export Association was asked to pay for the costs to achieve the Government's intended objective of stopping all the small-time farmers and it does not reflect very well on the sincerity of the Government. It led the people to suspect

that the Government will not be so generous in its compensation if really culling action should be carried out in all the large-scale farms. Since the flu is almost over, it will be time for the Government and relevant departments to sit down and work out some sensible compensation so that the farmers will be satisfied with the terms and will lend their full support to the Government for its action, if unfortunately, in future the bird flu were to attack Singapore once again.

Lately, due to the Avian Flu, farmers were asked to implement many cost-sensitive measures, like erection of nets for the whole farm enclosure. They were also asked to do things to improve the standard of their farms. As I know, at least there are more than three farms at the moment that have a balance of three years' lease. Judging from the bird flu scare, it looks unlikely that the farms' lease would be extended by the AVA. That is my personal opinion. The expenses on the improvements are just a waste of money and would not be justified if the lease is only to last for another three more years or shorter. If the Government is not extremely keen in keeping all these farms, why not compensate the farms with the early termination of their lease and let the

farmers' useful and hard-earned resources be redeployed to other businesses which receive support from the Government?

Agriculture Policy

Sir, in the late 80s and early 90s, the Government announced a large-scale agro-technology park development. At least four agro-technology parks were developed in Chua Chu Kang. At that point of time, the farmers did have the thinking that farming activities were being revitalised in Singapore and it was time for them to invest in the farms. At that time, seven farms, all large-scale, got into the business. Looking at the first measure, a few years ago, the Government gave the reason of pollution by the duck farms. Originally, we were 100% self-sufficient in the supply of ducks in Singapore. However, overnight, the farms closed down when their lease expired and the farms were all gone. In 2001, the complaints of smell from the farms led to the closure of three of the four egg farms in Sungei Tengah, which we were also very proud of as they provided 30% of the total egg consumption in Singapore.

Sir, I would just like to ask whether the Minister has any long-term policy on the farming activities in Singapore. What is the policy on the long-term food production in Singapore?

Food Safety

Sir, I would like to request the Minister to once again reassure all Singaporeans that it is safe to eat chicken in Singapore. Sir, may I ask the Minister what are the measures undertaken by AVA to ensure food safety in Singapore?

Sir, I used to enjoy eating this large chunk of otah at my club for breakfast until

somebody told me that this otah is probably made in some unlicensed factory or unhygienic place across the Causeway and brought over. Then, at one time, I used to buy at the supermarket char siew pau. They were very cheap - 15 cents - and I used to enjoy eating them until again somebody pointed out that these are probably made under very unhygienic conditions. Maybe that is why they always tasted so good. I find this very disturbing because, on the one hand, we ban the import of pork from Malaysia because of the Nipah virus, but we allow the pork to come in in the form of meat dumplings.

Then there is this case of the oyster food poisoning which took place in November when more than 200 people who ate at a 5-star hotel came down with poisoning because they ate raw oysters. Because of that incident, we found that the oysters did not actually come from Australia or New Zealand, but actually came from China. Although we were told that investigations were underway as to what the problem was, whether it was a contamination at source or due to the handling at the hotel, we have not exactly known what has happened. I know that the AVA does a very good job in ensuring very high standards for our food imports, but it is near impossible to check every source of food production or food manufactured overseas.

But in view of what I have said, can I just ask the Minister what steps can he take to ensure a better control of manufactured food and food that is imported into Singapore and to ensure that the food we consume in Singapore is always safe?

Sir, the questions I wanted to ask have been asked by the two previous speakers. I also want to know about food safety in Singapore.

Private Farms

Sir, with an ageing population, there are more retirees with time on their hands and looking for new hobbies, and many of them want to go back to the land to become farmers or gardeners, but not everyone has the luxury of living in landed properties with sizeable gardens to potter or putt around. In England and in Germany, plots of land are set aside for retirees to begin farming as an enterprise or as a hobby. I am asking if the Ministry of National Development could take the lead in this with AVA, HDB, URA, SLA, to keep aside more land beyond the 1,200 hectares that I believe are currently made available to retirees on two levels. For the smaller plots the HDB dwellers could come down, potter about and go back to his flat for home consumption.

Secondly, on a larger scale, for our more mobile retirees to sink roots here rather than take off to retirement homes elsewhere and form a farming entrepreneur ownership, and so develop even by-products from the products that they grow. This is indeed I feel a growth industry and there are many opportunities here for us. One example I can cite is Bollywood veggies by Mrs Ivy-Lim Singh and her husband Mr Lim Ho Seng, where their products are already in the NTUC supermarkets. And, you can even drop in now at their farm for by-products like lemon-grass tea.

We are running out of time. Let me try to gallop through these cuts. The most important question, in my opinion, was Dr Teo's: is eating chicken safe? I want to assure this House and, indeed, all Singaporeans, that eating chicken, certainly in Singapore, is safe. It is very, very safe, and nobody needs to have any second

thoughts or any reservations on that point.

Prof. Low said that the Avian Flu outbreak is almost over. I just want to put things in context. Avian Flu has been around for 100 years. It is not a new disease in that sense. What is new is that in 1997 it crossed the species barrier and affected human beings. And, he has quite rightly said the most feared sub-type is H5N1. But other sub-types as well can occasionally cross, and cause problems. So, the correct attitude is that whilst we must not over-react, we must not be complacent either. And the key is to have a responsive and proper system, so that we can make the appropriate reactions when a threat emerges. The key thing here is to remember that it is very contagious. Secondly, to also remember that early detection and effective eradication of the infected flocks or the potentially infected flocks is the most effective way to stamp out the disease. He asked why we would cull all the flocks in all the chicken farms. Let me put it to him in context again.

In Singapore we have seven poultry farms. All these farms are at close range to each other. Furthermore, they share resources in the sense that certain service trucks, certain transport and logistics arrangement, even certain feed sources, would be shared in common. So, if an outbreak occurs in one farm, can he, or AVA, or indeed anybody, be sure that the same breach in virus security has not occurred in any other farm? In our context, once this has occurred, we believe in a deliberate and systematic eradication of all the infected and potentially infected flocks, rather than to wait on tenterhooks and worry when is the next outbreak going to occur. Our policy objective is to eradicate the disease, to safeguard public health, to maintain confidence in Singaporeans and visitors alike. I would also remind him that in 1997, Hong Kong embarked on a total eradication policy and

the WHO has stated that this measure by Hong Kong in 1997 averted a potentially disastrous global outbreak.

I want to touch on the allegation of double standards. Let us put things again in context. Avian Influenza affects mainly poultry. Why poultry? Because they are the most sensitive, the most susceptible to this particular infection. So far, all major outbreaks in the world have occurred only in the context of poultry farms, not in the context of pet birds, not in the context of bird parks. In the case of Singapore, if an outbreak were to occur in a susceptible species, for some reason we suddenly found that it has mutated and a certain species in the Bird Park is susceptible, of course, we will eradicate and take all the measures needed to contain that outbreak. So let me assure the House that there is no commercial or policy reason to have double standards.

Next, I want to touch on the issue of compensation. If Avian Influenza breaks out in Singapore, it will be a disaster. It will be a disaster financially to the people involved in the trade. Let us not pretend otherwise. But, let us also be honest enough to accept that there is no way the Government can fully compensate for all the immediate and consequential business losses. Our approach is to say that we will share the pain and we will help bear the cost that they will incur in controlling that outbreak. The Government will make ex-gratia payments to the farmer for the live poultry which are culled, based on the estimated market value of the flocks. In the case of Tekong, I am glad to say that all, or almost all, the chickens were sold and they were sold at the market rate and, therefore, the issue of compensation does not arise. He mentioned the increased cost associated with providing bio-security, like bird-proofing the farms. This, we believe, is the cost of doing business and, properly, it should be paid for by the people who choose on a

voluntary basis to embark on chicken farming.

Prof. Low also asked about our long-term policy on farming in Singapore. Sir, Singapore has a very limited land resource. It is not possible for us to be totally self-sufficient in food. Our approach towards a resilient food supply is to ensure that we diversify our sources of food supply. As far as local farms are concerned, we will allow farming to occur in Singapore so long as land is available and, so long as the private sector finds it commercially viable to use the land for this purpose. Ms Braema asked if cheap farm land could be set aside for retirees. I think it follows from my earlier point that the private sector, including Ivy-Singh Lim, must find it commercially viable to run these farms on available land. We will not subsidise the land for these purposes.

Incidentally, we have six agro-technology parks set aside, zones that are reserved sites in Singapore. This can be used for farming but I would also add that it can also be used for other compatible activities, like horse-back riding, spa resorts, camping sites, etc. Interested parties can bid for this land in an open tender. The land will be awarded to the highest bidder and who is able to make the best use of the land.

I would now move on to the issue on ensuring food supply safety. I am glad Mr Tan Soon Khoon enjoys his otah, his pau and his oysters. Our objective is to allow him and other Singaporeans to continue enjoying these delicacies. How do we ensure food safety? We have an integrated food safety system. It starts from the farm all the way to the fork. We have first to accredit the supply sources, and a lot of AVA officers have to spend time going to farms or factories overseas to make sure that these sources are producing things in a wholesome way and in a safe way. We also expect health certification by the exporting authorities in

the countries which are exporting the food to us. We have a system for the inspection of import consignments on arrival, and this is backed by advanced food testing capabilities.

Our system enables trace-back to identify and recall if any products are found to be defective, and to also remove the suppliers from this pre-approved list of supply sources.

12.30 pm

If contamination of food poisoning is discovered, AVA will work closely with MOH to identify whether it is due to contamination at source or contamination due to handling. And unsafe food products will also be recalled in that context. Basically, by staying vigilant and keeping abreast of emerging food safety issues, the AVA will be able and has been able to respond effectively and rapidly to prevent unsafe food from reaching our consumers.

Sir, the final point I want to make also is that it is an issue of shared responsibility. It is not possible for AVA to check every pau that you have got - it may have come across the Causeway in somebody’s plastic bag - and there will be times when things breach our defences. But I would urge Singaporeans to use common sense. If you want to take the risk, then in the spirit of shared responsibility, you must be prepared to face the potential consequences. But if all of us play and do our part, I think we will be able to enjoy our food which, after all, is a key ingredient of our life down here, to enjoy our food and to do it in a safe way.

Dr Teo, are you withdrawing the amendment?

Sir, I would like to thank the Minister, Minister of State and the Senior Parliamentary Secretary for their comprehensive answers. I am sure

that over 95% of the Members of this House are satisfied with their answers.

Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Amendment No. (2), Mr Chiam.

Upgrading of Sennett Estate

Sir, I beg to move,

That the sum to be allocated for Head T of the Main Estimates be reduced by $10 in respect of Code TI 1500.

Sir, my cut is on the upgrading of Sennett Estate. It has been reported that I am always harping on the same issues again and again. But in this case, the issue has still not been resolved, and it is my duty to ask the Prime Minister again whether he intends to adhere to his announcement made last year to upgrade Sennett Estate.

During my house-to-house visits at Sennett Estate, the residents asked me to ask the Government when are they going to repair the drains in their estate. Most of the drains in the estate are stagnant with water and are breeding mosquitoes which causes great concern to the residents because of the rising dengue fever cases. I would urge the Prime Minister to give top priority to this concern because it is now about a year since he gave the assurance to upgrade Sennett Estate but nothing in relation to the upgrading proper has been done other than some minor ad hoc works. I wonder whether the Prime Minister is carrying the upgrading programme at Sennett Estate forward as a strategy for the next elections. Can the Minister please confirm that upgrading shall be carried out at Sennett Estate as

promised and the commencement date of the upgrading?

Sir, on behalf of the Minister for National Development.

Sir, the PAP Government is an honourable party and the Prime Minister is a very honourable man. What he promises he delivers. The Estate Upgrading Programme in Sennett was announced last year, 2003. It is in good progress. Mr Chiam See Tong said that in his recent house-to-house visits, residents have been badgering him as to whether the EUP would be carried out. I would like to ask when was his last visit, because the EUP programme has already been rolled out. The adviser, Mr Seetoh Yee Pin, has been on the ground and he has already appointed the implementing agency; the architect, Mr J Y Hwang, is also in place. The residents together with him and the CC Chairman have formed a working committee to gather feedback as to what they should do about the open drains, the parks, roads and curbs.

Perhaps, Sir, if you give me a few minutes to mention the milestones that will be carried through. The design will be in place once the feedback has been consolidated, because we want the design to reflect the needs of the people. The design must also be such that it is within budget. Some time this year or early next year, a tender will be called and the work should be completed by around the middle of 2006.

Sir, the last time I visited Sennett Estate was three Sundays ago. At that time, I heard that only a few lamps have been installed in one of the backlanes. But the more important thing is that the drains have been untouched. Nothing has been done to any of the drains yet. As regards the playground, I do not think there is any need for upgrading because it has been upgraded.

What they want are humps on the roads. As the roads are narrow in the estate, there are some problems there.

I think the top priority is the mosquito problem. I think this has to be tackled first. The others may be cosmetic and are not so important.

Sir, I would bring this feedback to Mr Seetoh Yee Pin. And we want to assure him that all these issues will be addressed by the residents. Incidentally, Mr Seetoh has been working the ground many times now. No work has been done yet because the final design has not come out yet. The design will also be presented to the residents and Mr Chiam will be welcome to give his feedback through the CCC.

We are short of time, Mr Chiam.

Why refer to Mr Seetoh? I think it should be the relevant authority. Mr Seetoh is just a layman. What has he got to do with the upgrading of Sennett Estate? I am really surprised that the Senior Parliamentary Secretary has asked me to refer to Mr Seetoh. I have seen Mr Seetoh with one of his men scurrying and hurrying in Sennett Estate but I have not seen him doing anything in regard to the upgrading.

Mr Chiam, please let the Senior Parliamentary Secretary reply. Prof. Koo, make it a quick one.

Sir, Mr Seetoh is coordinating the feedback from all the residents. He is also the Adviser of the Potong Pasir CCC and it was Mr Seetoh who made repeated requests to the Ministry to offer EUP to the residents of Sennett Estate way before the Prime Minister made his promise.

Mr Chiam, are you withdrawing the amendment?

Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment No. (3), Mr Wee Siew Kim.

Sir, the Minister has replied earlier on Saturday. I will pass.

Mr Seng Han Thong, please move the amendment.

Space Adding Item

Sir, I beg to move,

That the sum to be allocated for Head T of the Main Estimates be reduced by $10 in respect of Code TI 2100.

Space adding item is a term we often use in our upgrading programmes. This term is a mouthful. When it is translated into Chinese, it is equally mouthful, kuojian mianji xiangmu. I always forget how to mention it.

Whenever we urge residents to vote for the upgrading programme, we tell them that space adding item means that you can have an extra little room. And our upgrading exhibitions always show this little room with a bed and a table. Residents are told that they can make use of it as a study room, children's room, computer room, maid's room or mahjong room. So, why not just call it an extra room?

I am told that, legally, a room which is less than six square metres cannot be called a room meant for human habitation. But why do we tell residents that it can be used as their children's room or maid's room? Sir, I think we need to change either the law or our marketing. I believe it is better to change the law as many

residents already make use of it as a living room.

An extra room, in Chinese, means jiafang. I think it is good. Good government gives good citizens jiafang, just like a good employer gives a good employee jiaxin and a good stallholder gives jialiao to good customers. So, for simplicity sake, we should just ask the residents to vote for an extra room. If we cannot change the law, then I think we can just ask them to vote for extra space, instead of a space adding item.

Sir, I thank Mr Seng for his advice on marketing.

I just want to emphasise that the so-called space adding item does not necessarily have to be an extra room. It could be a balcony; it could be a space for utility; it could be an extension of the current living room or used as a bedroom, kitchen or as an additional toilet. So, the reason we chose space adding item, not really imaginative, but it is factually accurate. It is an additional space.

Why not just say “extra space”? Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment No. (4), Mr Wee Siew Kim.

Fernvale Town Centre

Sir, I beg to move,

That the sum to be allocated for Head T of the Main Estimates be reduced by $10 in respect of Code TJ 2100.

Sir, last Friday, the Minister for Transport called Fernvale in Sengkang the wild west in the context of the continued closure of the West Loop of the Sengkang LRT, and I think he is right. But wild west

or not, we have built pockets of flats there. They are already populated. We need to provide for these residents who have moved there, certainly not expecting to play cowboys and Indians.

One may say that our people are little pampered. They all come from mature estates where they are practically immersed in everything they need in life. But then, is this not part of the lifestyle in Singapore that we all along to preserve? In spite of the fact that the pace of the building programme for Fernvale has slowed, can I ask the Minister two questions:

to consider ways to ensure that the necessities of life be provided in close proximity to these residents as quickly as possible;

we may need to exercise some creative flexibility to free from the constraint of economic viability. The HDB may need to invest ahead of full demand.

Alternatively, there is already existing an enclave of shops and amenities along Jalan Kayu leading to Seletar Airport. It is paying for its roti prata and it attracts Singaporeans from near and far. The infrastructure for LRT access is already there and, eventually, the LRT will be turned on. Seletar Airport grounds also harbour potential for other recreational activities. The wilderness of the farmway tracks provides a rustic distraction. Can I ask the Minister to study whether it is possible to find ways to rejuvenate this Jalan Kayu enclave, thereby using it as a ready-made centre of lifestyle amenities for the residents of Fernvale?

Mr Heng Chee How is not here. Dr Balakrishnan.

Sir, Fernvale is part of Sengkang Town. In a new HDB town like Sengkang, commercial facilities are provided at three levels. First, we

have the precinct level where there will be a local cluster of shops to cater for the daily needs of residents. At the second level above there are commercial centres where you get a wider range of commercial facilities such as supermarkets, fast food outlets and food courts, and these will have to serve a larger catchment of residents. If they did not have a larger catchment, the merchants and traders who are there would not be viable.

At the third level is the town centre which serves as the commercial and transportation hub of the town. It provides a wider range of commercial facilities and transport connectivity within and outside the town. There will only be one town centre in each HDB town. In the Sengkang Town Centre, it is co-located with the Sengkang MRT station and the LRT system exchange station.

The shopping needs of Sengkang residents are served by Compass Point Shopping Centre, a major shopping complex that is integrated with the MRT, LRT and bus interchange. And to better serve residents, a community building to house the community centre, a polyclinic and a neighbourhood police centre is currently under construction.

To cater to the needs of residents at Fernvale, a few clusters of shops at Blocks 403A, 405C and 408B Fernvale Lane have recently been tendered. These facilities include minimarts, eating establishments and a clinic, and they are expected to be operational in the next one or two months. Additional shop clusters and a commercial centre are also planned in tandem with future housing developments.

Mr Wee mentioned the Jalan Kayu area. This is an existing private residential estate and the shops along Jalan Kayu are located within the western part of Sengkang Town.

This town is expected to grow as more residential developments

are built and this will inject more life, more catchment and, ultimately, more shops for the residents in Jalan Kayu.

12.45 pm

Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment No. (5), Dr Warren Lee.

Heavy Vehicle Temporary Car Park

Sir, I beg to move,

That the sum to be allocated for Head T of the Development Estimates be reduced by $10 in respect of Code TJ 5100.

Sir, in view of the slowdown in HDB's building programme, would the Minister consider the provision of temporary heavy vehicle parking on land previously designated for future residential and light industrial development?

Heavy Vehicle Parking

Sir, there is much unhappiness among Sengkang residents over the lack of heavy vehicle parking. Last week, Miss Penny Low faced the ire of 10 families in just one block of flats alone in Compassvale. In a survey in Anchorvale, 180 families responded with their predicament. Safety, noise-heavy vehicles are anyway not supposed to be used for personal transportation - are often used to justify the lack of attention to this problem.

Take a moment and look at it from the standpoint of the drivers. Can you seriously believe that these drivers have

any bargaining power with their employers over whether they get transportation to and from work, or get paid an allowance to get to work and back home, when all of Singapore is asleep? Invariably, it hurts the drivers’ pockets. Yes, each heavy vehicle comes with a parking permit when it is registered. But there is a severe mismatch of where the parking lots are and where people live and work. This parking permit cannot be a solution.

Also, the options available to these drivers are disappearing. The compounds of schools, temples, churches, petrol stations where they used to have them are getting smaller and are fast disappearing as an option. The new town does not have surface car parks. Multi-storey car park is the norm. These multi-storey car parks are themselves the bane of drivers who are not even driving the big prime movers but just a van with a roof that exceeds the 2.1 metres allowed clearance for these multi-storey car parks. I feel for the effect that it has on the lifestyle of these drivers. They either park miles away from home or work and spend untold hours to commute. They hit the road before the break of dawn and get home with just the moon as company, or else play a cat-and-mouse game with traffic wardens. Invariably, paying parking fines becomes a fixed monthly outlay. And we say we pay attention to lifestyles and want more babies? As an MP, I too worry about the safety and noise concerns, but these can be solved.

Can I ask the Minister to consider locating heavy vehicle parking at the fringe of Sengkang Town, so that at least the drivers of such vehicles have the option of a long walk or go on bicycles? This would take care of the noise and traffic issues. Or we could locate the parks, as Dr Warren Lee has just said, in the area designated for light industries. Surely, one cannot say that heavy vehicle movements to and from these industrial estates pose a safety issue.

Sir, the URA works very closely with the various authorities (NParks, HDB and LTA) to ensure the sufficient provision of land for parks and sporting facilities as well as the provision of heavy vehicle parking facilities. These facilities are implemented together with the HDB’s building programme. Dr Lee suggested that we find creative ways to use the land not presently needed. Indeed, we do that. Today, the grassroots organisations can approach SLA or HDB to use vacant land for interim parks and other community and recreational uses. Residents who need to use this interim land for any special purposes can always contact the advisers who can access a special portal, and the approved uses are listed in the portal.

Sir, on the issue raised by Mr Wee on the provision of heavy vehicle parking lots in HDB estates, he has given us a reason, and I think it is a good reason, because heavy vehicles are not meant for personal transport. Heavy vehicles are actually factors of production and they should be parked in places designated for such purposes, in the factories or in heavy vehicle parking lots. Where possible, URA, together with LTA, tries to provide these heavy vehicle parking lots at the fringe of HDB estates. In the case of Sengkang, I understand that many residents are heavy vehicle drivers and, hence, the pressure on the MPs like Miss Penny Low and Mr Wee Siew Kim.

At the same time, we also have to be mindful of the residents’ concerns. The residents have complained to the press, Ministries, URA, HDB, LTA and also to MPs – perhaps not to the Member – that the presence of heavy vehicles in the vicinity of HDB car parks, initially multi-storey car parks, endangers the lives of their children and, indeed, themselves. At the same time, we are also mindful that heavy vehicles are noise polluters and emission polluters, however efficient they

may be. So the suggestion that we should locate these heavy vehicle parking lots in the midst of the HDB estates should be reconsidered. We have to balance the needs of the heavy vehicle drivers with that of the residents. We are talking about residents in the hundreds of thousands, and we are talking about heavy vehicle drivers perhaps in the hundreds. We understand the difficulty of heavy vehicle drivers of rising before dawn and going back after dark. We will try as far as possible to locate heavy vehicle parking lots near the estates. SLA and LTA are mindful of this. They have provided a special portal called "Onemotoring.com", and the owners of the heavy vehicles or, indeed, the drivers can access this website and look at the nearest parking lot.

Clarification, Sir. The SBS has just fed its comment back to me. We all know the reasons why heavy vehicle parking has not been allowed. But really what I ask for is, firstly, there is already a light industrial park planned for Sengkang and if people cite safety issues, then we have a problem with the light industrial park. Secondly, I mentioned that it is on the fringe. We have heard the comment that Sengkang is a wild west, and I do not know what noise and safety the people are talking about. I would like the Ministry to reconsider its position.

Sir, we will take his feedback and look at the issue again. But, again, I want to emphasise that Singapore is a small place. There is no wild west like California. And Sengkang is indeed one of our very favourite HDB estates, and it is reflected in the choices given to us by the residents. Sengkang itself is an estate which is heavily populated and we must balance the needs of heavy vehicle drivers and the residents.

Sir, I thank the Senior Parliamentary Secretary for his reply

and his promise to reconsider the issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment No. (6), Dr Lee. Keep it short, please. We have only got about six minutes left.

Open Areas

Sir, I beg to move,

That the sum to be allocated for Head T of the Main Estimates be reduced by $10 in respect of Code TL 3100.

Sir, the slowdown in the pace of building new flats has left many residents in non-mature estates with a problem of tracts of undeveloped land, stray dogs and mosquitoes. At the same time, amenities such as sports stadia or swimming pools will be in short supply as they tend to be built only when there are enough residents to justify the amenities. It is a chicken-and-egg situation. I am glad that the Senior Parliamentary Secretary has already mentioned that the Ministry would consider working with residents and grassroots leaders to create temporary parks, recreational facilities on these often large tracts of open ground. Done gotong royong style, these facilities need neither be expensive to build nor maintain.

As to the temporary nature of these facilities, I think we need to keep matters in perspective. Even though a biking trail or an unofficial soccer pitch, or even a hobby farm, may be available for only three to five years, it will benefit a whole cohort of children in the neighbourhood and lots of residents who may feel strapped for cash to travel to other sports facilities far away.

I hope that the Minister would consider this.

East Coast Park

Sir, I would like to ask the Minister whether the Ministry has plans to upgrade the East Coast Park in the next financial year. I think the existing facilities in the park should be upgraded and new and more facilities be added, especially for family activities. For example, the beach should be improved to provide more facilities for sea sports activities with swimming lagoons which are safe for children to enjoy swimming. I would like also to see that a part of the park be designated for weekend or holiday pasar, or market, for sale of handicrafts, paintings or other works of our local artists, and so on.

I think we should allow busking and local music groups to perform in the park. In this way, we can encourage our local talents to come up and show their talents in the park, and this will make the park a more exciting and vibrant place for relaxation, recreation and leisure.

We have four minutes left.

Sir, I think I have partially answered Dr Warren Lee’s questions, and I take his feedback in good spirit and will feed this back to the Ministry officials.

On the East Coast Park, we are in the process of upgrading the East Coast Park facilities. The East Coast Park, as Members will know, is one of our jewels, it is the largest and the most popular park in Singapore, attracting some seven million visitors every year. I would perhaps just like to list out some of the upgrading projects that we are doing.

We are doing cycling tracks and footpaths. We are also building bigger shelters and new barbeque pits to replace old ones. We are also improving the lighting and the drainage. Recently, of

course, NEA has upgraded a very well patronised hawker centre there. More works will be in progress. In the long term, NParks is working on a masterplan of the East Coast Park with URA and other agencies. This plan proposes to expand the park area and lengthen its beach line through land reclamation.

With regard to the suggestion of allowing more busking, bazaars and trade fairs, I will feed this back to other agencies because this agenda comes under their purview and not under the Ministry of National Development. But these are good suggestions.

Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment No. (7). You have two minutes left. Just ask your question so that you can get the answer.

Consumer Protection

Sir, I beg to move,

That the sum to be allocated for Head T of the Main Estimates be reduced by $10 in respect of Code TM 3100.

Sir, I would like to know how does AVA ensure that all the retailers and suppliers comply with the food labelling regulation - to show the origin of the food and the date of expiry of all food they supply and sell in Singapore.

The next question is: what is the Government's position on genetically modified (GM) food?

Sir, AVA requires food labels to carry the product names as well as the name and address of

the manufacturers or importers. In case of any problem, the information facilitates product recall and trace back to the supply source for further investigations. An errant establishment will be suspended until satisfactory remedial action has been taken, in order to ensure that they comply with the requirements.

Food labels are also required to list the ingredients of the product for the benefit of people who may be allergic to some ingredients, for example, nuts. Infant food and products with a limited shelf life, for instance, perishables like dairy products and tofu, must be date-marked. The issue is not whether it is canned or not. The issue is the durability of the food. Retailers are held responsible and will be prosecuted and their products will be seized and destroyed if they are found to sell unwholesome products. AVA checks the labelling of food products at retail outlets, warehouses and food factories. Importers, manufacturers and retailers are subject to enforcement actions if their products do not meet these requirements. AVA has found that the pre-packed bread sold at supermarkets meets the labelling requirements because such requirements do not apply to loosely packed bread and pastry products sold at bakery shops. But AVA will be pleased to look at any other feedback received by CASE concerning food labelling.

Very briefly, on genetically modified food. GM foods are currently available on the international market and these are considered safe. They have passed pre-market risk assessments before approval, and so far there have been no adverse effects on human health documented from consuming these foods.

Codex Alimentarius Commission is the international reference for foods ---

Order. It is guillotine time. Mr Yeo, are you withdrawing your amendment?

Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $379,857,050 for Head T ordered to stand part of the Main Estimates.

The sum of $4,508,522,000 for Head T ordered to stand part of the Development Estimates.

1.00 pm

Head J - Ministry of Defence. Amendment No. (1), Dr Ong Chit Chung.

Strategic Review and Defence Policies

Sir, I beg to move,

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

Sir, Asia-Pacific is a region of uncertainty with underlying currents and fault lines. It is even more so after 911. We now know that the JI network has been built up over many years in many parts of the region, including Singapore, Malaysia, Indonesia and the Philippines. Religious extremism has harnessed terrorism, making the threat even more immediate and real. Bombs have gone off in Bali, Jakarta and Manila.

There is increasing political uncertainty on the ground. Many of the countries are in the throes of election. In Malaysia, the new Prime Minister Abdullah Badawi is battling against PAS and religious extremism. All are watching whether UMNO could win the Malay votes and hold Kedah against the PAS onslaught. In Indonesia, no one is sure who will emerge victorious in the presidential election, though

President Megawati has the advantage of incumbency and the mantle of Sukarno. But one thing for sure is the rising tide of political Islam. We view with dismay and concern the early release of Abu Bakar Bashir. In the Philippines, there is going to be a fierce fight between President Arroyo and Poe. In Taiwan, President Chen Sui-bian is fighting a neck-to-neck race against Lien Chan and is playing with sensitive issues like independence and referendum. And we watch with concern the series of fanatical bombings and attacks in southern Thailand and the motives of the perpetrators are not clear. Further north, the North Korean leader is playing poker with nuclear weapons and the South Korean President is impeached.

In these uncertain times, Sir, and with the stark strategic realities before us, we have no choice but to build up the SAF as a strong and capable deterrent force. We must keep the predators at bay and protect our homeland against terrorism. We must not forget that we are a trading nation. We import our food from overseas. We need to keep the vital sea lanes around us open, and check and deter piracy. For this, we need a strong SAF.

I therefore support the increase in the Defence budget. We must spare no effort nor hold back any expenditure on defence. Without a strong SAF, Singapore will be at the mercy of others. Without a strong SAF, there will not be an independent Singapore.

We are prepared to spend the money, Sir. The SAF on its part must make good use of the funds. I hope therefore that the SAF will be trained and ready for the new conventional and unconventional roles it has to play against a spectrum of threats. I would like to ask the Minister if the SAF is combat ready to defend Singapore and Singaporeans.

Sir, I would like to make two observa-

tions. First, global terrorism remains a very real threat. The train bombing in Madrid last week was a stark reminder of how violent and senseless terrorism is and how it can happen any time, anywhere and that no country and no one is truly safe. Emerging evidence points to the Islamic militant network, Al-Qaeda, as the group responsible. Indeed, the Spanish authorities are now analysing a video tape claiming that the train bombings were Al-Qaeda’s punishment for Spain’s support for the US-led war in Iraq.

Sir, several countries have since stepped up their security after the Madrid attack. The British are deploying anti-terror marshals on trains across the country and throughout London's underground network. France deployed 500 soldiers to key transportation hub, while the US has also increased its rail security. I would like to ask the Minister whether Singapore is taking steps to also beef up its security, especially the public transport security, given that we have also supported the US in the war against Iraq.

Sir, combating terrorism also effectively requires the fullest possible international cooperation, especially in intelligence. I would like to also ask the Minister how is our cooperation with our partners on this.

My second observation is that the geo-political situation in this region is more uncertain and fluid, as pointed out by my GPC Chairman. Elections in several countries, Malaysia, Indonesia, Taiwan, would have implications on this region. The outcome of the US presidential election will also have implications on our policies and the different policies in this region. The historic impeachment of the South Korean President last week adds further uncertainty into the picture. I would like to ask the Minister for his assessment on the security outlook for the region and how we are gearing up to

meet the expanding spectrum of national threats.

Strategic and Security Challenges

Sir, as in past years, MINDEF has again been allocated very substantial funds to look after the defence of Singapore. And I welcome that the Government has not cut back on defence spending to ensure that the security of Singapore is never compromised. While I welcome this continued spending on defence, there are obviously many security and strategic challenges facing Singapore. And for this continued expenditure, I am quite sure that there are continuing security threats and challenges. I would like to ask the Minister to highlight what are these security and strategic challenges that are facing Singapore so that, not only do Members of this House have a better understanding, but also that many Singaporeans out there appreciate these continuing security and strategic challenges facing Singapore.

Piracy

Sir, the problem of pirate attack in our regional waters, especially the Malacca Straits, seems to be getting worse, not only in their numbers, but also in terms of their ferocity. The International Maritime Bureau has said that pirate attacks jumped to 445 last year, that is 20% higher than the previous year. Although most of the attacks took place in Indonesian waters, a few occurred in Singapore waters as well. And according to the shipping community, the pirates now come heavily armed, well trained and are well organised and they are attacking with a precision not seen before. This is a disturbing trend, especially with terrorism in the midst. With terrorism, piracy could escalate to a more violent form that would destroy shipping facilities and block shipping channels.

Sir, a recent report in AWSJ reported that, in December last year, the Malaysian Marine Police intercepted a small boat off the coast of Sabah and detained eight suspected militants. Under interrogation last month, one of them confessed that he was involved in the planning of a suicide bomb attack in Indonesia.

Sir, we must step up our vigilance and presence in the Straits of Malacca. Increasingly, maritime terrorism is becoming a real threat to our security. I would like to ask the Minister if the Police Coast Guard and the Republic of Singapore Navy have sufficient boats patrolling the regional waters and whether they are adequately equipped and are fast enough to pursue the pirates and capture them. Just consider the terrorist attacks on the tanker Limburg and warship USS Cole. Both suffered substantial damage with terrorists in speed boats packed with explosives. Often undetectable by radar, such boats could zip into Singapore waters and do serious damage.

Sir, we have talked about pirate attacks in the region for decades and yet the problem persists. I would like to ask the Minister how are we cooperating with the regional countries to combat this worsening problem of piracy and what more can be done.

Overseas Missions and Operations

Sir, over the last few years, MINDEF has sent a number of contingents overseas. In particular, we participated in UN peacekeeping missions in a number of countries. An example was the peacekeeping mission to Timor-Leste under the sponsorship of the United Nations. And we also sent a small contingent to Iraq to help maintain security. May I ask the Minister what are the criteria for deciding whether we should undertake such missions? What

are the factors for determining the force structure of our troops in such missions? Do we deploy both regulars and National Servicemen? At these missions, are our troops fulfilling the purpose? Are the missions worth the commitment of precious manpower as well as military resources? What do our officers and men learn from such missions and whether they share their experience with the rest of the SAF upon their return?

Sir, in recent years, our country has been involved in UN's various peacekeeping missions largely through communication, logistical, medical provisions and support staff to countries, such as Cambodia, Afghanistan, East Timor and Iraq. SAF, for instance, assisted in UNTAET's peacekeeping mission efforts in May 2001 to maintain law and order in East Timor by contributing a platoon of combat peacekeepers for the first time, on top of Ship Landing Tanks, medical teams and military staff officers. It was also the first time that we had the full NSmen as well as operationally ready NSmen who embarked on this mission. The SAF has also deployed staff in the Gulf region in support of Iraq's reconstruction in recent times where the 10th team is still serving.

In the light of increasing overseas deployment of SAF, what are the policies drawn in preparation for engaging them in frontline action and where do we draw the line? How prepared are our inventory for such a scenario? Will there ever be a scenario where we will engage in frontline action on behalf of another country?

SAF

Sir, technology is an important strategic factor in warfare. Advances in technology will have a profound effect on the future of warfare. It has been said many times that generals invariably fight the war. For example, based on the First World War experience,

the Polish generals sent their horse cavalries against German tanks at the outbreak of the Second World War, and the French generals defended France by building an outdated Marginot defence line, which was easily breached by German tanks punching through selected points in blitzkrieg attacks.

More recently, the first Gulf War in 1991 and the second Gulf War in 2003 highlighted to all of us the immense changes in warfare. This led to a revolution in military and strategic thinking and a fundamental review of weapon procurement and military doctrines. Such paradigm shift is now termed as revolution in military affairs (RMA).

Likewise, we need a paradigm shift in the SAF. I hope the SAF is not being tied down to old-fashioned warfare of the past, and is not bogged down by the baggage of our experience in World War II, the Malayan Emergency or even confrontation. More to the point, what happened to the two Gulf Wars demand a total review of the force structure, strategic concepts and operational doctrines of the SAF.

Sir, even the US Secretary for Defence, Mr Donald Rumsfeld, is shaking up the American armed forces with an ongoing review of the way the forces are trained and deployed. Old fashioned generals weighed down by old concepts are being replaced with forward-looking commanders. Are we in the SAF prepared to change and ride the tide of such unprecedented technological advances and changes? At the same time, SAF is facing new threats. In the new strategic landscape, the SAF has to contend with biological and chemical attacks, low intensity operations and terrorist attacks. I therefore wish to ask the Minister whether the SAF is prepared for such unconventional threats and how far is the SAF transforming itself in view of the

changes in technology and the strategic landscape.

1.15 pm

Sir, last year probably has not been a particularly good year for our armed forces, in terms of incidents that occurred. The year started with the disastrous collision of the naval vessel Courageous with the merchant ship in which four of our servicewomen died.

Then came the revelation that three NSmen died in training in August, one of whom was the result of serious breaches in training procedures. These incidents have cast a stain on the reputation of the SAF. Then the revelation of the so-called labelling of "white horses" amongst NSmen has also not helped the image of the SAF. Unfortunately, most people do not buy the explanation that "white horses" were identified so that they do not receive special treatment.

So, I think the image of the SAF suffered somewhat during the year. However, the openness in which we discussed the deaths of our NSmen in Parliament shows that the Ministry is serious that it wants to be held accountable for any lapses, and this is very important, especially when we consider that, in the last 10 years, 3,000 NSmen had in fact been injured during training, and a total of 37 had died. We must, therefore, continue to have such open accountability. The availability of the SAF Hotline to report any misconduct or unhappiness in training is encouraging, but some NSmen do not know what is allowed or what is not allowed in training. So, they do not know if there has been a breach of training guidelines or of what the limits are. Then, there are some NSmen who are afraid of reporting their injuries to medical officers, as they fear they may be accused of malingering and giving excuses to skip training. Yet, some of these injuries may have life-long implications in the long term.

Sir, the SAF has to continue to uphold its image as a professional fighting force capable of defending the nation. We must be sure that our professionalism and our reputation as a fighting-fit force will always be maintained. But, at the same time, we have to assure families that their sons sent for NS to serve the nation will return home safely in one piece. And I hope that the Minister can continue to give this assurance.

Sir, recent conflicts have shown us that it is no longer sheer numbers and firepower that win wars. Small groups of well-trained and well-equipped forces with superior information about the enemy forces and intentions have often tipped the balance in their own favour. We have a situation where the SAF can no longer count on increasing headcounts or bigger budgets alone to keep our fighting edge. The SAF will have to do more with less. While transforming itself into a force that can effectively face the challenges of these asymmetric warfare, unconventional warfare, defence against terrorist attacks, and keeping the peace. On the one hand, our soldiers will have to use more simulators while, on the other, more will be called upon to protect our own local vital installations from real threats in peace time, and even to serve overseas. We will need to restructure our forces, reprioritise our plans for acquisition and replacement of equipment and reskill our men to meet these new challenges. We will need to maintain unit cohesion and inter-unit cooperation, and improve our capability to mount joint operations on land, sea and air, even as we try to lessen the burden of reservist training on our Operationally-Ready NSmen and their employers.

Sir, our NSmen are now better educated and most, if not all, are highly motivated to defend their country. We should strive to ensure that their time in

NS or reservist training is not wasted while adequate time is given to rest and recreation after training. We will need to reassure them, their parents and their loved ones that the SAF will conduct rigorous and challenging training while ensuring that the safety and welfare of the men are never taken lightly. We need to assure that the environmental hazards that our men will face, eg, infectious disease risks, will be managed and planned for as well as military risks will be planned for. If we do this, then I believe that all Singaporeans will do their part towards the total defence of Singapore.

Sir, if we look at the SAF today, we will realise that it is a very different organisation from what it was when it first started. The SAF has over the years transformed itself into a lean and well-organised armed force that leverages heavily on technology as a force multiplier. This reliance on technology has given the SAF the edge that it enjoys today. In fact, independent analysts hold the SAF in very high regard as an effective fighting force in the region. The experience of the recent war in Iraq has proven the effectiveness of leveraging on technology to fight a modern war. This shows that we were doing the right thing in moving in the direction that we did.

Yet, we know that the transformation was no easy task. It requires vision and far-sighted planning to bring these changes. Even before the Iraq war, I am sure our planners had an idea of how military technology is evolving, and must have thought about using information technology and smart weapons as an integral part of our defence system. I am grateful that MINDEF has, on its part, invested resources into making this possible. In fact, more than just relying on foreign technology to meet our needs, our Government has even got down to designing weapons systems and platforms to ensure that our armed forces are

equipped with tools to meet our own local specific requirements.

There is never an end point in a transformation process. For the SAF, the organisation is constantly evolving. Besides, even aside from the transformation in the way in which battles are fought, the conditions and nature of the battlefield are also evolving. Whereas the soldiers in the past were being prepared to fight conventional wars, in the aftermath of September 11, we are now mindful that the SAF may also have to engage in low intensity battles with enemies that may not be as easily defined. Such a transformation may at times require a paradigm shift in the way in which doctrines are written and training schedules are planned. I would like to ask the Minister to share his vision to the extent possible of the kind of organisation that the SAF is likely to evolve itself into in the next 10 years, whether the SAF, as an organisation, is nimble enough to deal with changes in the nature of challenges that we face. For instance, can the SAF deal with low-intensity conflict as opposed to having to fight in a conventional warfare? Are we confident that our on-going efforts to transform the SAF will be adequate to prepare our armed forces to adequately deal with the situation when it arises?

Sir, the SAF has been one of the key pillars of our progress. We have been told that our armed forces have come a long way from its beginning. One of the key components of our SAF is the operational readiness of the National Servicemen and the reservists.

Sir, mobilisation exercises have been going on for several years now and, to ensure the operational readiness of our SAF personnel as well as the civil resource owners, I would like to ask the Minister what are some of the criteria

used to assess our operational readiness during such exercise. How has the performance with regard to mobilisation exercises been in the last few years? In terms of civil resource owners, how has their response been towards such exercises? How do we fare compared to other armies of the same size as ours with regard to such exercises?

Sir, with the threat of terrorism looming the world over, I would like to also ask the Minister on the SAF's readiness in combating non-conventional war and threats. Are our servicemen prepared and trained for this non-conventional warfare? How prepared are we, and what more will be done to ensure the highest level of preparedness?

Intelligence

Sir, the Western alliance, comprising mainly the US and the UK, went to war with Iraq last year, almost certain that the evidence they had on hand would prove beyond doubt that the belief that President Saddam Hussein had weapons of mass destruction. So confident were the Americans that Mr Collin Powell went to the United Nations Security Council, believing that the photograph he had was enough to convince the world. One year on, after the invasion of Iraq and the fall of President Saddam Hussein, we are nowhere nearer to finding any weapons of mass destruction than when we first started out with. All they ever found were some old canisters, probably used for chemical weapons. These were probably remnants of the time when Iraqis wielded chemical weapons against the Iranians and the Kurds. There was certainly no evidence of any nuclear, biological or even chemical weapons that were ready for deployment within 40 minutes, as the British Prime Minister had led the world to believe then. It is becoming increasingly clear in the minds of many that there were probably no

weapons of mass destruction or any programme leading to the development of weapons of mass destruction.

This has become most embarrassing to political leaders on both sides of the Atlantic who have been left scrambling for an explanation for the failure of intelligence gathering in the run-up to the Iraqi war. Of course, there had been accusations of political interference in the work of intelligence officials which led to the famous BBC comment that intelligence reports had been sexed up to gain public support. The issue, therefore, is the extent to which the public can be assured that there is proper segregation between the work of intelligence officials and the elected leaders whose task is to take political decisions based on the outcome of intelligence reports. No doubt, this issue will be addressed in the next few months as the public enquiries in the UK and US progress. What has happened overseas will no doubt be relevant in Singapore. I would like to ask the Minister what assurances there are for Singaporeans that our intelligence gathering is accurate and reliable, and that the work of intelligence officials will not be unduly hampered by the interference of any party, to avoid a repeat of what has taken place elsewhere.

Mr Heng Chee How is not here. Dr Ong Chit Chung.

Defence Spending

Sir, while other Ministries' budgets are being cut as a percentage of GDP, MINDEF's budget is not suffering a cut at all so that MINDEF will sharpen its cutting edge. We wholeheartedly support the MINDEF budget, as we place the highest priority on the nation's security and sovereignty.

However, we would like at the same time to highlight the importance of prudence and frugality. We want the SAF to be a strong and mighty stallion, guarding the gateway to Singapore. We do not want a runaway horse galloping in the wrong direction and allowing the costs to escalate and spin out of control. For example, to save cost and manpower, we should outsource as far as possible. We want the defence dollar to be stretched, and be value for money.

Sir, it is not possible to have security and defence on the cheap and at the same time request for more and better protection against the more complex threats facing us today. Hence, I fully support the decision to increase defence spending this year. This is a necessary investment in the transformation of the SAF in response to new conditions in the security environment.

Sir, we need to spend more on counter-terrorism measures and to continue with our systematic efforts to modernise and upgrade the conventional warfare capabilities of the SAF. The challenge is to identify what mix of existing and emerging systems and capabilities is required to deal with the threat environment while also exploiting our own technological secret edge. With the emphasis towards military transformation, I would like to urge the Ministry of Defence to spend more on R&D. This would strengthen its indigenous defence technological capability tailored to our own specific environment and needs as part of our deterrence policy.

Currently, Singapore invests some 4% of the Defence budget to defence R&D. But to progress further in developing our own technological edge, we need to be bolder. In January this year, I was privileged to be in the delegation to France to witness the launch of the RSS Formidable. It is the first of six new frigates. They are

highly capable warships equipped with advanced combat systems. I noticed that, while the hardware was built in France, the more sensitive software was developed in Singapore. For instance, the command and control of the various sensor and weapons systems onboard each frigate are achieved via an indigenously designed Combat Management System (CMS). This system was developed by the Defence Science and Technology Agency (DSTA) with the cooperation of its partners. It is the first system designed with embedded intelligence for track management, identification and weapons assignment functions.

Such developments keep us ahead of the pack. They also help us to compensate for our tight manpower by leveraging on technology. The DSTA has said that it plans to model the agency after the Defence Advanced Research Projects Agency (DARPA) of the US. DARPA's work is high-risk and high payoff. But its success may result in dramatic advances for the US military.

Given the importance of R&D, I would like to ask how much we intend to spend on R&D, and what are the strategic thrusts of DSTA.

Sir, Singapore's defence expenditure is something that this House has always supported, and I am very happy that many analysts have always complimented Singapore that it is always money well spent. In fact, Tim Huxley, a famed defence analyst, wrote in an article "Singapore and the Revolution in Military Affairs", that for less than $5 billion annually, MINDEF and the SAF provide Singapore with a remarkable range of military capabilities. In Singapore's immediate regional context, these capabilities presently outclass those of any potential opponent in conventional military terms, and I know the SAF strives for quality,

transparency and getting the best for the defence of Singapore.

Sir, in this regard, while I am aware that defence spending has gone up due to three primary reasons, ie, high cost of new acquisitions, high cost of R&D and high salaries, I would like to ask the Minister how do we ensure that while we spend substantial amounts of money in procurement, we also ensure that substantial money is also spent locally and that there is spin-off for local industries and R&D efforts. I would also like to ask the Minister what checks and balances are there in place to ensure proper and adequate spending of the defence money. Lastly, how do we ensure that we always get value for money for our expenditure?

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Sir, no one ever said that maintaining SAF as an effective and credible fighting force to defend our homeland is going to be cheap. However, we have, over the years, been able to build up the SAF into a highly regarded organisation, while keeping a cap on the SAF expenditure at no more than 6% of GDP. Our Government has consistently maintained a high level of expenditure, even when the economy seems uncertain.

Our budget policy towards defence spending raises one basic issue. Should we continue to spend so much or even increase our defence budget when the economy does not appear to be so robust? Sir, to be sure, the issue has been raised in previous years, and will no doubt be an evergreen issue as MINDEF, together with the other Ministries, will have to compete for limited resources that are available. In terms of total expenditure in absolute terms, the actual amount that the Government is spending this coming fiscal year on defence is definitely going up by 4.5% over 2003's budget. This is quite a significant increase.

I would therefore like to ask the Minister why there is an increase in our defence spending. Secondly, whether MINDEF has made every effort into ensuring that increases in expenditure could not have been partially offset by other savings within the organisation.

Mr Heng Chee How is not here. Dr Maliki.

Sir, the budget for MINDEF has not been reduced despite the economic situation. We have heard so many in the House say, in fact, that it has been increased - the only Ministry that has not had its budget cut.

While many will not argue on the importance of defence, some in the House have argued that other Ministries like the Ministry of Education perhaps, also deserve equally important attention and hence, should not have their budget cut.

Sir, in this regard, we cannot take our security for granted. I would like to ask the Minister: how can MINDEF justify its budget and expenditure? What are the proposed plans for the SAF in the next five years with this budget?

Sir, the public may be asking that while they hear that the SAF needs more funds, they only hear of accidents, mishaps, financial improprieties and record rigging in the SAF through the media. Sir, such negative media reports do not do justice to the amount of work that MINDEF has been doing over many years.

Thus, I would like to ask the Minister if there are sufficient public education efforts in ensuring that the public understands what the money is spent for

or why we need good defence spending so that the public continues to have confidence in the SAF.

Sir, senior officers at the recently concluded air show said, as reported in the Today papers, that, "The cost of buying military equipment and low value purchases are rising and taking their toll on military expenditure."

In view of the expected contractions in the budget of the various Ministries over the coming years as the economy is not as good as in the past, what is the Ministry going to do about the possible overall reduction in budget that may even take place in the Defence budget over the years? How do they intend to tackle this rising cost problem, especially in the purchase and use of advanced military technology?

On another matter, Sir, there are two ways of achieving peace - harmonious relations through diplomacy and cooperation versus deterrence. The first choice is always the better, as it is less threatening and promotes the spirit of mutual cooperation, understanding and win-win attitude. This is especially happening now in Asia and around the world. In view of the rising trend towards greater economic cooperation and trade pacts, do we still need to continue investing heavily in those latest and most advanced but also highly expensive weapon systems? The truth is that military hardware is expensive and constantly requires costly maintenance. So if we can pursue a strategy of peaceful cooperation and recognise that the threat of traditional warfare is low, should we also not look into reducing our expensive military arms purchase, while focusing more on terrorism-related defence expenditure?

Mr Chandra Mohan is not here. Dr Ong.

Training and Safety

Sir, in the past year, the SAF has unfortunately, suffered a number of deaths in training incidents. I would like to ask the Minister what lessons are being drawn from such incidents and what safety measures have been put in place to prevent the recurrence of such incidents.

And despite all these measures on safety, another unfortunate explosion happened at the Armour Training Centre at Sungei Gedong in February this year. According to reports, an ammunition was stuck in the machine gun. The officers and men should have left the machine gun at the range and asked for a weapon specialist to deal with the problem. Instead, they brought it back to the barracks and foolishly tried to deal with the problem themselves.

Again, the safety measures were there, but the men did not follow the safety measures nor did they exercise good judgment. This illustrates the point that you can put all kinds of safety measures in place, but it is even more important that the officers and men abide by them and constantly cultivate the habit of safety.

You can put in a good system of safety, but quite often, it is not a system failure at all, but failure on the part of the men in implementation, in forging a safety culture and in having the habit of safety. This culture of safety must prevail and permeate throughout the SAF. Thus, besides instituting safety measures, the SAF should do much more to promote safety awareness and instill in each and every man, the importance of safety right from the very beginning of their recruit days. It should become second nature to the men.

We must do everything possible to uphold safety, as the lives of our sons and

loved ones are at stake. I also wish to ask the Minister whether our field or back-up medical facilities are adequate for the type of training they are undertaking. Further, whether compensation for our NSmen is adequate. If not, whether they should be revised to recognise the sacrifices of our NSmen.

Sir, we have had this debate on training safety several times in this House. Each time, MINDEF will take pains to assure parents of our National Servicemen that their children are in safe hands. I have no doubt that the Government is very serious and committed that our soldiers train in a safe environment and that no expenses will be spared to ensure maximum safety in all circumstances within what is reasonably possible for them.

What I would like to caution is that no amount of improvements to safety standards is going to guarantee that there will be no accidents in training. As we have heard earlier, very often accidents can happen because of human error and miscalculations. And even if MINDEF makes every effort to improve the safety environment, accidents do and will occur.

Perhaps the issue is not whether or not MINDEF convenes an enquiry each time an accident takes place or training standards are reviewed regularly. What matters is how we rank, in terms of safety standards. It would help the public if MINDEF would perhaps have a benchmark that measures their safety level against the training safety level in comparable armed forces elsewhere. This would provide a better comparison on the extent to which MINDEF has paid attention to training safety and would also, at the same time, provide much assurance to parents that their children are in safe hands. I cannot reasonably expect my son, when he goes to National Service, not to be in danger. But if I know that the odds of getting hurt in a

road accident are higher than when he is training under the SAF, for me, speaking as a parent, I will be very much assured indeed.

Sir, the recent explosion incident at the Armour Training Centre and the training deaths last year highlight the need for an effective audit system for training safety.

Last year, as part of the review of training and safety systems, several measures have been proposed to enhance the SAF's audit system. They include introducing a safety hotline within each formation which is supposed to be over and above the existing feedback channels to allow servicemen a dedicated chance to give feedback and report safety breaches and bad practices. I just want to ask the Minister whether this has been used and whether it has been useful. I also want to ask the Minister about another measure that has been proposed, which is for benchmarking purposes, that the Army is considering engaging an independent external agency to validate the effectiveness of the safety and audit systems. I would like to ask the Minister whether there has been any decision on this and whether external agencies have been engaged.

I also want to add a point to what my colleagues have said about human errors. It is true that human error is hard to predict and control. But we can try to minimise it. But on the other hand, in minimising it, in seeking to ensure safety, I hope that our SAF will not swing to the other end, be so safe that our training lacks the vigour and toughness that it needs to produce a strong SAF.

Dr Warren Lee is not here. Mr Low Thia Khiang is also not here. Dr Ong.

SAVERS Scheme

Sir, some years ago, the SAVERS Scheme was introduced by MINDEF with much fanfare. The SAVERS Scheme aims to give flexibility and a good return to the regular officers of the SAF, upon their retirement or completion of service.

I understand that some regular officers have lamented that they are not getting good returns from the SAVERS Scheme. They feel let down.

I also wish to ask the Minister if the SAVERS Scheme has lived up to its expectation, and whether the SAVERS Scheme should be revised in view of the recent results. The point is: what can the serving officers in the SAF look forward to in the future?

Dr Tan Cheng Bock is not here. RAdm Teo.

Sir, first of all, I would like to thank Dr Ong Chit Chung, Ms Irene Ng, Mr Ravindran and other hon. Members for their comments and questions on this critical issue of Singapore's defence and security. What they have said reflects a general recognition that our strategic environment is a difficult one, and the challenges we face in our efforts to enhance Singapore's security have also become more complex.

The spectrum of missions that the SAF has to deal with has expanded in recent years. The SAF will have to meet these increased demands for many years to come. In the area of non-conventional threats, the tide of the extremist ideology which is the well-spring of catastrophic terrorism shows no sign of abating. More than two years after the September 11 attacks, Al-Qaeda and its affiliates, even in our region, are still actively recruiting

and training, and plotting to launch attacks, after having succeeded in two devastating attacks in Bali and Jakarta. Many Southeast Asian countries are on the hit list, including Singapore. The Government's efforts to prevent such attacks and to protect our people are of the highest priority because the danger is clear and present. The SAF works closely with the Home Team and other Ministries, with the DPM and Co-ordinating Minister for Security and Defence, Dr Tony Tan, coordinating these efforts. These efforts require the commitment of MINDEF and SAF resources, manpower and capabilities, for example, to protect key installations from air, sea and land threats. It also requires ideas and research and development (R&D) to deal with scenarios that are very different from what we have been used to, such as to protect civil airliners against surface-to-air missiles, maritime terrorism and biological, chemical and radiological threats.

Ms Irene Ng has asked what we are doing about beefing up security on our trains, in view of what has happened in Madrid. I should say that we do not look just at particular events, but we have to look at this in a comprehensive way. We adopt a comprehensive approach to national security, rather than taking piecemeal measures and the security of our MRT system is something that has been carefully considered in our national security plans, particularly by the Ministry of Home Affairs and the Ministry of Transport. It requires a combination of good intelligence to identify threats before they can launch their attacks, hardening potential targets with heightened security measures, imposing very tight controls on the movements of explosives and other dangerous materials, good border controls for immigration and customs. But even with all these efforts, we cannot afford to be complacent and the security agencies will be maintaining a high level of alert as long as there is a potential threat. But our defence efforts also require Singaporeans

to be alert, as the total defence of Singapore is not complete without participation of every Singaporean.

In addition, we will have to continue to work with other governments because no country, on its own, can effectively counter this transnational threat that respects no borders. Cooperation in the form of intelligence exchange, is particularly important, as Mr Sin Boon Ann has suggested. Our intelligence agencies are recognised by their counterparts for their professionalism and ability and I have no doubt of their capability and their ability to maintain the independence of their advice and reporting.

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Singapore's intelligence agencies have good ties with friendly counterparts worldwide and these links have reaped significant results such as the arrest of key terrorists in Singapore, Malaysia, Indonesia, Thailand and the Philippines. As Ms Irene Ng has suggested, international cooperation in enhancing maritime security is yet another critical area,

especially in waterways used for international navigation such as the Malacca Straits. The Malacca Straits is a strait which has several littoral countries and it is not possible for just a single country to be able to ensure security there. It requires international cooperation. In this regard, Singapore is working with the countries in our region, as well as other countries which share these security concerns, such as Japan and the United States. At the bilateral level, we have been cooperating with Indonesia in conducting coordinated patrols in a designated area of the waters in the Singapore Straits for many years. This cooperation has been very successful in tackling the problem of piracy. With the exception of a short period, in 1998-99, when Indonesia was going through a particularly difficult period, there have been no pirate attacks in this area since

the coordinated patrols started with Indonesia in 1992. Within Singapore's own waters, the Navy and Police Coast Guard have taken various measures which were detailed last week by my colleague, the Minister for Home Affairs, in this House. I agree with Ms Ng that more needs to be done in this area, and the inter-ministry Maritime Security Task Force, chaired by the Permanent Secretary of Defence, is studying what further measures can be taken.

Countering the proliferation of weapons of mass destruction also requires international cooperation. Singapore has contributed to the global counter-proliferation effort by tightening up our export controls and participating in the Container Security Initiative. The SAF has been taking part in the multinational Proliferation Security Initiative (PSI). Our LST, for example, participated in Exercise Sea Saber, a US-led Maritime Interdiction Operation exercise in the Arabian Sea in January that involved 12 countries. We will be observers in a German Customs exercise in Frankfurt, an Italian exercise in the Mediterranean, and a French air exercise in Paris, over the next three months. The SAF is also looking at hosting a multilateral PSI exercise in the future.

We are committed to countering the proliferation of weapons of mass destruction and terrorism, especially as the confluence of the two threats, the possibility of such weapons falling into the hands of terrorists is a real one, and there would be untold consequences of such an attack on a city-state like Singapore.

The threats of terrorism and weapons of mass destruction proliferation underscore how our national borders no longer are the boundaries of our security. As a small country which is so open and connected to the rest of the world, developments elsewhere in our region and

even further afield will have repercussions for our security. And this is a key reason why we have sent SAF contingents to take part in the UN peacekeeping mission in Timor Leste and the coalition mission for the reconstruction of Iraq. Instability in Timor Leste would have had serious implications for the rest of our region, and it was important that we play our part to help to restore stability to this young nation.

In sending an LST and a C-130 transport aircraft to the multinational mission in Iraq, we recognise that there are significant risks involved. But restoring stability in Iraq and re-integrating it into the global community is vital for a stable Middle East and for global stability in general. If the multinational mission in Iraq were to fail, Iraq could quickly become a hotbed of terrorist activity which would embolden terrorists all over the world. The consequences of this will, sooner or later, spread to our region and arrive at our shores.

Dr Ong Chit Chung has asked for details of our participation in multinational missions. The criteria for deciding on our participation would, first of all, be the strategic considerations I have just spoken about. In addition, the SAF conducts a careful study of the operational requirements of each mission to determine what we can contribute which would add the most value to the mission. Singapore is not in a position to send large numbers of troops, but we can contribute SAF personnel and assets that can make a useful contribution, such as a company of combat peacekeepers, a medical team, a helicopter detachment, and a Force Commander in UNMISET in East Timor; and an LST doing security patrols in the Arabian Gulf and a C-130 flying supply and medevac missions into Iraq.

In all, about 1,500 SAF soldiers, sailors and airmen have participated in the Timor Leste and Iraq missions. The

personnel deployed on such overseas missions are regular servicemen, but we also accept National Servicemen when they volunteer. Many full-time National Servicemen came forward to volunteer to serve in Timor Leste and Iraq. Those who were accepted converted to regular service for the period of the overseas mission. They served with great professionalism and did Singapore proud.

The SAF's participation in these operational missions is valuable for enhancing the professionalism of our personnel and reinforces their confidence in their equipment and in their training. They operate under difficult conditions, facing real-life challenges and dangers. Our LST spent a total of 42 days on station in the Gulf, queried over 250 ships over these 42 days and boarded and searched over 70 of them, which was almost two a day. Our C-130 commenced operations in the Gulf from 9th February and is tasked to fly missions into Baghdad, Kirkuk, Mosul, Tallil and Basra. Our men and women work closely with other armed forces and, in the process, learn from as well as benchmark themselves against their foreign counterparts.

Sir, I was heartened when the New Zealand Defence Chief told me recently that the SAF peacekeepers in Timor Leste had been highly professional and an asset to the New Zealand Defence Force battalion to which our unit was attached. The New Zealanders are seasoned and highly regarded peacekeepers. So this was a worthy endorsement.

Sir, as you can see, we have responsibilities and contributions to make as a responsible member of the international community. We have to get involved in international issues which have implications for our security. And, we have to work with other countries to fight transnational threats.

Peacekeeping, counter-terrorism and counter-proliferation are relatively new roles for the SAF. They add to, and contribute to, but do not supersede the fundamental mission of the SAF. The SAF is, first and foremost, for the defence of Singapore. The SAF is the defender of our sovereignty and territorial integrity.

Singapore wants positive relations and mutually beneficial cooperation with our ASEAN partners and friends. In MINDEF, we actively pursue this through our policy of defence diplomacy. Apart from building closer defence relations with our ASEAN neighbours, Singapore signed a Defence Cooperation Agreement with India in October last year, and we are discussing a Framework Agreement for a Strategic Cooperation Partnership in defence and security with the US.

But while we pursue defence diplomacy, we must recognise that our strategic environment remains fraught with uncertainties. The flux which has characterised the regional situation over the past few years has not entirely settled. Dr Ong Chit Chung has reminded us of the uncertainties that we must always be prepared for. When things are going well, we should not be too elated or become complacent. Nor should we be too disheartened or discouraged when things take a turn for the worse. The SAF provides us with the confidence to face any eventuality with equanimity.

Because we have always been prepared to make steady investments in our defence, in both good times and bad times, we have been able to maintain an even keel whether there are smiles all around or we are being harangued. We can calmly carry on with our lives in the face of pressures or even saber-rattling. The SAF gives us that political room to confidently proceed with policies which best serve Singapore's interests instead of being forced to dance to the tune of

others. The SAF is the insurance policy that allows us to navigate steadily and securely. It provides the solid foundation for our economic development and social progress.

Sir, I would like to assure Dr Ong Chit Chung, Mr Ravindran and Dr Maliki that the operational readiness of the SAF is one of our highest priorities. The SAF cannot be an effective deterrent unless it is operationally ready. The modernisation and upgrading of our capabilities is an ongoing process, carried out on the basis of sensible professional considerations. Should our servicemen ever be called to battle, they must have the weaponry and equipment that give them the advantage. Our training is serious and rigorous. There is a cycle of exercises to test our doctrines, our weapons and equipment, and our men, and to do all this at different unit levels.

We also carry out regular mobilisation exercises. Dr Maliki will be pleased to know that the turnout rate in the SAF's mobilisation exercises is consistently 95% or higher, and often close to 100%. Civil resource mobilisation exercises have also recorded similarly high positive result. This means that our units will be fully manned within six hours of recall and ready to do their duty, armed with capabilities which give us a significant edge over any potential adversaries.

Sir, I would now like to turn to what is the key initiative in MINDEF, one which we have embarked on to ensure our security for the future and not just to defend against today's threat. While we maintain our operational readiness, we are also looking ahead and developing capabilities to enable the SAF to stay ahead in the next decade and beyond. The Iraq war last year showed us how the revolution in military affairs will change the way in which wars are fought. The

devastating effect of precision strike, for instance, was decisive. In World War II, it was estimated that it took 9,000 bombs brought out by waves of bombers to ensure a successful strike against one strategic target such as a command HQ or a key bridge. In the Iraq war, just one aircraft flying a single sortie could destroy several strategic targets by dropping one or two precision-guided bombs with pin-point accuracy on each target.

This was also possible because the US and coalition forces had superior information of the battlefield, made possible by the latest communications, network and sensor technologies. Such technological possibilities - and there are many other exciting areas of technological developments - will fundamentally change the nature of warfare in the future. The advantage in the battlefield of the future lies with the force that can harness technology to make maximum use of these transformational capabilities. Platforms, manned and unmanned, weapons and sensors that are fully networked into such a fighting system will have their combat power magnified many times. Tanks or ships or aircraft operating on their own, which are not so networked and which are capable of operating only in the conventional way, may find that they are merely targets.

The transformation of the SAF to exploit these rapidly emerging possibilities is a strategic imperative. But, it is not something that can be achieved overnight. To introduce new concepts of operations and new technologies requires experimentation and research and development. It will ultimately lead to changes in organisation, less demand for conventional platforms, more demand for less visible technologies like information system,

precision weapons, electronic warfare systems, unmanned platform technologies, and a new type of soldier who is trained to exploit these capabilities. This is a major and strategic effort

we have already embarked on, but it will take time.

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We recently set up a Future System Directorate to take the lead in exploring and experimenting with how technology can be harnessed to develop superior and innovative concepts. MINDEF considers this effort so critical that we have set aside 1% of the defence budget for experimentation, over and above the 4% to 5% we set aside each year for research and development (R&D). The newly created SAF Centre for Military Experimentation is already conducting various experiments in a virtual environment. The SAF also started conducting experiments outside the laboratory, during exercises, to test out new concepts under real-life conditions. For instance, when I visited Australia last year, I was able to see some experiments with new command and control concepts and systems for future land battles fielded for the SAF's Exercise Wallaby.

While MINDEF will continue to modernise the SAF, such as through the acquisition of the Next Generational Fighter, the effort in transformation will eventually see a third generation SAF emerging over the longer term. This will be an SAF that has enhanced capabilities through exploitation of new concepts and technologies, an ability to fight across a wider spectrum of operations, flexible, and much more efficient in the use of resources.

The SAF has, for many years now, been exploiting technology as a force multiplier and investing significantly in R&D locally as well. We have built up many centres of excellence in a number of high pay-off strategic transformation technologies - such as comprehensive awareness, network-centric warfare, electronic warfare, and precision strike - in the Defence Science and Technology

Agency, DSO National Laboratories, and Singapore Technologies Engineering. Our local laboratories and industry have a solid depository of the technologies that are needed for the future.

While I am unable to describe many of the remarkable achievements and capabilities because they are classified, I can say that some of these are in technologies one reads about on the war in Iraq. But given the importance of their work in developing the third generation SAF, MINDEF intends to showcase some of these technologies at an exhibition later this year that will coincide with the Defence Technology Prize Award ceremony. In addition, I would be happy to invite Members for a visit to the Defence Science and Technology Agency to view some of these technologies.

One of the key advantages that we have is that we are fortunate that we have well educated soldiers who can easily master the technologically sophisticated weapons and equipment. We also have a strong science and technology base and a solid R&D set-up. These are things which no country can create overnight, and which we are fortunate that we have built up both nationally and within our defence establishment and industry over many years. The implications for the SAF are profound. It means that we will not be held back by numbers. A small population will not be a constraint on our ability to defend ourselves and to deter would-be aggressors. Our technological edge and our transformational capabilities will not only neutralise but more than compensate for this.

Sir, the transformation of the SAF is a critical initiative. It is an effort to make sure that Singapore is safe not just for today, but for our children and our children's children. That is why we must continue to invest a portion of the defence budget for transformation, for

research and development. That is why the Government is prepared to invest a significant share of the budget in MINDEF.

Maintaining operational readiness and transformation are both key priorities for the SAF. One priority, operational readiness, ensures that the SAF can carry out the missions required of it to defend Singapore against the spectrum of threats to our security - a spectrum which has grown both in range and complexity. The other priority, transformation, ensures that the SAF continues to be a credible deterrent for many years to come, sustaining the clear edge over potential adversaries, equipped with the capabilities to fight the wars of the future.

Sir, I am happy to note the firm support for defence investment which has been expressed here today by several hon. Members. The firm commitment of our people to the defence and security of Singapore has allowed the Government to maintain a steady and prudent course over many years in the development of our defence capabilities. Ours is not a feast or famine approach. We do not splurge in good times nor do we cut back and leave ourselves exposed in difficult times. Defence capabilities cannot be built up in fits and starts. Singaporeans understand that the optimal development of defence capabilities takes time and careful planning with a long-term horizon.

Defence is not an optional extra for Singapore - it is critical for a small state for which there will be no second chance if we lose the first battle. Defence spending is the largest part of our budget by far, reflecting the importance the Government and people attach to ensuring Singapore's security and the seriousness we put into the effort. The Government is committed to spending up to 6% of GDP on defence. We have been spending between 4.5% and 5% for several years

now. MINDEF has requested only for what is needed to ensure our defence, and has not always asked for the full amount. We will keep to this policy. MINDEF is committed to prudent spending.

Sir, allow me to elaborate on some of the measures MINDEF and the SAF have adopted to stretch each dollar of our defence expenditure to get maximum value. The MINDEF Productivity and Innovation Committee is chaired by the Minister of State for Defence. The MINDEF Economy Drive Committee indeed has been in place since 1976. Over the last few years, the Committee has helped MINDEF to make cost savings of an average of $125 million a year. Last year, the saving was $195 million, or 2.37% of the defence budget. The savings are effected without compromising operational readiness and effectiveness and allow these resources to be ploughed back to develop other areas of defence. MINDEF's Economy Drive effort is the analogue of what the civil service has adopted in its Economy Drive campaign. At the individual level, a strong culture of cost consciousness and striving for improvement is encouraged. In the last quarter alone, the SAF suggestions scheme yielded cost savings of $62.7 million. This amounted to $144 of savings for every dollar that MINDEF and the SAF awarded servicemen for the suggestions that they put up.

We have also been able to leverage on technology to increase productivity and stretch our defence dollar. For instance, the SAF uses some of the most advanced simulators in the world. These simulators have improved training effectiveness in such areas as armour and marksmanship training, flight training, and navy procedural and tactical training. They have both increased the effectiveness of our forces and reduced the cost of training.

At force structure level, we have stretched our defence dollar by upgrading

our platforms where possible, and replacing them only when they are no longer cost-effective to deploy. Our A-4 fighter aircraft and missile gunboats would have been upgraded several times and been in service for 25 to 30 years by the time they are replaced. In fact, they are older than most of the servicemen who serve on them.

In manpower productivity, our artillery guns are a good example. In earlier days, we needed 12 men to operate each 155 mm gun. Then we developed locally our FH-2000 which needed only eight men. Last month, I was in New Zealand with Dr Ong where we carried out the first live firing exercise of the Primus, our Singapore Technologies built self-propelled 155 mm howitzer which has improved mobility, faster response time and more lethal firepower. It requires a crew of only four National Servicemen. Over a decade, we have increased manpower productivity three-fold for our artillery guns. We were able to do so through innovation in operational thinking and engineering, and also because we could leverage on the increasing proportion of A-level and Diploma qualified men in each cohort to operate these systems.

Hon. Members have asked about the effect of a lower birth rate. This is not a new challenge for the SAF. The Ministry of Defence and SAF have had a policy of zero growth in regular manpower establishment since 1986 while cutting down on the requirement for full-time National Servicemen. This is possible despite the greater demands on the SAF and the deployment of more capabilities, because of productivity improvements and constant attention to restructuring in both front-line units as well as support units.

Outsourcing is one important cost-saving measure. For instance, Members may not be aware, but we now do our air-grading, ie, how we identify those with

flying potential, in a place called Tamworth in Australia. It is a commercial arrangement where we do not even own the aircraft. We provide the key people to do the assessment but we do not own the aircraft and we do not maintain the aircraft. The savings from doing our air-grading in Tamworth, instead of the previous way of maintaining a fleet of our own trainer aircraft, has resulted in savings of $7 million a year. Yet another example is the maintenance of our C-130 aircraft for the operation in Iraq. Members may not realise that the maintenance of the C-130 has actually been outsourced and together with our pilots and crewmen operating in Iraq, are ST Aerospace technicians who service the aircraft when the aircraft returns from a mission.

There are other initiatives which MINDEF has pioneered in the civil service to cut costs. One example is how we commercialised our logistics through the setting up of the Army Logistics Base. In a private financing initiative arrangement, a commercial company put in the investment and MINDEF assured it of a multi-year contract.

To address Mr Steve Chia's comments, all investments in new capabilities go through stringent assessments of requirements in relation to the SAF's missions and war-fighting strategies. Our current programme to select a New Fighter Replacement is a case in point. It is being watched closely by the aerospace industry and other air forces because, as the Financial Times said in an article last year, "much of the intensity is due to Singapore's reputation as a 'reference customer', one of a handful of countries that carry weight because of the stringency and transparency of their procurement process."

Sir, when we buy weapons and we look at them, our engineers and our people do so very seriously and with a

keen eye to cost-effectiveness, to make sure that we make the most of our defence dollar. Our engineers and procurement officers ensure that we get the most cost-effective systems, and we undertake creative sourcing, strategic cost previews and cost audits. As an example, we started using reverse auctions for procurement in 2001, not something always that our suppliers like or enjoy. This procurement method has yielded an average 10% savings over traditional methods. We have activated about $100 million worth of reverse

auctions per year and this has generated an average of $10 million savings each year. For the Ministry of Defence, such efforts are not merely driven by financial considerations. Taken together, they give the Ministry of Defence a real strategic advantage by ensuring that we get maximum value for each and every defence dollar that this House votes for MINDEF.

2.15 pm

Sir, Dr Ong Chit Chung, Mr Tan Soo Khoon, Mr Sin Boon Ann, Dr Tan Cheng Bock, Ms Irene Ng and others - Dr Tan Cheng Bock is not here, but he mentioned this to me outside the House - raised the issue of training and safety. The interest in this subject and the concerns that have been expressed are fully understandable and well placed given that almost every Singaporean family has a son or husband, or other male relative, who is a SAF serviceman doing National Service. I would like to reiterate the assurance I gave Parliament last October after the tragic deaths of three SAF servicemen doing training. The SAF will train our servicemen hard and train them realistically for the defence of Singapore, but we will never compromise on safety nor risk the lives of our servicemen during their training. I am heartened by the very mature response of Singaporeans and Members of this House. Singaporeans

understand the need for the SAF to have tough and realistic training. Many have told me so. But they also expect the training to be conducted safely, and rightly so. They must also have the confidence that if, in spite of the procedures and checks in place, an incident does occur, that MINDEF and the SAF will deal with it professionally and in as open a manner as possible, to uncover any problems and shortcomings, learn from them and prevent a recurrence.

The SAF has completed a full review of its training safety system. The review affirmed that we have in place a strong safety system to support our training. The safety structures, processes and procedures that had been developed over the years are robust. The review also found that for the safety system to work most effectively, there must also be a strong safety culture. This has been pointed out by Members of this House - Dr Ong, Mr Tan and others. And this is one of the areas of focus of the SAF's efforts to further improve training safety. The enhancement of a safety culture includes emphasising openness, command responsibility and an attitude of performing one's job professionally and safely. Safety hotlines have been installed in all three Services to encourage feedback. The SAF has also taken steps to ensure that not just accidents, but near-accidents are thoroughly investigated and lessons learned from them.

Besides enhancing the safety culture, the SAF has also improved the dissemination of safety information within its ranks. A knowledge management system for safety information is currently being set up. The SAF is also studying trend forecasting methods to anticipate and address potential safety problems before they arise.

The review of the training safety system included a full review of lesson plans to ensure that they are up to date.

To make sure that training is actually conducted in accordance with the lesson plans, we have stepped up senior commander visits and audits by the Service inspectorates. All instructors and all army commanders now undergo safety-related training before they take up their posts, so that they are well equipped for field training. In addition, all three Services have beefed up their inspectorates and safety sections with additional staff. They are also looking into how best to engage external safety auditors so that we may further improve training safety. We are also benchmarking SAF safety standards against those of established armed forces.

The review concluded that medical coverage for SAF training was adequate. Nonetheless, we have made a number of improvements to the medical support system. Training centres now have advanced resuscitation equipment, such as defribillators. Additional training for first responder resuscitation is conducted for both medical and non-medical personnel. This means that more and better firstline medical response can be provided in the field. The training for medical vocationalists has been revised so that our doctors and medics are current in advanced life-saving skills.

The SAF is working hard to maintain high training and safety standards. The review that we have just completed has led to several measures being implemented, as I have enumerated. But safety has to be a constant, ongoing concern. And I assure Members that attention to safety will continue to be of the highest priority for the SAF. We have a substantially good system, but we know that we can always try harder and improve, and we will.

Sir, on a related matter raised by Dr Ong, the issue of compensation for SAF servicemen was raised in Parliament last October. I informed Parliament then that MINDEF would carry out a review of the

compensation issue. MINDEF compensates servicemen for death and injury sustained due to military service in accordance with the SAF Regulations. While the basic compensation provided is based on the provisions in the Workmen's Compensation Act, MINDEF also has the flexibility to pay up to 30% in additional compensation in cases where circumstances merit this. In exceptional circumstances, MINDEF has also paid compensation beyond the 30% cap.

The principles that MINDEF applies in computing the compensation amount are consistent with the legal principles applied by the civil courts in assessing damages for injuries and deaths. I am satisfied that MINDEF's current framework is essentially adequate to provide fair and reasonable compensation to our servicemen.

I have directed MINDEF to formalise these arrangements into a framework for compensation. This framework will provide greater clarity for decisions on compensation for deaths and injuries sustained due to military service according to the merits of each case.

In addition, I have asked that for the purpose of compensation, MINDEF treats full-time National Servicemen and NSmen on par with regular soldiers. This means that for deaths due to service, we will also provide a lump sum pension of a minimum of one year's equivalent of a regular's pay in addition to the compensation.

Aside from compensation, there is also a range of additional benefits, such as welfare grants from the SAF Benevolent Fund and a dependants' pension depending on the family's financial circumstances. There is also a comprehensive group insurance scheme which our soldiers are encouraged to take up. It provides coverage of up to $400,000 at affordable premiums of $16 per month for every $100,000 of coverage.

Sir, MINDEF knows that no amount of compensation or benefits will alleviate the grief or make up for the loss to the serviceman's family. However, with these improvements to our compensation framework, we will be in a better position to compensate our servicemen's families as fairly as possible.

Sir, Dr Ong Chit Chung has asked about the SAVER Scheme. We have a policy of keeping the SAF young. With the threat environment and war-fighting becoming ever more complex, the timely renewal of the SAF leadership is key if we want to keep the SAF dynamic, vigorous and forward-looking, with a constant supply of fresh ideas and receptiveness to new concepts and change. This is the best way to make sure that our generals are always prepared to fight the next war and not be trapped trying to fight the last war.

In 1998, MINDEF implemented a 23-year career for our officers. This maintains a balance between the requirement for experience while ensuring timely leadership renewal. This also means that the individual officer is still young enough to acquire the skills and knowledge to make a switch in career, and he has enough working years left to have a meaningful second career.

To support this new career structure, MINDEF introduced the SAVER Scheme. This scheme offers our officers accelerated career advancement and a very good salary and benefits package. A key feature of SAVER is a generous superannuation scheme to support their transition to a civilian career when they leave the SAF. This is designed such that an SAF officer in his 23-year career would earn close to 75% of what his private sector counterpart would earn in a 40-year career. Since its inception, the SAVER Scheme has met its objectives of

improved recruitment and retention of officers and timely leadership renewal.

Currently, MINDEF is enhancing the career transition programme to provide better support to those officers who are leaving as the employment environment in recent years has been more difficult. The programme offers career counselling, networking opportunities and outplacement services in preparation for their career transition.

Dr Ong has also referred to some complaints by retired officers that they did not get good returns from the SAVER Scheme. Let me exaplain. The SAVER fund is no different from other pension funds which are invested, and we have explained to our officers that they should take the long-term view. In fact, the returns are slightly higher than the benchmark which the fund compared itself to. SAVER benefits are invested with a view to giving good returns over the long term, based on a strategy of balanced asset allocation. There may however be a few years when the performance of the fund is negative, and there may be a small minority who leave the SAF at that point where the returns are negative. The performance of the fund, as I have said, so far has been better than our benchmark, and better than numerous established pension funds in the market. Our officers also have the option to move. They can move their retirement benefits into a more conservative portfolio two years before their retirement, depending on their risk appetite. But of course, if they do that, and if the investment makes exceptional gains in those two years, then they will not benefit from those exceptional gains. So those are the risk return benefits. However, having now run the fund for about six years, MINDEF is reviewing the fund structure to fine-tune it to see whether there are more options that can be developed to meet the needs of the

fund members at the various points of their career.

Sir, good and strong leadership in the SAF is vital and cannot be compromised. MINDEF will ensure that our employment schemes continue to attract officers of quality which can meet the demands required of those who shoulder the responsibility of safeguarding our nation's defence and security.

Sir, I am most heartened by the degree of support which hon. Members have shown for the need to ensure Singapore's defence and security. Underlying many of the points which they have raised is the recognition that security is the basic building block of our nation's well-being. Without security, economic development and social progress, nation-building cannot proceed. I would also like to take this opportunity to express my appreciation for the support that Members of this House and Singaporeans, in general, demonstrated for the SAF through the difficult times last year. That brought the people and the SAF closer together. It also helped to reinforce confidence in the SAF, and strengthened deterrence.

RECORD III

Sir, recommendations of RECORD III which was convened in the year 2000 were accepted by the Ministry of Defence. I wish to ask the Minister on the progress of the implementation of such recommendation, in particular, how many National Servicemen benefit from the award of bonus points for admission to NUS and NTU. Is it time now to convene a new RECORD IV to further review the needs of the National Servicemen and to further recognise their contributions?

Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Order. I suspend the Sitting and will take the Chair again at 2.50 pm.

Sitting accordingly suspended at 2.30 pm until 2.50 pm.

Sitting resumed at 2.50 pm

Debate in Committee of Supply resumed.

Head J (cont.) -

Dr Warren Lee is not here. Mr Arthur Fong.

National Service

Sir, two years ago, my parliamentary colleague Dr Chong Weng Chiew made a plea for a review for the reduction of the length of National Service term. He argued that, given the advancement of modern technology and the lesser reliance on manpower, would it not be possible for the length of our National Service to be shortened. Sometime later, the then Minister for Defence, DPM Dr Tony Tan, informed this House that MINDEF had studied the request in detail and responded to Dr Chong's plea.

Sir, I wish to take up this issue again for several reasons.

Firstly, MINDEF had anticipated and made preparations in response to our falling birth rate. For instance, I understand that MINDEF is relying more on technology, so much so that the building of assault bridges, for example, no longer requires or relies on a lot of manpower. We have also added more advanced

weaponries that trim manpower needs tremendously. Hence, in this regard, the utilisation of our NSmen need not be a compact two years.

Secondly, we are addressing the falling birth rate, but we cannot be sure of how it will turn out. That being the case, it makes our smaller manpower pool all that more precious. Our youths today face competition not just from amongst their peers, but on the global arena for jobs. Our young graduates, as it is, compete against their peers from some countries with a very much lower starting salary, as they hit the job market two to two and a half years later than, say, a Malaysian, European, Indian or American professional hired here on local terms. Although these and other nationals can augment our pool of professionals and perhaps even given a PR later, our very own young men who bear the responsibility of national defence start a peg below these other foreigners.

Finally, our current employment situation, where workers above the age of 45 are having difficulty in securing re-employment, means our youths need to be economically productive to their family as soon as possible. Many of these NSmen have parents who are in this age group and who are worried that, if they lose their jobs, they will have problems supporting their children through university after their NS stint. A few of such families have described the time when their children are still in NS a very stressed period, as some of them are saying that they are on borrowed time, hoping not to get retrenched or getting the pink slip. Although there was a review and a welcome revision of NS allowances recently, and notwithstanding the importance of national defence, given Singapore's unique situation, the families of many of these NSmen are worried and would like to see their children launch into their career or further studies earlier,

thereby relieving some of the stresses and burdens of the families.

Sir, I would like to suggest that we introduce National Service for our female citizens for a 1-year period, starting from 18 years old. I would suggest that our girls do basic military training for three months, including the use of weapons, and the balance nine months be taken up for basic nursing and nursing related training.

Sir, it is not a new thing for women to do National Service. Recently, the Malaysian government made the girls there do national Service, and the girls in Israel do national service as equals to their men. I believe that basic training in nursing is good for all our girls. It shall equip them to be better and more mature women, and to cope better with life generally. After a period of training in nursing, I believe our girls can manage emergency situations better. They shall also be better housewives. It shall, in a way, prepare our girls to embrace motherhood more readily to help in the procreation policy. The basic training in nursing will make it easier for our girls to take up full-time nursing as a career, and to be able to fill the many vacancies in our hospitals. Even if they do not take up full-time nursing, the training can make them deal with life better.

In Singapore, we do not have a war situation like in Israel, and there is no need to involve the women to do National Service in combat duties. Our girls, after they complete their 1-year stint in National Service, can be deployed in non-combatant duties, such as in the medical corps, administration or logistics. They can thus relieve a lot of our men from carrying those non-combatant duties. I think, generally, our girls would not object to do 1-year National Service. They get to mix with the guys, and they are in a better position to find a boyfriend or a husband.

Sir, Mr Arthur Fong has raised the issue of the declining birth rate on National Service. I support his concern. The declining TFR highlighted by the DPM in his Budget Statement has its implications for defence a decade or so down the road.

Sir, ours is a national service doctrine, based on full-time National Servicemen. Furthermore, the full-time NS obligation of two to two and a half years, one of the longest in the world, was established years ago, based on the requirement to maintain a standing force of a certain size. As the number of NSmen has declined from the 1960s to now, how do we maintain a standing force of a certain size must have occupied the minds of the MINDEF establishment. As the number of recruits drops, to maintain the same operational force size, we will need to extend the NS period, or the requirement for the standing force must have changed. There are no two ways about it.

In his statement earlier, the Minister touched upon manpower productivity measures where MINDEF has somehow found a way to work with fewer National Servicemen. As they look down the road 10 years from now, they must have prepared for the day when the number of our National Servicemen will be even much smaller. The Minister has already painted the future of the 3-G SAF, where technical capabilities are becoming more crucial and indispensable in the defence of Singapore. Since war was first pursued, generals have always asked for more men and more weapons. The Chinese proverb duo duo yi shan, which means the more the merrier, was attributed to General Han Xing, who helped to establish the Han Dynasty. In recent times, one is reminded of the American generals in the conduct of the Iraqi war. It was at the insistence of the US Defence Secretary, Mr Donald Rumsfeld, that the US military already had sufficient forces at hand to pursue its campaign that the general reluctantly

went ahead. Otherwise, the military would have waited for more men and more equipment.

Sir, MINDEF would have to live with a much smaller force a decade down the road. Sooner or later, we would have to adopt a different doctrine for a totally different war of the future and not, as the Minister said, wars of the past. Could we have taken advantage of our transformation into a 3-G SAF, thereby reducing the size

of a standing force, even today? If so, could we have moved more aggressively so that we could reduce the full-time and part-time commitments required of our National Servicemen?

Sir, although National Service has been introduced for more than three decades, for a variety of reasons, females have never been enlisted. MINDEF's response has hitherto been that, based strictly on our current defence needs, there is no need to enlist women for NS.

Sir, perhaps it is time to reconsider this policy for three reasons:

Firstly, women have an equal responsibility to men for the well-being of Singapore. Singapore belongs as much to the women as she does to the men. On the economic front, women already have equal access to education and to employment, whilst on the social and political fronts, there are no hindrances to participation and contribution. By the same token, women should not be excluded from National Service.

Secondly, National Service need not be limited to military service. Equally compelling possibilities are nursing and civil defence but not for the reasons that Mr Chiam has given, which appear to revolve around stereotype views. My point is about enlarging the whole concept of National Service, regardless of gender, and not to reinforce stereotype

views that nursing is only for women. Even for military vocations, there are women who are professionally employed currently. As the Minister has said, as technology and knowledge will be applied on an increasing scale, that is, more brains than brawns, the exclusion of women becomes less defensible.

Thirdly, currently, NSmen are recipients of preferential treatment in several ways. NSmen who join the public sector are afforded higher starting salaries. They are given tax reliefs and issued more distributions by Government, for example, the New Singapore Shares. They enjoy membership of SAFRA club facilities. But, most importantly, on an intangible scale, every male has a shared experience that facilitates bonding with one another. Overall, NS has helped foster ties and served as a leveller, and as a melting pot for our diverse cultures.

In a quick survey by the newsapaper, Today, some 45% of the women aged between 14 and 25 years polled said "yes" to NS. Although not all females are enthusiastic about being conscripted, as my two girls will readily tell you, we should bear in mind the bigger picture. The fact that only men are made to serve NS is a form of discrimination. The current policy of enlisting men only fails to recognise the equal role that women can play in the defence of our nation. It also denies them the privileges that their male counterparts are afforded by virtue thereof.

Sir, DPM spoke of forging a strong society which must necessarily entail the contribution of all Singaporeans, both men and women. I do not deny that extending NS to women will increase defence and related spending as well as have potential ramifications for our labour supply. But change is what remaking Singapore is all

about, is it not? I would therefore like to ask the Minister for his reasons for not introducing NS to females.

Sir, National Service has become a way of life in Singapore. Many of us, male citizens in Parliament, have undergone military or Police National Service since its inception in the 1960s.

In the old days, military or Police National Service personnel had to do two or three years of NS, depending on the rank he held. It could be asked: how productive was he during these 2-3 years? What is the productivity level of National Servicemen undergoing 2½ years of NS today? Is there a need to serve that long? Could the Minister consider reducing National Service liability, in a few years' time, say, with effect from 2006 or 2007, to 1½ years instead of 2½ years, so that our young NSmen, while serving the nation, could go on to be more productive in studies and working life as soon as possible? A great deal of their training may be repetitive and unnecessary. Alternatively, NS could be served during university or polytechnic holiday periods.

It has been constantly discussed by our people and leaders whether National Service should be extended to females once they attain 18 years of age. Thus far, the Ministry has not favoured it. Should this be reviewed? Should it be considered on a voluntary basis or should it be compulsory plus voluntary basis, serving perhaps, for one year, and beyond that, on a voluntary basis of another half year if it is going to be 1½ years?

Should they not be given a chance to serve the nation too like men, maybe not in a combat role except those who are really keen to do so? They could easily be assigned to do many jobs in the military or Police, including administrative, planning, medical, etc. Also, this will ensure that they keep fit and will learn and appreciate

what NS is all about and be loyal to the nation.

One thorny issue that crops up often but seldom gets a full airing is the issue of Malays doing National Service. What is the ratio mix of NSmen in the SAF and Police National Service currently? Compared to our population of Chinese, Malays and Indians, what is the percentage of Malays in the military and the Police National Service? What is the percentage in the Army, Navy and Air Force? There is, for many years, the perception that Malays are not to be given sensitive positions in the military. Why not? Is it because of the sensitive Malay-Muslim population in this region and because of Malaysia and Indonesia? Would our Malays be sitting on the fence if there is a conflict between Singapore and Malaysia or Indonesia? What if there is a conflict with India or China? Would the Indians or Chinese be sitting on the fence too?

We should treat all citizens alike and the nation and its leaders must be confident of its citizens to be loyal. During confrontation in the early 1960s, the Malays defended Singapore against Indonesia, so did the Chinese and Indians. There should not be a mental discrimination against race in the Singapore Armed Forces or Police Force National Service.

Sir, I fully agree with Mrs Lim Hwee Hua's call for Government to reconsider the issue of having our women serve in National Service. Apart from the very pertinent reasons that Mrs Lim has enunciated, there is also a very practical issue which I think we should consider.

While compulsory National Service for young men ensures that the Armed Forces will be adequately manned, there are many sectors as well in the country that have to be fully geared and operational in

the case of an impending war or other such national emergencies.

Currently, not an insignificant percentage of the staffing in our hospitals are non-Singaporeans. In the case of an impending war, there is a significant probability that these workers may return to their homes, leaving our hospitals and other healthcare institutions very short-handed, particularly in a situation where the men with National Service obligations will also have been called up.

I expect that this may similarly be the situation in other equally important sectors, besides healthcare. Therefore, I think this is a situation which should be addressed and we should therefore consider the introduction of National Service for Singaporean women. It is important, as Mrs Lim has said, that our women are allowed to serve as well as our menfolk do in the defence of our country. Besides that, there are other reasons and benefits for the women and the nation.

Firstly, opportunities for women to be educated and sensitised to national issues which I think is currently quite a gap, as women transit from school to work and then considering a total involvement in family issues and, therefore, they do not have the same kind of exposure and opportunities as our young men do.

Secondly, increase opportunities for them to foster understanding and bonding across racial and socio-economic classes through the mixing that is possible in the period of National Service. This concurrently enables them to widen their own network of friends and colleagues into the future.

Thirdly, opportunities to pick up skills which will be useful throughout their lives.

Fourthly, opportunities for young women with potential to be identified so that the development to optimise their contributions in future leaderhip roles can be facilitated.

With all of these in mind, I therefore trust the Minister will give this proposal some consideration.

Operationally Ready NSmen