Hansard, 2004-07-20

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) Prof. S Jayakumar 20 Jun 23 Jun 29 Jun 03 Jul 08 Jul 16 Jul Mr Chan Soo Sen 21 Jun 23 Jun Mr Arthur Fong 23 Jun 27 Jun 08 Jul 09 Jul Mr S Iswaran 23 Jun 23 Jun 29 Jun 01 Jul 05 Jul 06 Jul 13 Jul 15 Jul 18 Jul 23 Jul 10 Aug 13 Aug Ms Irene Ng Phek Hoong 25 Jun 27 Jun Dr Lily Neo 25 Jun 27 Jun Mr David T E Lim 26 Jun 30 Jun 13 Jul 17 Jul Mr Lee Yock Suan 29 Jun 01 Jul 17 Jul 25 Jul Mr Raymond Lim Siang Keat 29 Jun 03 Jul 11 Jul 16 Jul 20 Jul 20 Jul Encik Yatiman Yusof 30 Jun 02 Jul 20 Jul 21 Jul Mr Abdullah Tarmugi 01 Jul 01 Jul 18 Jul 23 Jul Dr Ahmad Mohd Magad 02 Jul 09 Jul 21 Jul 25 Jul Mdm Cynthia Phua 04 Jul 06 Jul 11 Oct 17 Oct 16 Nov 20 Nov Dr Vivian Balakrishnan 05 Jul 06 Jul Mr Ang Mong Seng 06 Jul 12 Jul 22 Jul 24 Jul Mrs Lim Hwee Hua 06 Jul 10 Jul 22 Jul 27 Jul Column: 171Mr Ong Kian Min 06 Jul 09 Jul BG George Yong-Boon Yeo 07 Jul 14 Jul Mr K Shanmugam 07 Jul 21 Jul Mr Loh Meng See 07 Jul 08 Jul 12 Jul 17 Jul Dr Tan Cheng Bock 07 Jul 11 Jul Mr Chiam See Tong 08 Jul 12 Jul 18 Jul 28 Jul Mr Goh Chok Tong 08 Jul 15 Jul Mr Wong Kan Seng 08 Jul 11 Jul Dr Balaji Sadasivan 09 Jul 12 Jul Dr Michael Lim Chun Leng 09 Jul 11 Jul Dr Warren Lee 09 Jul 11 Jul Mr Lee Hsien Loong 10 Jul 13 Jul 16 Jul 19 Jul Assoc. Prof. Dr Yaacob Ibrahim 10 Jul 16 Jul Assoc. Prof. Ho Peng Kee 12 Jul 13 Jul Mr Lim Hng Kiang 12 Jul 13 Jul Dr Ong Chit Chung 12 Jul 13 Jul 04 Aug 06 Aug Mr Wee Siew Kim 12 Jul 14 Jul 18 Jul 24 Jul Mr Leong Horn Kee 14 Jul 19 Jul Mr Cedric Foo Chee Keng 17 Jul 22 Jul Mr Ahmad Khalis Bin Abdul Ghani 18 Jul 23 Jul Dr Amy Khor Lean Suan 18 Jul 23 Jul Mr Charles Chong 18 Jul 23 Jul Assoc. Prof. Chin Tet Yung 20 Jul 20 Jul Mr Davinder Singh 20 Jul 20 Jul Dr Gan See Khem 20 Jul 20 Jul Mdm Ho Geok Choo 20 Jul 21 Jul Mr Chay Wai Chuen 25 Jul 01 Aug Mr Inderjit Singh 26 Jul 05 Aug Mr Othman Haron Eusofe 26 Jul 29 Jul

Mr Ong Kian Min

CHEW HENG CHING Deputy Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the dates stated:

22nd June,2004 (1) Development Fund (Amendment) Bill 24th June,2004 (1) Medicines (Amendment) Bill (2) Police Force Bill (3) Manufacture of Optical Discs Bill (4) Legal Profession (Amendment) Bill (5) Patents (Amendment) Bill (6) Trade Marks (Amendment) Bill (7) Intellectual Property (Miscellaneous Amendments) Bill (8) Plant Varieties Protection Bill CHEW HENG CHING Deputy Speaker Parliament of Singapore

[Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

1. Mr Leong Horn Kee asked the Minister for Trade and Industry what are (i) the reasons for the recent spate of power failures in Singapore and (ii) the measures being taken to prevent their recurrence.

2. Mr Tan Soo Khoon asked the Minister for Trade and Industry (a) what were the causes of the power failure on 29th June 2004; and (b) what steps can be taken to prevent a recurrence.

3. Dr Warren Lee asked the Minister for Trade and Industry (a) what is the cause of the latest widespread electrical power failure in Singapore on the night of 29th June 2004; (b) whether such a situation can be prevented by diversification of fuel sources for our power stations or by having a wider range of generating plants so that the loss of any one fuel source or plant is less likely to result in electrical power failure to large parts of Singapore; (c) how often do construction accidents cause damage to major electrical cables in Singapore; and (d) whether enough measures are taken to reduce the risk of such an occurrence causing a widespread power failure.

4. Dr Amy Khor Lean Suan asked the Minister for Trade and Industry (a) if a thorough investigation has been or will be undertaken to determine the causes for the three power outages that have occurred and which have been linked to disruption in gas supply from Indonesia; (b) what are the causes that have been identified for these power outages; (c) what steps have been and will be taken to minimise the occurrence of such power outages; and (d) what assurance he can give to the public that adequate measures have been taken to ensure that risks of sabotage of our gas and utility supply by terrorists are contained.

5. Mr Low Thia Khiang asked the Minister for Trade and Industry what has been the extent of damage to Singapore's international reputation due to the recent power failures.

Mr Deputy Speaker, Sir, with your

permission, I will take Question Nos. 1, 2, 3, 4, and 5 together.

Yes, please proceed.

Many MPs have filed questions on the recent power failures. The power failure on 29th June, in particular, caused great inconvenience to many Singaporeans and harmed our international reputation. The Economic Development Board (EDB) has reported serious negative comments from our existing and potential investors. We take a very serious view of such power failures, and will do everything possible to minimise the possibility of their recurrence.

Mr Deputy Speaker, power failures can occur because of two major factors: first, due to a disruption of the generating facilities; and second, due to a disruption at the transmission or distribution grid level. Let me deal with each of these two scenarios in turn.

The power failure on 29th June 2004 was caused by a disruption in the gas supply from the Natuna gas pipeline. This led to a sudden loss of about 30% of online generation capacity and a blackout that lasted up to one hour and 50 minutes. 300,000 customer accounts were affected. The supply disruption was traced to a defective pressure regulating valve in the onshore gas receiving facility (or ORF) operated by ConocoPhillips at Jurong Island. The valve malfunctioned because the solenoid, which is an electrical device that controls its movements, was water-logged and short circuited.

The pressure regulating valve first malfunctioned at 9.56 pm that night, and this was followed eight minutes later by a total closure of the emergency shutdown valve at 10.04 pm. The generation companies were alerted at their premises that

the gas pressure at the ORF was dropping. When the emergency shutdown valve closes, the gas plants are supposed to "hotswitch" to their backup fuel (in this case, diesel), without affecting the continuity of electricity supply. Unfortunately, on that night, only one of the six gas plants in operation successfully made that "hotswitch". Two gas plants failed because of a problem with their diesel filter. And the other three ran out of gas before completing the "hotswitch" process. This resulted in the widespread power blackout that occurred at about 10.10 pm that night.

Let me just go through some of the findings and the immediate follow-up actions that the Energy Market Authority (EMA) has been engaged in since. As the emergency shutdown valve was not initially triggered, it was not immediately obvious at that point in time that "hotswitching" should have been commenced straightaway since, in such circumstances, some mild pressure fluctuations are part and parcel of a normal system. However, the unanticipated abnormal behaviour of the valve system at the ORF misled the operators that night. In retrospect, we now know that critical time was lost arising from this. EMA has instructed the generation companies to change their standard operating procedures so that they "hotswitch" earlier in the event of any pressure drop. The generation companies are also exploring ways to shorten the "hotswitching" process further. In addition, they have also stepped up maintenance of the diesel pump system, and will do "hotswitch" drills more frequently. I want to emphasise that we are talking about a response that takes a few minutes. They have to make this "hotswitch" between four and 12 minutes. And in the case of the failure that night, events occurred

very quickly between 9.56 pm and 10.04 pm.

Let me move on now to the valve system at the ConocoPhillips facility. This system, unfortunately, has failed on five separate occasions for five different reasons since August 2002. I think Members of this House will agree that this is clearly not acceptable. EMA has instructed ConocoPhillips to do a comprehensive technical re-evaluation of its system design and operations, including maintenance and operational procedures. It must submit its report to EMA within three months. Furthermore, EMA will bring ConocoPhillips under licensing control by the end of the year.

I would like to address concerns expressed by many that we are apparently relying too much on a single source of fuel. Today, we have a good balance of steam plants using fuel oil and gas plants generating electricity. About 60% of our installed capacity consists of steam plants and 40% comes from gas plants. Fuel oil for the steam plants is available from multiple sources. For gas plants, the backup is diesel, which is also widely available. Every power station is required to stockpile at least 90 days of fuel reserves, with at least 45 days worth of these reserves being kept on site. Overall, our total supply capacity is almost twice our peak demand. In short, we can actually operate without gas indefinitely if we have to, albeit at a slightly higher price.

EMA is exploring with the generation companies how to back-up gas from dual sources for operational continuity. These dual pipeline feeds will give power stations those precious extra minutes to make a successful "hotswitch". In addition, EMA is also studying the feasibility of having compressed gas storage. This would, in effect, provide another additional source of redundancy. Over the longer term, we are also

exploring the possibility of Singapore having a liquefied natural gas (LNG) facility. We will be conducting a feasibility study, and if the findings are positive, the LNG facility should be operational soon after 2010.

Let me now touch on the second group of power failures due to grid infrastructure and accidents at worksites. Other power failures may be caused by faults within the grid infrastructure or damage to electricity cables. For instance, on 13th April 2004, a cable fault developed at the Choa Chu Kang substation, which caused a blackout that lasted about 60 minutes and affected 80,000 customer accounts. On 2nd July 2004, electricity supply to 28 HDB blocks at Pasir Ris was interrupted for about 30 minutes, and this was due to a tripping of substation equipment during a testing of the remote control equipment.

Our power infrastructure must have top class standards of reliability. This requires continual investment and maintenance of equipment. EMA will be imposing higher standards on all the companies involved in this entire system. These companies will have to meet these stringent standards or face financial penalties of up to $2 million for each performance failure. These changes will take effect from 1st August 2004. EMA will release details of these shortly.

Dr Warren Lee has asked how often construction accidents caused damage to major electrical cables. In 2003, there were 15 such incidents. Since 2001, 21 contractors have been brought to court, of which 12 have been fined and nine cases are pending. Errant contractors found guilty by the court can be fined up to $1 million.

Dr Khor has asked whether adequate measures have been taken to ensure that we minimise the risks of sabotage of our gas and utility supply by terrorists. I

would like to emphasise that the recent power outages were not due to terrorist sabotage. Nevertheless, under our law, power stations and major transmission substations are gazetted as protected areas. Security measures were reviewed and augmented after the September 11 incident. There are tight access control, vehicle road barriers and armed guards at critical installations. Security patrols and surveillance are undertaken round the clock to reduce the likelihood of sabotage and intrusion. We will continue to be vigilant and will take all necessary actions to safeguard such critical infrastructure.

Finally, I would like to announce that the Ministry of Trade and Industry (MTI) will be setting up a high-level Energy System Review Committee, which will include international experts, to take a fresh look at our electricity and gas systems in totality and recommend how we can improve them further. This will ensure that our systems are sufficiently robust against accident or disaster.

Mr Deputy Speaker, Sir, this is a very important topic of much public interest. I have a few questions, and I shall be brief.

I heard the Minister of State say that the penalties will be increased up to $2 million. For parties that are found responsible for causing major blackouts where the fallout and the damages could be very high, should the Government not consider imposing higher penalties than $2 million, so as to serve as a deterrent? Also, should further higher penalties be imposed for repeat offenders? In the case of the ConocoPhillips, I just heard that it was the fifth time that it has caused a blackout.

The second question is this. In certain instances where there is a commercial arrangement between, say, ConocoPhillips and SembGas, I was told that the

Government has no power to control such commercial arrangements. Is it true, and if it is true, would the law be amended to allow the Government to have more powers to monitor and control the market, and find out the causes for the blackout?

The third question is whether the Government actually has a central body or authority with the expert knowledge to constantly review various alternative sources for gas or oil, and even for other forms of energy like solar or tidal, so that we can have more sources for our supply.

Finally, during a blackout, many people made phone calls and the phone line was jammed, especially the important lines like 999 and 995. Should the Government not consider setting up another line, for example, 911 - sorry for the pun, but it is a number which is very easy to remember - for the public to call on such emergencies, not fire or police matters but national emergencies like a blackout, so that people get information and know what is happening?

I thank the Member for his supplementary questions. The first issue is on penalties. There is an escalating scale of penalties. If a company repeatedly fails in achieving the required standards, the cumulative penalties will exceed $2 million, just by adding it up. But having said that, it is not just a matter of penalties imposed by EMA. Do not forget that

there are also market mechanisms which will punish companies which do not fulfil their contractual requirements and these companies may also be subject to legal action by other parties whom they have contracted to supply power.

The next point is about jurisdiction over commercial operators. That is partly the reason why we have decided to bring ConocoPhillips facility under our licensing

requirements, to give us more regulatory teeth to ensure that all players in the energy system perform their roles according to specifications. As far as having a Government agency to oversee energy, we have the Energy Market Authority which has the experts to keep an eye on the entire energy system, including alternative sources of supply, new technology changes and, in turn, EMA is supervised by the Ministry of Trade and Industry.

The final point is on information flow. I do not believe having another line will solve it because that other line will also become clogged with everyone calling in. I think the most practical means of information flow during emergencies like that would be to use the radio and, in particular, battery-operated radios which will work in almost all circumstances, and to ask the public to make phone calls to emergency services only if they actually need it, and not just to make phone calls to seek more information. Of course, we understand that these are times when there will be high anxiety and the authorities, EMA and everyone will be scrambling to do two things, ie, to fix the problem immediately and also to push the information out to the public. So I hope the public will cooperate in times like these and use more passive ways of information retrieval which will not clog up the telephone lines.

Mr Deputy Speaker, I have several questions for the Minister of State. First of all, are we not making ourselves vulnerable by just depending on one sole supply of gas? Do we have a back-up plan for alternative supply of gas? In fact, more pointedly, I would like to ask why is it that we have never thought of a back-up plan although we had several cases of power failures in the last two years. Why have we not thought of such a back-up plan long ago so as to avoid a systemic failure like the one we experienced on 29th June?

Sir, the next point I would like to raise is the question of damage which has been caused to a lot of electronic equipment. In fact, a very angry constituent of mine told me that during the failure on 29th June, his TV set was badly damaged and he had to pay $200 to get it repaired, and he asked me if this keeps happening, who is going to be responsible. So my question is, while it is very well to have increasing penalties imposed on the power supply companies - but this money goes to the Government - could not somebody, whether the power companies or the Energy Market Authority, be made responsible in some way or other for the damage that is being caused to equipment which is owned by consumers and Singaporeans at large?

Mr Deputy Speaker, we do not have only a single supplier of gas. There are three pipelines bringing in natural gas to Singapore - one from Natunas, another one from Asamera, and the third one comes from Peninsular Malaysia and lands at Senoko. Having said that, his question is a valid question, ie, what is the back-up when, for any reason, the gas fails? As I explained earlier in my answer, the back-up in such circumstances is for our gas plants to switch to diesel of which we have more than adequate reserve stocks of, and for which we can replenish from multiple sources. The problem on that particular day was that the "hotswitch" process failed in five out of six gas plants. If the "hotswitch" process had not failed and, in fact, this occurred in December 2002 when, despite disruption of gas supply, the gas plants made a successful transition on to the back-up field. The result of that is that, I think, practically all Singaporeans were not even aware that there was a problem with the gas supply.

So I want to emphasise that there is a back-up, and it uses diesel as a back-up. But having said that, his next question then should be, is there anything else we

can do to further harden the system. Our answer to that is yes, and we are working on it. That is why we have been encouraging the generation companies to do so. They, in fact, on their own initiative, have now gone on to have dual pipelines, ie, each company will have two feeds of natural gas. In addition to that, exploring whether we should have on-site or even off-site storage of compressed natural gas gives us another back-up plan and ultimately, of course, would be to consider even LNG, which then immediately increases our potential suppliers of gas. So I want to just reiterate that we have both immediate, short-term and long-term plans to back-up this essential infrastructure.

On the question about damage to TV sets, my understanding is that several people noticed some discoloration on their TV screens after the power was restored. I have been informed by the technical people involved that this was due to problems with the degausser within the TV set coming back on when it was still warm, and that the fix for it really was to switch off the TV set and disconnect it, and let it cool down for an hour or two. This is what most people did and most people would by now have realised their TV sets are working fine. But having said that, I recognise that there are some people who may have sustained more long-term damage to their equipment. I believe that, as far as consequential damage to the equipment is concerned, this becomes a legal issue, a contractual issue, which, if they wish to pursue, they can take upon on their own volition. But the Government and EMA cannot warrant that all equipment will never be damaged by any incident, accident or problem like this.

Sir, the Minister of State, in his reply, says that Singapore's international reputation is seriously affected. I would like to know how serious it is. Does this mean that it

will affect foreign direct investments in Singapore? And what is the Government's plan to mitigate the situation?

Sir, the second question is on ConocoPhillips. I would like to know on what consideration has the Government given the contract to ConocoPhillips to control the supply of gas to Singapore, why has the Government not considered it necessary to bring the company under the licensing requirement earlier, and what is the relationship of the company with our GLCs. Is it a GLC by itself?

My third question is a follow-up from the answer from the Minister of State. He says that there is a back-up plan, but the back-up plan has not worked or failed. My question is: has the back-up plan been tried before? Or was it just a back-up plan and it has never been tried to see whether it works? If it had been tried before, why has it failed this time?

Mr Deputy Speaker, damage to the reputation is difficult to quantify in exact terms. So I cannot give him a dollar amount.

Will this affect investors' confidence in us or attractiveness as a destination? I think the answer to that is that if we do not show resolve and we do not show that we have got a clear and proper plan to fix the problems, then we will really reap the bitter harvest of this. So our approach has been to identify what was wrong and to take all immediate steps to fix operational problems on the ground, and to look at the system, harden the system, build back-up to back-up plans, if need be and, ultimately, to restore confidence on both the part of locals as well as investors who depend on a stable and reliable electricity supply. I think it will be pointless to try to calculate the dollar sums for the damage to the reputation that we have incurred.

ConocoPhillips is a commercial company. It has commercial arrangements with the gas suppliers and with the generators that take gas from it. The Government is not involved in it. Has the back-up plan been tried before? The answer is yes. As I alluded to it earlier, in December 2002, despite the valve system at ConocoPhillips failing, the back-up plan kicked in and the generation companies successfully made that transition to diesel, and there was no power disruption. Yes, it failed this time. Clearly, what our take-home point now is that we need to harden the back-up plan further. And as I have said earlier, by resetting the SOP, so you react earlier, and you reduce your gas consumption at an earlier point in time so that there is more gas left in the system. You make sure that all the ancillary equipment needed to "hotswitch" the diesel pumps, filters, and all that, are working, and that your people are practised. The power companies' mandatory practice or drill was once every three months. But if we actually look at the records, they were actually doing it much more often than that. I have personally gone down to a power station and seen with my own eyes that the people are well-trained and they know what to do. But in all these situations, when something really does go wrong, it is often a series of small problems which added up and ended in a catastrophic situation, like what we experienced on 29th June.

Will it happen again? I can tell you quite categorically that if the same sequence of events on 29th June, ie, the problem with the valve, occurred today, it would not lead to a blackout. But that is with the advantage of hindsight. In retrospect, we know where the problems are and we will fix them. What we are focused on now is to prospectively look at the system and harden it further. I think we will certainly get better with time, but our target ultimately must be one in which the possibility of failure is infinitely small.

It can never be zero and, even if it fails, the impact would be minimised.

The Minister of State forgot to answer my question on why the Government did not see the need to bring ConocoPhillips into the licensing ambit earlier.

The answer is that we did not think it was necessary at that point in time. But clearly, as I have announced earlier, we now do believe that it is necessary to bring them under the licensing requirements.

Mr Deputy Speaker, Sir, the Minister of State, in his reply, alluded to two sets of problems that can cause power failures. One was the generation of electricity, and the other was the switching system in the event that one part of the system fails. I wonder whether he could enlighten us on any plans that the Government or the Energy Market Authority has in place or made possible in the near future on switching to another part of the system in the case of isolated instances of power failure.

I presume he means when there is a localised failure, whether there are alternative channels of power to be supplied to that area so that there is no disruption.

I think it is a technical term which refers to the way that a load is redistributed within a network, as opposed to switching of fields.

The answer to that is yes. There is a complex control system that continuously, in real time, balances supply versus demand, and also, if need be, if one part of the network goes down, as long as there are alternative channels, it will route electrical supply through these alternative channels, so that there is no disruption.

But, again, I do not want to pretend that this is a simple system that will work totally according to plan all the time. However, the Member's question is: is there such a system? Yes. Do we have a state-of-the-art system? Yes. Do we still want to make sure that we try to improve it further? Yes.

Sir, I recollect when there was a major blackout in the USA, a question was raised in this House as to whether we could have such a blackout, and I do remember the answer was that it should not happen in Singapore. It has happened, and I am very sad, and I would like to ask three questions.

Firstly, will the Ministry be looking within the Ministry and the regulators of the industry to see whether there were some incompetent decisions made and whether there was complacency among some of these key scenario planners or regulators?

Secondly, when a major blackout happens in Malaysia, they are able to tap into our grid and take electricity supply immediately. In the instance when we had a blackout, why were we not able to tap into the neighbouring country's electricity grid and at least get some supply of electricity from the country?

Thirdly, many people were affected by this blackout. Not only were consumers affected, but a lot of companies were also affected. Could we have in place a body which could, in a way, look at the claims of these people who were affected by such a blackout and try to see whether we could consider giving damages or compensation for various losses or damages suffered by both consumers and the companies involved?

During the on-going investigation by EMA, and indeed

subsequently by the Energy System Review Committee, if we discover any incompetence, negligence or, as you have alluded to, complacency, the Government will take action.

The second question was on our inter-connection to Malaysia. There is an inter-connection between the Singapore and Malaysian electricity systems. But this pipeline, so to speak, is basically meant to assist in load balancing for small degrees of fluctuation. On a night when you lose 30% of the capacity, this inter-connect must shut down, and the reason it must shut down is that, otherwise, you will get a sequential collapse of whole regions and, possibly, even extending across countries. So, Malaysia does not want to have a blackout because we have a problem, nor do we want to have a blackout in Singapore because of a sudden catastrophic failure in Malaysia. So, although there is an inter-connect, it is not designed to respond to losses of 30%, as what we experienced on 29th June 2004.

The third point on whether we should have a body to award damages, Mr Deputy Speaker, I am very reluctant to go down that route. I would rather focus on making sure our system is as robust as possible, and that the impact of such failures is minimised. Over and above that, if companies wish to pursue their legal options or exercise their contractual rights, I think they are free to do so and to go down the legal route.

May I ask the Minister what has happened to the plan of building a liquefied natural gas (LNG) terminal at Tuas which was announced in 1999? Have there been feasibility studies done for such LNG terminals since 1999? Will he now seriously consider building LNG terminals and storage of LNG in order to ensure the

uninterrupted supply of natural gas in Singapore?

The feasibility study on whether or not to have an LNG terminal will commence later this year. I do not want to make any conclusions on what that study will show. But I also want to add, however, that we did not make that decision to embark on a feasibility study because of this blackout. There were other strategic and commercial reasons to consider this, and we will await the results of the feasibility study before the Government makes a considered decision.

Mr Deputy Speaker, Sir, why are these additional back-up plans like the dual pipelines, as mentioned by the Minister of State, not considered after the 2002 blackout? Why did EMA actually wait until after this recent blackout to further consider these additional back-up plans?

The generation company at Senoko already has dual pipelines. The PowerSeraya and Tuas generation companies already had plans in place to install dual pipelines even before this blackout. So, it is not for lack of consideration or forethought.

I will allow one last question. Mr Arthur Fong.

Mr Deputy Speaker, in the same question in 2002, after the US blackouts, we were told that some of the reasons were inadequate capacity, diversity of supply, etc. But among the answers given were that we also carried out regular exercises in Singapore to check the integrity of our electrical system. When was the last check done before this recent major blackout? If the audit of the system did reveal any weaknesses, or the scenarios

that Mr Ravindran talked about, could it have helped us prevent this last blackout?

I cannot give a detailed answer as to exactly when the last system-wide test was performed. But last night I was going through the records of the "hotswitching" drills that the companies had gone through and, within the month of June itself, there was at least one company which had done it twice. So, it is not for lack of going through the drill, and it is not for lack of education or training on the part of the operators.

However, I just want to say that on the 29th June, it was a hitherto unexpected and unanticipated problem. If it had been a simple shutdown of the emergency valve or a repeat of incidents which occurred in 2002, we would not have experienced this blackout. Instead, we had a pressure valve malfunctioning, first closing and then suddenly opening, overcoming the back-up system, and then the emergency shutdown valve having to kick in because of safety concerns. In that space of eight minutes, we lost precious time, and that precious time then cost us the ability to "hotswitch" in time before the gas ran out.

Sir, I am not offering this as an excuse. I am just offering an explanation for what went wrong. It was an unanticipated sequence of events. But we can fix this, and we intend to fix this. If we look at our plans both in the short and long-term, we will have additional back-up measures, additional robustness within our system, and I think we will all emerge ultimately stronger for this experience.

Ms Irene Ng, can you ask the next Question?

Sir, can I just ask one last supplementary question, please?

No. I think we have spent enough time. Can you ask the next Question?

6. Ms Irene Ng Phek Hoong asked the Minister for Home Affairs, given the public confusion that arose as a result of the recent power blackout, (a) whether Singaporeans can be taught how to handle such emergencies, including lift rescue, as part of Total Defence; and (b) whether the police should improve its hotlines to provide timely information to the public during such emergencies.

7. Dr Ong Seh Hong asked the Minister for Home Affairs in light of the recent power failures (a) how adequately prepared are our households to meet the challenge with the emergency kits prescribed by SCDF; (b) has his Ministry any plans to issue all households in Singapore with these kits, for instance torchlight, transistor radio and first-aid box, or at least to encourage households to be equipped with them.

8. Dr Ong Seh Hong asked the Minister for Home Affairs in the event of future power failures what contingency plans his Ministry has (i) to ensure that proper law and order is maintained although the recent failures have been crime-free and (ii) for the Traffic Police to ensure that our roads are flowing freely and accident-free.

Mr Deputy Speaker, Sir, may I have your permission to take Question Nos. 6, 7 and 8 together as they are related, please?

Yes.

Sir, emergency preparedness is the joint

responsibility of the Government and Singaporeans. The Government has undertaken many outreach programmes, as part of Total Defence, to educate and train the public on how to cope with various emergencies, including blackouts. These include the island-wide distribution of the Civil Defence Emergency Handbook, Exercise Community Spirit and Emergency Preparedness Day events, and the Community Emergency Preparedness Programme.

To ensure community emergency preparedness, the SCDF has strongly advised all households in Singapore to stock up essential household items, such as portable battery-operated radios, torchlights, candles, matches and first-aid kits. As we all know, these items will come in useful in any emergency, including blackouts. As they can be easily bought in neighbourhood shops, there is no need for the Government to issue them to all households. Sir, I take this opportunity to remind Singaporeans who have yet to do so, to stock up on these common and essential items, as they should take emergency preparedness seriously. Having these items in hand will enable them to cope with emergencies.

Sir, today, all public housing lifts are equipped with an Automatic Rescue Device (ARD) that will bring the lift car to the next lift landing and open its door in the event of a power cut-off. Proper maintenance is essential to ensure that the ARD works as designed, so that there is no lift entrapment. This is the responsibility of Town Councils and management corporations.

However, if members of the public come across persons trapped in lifts, it is not advisable for them to attempt any lift rescue on their own. As they are not familiar with the lift systems and do not have the proper equipment, they may

pose a threat to the safety of the trapped persons and, indeed, to themselves. Instead, anyone who knows of persons being trapped in lifts should call the Emergency Maintenance Service Unit (EMSU) that is engaged by the Town Councils or management corporations to attend to such situations. Those who are trapped should not try to force open the lift door or the ceiling hatch, as such escape attempts may result in fatal accidents. Instead, they should remain calm and wait for the arrival of response crews.

Sir, as for the police and SCDF hotlines, as Dr Balakrishnan has said, these are not public information hotlines. They are meant for the public to call when they are facing life-threatening situations or are in real need of emergency ambulance assistance. When a blackout occurs, the public should turn on their battery-operated or car radios for information, as radio broadcasts will be the most effective means for the public to obtain up-to-date information on the blackout. Hence, really, one key lesson from the recent blackout is for all Singaporean households to have ready for use, battery-operated radios, as part of emergency preparedness efforts.

Sir, let me assure Dr Ong that the police has sound contingency plans in place to maintain law and order and to ensure smooth flow of traffic during a blackout. In essence, resources are redeployed to enhance police presence in affected locations. In a prolonged and extensive island-wide power failure, additional resources will be mobilised from off-duty teams. Police operations will not be compromised in a prolonged power failure, as its critical installations and facilities have backup power supply for operational continuity. Police officers are also equipped with torchlights and searchlights in their vehicles, so that they can carry out their duties even during a power failure.

As for traffic control at major junctions during a power failure, what police does is to deploy its officers to direct and manage traffic. Our public radio stations will also be given prompt and regular traffic updates to keep the motoring public informed of the road situation. These measures, including the release of public advisories through the media, were carried out in the recent incidents of power failure. Nonetheless, motorists should take special care to drive or ride safely and be considerate to other road users during blackouts. Pedestrians should also exercise more caution when crossing roads, as they may be less visible to the motorists.

Sir, can I ask the Senior Minister of State whether he can clarify why there is a rejection of the idea for a hotline if only it is to record a message to inform residents who are affected by a blackout, because it could be a terrorist attack, it could be some catastrophic incident and they need the information quickly, and radio broadcasting may not be the most effective means for direct and immediate communication?

Sir, I think Dr Balakrishnan has alluded to the answer, which is essentially that if you have a hotline like this, people want to know what

is happening, and they call the hotline. As has been shown during the recent incident when everybody called in, Police hotline was jammed. So there will be even greater anxiety. The clear demarcation should be that if they want information, the information would be put out, and this has proven to be the best way. People who turned on the radio - and I have heard friends who said that when they turned on the radio, they knew exactly what happened and what to do, and waited for the lights to come on - helped to clear the emergency lines for situations where, for example, there may be a fire, theft or other situations where

Police or SCDF's response is immediately needed.

In any case, I understand that there is a Power Grid hotline, which is 24 hours, which can be used if you want information. But I would say that we should not have a dedicated hotline just for a situation like that.

With the earlier announced higher operational standards to maintain the equipment to make sure that hot switches work and with the extra measures taken also to make sure that the public is prepared, I would just like to ask whether the cost will be passed on to the consumers in terms of increased electricity charges.

I think the Member has crossed the lines.

9. Dr Ong Chit Chung asked the Minister for Foreign Affairs to inform the House if his Ministry has entered into negotiations with the Foreign Ministry of Malaysia on the bridge, as stated by the Malaysian Minister for Works Mr Samy Vellu on 13th June 2004, and if so, to update us on the progress on this issue.

Mr Deputy Speaker, Sir, in reply to the Member's question, the answer is that there have been no such negotiations or discussions between the Foreign Ministries of Singapore and Malaysia on the bridge since I last spoke on this subject in this House on 6th February 2004.

Members will recall that the bridge is just one of a number of outstanding bilateral issues where we are waiting for Malaysia to reply with its proposals. And if I may recapitulate, when Prime Minister

Abdullah Badawi visited Singapore on 12th January 2004, Prime Minister Goh explained that our preference was for these "dead knot" issues to be referred to third parties for arbitration or adjudication so that both sides could move forward with bilateral relations and not be bogged down by these outstanding issues. However, Prime Minister Abdullah wanted to give talks another try, and Prime Minister Goh agreed. The understanding reached was that Prime Minister Abdullah would reply to Prime Minister Goh with specific proposals on how to resolve the various bilateral issues. It was also agreed that these proposals would be first discussed at the Prime Ministers' level. Prime Minister Abdullah has yet to respond with these specific proposals. And, Sir, that is where matters still stand.

Mr Deputy Speaker, Sir, I am puzzled that this misimpression has been created, that we are in actual discussion when this is not the case. May I ask the Minister what is their intention? Is it to pressurise Singapore to agree or is it all part of politicking? What will happen if, at the end of the day, no agreement is reached on this issue?

Mr Deputy Speaker, Sir, I will respond by saying that we should not speculate. As I have always said in this House, we should not be distracted by media reports, and we will respond to the proposals made officially by their government.

I think the Malaysians know our position on the bridge issue and that position is quite simple. As I said at our sittings here on 5th January and again on 6th February, when we reluctantly agreed to the demolition of the Causeway and to build our part of the bridge, it was as part of a package deal that covered several bilateral issues. Malaysia, however, called

off the package in October 2002. To build our part of a full bridge along with CIQ-related revisions would cost us over $500 million and will also sterilise the use of land under the bridge.

With the package off, we really need to know what is being proposed by Malaysia that would justify our agreeing to build our side of the bridge at such a considerable cost.

So therefore, Sir, we have to first receive the specific proposals from Malaysia. Once we get them, we will study them in good faith and we will come up with our response. But as I have said before also, we can reach agreement only if the proposal is fair and there is a balance of benefits on both sides.

Dr Ong asked what will happen if there is no agreement reached at the end of the day. Well, as both Prime Ministers had agreed - and their Foreign Minister also said so in their Parliament on 25th January - "if no agreement is reached", he said, "we will seek third party help".

But I come back to this point. Let us not speculate. The position is that there have been no talks at the moment between the two Ministries, and we have not received any proposals. Meanwhile, we should not prejudge anything.

But I would add that what is important is that bilateral relations have indeed improved and there is a warmer tone when Ministers and officials meet. And recently, on 13th July, Prime Minister Abdullah Badawi said that "relations between the two neighbours are good, and (we) have an understanding that (we) will resolve (our) bilateral difficulties." And he said that "the feeling is good" and that he had not seen any public statement or indication in recent months that suggested any bilateral problems. He said he was optimistic that progress would be made and that "it would be in the interest

of both Singapore and Malaysia to resolve these issues".

I would say that I share the optimism of Prime Minister Abdullah. We do want to get on with our bilateral relations with Malaysia. We are prepared to consider the proposals when we receive them. But I think we have to be patient. And we must not underestimate the difficulties in unravelling these left-over dead knots. We also understand therefore that they need some time and, as stated in their Parliament recently on 7th July, their Malaysian Parliamentary Secretary for Foreign Affairs said, and I quote, "the Malaysian government needs time to make detailed preparations to give appropriate consideration over any decision to be made before these [outstanding bilateral] issues are ready to be brought up again to the negotiating table with Singapore", and he added that "negotiations between both countries about these matters will be held as soon as both sides are ready and we agree to start them".

So let us wait for their proposals.

10. Mr Yeo Guat Kwang asked the Acting Minister for Manpower (a) how does his Ministry assist workers, local or migrant, in their claims for unpaid wages, and resolve salary disputes with their respective employers; (b) whether the current arrangements are effective; and (c) whether his Ministry will introduce new measures to ensure workers' interests are better protected or to enhance penalties against errant employers.

11. Dr Amy Khor Lean Suan asked the Acting Minister for Manpower (a) if he will give an update on the assistance that has been rendered to the foreign workers who

were not paid salaries by their employer, Wan Soon Construction; (b) what measures his Ministry is looking at to prevent the problem of firms defaulting on their foreign workers' pay; and (c) whether measures can be put in place to give his Ministry early warning that foreign workers have not been paid their wages and to take prompt action to help them.

12. Mdm Halimah Yacob asked the Acting Minister for Manpower (a) what measures will be put in place to better secure and protect wages of foreign workers when businesses fail; (b) will the Ministry consider making it mandatory for companies employing foreign workers in sectors where problems of non-payment of wages are more recurrent to set aside some funds to offset the workers' claims; (c) will the Ministry consider putting in place an expedited system for processing claims of foreign workers; and (d) what more can be done to educate foreign workers on their rights and to seek help early before the situation worsens.

Sir, can I take Question Nos. 10 to 12 together, as they are related?

Yes.

My Ministry provides free services to workers on a range of employment matters, including salary disputes. This service is available to both local and foreign workers.

Workers can lodge claims for unpaid wages and disputes over other statutory benefits with the Ministry. Within two weeks of the lodgment, a conciliation meeting between the worker and the employer will be arranged by a case officer to investigate the claim.

From our past records, about 85% of local and foreign workers' claims are settled through conciliation. Unsuccessful

claims may be further referred to the Labour Court for adjudication by the Commissioner for Labour. If the employer is liable, he is required to pay the amount due to the worker within 14 days. The Order of the Commissioner for Labour is enforceable in the civil courts. If the claimant chooses to enforce the Court Order, the Ministry will help prepare the enforcement documents for the claimant to take out Writ of Seizure and Sale proceedings against the company. The success of any enforcement proceedings depends on whether the company has sufficient funds or assets which can be realised. In cases involving foreign workers who have returned to their home countries, we will work with the embassies concerned to remit to them any arrears subsequently recovered.

Last year, 86% of claims of foreign workers were settled within six weeks, while some 80% of claims of local workers were settled within the same time. The remaining cases took a longer time to settle as the issues were more complex or, in some cases, the employers were facing financial hardship. Claims that were referred to the Labour Court for adjudication also took a longer time to resolve. The Ministry successfully recovered a total of $7.1 million in salary arrears last year.

As the results show, up to fairly recently, the current measures have proved to be generally effective. However, of late, the construction sector has been going through a bad patch. The industry is suffering a downturn aggravated by increasing prices in raw materials, particularly steel and cement. Two recent cases involving local construction companies have highlighted the problems that can be caused when salaries are not paid. Not only do the workers face substantial hardship, but our

harmonious industrial relations climate is also affected, as well as Singapore's good international image. However, despite the downturn in the construction sector, the proportion of errant employers remains small. In 2002 and 2003, 657 and 546 companies respectively were involved in the salary claims lodged by foreign workers. These constituted some 7% and 6% of the total companies employing foreign workers respectively.

While the Government cannot ensure the success of any business venture, I agree with Members that what we can do is to help workers recover as much of their unpaid wages as possible and as quickly as possible. But in cases where companies are insolvent, workers may not be able to recover their salary arrears in full or even a substantial portion, at least not immediately. They may have to accept whatever is available at that time, and then allow the legal processes to run their course, which is why my Ministry advises foreign workers to inform us early to reduce the amounts owed to them.

As for the foreign workers who were owed salaries by Wan Soon Construction Pte Ltd, Dr Amy Khor has asked for some updates. While we are likely to secure from the various parties some funds to pay the workers, the amount will not be sufficient to meet their claims in full. We have urged the workers to be realistic and accept a partial payment with the remaining sum to be remitted to them in their home country, if the company has funds for distribution for such payment subsequently. In this regard, the workers have, upon the Ministry's advice, filed their claims with MOM for adjudication by the Commissioner for Labour. While the workers wait for their claims to be resolved, they will be provided with accommodation and meals by Wan Soon. Workers who wish to continue working in Singapore will be allowed to do so if they can find new employers to engage them.

In view of the recent episodes of companies failing to pay their workers on time, I agree with Members that our framework needs to be tightened. My Ministry will therefore tighten existing measures and review new areas to ensure prompt payment of salaries and restitution of arrears. First, we will improve our current system so that late or non-payment of salaries will be detected earlier. Concurrently, we will step up efforts to increase employees' awareness of their rights. These measures will reduce the amounts owed to workers.

Second, we will step up our enforcement procedures to ensure that irresponsible employers are punished to the full extent permissible by law. Employers must realise that non-payment of salaries should not be viewed as normal business debts from which they can be shielded by the cloak of limited liability. Errant employers will be made to bear the total economic and social cost of non-payment of salaries, as well as the cost of resolving disputes.

Mdm Halimah has asked whether the Ministry will consider making it mandatory for companies employing foreign workers in problematic sectors to set aside some funds to offset workers' claims. This is also being considered with various options and their details currently studied, as well as in other areas to promote the overall framework of payment and restitution of arrears.

My Ministry shares the concerns of hon. Members who have affected workers. And I would take this opportunity to remind employers of their statutory obligations, particularly to pay salaries on time. MOM will not hesitate to take action against them. If indeed they find their companies are having business problems, they should cancel their work permits and approach MOM. We will try to help these workers find alternative job arrangements, failing which

we can repatriate them. We would also like to encourage workers who have not been paid their salaries to raise salary arrears to MOM as soon as possible, to improve their own chances of recovering their salaries.

Sir, I have three supplementary questions for the Acting Minister. My first question is this. We have seen an increase in the number of cases where employers have been in arrears of wages, and over a number of years as well. I would like to ask the Acting Minister whether the Ministry would be considering increasing the penalties for employers who failed to pay wages to their workers because the current penalties in the law, obviously, are not a sufficient deterrent.

My second question is: how many employers have been prosecuted over the years for non-payment of wages and salaries?

The Acting Minister has described the procedure that workers could make use of in order to claim the arrears of wages, particularly after the Labour Court has made an order. If that is not paid, the worker could then apply for a Writ of Seizure and Sale in order to enforce the Labour Court's award. My third question is that usually in order to apply for a Writ of Seizure and Sale, the worker has to incur additional costs and he does not have the money to do that because, if he does not even have the money to purchase food for himself, he does not have the money to pay in order to apply for a Writ of Seizure and Sale. Would the Ministry be prepared to work with other agencies to see whether it is possible to have a waiver of these fees for a worker to apply for a Writ of Seizure and Sale when it comes to arrears in salary?

Sir, Mdm Halimah asked whether we would consider enhancement of penalties. The answer is, yes. This is being considered. She asked

how many employers were prosecuted. Let me go through some figures. In 2003, some 670 employers were warned for technical infringements. I do not have the exact figure of how many were prosecuted subsequently. I can give it to her if a written question is filed.

She asked whether we would help workers after the adjudication in the Labour Court to enforce the Writ of Seizure and Sale. The answer is, yes. We have done so, and will continue to do so.

I would like to ask the Acting Minister whether the Ministry would consider the suggestion that some union leaders have raised in today's New Paper that a separate unit be set up to handle the salary claims of foreign workers, particularly those who are not unionised because, as mentioned by the hon. Member, Mdm Halimah, the process today is a bit too long and expensive for the workers. It would be much easier for all if there is a Government agency to look into it.

The second question is: would the Ministry consider reviewing the law so as to make at least partial payment of the salary arrears to be higher in priority in the creditors' claim when the companies go bankrupt?

Sir, from our experience, the inability to seek restitution of arrears is not so much procedural; in other words, the process is not difficult or expensive. But in most episodes, the company goes insolvent. That is the first point. So, as I have said, what we try to do in our current measures under review is to tighten up so that the amounts owed to workers are reduced. And that we can do by putting in systems to detect the amount of arrears owed to workers so

that we are alerted earlier and we can take measures.

Secondly, we are seriously considering, as has been proposed by Members, for some mechanism where a particular fund or insurance is being set up so that some restitution compensation can be paid too. I think those are the critical measures and not so much the procedural aspects.

Mdm Halimah and Mr Yeo had also asked what else can be done for employers. I think for most employers, the greatest penalty is not to have these workers, because basically for many of them, that means the business folds. And it is a clear message from the Ministry that indeed you should take salaries of your workers seriously because if we find out that their salaries are in arrears, we will cancel their work permits.

How does the Ministry of Manpower monitor the non-payment of salaries by employers? How fast can the Ministry detect non-payment of salaries after the tightening of framework, as mentioned by the Minister?

I have to thank the Member for his question because it allows me to explain. We have over 500,000 foreign workers. The first point is that we do not have in place, as such, an electronic system where we could monitor all salary payments. We monitor the levies, as a proxy for salary payments. In other words, we assume that if he does not pay the levies, then he may not be paying the salaries and we flag this up. We are also dependent on the foreign workers telling us, and which is why we give them advisories at the point of employment that they should come to MOM, provide them the hotline, the numbers in their various languages, for them to understand and to inform us. We also have a particular team that checks in terms of salaries that are given. But, as

you could understand, there are many companies and many workers, and sometimes that is not a foolproof system. But we are looking into options to consider electronic aspects to tie the system up so that we could be alerted earlier.

Sir, I have three supplementary questions. Firstly, I am glad that the Ministry is tightening the framework further. The first question is that for the workers who have gone home, could the Ministry enlighten us as to how many cases have received some form of wages after they have been sent home? Secondly, - I am glad that the Ministry is thinking of an electronic scheme - would a GIRO scheme be possible, please? My third question is this. The Minister mentioned instances of tediosity where the Labour Court process is concerned, because it is a convoluted process perhaps in its own way. Could there be some form of discussion or dialogue to streamline this process, because while the workers are not being paid, waiting for a legal outcome, we could have a short cut through that whole process?

Sir, as I have mentioned in my reply, I do not want to give the impression that from past records this is a large problem. As I said, this is 6-7% of companies that are in arrears and, in terms of settlement, 99% of foreign workers' claims were settled through conciliation. So we should not get away with the impression that this is a tedious process. In fact, the process is working. But, as I have said, the number of episodes recently has caused us to look at the system and see whether we could see ways in which we could improve and strengthen it. The Member has asked if we could consider e-schemes. Yes, we are doing that. She also asked how many of the claims were settled when the workers went back. I do not have the figure but the overall number is that, as I

have said, 99% of foreign workers' claims were settled through conciliation. So those that could not get their claims settled are in the minority.

Sir, I think one of the factors that we are not able to detect such instances earlier is that the workers may not even know their rights and the channels where they can seek assistance. Would the Ministry think of doing more in this area? Would there be a possibility for us to get the embassies of the sending countries, for example, involved in such a collaboration?

Sir, we are presently working with the embassies, as well as stepping up our efforts to both increase awareness of the employers as well as the employees.

13. Ms Indranee Rajah asked the Deputy Prime Minister and Minister for Finance why were there excess taxes totaling $28.05 million, as at February 2003, which had not been refunded by the Inland Revenue Authority of Singapore (IRAS) to the relevant tax payers for more than three years and whether IRAS will be taking steps to expedite tax refunds in the future

Mr Deputy Speaker, the $28.05 million in un-refunded taxes as at February 2003 belonged to 63,910 persons. $22.98 million or 82% belonged to 49,444 foreigners (77%), while $5.07 million (18%) belonged to 14,466 Singaporeans (23%). So, as we can see, an overwhelming majority of the un-refunded cases involve foreigners.

IRAS has not been able to make the tax refunds as most of these foreigners did not leave their foreign addresses with

IRAS, though IRAS nevertheless puts in its best effort to track them down. For instance, in 2000, a taxpayer in Korea wrote to the Korean Herald, their newspaper, praising IRAS' exemplary efforts to track him down in Korea so as to provide him with his tax refund.

Showing just how difficult it is to make these refunds to foreigners, having been alerted about these arrears, IRAS made an extra effort and even by end-June 2004, $22.11 million belonging to 48,180 foreigners still remains un-refunded. IRAS has been able to track only 2.6% of the foreigners and returned 3.8% of the total amount belonging to foreigners.

However, IRAS has had much more success with the Singaporeans. By the end of June 2004, IRAS has settled 76.5% of the cases involving 75.7% of the total unrefunded taxes belonging to Singaporeans, with the sums being sent to the Official Assignee in the case of undischarged bankrupts. The 3,399 cases still unrefunded, involve a total sum of $1.23 million, and these are Singaporeans who are not contactable. Many of these may be taxpayers who have emigrated without leaving their foreign addresses. A number are Singaporeans who have passed away. IRAS has written to the families of the deceased but has not received replies.

So, all in all, of the $28.05 million of unrefunded taxes as at February 2003, $23.34 million remained unrefunded in June 2004, not because IRAS has not been trying, but simply because the taxpayers or their beneficiaries are not contactable.

In many tax jurisdictions, if the taxpayer does not make his claim, the tax authority will simply hold on to the money. Here, IRAS will continue to do its

best to contact all who have unrefunded taxes, and to make the refunds promptly.

Could I just ask the Minister on this $23.3 million, how long is the money sitting in the system and is there a process by which, if it is after a certain period of time, the money could be channelled into charity?

I guess that was the question coming. As Members can see, we try our best to refund the money. So some of these cases would have been very long outstanding. And there are no laws which allow us to pass on the money to charity.

14. Dr Wang Kai Yuen asked the Deputy Prime Minister and Minister for Finance what is the basis for funds donated by the public and held by the various Ministries to be reverted to the Treasury.

15. Ms Indranee Rajah asked the Deputy Prime Minister and Minister for Finance in relation to the public donations held by the Ministries of Health, Home Affairs and Community Development and Sports which are to be paid over to the Treasury, how will these funds be applied or dealt with by the Treasury after it receives them.

Sir, can I have your permission to take Question Nos. 14 and 15 together?

Yes.

Dr Wang asked about the basis for donated funds held by the various Ministries to be reverted to the Treasury and Ms Indranee Rajah asked how reverted funds would be dealt with by the Treasury.

Let me first assure the House that all donations by the public are spent on the purposes specified by the donors. The Government does not channel any donation to other uses without the permission of the donors.

Under our current guidelines, all donations received by a Ministry for a specific purpose have to be placed in a deposit account. This money cannot be considered as revenue to the Government and can only be used for the purpose specified by the donors. If there are surplus funds left over after the project or programme has been completed, the Ministry should return these funds to the donors, or seek their consent to use the funds for other purposes. The Ministry cannot transfer these surpluses to the Government's Consolidated Fund.

Hence, in the case of the Ministry of Home Affairs' Central Narcotics Bureau (CNB), the CNB is currently awaiting approval from the donor to expand the scope for the use of the remaining funds. Should this be turned down, the funds will be returned to the donor. Likewise, the Ministry of Community Development and Sports has sought the approval of its donors to return the unused funds or to use them for future campaigns of a similar nature.

Dr Wang and Ms Rajah were probably referring to the donations for health science research and development being transferred to the Treasury. The situation there is different. The donations were tied to the total expenditure of the research programmes as specified by the donors. The Ministry may first pay from its own funds to meet some expenditures before claiming reimbursements from the donated funds and channelling them back to the Government. The donations were, in fact, from the Totalisator Board. It is an example of the Government being reimbursed for expenses

which should partly have been borne by the donations,

but had been paid for using the Ministry's funds in the first instance. The Acting Minister for Health would deal with the details of this case in his reply to Dr Wang.

Let me mention, however, that not all donations are made with a specified purpose. In some cases, donations or gifts of money are made outright to the Government, ie, the Government is named as the beneficiary. For these cases, the donated funds are credited directly to Government revenue. And provision for expenditure will then be made in the annual budget estimates of the Ministries.

16. Dr Wang Kai Yuen asked the Acting Minister for Health why are public donations to his Ministry for health science research and development being transferred to the Treasury.

Mr Deputy Speaker, Sir, let me first clarify that the donations were not from the general public, but came from one donor, the Singapore Totalisator Board (Tote Board).

In 1994, the Ministry of Health (MOH) set up the National Medical Research Council (NMRC) to coordinate and fund medical research in public hospitals. NMRC is funded by the Government out of MOH's annual budget.

In 1996, the Ministry of Health asked the Tote Board to help fund the NMRC so that we have additional money for research. The Tote Board readily agreed and decided that it would contribute up to 25% of the annual NMRC expenditure on medical research, subject to a cap of $5 million per year.

The working arrangement is for the Ministry of Health to justify its research

needs to the Finance Ministry, when it seeks its annual budget from the Government. NMRC will then fund its activities from the MOH's budget allocation.

Separately, the Tote Board will reimburse the Ministry of Health with 25% of the actual research expenditure incurred by NMRC in the previous year, subject to the $5 million cap. Upon receipt of the reimbursement, the Ministry of Health should have taken it in as revenue, thus offsetting part of NMRC's expenditure, in line with the donor's intention.

However, the Ministry of Health did not do so. It only took in part of the donation as revenue, but retained the rest in a deposit account. As a result, the Tote Board reimbursements have accumulated in the Ministry of Health's deposit account to $29 million when the Auditor-General discovered the discrepancy last year.

The Ministry of Health has made a mistake by not taking in the entire reimbursement as revenue. After the error was pointed out by the Auditor-General, the Ministry of Health has correctly taken in the $5 million reimbursement received in 2003, while trying to properly resolve the $24 million accumulated in the previous years.

The Permanent Secretary has apologised to the Tote Board for this mistake. The Ministry of Health has also resolved the accounting treatment for the remaining $24 million with the Attorney-General and returned the amount to the Finance Ministry.

17. Mdm Halimah Yacob asked the Acting Minister for Health when will the

Medical Service Package which was recently introduced for treatment of cardiac cases at the restructured hospitals be extended to other medical procedures such as renal, stroke or neurology cases.

18. Mdm Halimah Yacob asked the Acting Minister for Health in view of the rising cost of medicines (a) what measures are being taken to ensure that the cost of medicines dispensed at public hospitals and outpatient clinics remains affordable; (b) what are the criteria for determining whether a particular medicine is standard where there is a subsidy or non-standard where there is no subsidy; and (c) will the hospitals consider charging patients attending outpatient clinics for follow-up treatment the same rate for medicines as when they were treated as subsidised patients in the hospital.

Sir, with your permission, may I take Question Nos. 17 and 18 together?

Yes.

Sir, healthcare is an expensive service to provide because it involves resources such as trained professionals, high technology equipment, and medical implants and pharmaceuticals. Of these, pharmaceuticals form 10-15% of healthcare cost. We do not control the price of these resources. Nevertheless, the Ministry is working to keep healthcare affordable.

In 1979, the Ministry developed a list of standard and non-standard drugs with the help of expert physicians. The Standard Drug List (SDL) was modelled after the WHO Essential Drug List, with modifications to suit local disease profiles and practice. It consists of drugs assessed by the MOH Drug Advisory Committee to be cost-effective and essential to the

provision of medical care to all Singaporeans. The SDL is further categorised into lists 1 and 2. SDL 1 consists of mainly first-line drugs required for the treatment of common diseases of mild to moderate severity. SDL 2 was established in 1992 to allow essential but more expensive drugs (eg, cancer drugs) to be included.

MOH reviews the SDL regularly to take into account changes in clinical practice and advances in medical science. Revisions to the SDL are made with the input of the MOH Drug Advisory Committee and the respective national specialty committees. Evidence from the medical literature and comments from medical practitioners of the respective specialties are also taken into consideration. Where necessary, new drugs are added to the SDL.

To ensure that the cost of medicines remains affordable, our hospitals and polyclinics have taken the following measures. They include:

Ensuring that drugs are prescribed appropriately: MOH has been working with the relevant specialists to develop clinical practice guidelines for various common diseases to help doctors provide the appropriate treatments that are evidence based.

Using cheaper alternatives where available: With the introduction of electronic prescription systems, doctors are now kept informed about the costs of drugs and available alternatives. Doctors are encouraged, where possible, to use generic instead of patented drugs.

Central procurement through the Group Purchasing Office: The Group Purchasing Office (GPO) was set up in the year 2000 to support the institutions under the two clusters to perform central procurement. The GPO obtains competitive prices through purchasing tools

such as open tenders for bulk purchases. Savings obtained by this economy of scale are passed directly to patients.

To succeed in our efforts to keep healthcare costs affordable, we need the support of both the doctors and the public. Medical care in Singapore can remain affordable if we ensure that we spend our healthcare dollars in a sensible manner. Many older medicines, which are generic, are effective and have a well proven track record of curing or controlling a disease. It does not always mean that a newer patented drug is better than an older generic drug. Often, the latest medical treatments only provide a theoretical benefit but at a significantly higher cost. The long-term benefits and risks of these new treatments are often unknown. Doctors therefore need to look at medical treatments objectively and not be swayed by the subjective influences of advertising and marketing efforts. The public should also not think that expensive or newer medicine is always better.

MOH has recently reviewed the inpatient subsidy system and introduced the Medical Service Package (MSP) for heart diseases on 5th July 2004. The main objective of the MSP is to ensure that patients receive the appropriate subsidies for all cardiac services according to their ward class. The need for services is strictly based on medical indication. Under the MSP, medical services are classified into basic and extended. Basic medical services refer to treatments where the treatment indications are standard. These services will not be subject to peer review. Extended medical services refer to treatments where treatment indications are still evolving or controversial. Doctors will conduct peer reviews on the use of extended medical services to ensure that the most appropriate treatment is provided to their patients. This will serve as a form of

quality control where the cardiology profession monitors the work of the individual cardiologist. This is to ensure that neither under-treatment of patients nor over-provision of services occurs. Experimental treatments like placement of an artificial heart or stem cell therapy will be considered as excluded services and will require MOH's approval before doctors can proceed with such treatments.

Previously, there was minimal subsidy for implants like stents, pace-makers and defibrillators. Stents can cost between $1,800 and $5,000. Defibrillators can cost about $25,000. With the introduction of the MSP, patients who need these implants will receive a subsidy of 65% for the implants if they are in B2 class and 80% if they are in C class. The MSP has also added nine new cardiac drugs to the list of drugs on the standard list and these drugs will be subsidised at 65% for B2 patients and 80% for C class patients. We will monitor closely the utilisation of cardiac services and the quality of care provided.

The development of the MSP for the other specialties will involve defining the list of services and evaluating the benefits to patients. It will also involve making the necessary changes to the hospitals' billing and IT systems. MOH will be monitoring closely the impact of the MSP on cardiac services over the next three to six months. Based on the results of this pilot, MOH will take a phased approach in extending the MSP to other specialties. With the subsidies under the MSP, healthcare services for heart diseases, which are expensive services to provide, will remain affordable for Singaporeans.

< Sir, I would like to thank the Minister of State for the explanation. The Medical Service Package

is really a welcome move, and also the subsidy for stents and other procedures.</p /> Sir, I would like to thank the Minister of State for the explanation. The Medical Service Package is really a welcome move, and also the subsidy for stents and other procedures.

What is your question?

The concern of some patients is that when they are in hospital receiving treatment for the procedures for cardiac treatment, for instance, their medicines will also be subsidised up to the level of 65% or 80%. But the minute they are discharged, then the level of subsidy for the medicine goes down. I would like to ask the Minister of State whether the same level of subsidy could be extended once patients are discharged and have to go for follow-up treatment at outpatient clinics.

Sir, our systems for subsidies for inpatient and outpatient are different. What we have done for inpatient is to take all parts of the treatment - medicines, implants, surgery, ward care - together, and we provide a 65% subsidy. For outpatient, our subsidy is up to 50%. At this point in time, I think we will continue with these subsidy levels.

In the past, we tried to differentiate - 65% subsidy for different parts of the inpatient treatment - and patients suffered. Because when they needed an implant, they did not get any subsidy and they had to pay for these implants out of their own pockets. With the MSP, what we are doing is that we are rationalising the treatment for inpatient care and ensuring that they get this overall 65% subsidy.

Sir, in view of the fact that stroke is the fourth leading cause of death in Singapore and stroke incidents have been on the increase with 7,500 cases of hospitalisation each year and about 33% of these cases end up with disability, will the Minister of State

prioritise subsidising stroke patients further and soonest in our public hospitals?

Dr Neo, we have one minute left.

Will he also extend subsidy to early and sustained rehabilitation of stroke patients in order to reduce disability? Am I correct to say that early brain scanning is essential for the outcome of stroke patients? Therefore, will he also extend subsidy to brain scanning at outpatient clinics in order for doctors to administer action soonest?

Dr Neo, you are not giving the Minister time to respond.

Sir, in short, we give a 65% subsidy for all diseases, whether it is stroke, heart disease or cancer. We do not discriminate between sick patients based on their diseases.

3.00 pm

Order. End of Question Time.

[Pursuant to Standing Order No. 21(3), Written Answers to Question Nos. 21, 22, 25-31 and 34 on the Order Paper are reproduced in the Appendix*. Question Nos. 19, 20, 23, 24, 32 and 33 have been postponed to the next available sitting of Parliament.]

*Cols. 255-274

Mr Deputy Speaker, Sir, in August last year, when I was appointed the Coordinating Minister for Security and Defence to review the security situation in Singapore, I asked myself two questions: First, what does

National Security mean in an age in which transnational terrorism is the biggest security threat facing all countries in the world, including Singapore? Second, how can we best organise ourselves to continue to keep Singapore safe and secure against the threat of terrorism which threatens our economy and society?

Sir, these two questions are simple to state but the answers are complex and difficult to formulate. The questions are not unique to Singapore. Every country in the world today is confronted with these two questions and is struggling to shape responses which are appropriate to their circumstances and situation. Over the past twelve months, I have discussed the subject at length with my colleagues, the Minister for Foreign Affairs, the Minister for Home Affairs and the Minister for Defence in the Security Policy Review Committee, with our Government officials and also with analysts and commentators who are knowledgeable in the subject.

I have also led a number of study visits to various countries (including the United States, Britain, France, the Netherlands, Germany, Spain and some of our neighbouring countries) to meet with my counterparts in the defence and security fields in order to gather a range of perspectives on how other countries deal with their security concerns and how they have organised themselves to ensure their national security in this new security landscape.

After almost a year of deliberation, study, discussions and many meetings, I have arrived at two main conclusions: First, national security in an age of transnational terrorism cannot be divided into separate tasks, eg, external defence against a military threat and internal security against terrorists and criminals. Rather, all countries, including Singapore, have to deal with a continuum of security challenges ranging from state-directed military threats to low-intensity conflicts to ideologically inspired and globally

pervasive terrorism. And the second conclusion is that to cope with the new security challenges, we need to deal with security threats today on a "whole of government" basis, instead of dividing the tasks into watertight compartments to be dealt with by separate Ministries. Formulating and implementing an integrated and coordinated security policy is best done today by setting up a Coordination Unit at the centre of Government which, of course, is the Prime Minister's Office, which will coordinate strategic planning, policy formulation and capability development in security and intelligence to cope with the threat of transnational terrorism.

The above conclusions have been accepted by the Cabinet. The purpose of my Ministerial Statement today is to explain how we have come to these conclusions and the measures which we will take to restructure our Government machinery to meet Singapore's new security needs.

Transnational terrorism

Sir, transnational terrorism has become a central concern for all countries in the world today. Transnational terrorism poses a serious and immediate threat to Singapore's national security. Singapore is a prime target for terrorists and we have to live with the real prospect of a terrorist attack. This threat will be with us for a long time. We must be prepared for a long-drawn campaign against an enemy capable of conducting organised, deliberate and prolonged attacks.

Sir, transnational terrorism is terrorism that is globalised. It has a global network with a global reach. It has an agenda that is unconstrained by geographical or political boundaries. Osama bin Laden's Al-Qaeda does not only target the United States. It also seeks to destroy America's

allies in the West and throughout the world, overturning the international political order in the process, in order to establish pan-Islamic caliphates. Al-Qaeda has a network of affiliated terrorist groups across the globe, including, of course, the Jemaah Islamiyah in this region, who subscribe not only to Al-Qaeda's deviant ideology, but also to its extreme methods of terror. The attacks are more lethal and dangerous than ever before. If the terrorists are ever able to get their hands on weapons of mass destruction, I have no doubt that they will use them. Their ruthlessness leaves no room for negotiation.

More dangerously, these terrorists are not mere criminals. They have shown a degree of strategic sophistication that belies the extremism of their methods. The Madrid bombing is a clear example of a terrorist attack designed to achieve the strategic effect of changing a government, and dividing the US and its allies. Similarly, the kidnapping of hostages in Iraq going on almost on a daily basis is designed to affect the responses of countries in supporting the Iraqi government and the US-led coalition.

Since 9-11, many commentators, analysts and security officials have discussed extensively about the nature of terrorist threats facing countries in the world today. I do not intend to burden Members with recounting the innumerable opinions, books, reports and speeches which have dealt on this topic. In my view, the nature and significance of what transnational terrorism means to the world today is aptly summed up in a speech given by Mr George Shultz, the former Secretary of State of the United States, and delivered in May this year. Mr Shultz said, and I quote from his speech:

"(Transnational terrorism) is the method of choice of an extensive internationally connected ideological movement dedicated to the destruction of our international system of

co-operation and progress. ... The movement's objectives are in four layers or phases:

to drive the international community's people and influences out of the Middle-East (the religious core of the Muslim world);

to overthrow all Arab regimes that are in a working relationship with the international community;

to gain a more entrenched and threatening foothold in the most populous parts of the Muslim world which have traditionally been different in their outlook from Muslims on the Arabian peninsula - these would include South East Asia, sub-Saharan Africa, Central Asia - and inside the Western world (which is Europe); and

eventually to eliminate all vestiges of the international state system from a unified Islamic theocratic rule. ..."

And Mr Shultz concluded that today:

"The international state system is under determined attack by a religiously motivated movement using terrorist attacks of dramatic lethality as its weapon of choice. The war is against this movement, not just the weapon of terror."

Sir, in this new security environment, the danger to us comes from an enemy without shape or country, and with the capacity to continually threaten Singapore and Singaporean interests. Today, national security means that we must be prepared not just to deal with the contingency of a conventional military conflict, but also to be always alert and ready to confront threats at the other end of the security spectrum, particularly those posed by transnational terrorism.

Sir, we have already enhanced homeland security by implementing various measures to safeguard Singapore. But the impact of transnational terrorism will be felt in many areas, and the

responses to the threat will be provided by many agencies.

With transnational terrorism, the traditional approach of delineating the boundaries between Ministries and agencies, so that each is solely responsible for a particular area, will no longer work. The experience of other countries since the 9-11 attacks, as well as our own, shows the inadequacy of a stovepipe approach. The separation of responsibilities between the Ministry of Home Affairs for internal security and the Ministry of Defence for external defence leaves gaps in the defence of Singapore against transnational terrorism. Furthermore, no Ministry or Government department has developed the full range of competencies or capabilities to deal with this threat. The resources needed to deal with terrorism reside in many agencies. For example, aviation security draws on the resources of MINDEF for air defence, and of MHA for implementing the air marshal programme. Maritime security depends on the Police Coast Guard and the Navy working together with the Maritime and Port Authority to secure our port and territorial waters.

Sir, the key to ensuring national security today lies in strengthening co-ordination and integration among Government agencies involved in national security, particularly between the external and domestic intelligence agencies, because intelligence is a crucial weapon in the fight against transnational terrorism.

In times of crisis, eg, when we were fighting SARS last year, there is no doubt that all Government agencies will work together to deal with the problems at hand. However, we should not wait for a crisis to happen. We must anticipate such problems and deal upfront with inter-agency issues that relate to national security policy and plans where there is no clear ownership among the various Government Ministries and agencies. We

need to ensure that the policies and plans of individual agencies are aligned to and consistent with the national mandate. To this end, co-ordination in the development of national security strategy, policy and plans is most effective if it is driven from the centre of Government, which is the Prime Minister's Office.

National Security Coordination Secretariat

Sir, the Government has therefore decided to set up a new National Security Coordination Secretariat (NSCS) in the Prime Minister's Office. The NSCS will be overseen by a Permanent Secretary for National Security and Intelligence Coordination (NSIC) who will report directly to the Prime Minister through the Coordinating Minister for Security and Defence. The Permanent Secretary (NSIC) will chair two Committees:

a National Security Coordinating Committee comprising the Permanent Secretary (Foreign Affairs),

Permanent Secretary (Home Affairs), Permanent Secretary (Defence) and other Permanent Secretaries, when needed, to coordinate national security activities; and

an Intelligence Coordinating Committee comprising these three Permanent Secretaries whom I have named, and the Heads of our intelligence agencies to oversee the work and progress of counter-terrorism intelligence efforts.

To assist the Permanent Secretary (NSIC), the NSCS will incorporate two key agencies, ie, the National Security Coordination Centre (NSCC), and the Joint Counter-Terrorism Centre (JCTC).

The National Security Coordination Centre will focus on national security policy coordination and planning. NSCC's operations will include developing

programmes for risk assessment and public awareness and launching a national security course for public officers. NSCC will also monitor the on-going development of capabilities to address threats stemming from biological, chemical, radiological and cyber-terrorism as well as initiatives to enhance aviation, maritime and land transport security. A very important responsibility of NSCC is to build up, together with our think-tanks, a better and deeper understanding of the ideology which fuels the anger and the motivations of terrorists. More details are contained in the Fact Sheet which I am asking the Clerk of Parliament to give out to Members now. [Copies of Fact Sheet distributed to hon. Members.]

Sir, the Joint Counter-Terrorism Centre (JCTC) will focus on counter-terrorism intelligence coordination. It will be the focal point for strengthening the cooperation in counter-terrorism intelligence between the Security and Intelligence Division (SID) of MINDEF and the Internal Security Department (ISD) of MHA, particularly in the area of strategic intelligence needed for policy making. Working under the guidance of the Intelligence Coordinating Committee, JCTC will have the challenging task of developing and enhancing the cooperative modus operandi between our two intelligence agencies (SID and ISD) that have hitherto worked largely independent of each other. JCTC will not be directly involved in operations but it will have full information access to ISD, SID and other relevant agencies pertaining to its conduct of strategic analysis on an all-source basis. In other words, Sir, JCTC will act as the integration node in the production of strategic counter-terrorism intelligence from its inputs from all sources for integrated analysis and assessment. JCTC will then be able to provide the higher level strategic picture that is needed to formulate national strategy and policy and plans for the development of national counter terrorism capabilities.

Sir, coordinating the responsibilities and work of a number of Ministries and agencies is always difficult. But whatever the difficulties, we must succeed in better coordinating planning, policy and intelligence, because failure to do so will mean a degraded capability which will not be adequate to deal with the threat of transnational terrorism.

Measures taken after 9-11

Sir, even before 9-11, we have been concerned with the issue of terrorism. Several of our Ministries and agencies, particularly the Ministry of Home Affairs, have been developing capabilities to deal with specific threats, eg, chemical and biological threats. But 9-11 has reinforced the urgency and importance of dealing with terrorism and, where necessary, we have put in place several ad hoc coordinating arrangements to protect Singapore and Singaporeans from terrorist attacks. The Security Policy Review Committee that I chair has provided strategic policy direction and guidance. Ad-hoc committees of Permanent Secretaries have been set up to co-ordinate the development and implementation of strategic responses to various threats, including aviation security, land transport security and maritime security.

Through these ad hoc arrangements, much has already been achieved in hardening Singapore against terrorist attacks. Since 9-11, we have put in place enhanced security measures that cover our land entry points, airport, seaports, critical installations and key public areas. We have also improved our capabilities to deal with explosives, and chemical and biological threats. The work we have done over the last three years has raised our overall vigilance and readiness, and helped to close obvious capability gaps that were identified.

But, Sir, it is unwise to depend on such ad hoc arrangements in the long run.

They must be replaced with robust institutional structures. The Strategic Framework for National Security will address the issues I have discussed, close the gaps which we have identified, and put in place the machinery to enable the Government to systemically deal with the security issues which confront our nation today.

National resilience

Sir, enhancing Singapore's national security cannot be left to the Government alone. The people and the business community must play their part. The Government's efforts to deal with the threat of transnational terrorism can only be effective with the full participation of all Singaporeans. Everyone has a part to play in Singapore's national security. The key ideas behind the Strategic Framework for National Security will be disseminated to create awareness through a public document titled "The Fight against Terror: Singapore's National Security Strategy" to be launched in August at a National Security Seminar.

Conclusion

Sir, the most fundamental duty of Government is to protect the lives of our citizens and their property and interests. Fulfilling this duty requires constant vigilance and bold thinking to pre-empt and prevent terrorist attacks. In this connection, Sir, I - and I think the whole of Singapore - should pay a tribute to our security and defence agencies, particularly MINDEF, MHA and their agencies, and also SID and ISD, for their sterling efforts and hard work to keep Singapore safe from terrorist attacks, despite the turbulent and dangerous security environment in the last few years. The Strategic Framework for National Security will now establish the baseline which will enable us to further evolve our security strategy to deal even

more effectively with the long term threat of terrorism that is constantly evolving and adapting.

When the National Security Coordination Secretariat and its two agencies, ie, the NSCC and JCTC, are properly staffed and fully operational, our Government Ministries and agencies will be better placed to work even more closely and effectively with the people and the business community to keep Singapore safe and secure.

I urge Members to support the Strategic Framework for Singapore's National Security which I have just outlined. I welcome your ideas, questions and views to continuously improve our efforts to safeguard Singapore's future.

Mr Deputy Speaker, Sir, with these measures that have been announced by the Coordinating Minister for Security and Defence, the House can be very assured that the Government is continually doing all it can to enhance the safety and security of its citizens. We all recognise that security is the responsibility of every citizen, and I am referring to this public document that the Coordinating Minister has just spoken about.

Firstly, can I ask the Coordinating Minister whether we can put out this document in a very simplified way and make it available to as many households as possible in Singapore, perhaps to all schools even, so that members of the public are fully aware of what the Government is doing and what role they themselves can play in enhancing the security of the country?

Secondly, can I ask whether it is possible for his Ministry to come up with a CD presentation that MPs can use to

present to their grassroots leaders so as to communicate the message?

Minister, do you want to give your reply now?

No. Later.

Yes. Mr Leong Horn Kee.

Mr Deputy Speaker, Sir, I would like to also thank the Deputy Prime Minister and Coordinating Minister for his very clear explanation about national security. I would like to ask whether it is timely now to heighten the level of public awareness about these various potential national threats, such as train attacks, explosions at installations, or even biochemical attacks. If we heighten the level of awareness and make it more public, there will be more public concern and, therefore, people get more worried. I think, on balance, it is better to actually start with more programmes of such kind whereby the public can be educated, as Mr Tan Soo Khoon said, on television, by publications and various means, so that we know how to prepare ourselves and how to react when such instances do happen.

In particular, I would also like to ask whether we could also involve the schools, grassroots organisations and the public in general in getting involved in some of these exercises and to suggest whether we should conduct national alert emergency exercises and programmes, so that people can practise and learn how to react.

Mr Deputy Speaker, Sir, I welcome this integrated and coordinated approach to our national security. I would like to ask the Deputy Prime Minister and Coordinating Minister whether the National Security Coordinating Secretariat would have additional budget to give it the bite and

also to influence the other Ministries. Although now that you have a Permanent Secretary based in this Coordinating Secretariat, I wonder how influential this Permanent Secretary will be in motivating the other Ministries and agencies to come and work together. Will he, for example, be able to influence its budget? Can he influence, for example, the appointment and promotion of civil servants working in different Ministries, because these are critical elements for them?

Sir, the establishment of the NSCS under the PMO and the appointment of a senior civil servant focused on national security are important steps that demonstrate the Government's serious approach to the new threats facing us. But I would like to ask the Minister to clarify the exact mandate and authority given to this unit and the Permanent Secretary, as it would lead to how seriously the measures would be taken and whether it would be tight coordination or loose coordination. Can I ask the Minister whether the role is to coordinate in terms of giving suggestions on how to improve networking, or will the agencies and the Ministries that are involved be required to respond to his directions?

Related to that question is whether a new secretariat under the PMO would also have authority over the planning and budgeting resources and the personnel required to encourage, if not force, the various Ministries and agencies to take joint coordination and operations seriously. I would also like to join my colleague, Dr Ong Chit Chung, to ask whether a budget should be allocated to this secretariat, to make sure that it will be able to carry out its programmes effectively.

Sir, my last question is, given the range of threats that have been mentioned in the Minister's statement, whether there is a clear sense of priorities

in terms of which threat we should be focusing on, because that would give us a sense of how to allocate our resources as dollars are finite, and also to give the public a sense of what sort of threats we should be looking out and preparing for.

Mr Deputy Speaker, Sir, I thank the four Members for their questions. I thought I would answer these questions first.

Mr Tan Soo Khoon and Mr Leong Horn Kee have brought up this question about involving the public to ensure national security for Singapore. Sir, this is a most important point. As I said in my speech just now, national security cannot be left to the Government alone. National security is the responsibility of every Singaporean. This has to be brought home to grassroots organisations, schools and to the general public. That is why we are preparing a public document to explain the ideas in the statement which I have just made, but in a much more friendly and accessible manner with illustrations, photographs and in simpler language. We will disseminate this publication at a national security seminar to be held in late August and make it available to schools and households. We would appreciate the help of Members of Parliament to distribute it to their constituencies. We will also make available a CD presentation which Members can use when they talk to their grassroots leaders. We also need to publicise this through the media, the newspapers, the television and the radio. We will arrange for discussions and interviews in order to put these points across. It is difficult to put across the main points and all these nuances in one presentation. I have set out the main points today. We will elaborate on these in the coming months. In this case, Members can do a great service to Singapore by working with the National Security Coordinating Committee and the Secretariat in order to put across these ideas and to explain the significance of

these measures to the man-in-the-street and to the public.

Dr Ong Chit Chung has asked whether the National Security Coordination Secretariat will be given an additional budget in order to influence other Ministries. I think the same question has also been asked by Ms Irene Ng about how we ensure that there is cooperation between the Ministries.

Sir, let me say, first of all, that we should be proud of our security agencies - MINDEF, MHA, SCDF, the Police, SID and ISD. These are first-class organisations. They are staffed by dedicated professionals, led by competent leaders who have the vision and determination to keep Singapore safe. And because they are good organisations, it is to be expected that they would have different views about how to handle issues and different perspectives on how to ensure national security. If they were people without strong convictions, it would have been much easier to get agreement on the measures which I have just outlined. But because they are strong individuals with strong views, we have had to trash out these issues over many meetings and over many months, and that is good. I welcome that because I am assured by that process that they have applied their minds and where we have been able to get agreement, it has not compromised their core interests.

But to ensure coordination, the most effective way is through the budgeting process. The Ministry of Finance has made available to the Security Policy Review Committee a revolving budget of $50 million which they top up from time to time, as and when we need to launch urgently some national security programmes. For example, we were very concerned over the last few months with the security of some of our embassies

overseas. With the measures which we have taken in Singapore, we are confident that we have hardened Singapore. And, therefore, if any terrorists were to attack Singapore or Singaporeans' interest, it would most probably be overseas rather than at home. The SPRC discussed with the Ministry of Foreign Affairs (MFA), pointed out the danger, and MFA has now launched a programme to ensure that all our embassies are safe. Of course, that requires money. And through the normal process of budgeting, it may take some time. But this is an urgent issue.

The SPRC made available the necessary money to MFA so that they could get the programme started as soon as possible because we cannot waste time when lives are at stake. Our officials, our Ambassadors, our foreign service officials in our embassies live and work abroad to serve Singapore, and we must ensure that their working environment is safe and that they will not be blown up by a car bomb or by a suicide attack. And through this process of a revolving budget, it has been most helpful in getting such programmes quickly off the ground and we will make the same arrangements, with the cooperation of the Ministry of Finance, for the National Security Coordination Secretariat.

How do we ensure coordination between the domestic intelligence and the external intelligence agencies? It is very difficult. The difficulty of getting, for example, in the United States, the CIA and the FBI to work together is well-known. If you open any newspaper today, their problems are manifest. I hope that through the arrangement which we have set, through the good sense and cooperation of the individuals and the leaders in our intelligence agencies, we will be able to foster this cooperation.

The British have the same problem and they have a lot of experience with terrorism because they have been fighting

the IRA terrorists for many decades. Their intelligence arms are MI5 (which is their domestic intelligence arm) and MI6 (which is their external intelligence arm). MI5 reports to the Secretary of State for Home Affairs, MI6 reports to the Secretary of State for Foreign Affairs and GCHQ, which is their signal intelligence arm, reports to the Secretary of State for Defence. Ultimately, to ensure that these three intelligence arms work together, they have only one intelligence budget which is under the control of the Permanent Secretary for Coordination and he allocates it between the three intelligence arms and therefore compels them to work together. We have not gone as far as the British in our proposal. I do not expect that we will need to do so, but at the end of the day, we have to have an arrangement whereby SID and ISD will work together to enable the Government to have an integrated intelligence picture. If intelligence is not there, if the intention is flawed, then we can get into big problems, as the British and US governments are now finding over the situation in Iraq. That is fundamental.

The National Security Coordination Secretariat is a work in progress. It is a start. We have to see how it goes on. And we may have to make modifications along the way. We may have to strengthen the powers and authority of the Permanent Secretary for National Security and Intelligence Coordination, and we will do so. But, I think, give it a try. The discussions which I have had with the Ministers, our Permanent Secretaries and other officials in our security agencies give me confidence that whatever be the difficulty, we will eventually get this coordinated intelligence and policy planning which is necessary to keep Singapore safe.

Mr Deputy Speaker, Sir, it is clear that the new structure will focus on protecting Singapore from terrorist

attacks. But in view of the ways that terrorist groups are using hostage-taking of civilians as their weapon in terrorising nations in Iraq today and potentially beyond, will the new security structure consider the potential threat of such methods to Singaporeans overseas? How can Singaporeans be further prepared and protected from such threats when they are overseas?

Sir, while we welcome the setting up of the new coordinating agency, I think most Singaporeans will be keen to know what assurance can the DPM give to Singaporeans that the failings of the security agencies in the West, particularly in the United States, will not be repeated by this new coordinated agency.

Sir, the DPM has rightly pointed out that the fundamental responsibility of the Government is to protect the lives and property of Singaporeans.

Sir, I support the new integrated framework of national security structures. It is right to place it at the highest command of the nation, ie, the Prime Minister's Office. However, Sir, I think the most difficult part of policy formulation, in response to security threats, is to formulate the appropriate response. How much should be tightened to ensure that there is no loophole for terrorists to penetrate? But, Sir, on the other hand, are we sure that we are not over-reacting to some perceived threats which could result in an over-draw on our resources and also curtailing unnecessarily the freedom of our people?

Sir, I think with the coordinating agency having both the benefit of intelligence information and also in the process of formulating policies, I believe that the measures to ensure a safe Singapore would be better calibrated. I would like to know how and what benefits will be derived from this new set-

up in which we would have an appropriate response to security threats which is balanced and necessary, but does not curtail unnecessarily the freedom and movements of Singaporeans.

Mr Deputy Speaker, Sir, it is very reassuring to hear from DPM that actually we are very serious in beefing up our national security and we are concerned with foreign terrorism as well as the dangers and risks posed, if incidents were to occur in Singapore.

The recent blackout incident - it is not terrorism-related, thank goodness for that - in terms of the public response, it seems that we are not that prepared, whether it is due to accident or other deliberate attempts. In this regard, the local connections of beefing up the psychological defence of our people are important, ie, how well connected are we with utilising to the maximum our extensive network of grassroots bodies and the CDCs in helping, firstly, to root out the possible causes for disquiet, unrest and the beginnings of recruitment for terrorist activities by foreign parties. But, more importantly, we need to have the resilience in tackling any crisis, and if any crisis were to occur, we have an orderly and systematic way of dealing with it, rather than, as we have heard earlier in the House, being not that prepared in such incidents.

Sir, in a recent study by Rand Corporation, which studied the four intelligence agencies of UK, US, France and Australia, what came out clearly was that inter-agency rivalry was the cause of intelligence failure repeatedly whenever challenges face these agencies. So while I recognise that at the upper echelons of Government we would have coordination, my concern is how do we ensure that this rivalry at the operational level does not

affect the quality of intelligence that is ultimately given to the upper echelons. And could we consider, at the lower echelons - whether it is Police intelligence, SID, ISD or MFA - some form of cooperation or training whereby some of these officials could be brought together regularly so that they understand ultimately that the protection of their individual department's turf is not as important as national security and interest?

The second question that I would like to ask the DPM is whether having too many structures would in itself hamper quick decision making when it comes to a time when some quick decisions have to be made to meet some of these security challenges or emergencies that may arise.

Mr Deputy Speaker, Sir, let me deal with the questions which have been raised by Members.

First, the point from Dr Maliki about hostage-taking in Iraq and the dangers to Singaporeans overseas. Sir, it is not possible for us to protect every Singaporean who works or lives overseas. Everyone has to take a sensible approach to his or her own security. Where it is necessary, like for example in Iraq, the Ministry of Foreign Affairs has put out a travel advisory, advising Singaporeans against travelling to Iraq or living there, because the danger of being kidnapped by the militants in Iraq is very high. And we do not want to have a repetition of the Filipino situation in Singapore. We have to take sensible precautions. That is why, where necessary, we would advise Singaporeans about the dangers of travelling to different countries. But it is not possible, unless we prevent Singaporeans from going overseas, to make sure that no Singaporean would get into trouble. I would urge all Singaporeans, who go to places which may be dangerous, to at least let our embassy know of their

whereabouts and arrange to be contactable by the embassy, if and when there is trouble.

Mr Sin Boon Ann has asked whether we could be assured that the failures in intelligence, which have been so well publicised in the West, would not happen in Singapore. Sir, I cannot in all honesty give an absolute guarantee that it would not happen here. With the structure that I have outlined, and with the hard work of our people, I think that the danger is much less. At least, we have made a start, while other countries are still talking about how to coordinate their intelligence agencies. But there is no 100% fool-proof method. Intelligence is a delicate subject. Somebody has said that intelligence does mean connecting the dots from point A to point B. Intelligence means looking at the pattern of dots and being able to figure out a relevant structure. And that is very difficult because different people looking at the same group of dots would come to different conclusions. So it is never 100% sure. But if we can integrate our domestic and external intelligence, I think we will have a better chance of getting the right answers. But I cannot guarantee that we will be right all the time.

Mr Low Thia Khiang has brought up a very important point. How do we balance protection and security for Singapore and Singaporeans, without at the same time curtailing the freedom and the rights of our people? This is a question which is relevant not only to Singapore but to all countries, and we have to strike a balance here. We have to live with terrorism. We cannot allow terrorism to dictate our lives. We cannot allow the possibility of terrorist attacks to prevent us from going about our normal lives, doing our own work. So, there is a limit to how much protection or preventive measures that one could put in place. Otherwise, we would not even go out of our houses! It is a question of balance. When we harden Singapore, for example, by preventing customers of

restaurants and bars from parking in front of these establishments, we know that we are creating inconvenience and affecting the business of these bars and restaurants. But, if we do not do it, then the possibility of someone packing a car with explosives, parking in front of a bar or restaurant, blowing it up, causing hundreds of casualties, as had happened in Bali, is very real. So that is something we have to do. It causes inconveniences to people, but it is necessary.

There is no magic formula to decide what is necessary or what is not necessary. We have to have good sense. We have to depend on the intelligence of our officials and, where possible, we will only do what is absolutely necessary because it is not possible to keep Singapore completely safe, and to assure Singaporeans that there will never be a terrorist attack in Singapore. And this brings me to the point brought up by Prof. Ngiam.

Sir, we have to develop resilience in Singaporeans. The possibility of terrorist attacks will be here for a very long time and it could come in many fashions. Apart from a car-bomb going off in front of a hotel or a restaurant, one thing we are very worried about is people hijacking a ship with chemicals and crashing it against our port. And our port is located in a part of Singapore which is densely populated. That could cause hundreds, if not thousands, of casualties. These are dangers which we have to guard against. For the more extreme ones, we have to take all measures to make sure that they cannot occur. But, one day, some terrorists may get through. There may be a bomb attack. The thing to do, Sir, is to assure Singaporeans that even if there is a terrorist attack in Singapore, it is not the end of the world. Singapore will go on; we will overcome! But we must have the resilience to overcome these attacks.

Mr Ravindran brought out a very difficult point - how to ensure co

operation right down the line, not only at the top but among the officials. And that is very difficult. Sir, we must realise that for intelligence agencies, information is their life-blood. That is what they live for. And for an intelligence agency, whether in Singapore or overseas, to share intelligence is going against their very nature, and that is why it is so difficult to integrate and coordinate these agencies.

The example has to be set from the top, from the Heads of SID, ISD and all our other agencies, in order to show that we are prepared to work together. We have the Intelligence Coordinating Committee under this set-up, which comprises the four Permanent Secretaries, together with the Heads of SID, ISD and JCTC, and they would have to work out ways in order to make sure that this cooperation takes place. It would be difficult but it has to be done. All I can say to Members is that at least we are trying to make a start here. Other countries have not even come to the starting point.

Mr Deputy Speaker, Sir, unlike Mr Low Thia Khiang, when it comes to safety and security, I feel that we should even be prepared to err on the conservative. I think we should put as much resources into making sure that our place and our citizens are safe. So while we pay tribute to our security agencies and personnel, I would like to even urge the Government to ensure that they are given the best of resources. It is also a question of spirit. I think we all know that it is also about the battle of the mind. So I am glad to see that the DPM and Coordinating Minister for Security and Defence has spoken about the need to build a better level of intellectual capital, for example, research into political Islam, violence and terrorism. I think we also need to ensure that we build up a greater sense of goodwill

among our people. There is a lot of misunderstanding about Islam, Muslims, terrorism and violence. So I think better research into political Islam, violence and terrorism would also bring about better understanding so that we could get the majority of Muslims who are moderate to be on our side to fight the evils in terrorism and violence.

And, finally, Sir, on the question about international and regional cooperation, I am glad to also hear the Coordinating Minister speak about threats in aviation and maritime. I would like to ask the DPM what is the level of cooperation that we are getting from our neighbours, particularly in the areas of maritime cooperation.

Sir, I would like to ask the Coordinating Minister whether with this new framework in mind, there would be more regular updates and reports from the new secretariat. Or would it continue to operate in a mode of absolute secrecy? Secondly, would the Internal Security Act be amended accordingly?

Mr Deputy Speaker, Sir, I think Singaporeans would do well to heed the travel advisories given by the Government, especially when going to places where there are possible dangers. But hostage-taking might actually happen in any country when Singaporeans are abroad. What would be our Government's stand should situations like these occur?

Mr Deputy Speaker, Sir, from the business community, we certainly welcome this increased security measure. I would just want to find out from the Government if there are certain ways of looking how best to lessen the burden for the business community, because I am sure there will be more procedures like the security checks at the port, land, air and sea.

Mr Deputy Speaker, I have just one point of reflection for the Deputy Prime Minister. I was looking at his theme for 2004 - "It's not complete without you". Our discussion is that everyone has to play a part. The structures seem, if you would be patient with me, a little bit too defensive. I think the best way to go about security issues is to bring the citizenry in and, at the same time, not to throw the baby out with the bath-water. We have strong community bonding. My fear is that as we go on in this way, the alienation might set in if we are not careful. From that perspective, I would like to suggest that perhaps the theme could be "It's only complete with you", which is more positive and inclusive.

Mr Deputy Speaker, Sir, I want to talk a little bit about the point brought up by Mr Zainul because he has brought up an extremely important point, and that is the role of ideology and belief in fuelling terrorists.

Sir, one of the most troubling things about the extremists whom we arrested in December 2001 was that they were ordinary Singaporeans. They were not ideologues. They were people who had jobs and were educated, and yet they could be inspired by their erroneous beliefs. If we had not arrested them and disrupted their plot to carry out attacks, it would have killed not only Americans or foreigners, but their friends and perhaps even members of their families. How do you account for that?

This is a very deep issue. It involves religion and religion involves the deepest motivations of human beings. At the end of the day, the western world and governments cannot defeat radical Islamic terrorism. It can only be done by the Muslim community themselves, by moderate Muslims speaking out against the deviant teachings of Osama Bin Laden and his group, and point out that this is wrong.

Sir, Islam is a religion of peace. Ordinary Muslims do not go about trying to kill people. But there are groups out there who subscribe to this ideology and inspire other people to follow them, and that is why there were bombings in Madrid, Bali, and other attacks. It is a very long term problem. As Mr Zainul has rightly pointed out, one of the most important tasks of the National Security Coordination Centre is to build up this knowledge about ideology and belief, so that we can better understand the motivation of these terrorists. In that way, we could work with moderate Muslim leaders, and at least for our own people here, enable them to get a better understanding and to prevent Muslims from going the wrong way. Here, we would appreciate very much the help of Muslim Members of Parliament, grassroots leaders and mosque committees to work with us in order to get this message across.

Mr Steve Chia has asked whether we will make more regular reports, I suppose, to Parliament. Sir, intelligence is not something we talk about all the time. It is only when it is necessary. And defence is not a subject which is regularly brought up. We will do so when it is necessary.

We will also not amend the Internal Security Act. It is necessary for Singapore now. Without the ISA, we would not have been able to disrupt the plot in December 2001. Seven car bombs - each of them with three tonnes of ammonia nitrate - would have been detonated instantly against the US, British, Australian and other embassies, some of our military camps and MRT stations. Singapore will not recover from such an attack. So, to do away with the ISA would be an extreme act of foolishness.

Dr Warren Lee asked what would be the Singapore Government's stand if a hostage were to be taken and we are subject to the same situation that the

Philippine government is now facing. First of all, we must try and make sure that we never get into that situation. Once we get into that situation, it is very difficult to resolve the situation. But I just want to make one point that we cannot negotiate with terrorists. If we give in, and in the case of hostage-taking, it is a heart rending situation. We are dealing with people who cannot be persuaded by normal human interests. Let us not get into that situation first. But if we do, then the Singapore Government cannot and should never negotiate with terrorists. It will encourage more terrorists to take more of our people as hostages.

Ms Olivia Lum brought up the point about the burden on businesses. We do realise that because it is a fact of life today. It is unfortunate that it means more cost. We will try and lessen it as much as we can. Whenever we have to impose any measures, we try and discuss with the business community, but some measures are inevitable and I think businesses will have to bear with these measures at least for the time being.

Finally, Ms Braema has said that we should involve the community and she has got a tag line - it's only complete with you. I think it is not bad. We will think about it. But it is true that we have to involve everyone. National security in Singapore cannot be left to the Government alone. It involves every Singaporean. It involves our own safety. But with the support of Members of Parliament, grassroots leaders, the public and schools, I am confident that we can keep Singapore safe.

"relating to the registration and regulation of business trusts and matters connected therewith",

presented by the Second Minister for Finance (Mr Lim Hng Kiang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Securities and Futures Act (Chapter 289 of the 2002 Revised Edition)",

presented by Mr Lim Hng Kiang; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Criminal Law (Temporary Provisions) Act (Chapter 67 of the 2000 Revised Edition)",

presented by the Minister for Home Affairs (Mr Wong Kan Seng); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Prisons Act (Chapter 247 of the 2000 Revised Edition)",

presented by Mr Wong Kan Seng; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Building Control Act (Chapter 29 of the 1999 Revised Edition)",

presented by the Minister for National Development (Mr Mah Bow Tan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Government Securities Act (Chapter 121A of the 2002 Revised Edition)",

recommendation of President signified; presented by Mr Lim Hng Kiang; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to prohibit the placing of a human embryo clone in the body of a human or an animal and certain other practices associated with reproductive technology",

presented by the Minister of State for Health (Dr Balaji Sadasivan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.25 pm.

4.09 pm until 4.25 pm.

Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

Sitting accordingly suspended at Sitting resumed at 4.25 pm

Order for Second Reading read.

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Background

The IRAS Board was set up in 1992 when IRAS was restructured from a

Ministry of Finance department into a statutory board. The role of the IRAS Board is to ensure that IRAS carries out its functions competently.

This Bill will amend the Inland Revenue Authority of Singapore Act to give legislative effect to the following measures:

Remove the requirement that the Chairman of the IRAS Board shall be the Minister for Finance;

Empower the Minister for Finance to appoint the Chairman of the IRAS Board;

Increase the membership of the IRAS Board members (excluding the Chairman) from the current range of four to six members to the new range of five to 10 members; and

Increase the quorum for the IRAS Board from three to five.

Sir, I shall now explain the amendments in the Bill.

Chairmanship

The first amendment to section 5 of the IRAS Act removes the requirement for the IRAS Board to be headed by the Minister for Finance.

The provision for the Minister for Finance to be Chairman of the IRAS Board was set out in 1992 to ensure the smooth transition of IRAS from a department under the Ministry of Finance to a statutory board. Now that IRAS has functioned smoothly for so many years, the chairmanship of IRAS can follow the common practice of other statutory boards, where the Minister appoints the chairman of the statutory board. In this

regard, suitable candidates for the Chairmanship can be identified from the public or private sector. However, parliamentary accountability will remain with the Minister.

Cap on number of board members

The second amendment to section 5 of the IRAS Act increases the number of IRAS Board members (excluding the Chairman) from the current range of four to six members, to a new range of five to 10 members. This will bring the IRAS board membership closer to other statutory boards such as the CPF, LTA and MAS boards, which have upper limits on the number of board members ranging from nine to 14 each. More importantly, it will allow a broader range of members from the private sector to be brought in, who can offer inputs and guidance to IRAS in meeting the needs of taxpayers and the economy.

To ensure that decisions are made by a representative Board, the IRAS Act will also be amended to increase the quorum for the IRAS Board from three to five.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Lim Hng Kiang].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Bill comprises amendments to three Acts, namely the Accountants Act, the Companies Act and the Government Procurement Act.

Amendments to the Accountants Act

Sections 13 and 15 of the Accountants Act set out the procedures for renewing a public accountant's certificate of registration and the conditions for removing the name and particulars of a public accountant from the Register of Public Accountants.

The amendment addresses the following two points. First, it makes clear that the renewal of a certification of registration for a public accountant must be made to the Oversight Committee one month before its date of expiry. Second, it makes clear that the Registrar will have the power to remove the name and the relevant particulars from the Register of Public Accountants if a public accountant certificate has not been renewed one month after its date of expiry.

Amendments to the Companies Act

Inspection of Minute Books

Let me next turn to the amendments to the Companies Act. Section 189 of the Companies Act describes the inspection of minute books by members. The current provision erroneously requires companies to provide its members access to all proceedings of general meetings, as well as meetings of their directors and managers. This was a drafting error.

Section 189 will be rectified to limit members' access only to those minutes of meetings which involve them, namely, the minutes of proceedings of any general meetings and any written resolutions. This

is consistent with international practice and good corporate governance. The amendment will be backdated to 1st April 2004.

Winding Up Procedure

The second amendment to the Companies Act is to provide for the Court to order the winding up of a company only where there is no member remaining. This follows the recent Companies (Amendment) Act 2004 to allow for the existence of one member companies.

Amendments to the Government Procurement Act

Let me now turn to the amendments to the Government Procurement Act. The amendments in the Government Procurement Act are necessary to bring into effect our Free Trade Agreement (FTA) obligations under the Government Procurement chapters.

Singapore acceded to the World Trade Organisation's Agreement on Government Procurement (GPA) in 1997. Parliament passed the Government Procurement Bill later that year.

The Government Procurement Act and its subsidiary legislation put into law the obligations of the Singapore Government as a party to the WTO-GPA. In our FTAs with fellow GPA members like the United States and Japan, the Government Procurement chapters in these FTAs often incorporate clauses from the WTO-GPA text. It is necessary to expand the scope of the Government Procurement Act so that the relevant subsidiary legislation could be amended to accommodate the lower thresholds and wider range of committed services accorded to partners under our FTAs.

There are two main amendments. First, to expand the scope of the Act by way of amendment to its title to include,

in addition to the GPA, other international obligations of Singapore relating to public procurements. Second, to amend the definition of "relevant suppliers" in the Government Procurement Act to include suppliers of our FTA partners.

Sir, I beg to move.

Question proposed.

Sir, I understand that one of the amendments needed in the Companies Act is actually because of a drafting error in the earlier Bill passed by Parliament. I think it was reported in the Business Times. We should all feel embarrassed of passing a Bill with such an error. I would like to know how did the error occur in the first place. How was the drafting process supervised? Was it adequately supervised? What steps are taken now to make sure that such mistakes will not happen again? I would like the Minister to clarify these points.

Mr Deputy Speaker, it was indeed an error and an oversight. What happened was that when we put up the draft Bill for public consultation, everything was in order. But later on, when we took in the feedback from the various comments, there were some amendments to the various sections and, in particular, the drafting error came about when section 188 was amended as part of the amendment Act to require a company to keep minute books containing all resolutions passed by written means, declarations and resolutions made by the company. Then a subsequent amendment was also made to section 189, and in that amendment, it required certain documents kept in the minute books to be made available to shareholders for inspection or purchase. However, because section 189 also made reference to section 188, therefore an unintended result of the amendment was that section 188 now required the company to also make available for inspection by any member

minutes of all proceedings of general meetings as well as meetings of the directors and managers. So that was how the mistake was made.

Clarification, Sir. How did the drafting error occur in the first place? The Minister has explained how it happened. But, I suppose, officers in the AG's Chambers are all legally trained. Is the amendment very complicated? Is there any other additional step taken now to prevent such things from happening again, ie, an additional process of checking before presenting it to Parliament?

As I explained, when they made the amendments to section 188, that amendment was correct. But they did not realise that section 189 also referred to section 188. Therefore, when you now allow members to have access to the minutes of meetings, and section 189 says that minutes of all meetings are also covered in section 188, then it also includes all the other meetings like the directors' meetings and management meetings. That was how the oversight came about. So it was just the drafters' error in not detecting that when they made amendments to section 188, they should check what were the other references to section 188 which also had these consequential amendments.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Lim Hng Kiang].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Mr Deputy Speaker, Sir, I beg to move,

That this Parliament, in accordance with Article 144(1)(a) of the Constitution of the Republic of Singapore and section 3(1) of the Local Treasury Bills Act (Chapter 167 of the 2002 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore under that Act, a further sum not exceeding Ten Thousand Million Singapore Dollars (S$10,000,000,000), thereby in total a sum not exceeding Thirty Thousand Million Singapore Dollars (S$30,000,000,000).

Sir, on 25th September 2001, Parliament resolved, in accordance with section 31 of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition) that the Minister for Finance be authorised to borrow by the issue of Treasury Bills in Singapore a revolving sum not exceeding $20,000,000,000. As at 31st March 2004, the outstanding amount of Treasury Bills issued is $18,000,000,000. There is a need to raise the limit. The small issue size of the three-month Treasury Bills is hampering trading activities in the short end of the Singapore Government Securities curve as most of the Treasury Bills are locked up as minimum liquid asset requirements of financial institutions. The average issue size of three-month Treasury Bills is about $950,000,000, which is smaller than the average issue size of around $2-$2.5 billion for the longer term securities, and the average daily trading volume of Treasury Bills in 2003 was only $161,000,000, compared to $2.5 billion for Singapore Government Securities. To meet the market demand and to support capital market development efforts, the Monetary Authority of Singapore will gradually step up the Treasury Bill issue.

I propose therefore that the current ceiling for borrowing by Treasury Bills of $20,000,000,000 be raised by another $10,000,000,000 to a total of $30,000,000,000. This ceiling will apply to the outstanding amount of Treasury Bills.

Parliament is requested to enable the Government to issue the Treasury Bills up to a total amount not exceeding $30,000,000,000.

Question put, and agreed to.

That this Parliament, in accordance with Article 144(1)(a) of the Constitution of the Republic of Singapore and section 3(1) of the Local Treasury Bills Act (Chapter 167 of the

2002 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury Bills in Singapore under that Act, a further sum not exceeding Ten Thousand Million Singapore Dollars (S$10,000,000,000), thereby in total a sum not exceeding Thirty Thousand Million Singapore Dollars (S$30,000,000,000).

Resolved,

"That Parliament do now adjourn to a date to be fixed." - [Mr Mah Bow Tan].

Adjourned accordingly at

Sixteen minutes to Five o'clock pm

to a date to be fixed.

WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 3.00 PM

asked the Minister for Community Development and Sports as there are about 138 complaints against childcare centres last year, the number of which is more than double that of 2002, what actions have been taken by his Ministry to curb the trend.

As at 1st June 2004, more than 40,000 children are enrolled in 667 childcare centres in Singapore which provides more than 55,000 places. I would like to assure Members that as the licensing authority for childcare centres, my Ministry gives our highest priority to the safety and best interest of children. MCDS would take action against any child care centre that is found to be negligent or carrying out inappropriate practices. Such action can range from the issue of written warnings to termination of the childcare centre licence.

The majority of the 138 complaints received in 2003 concerned administrative issues arising from centre closure due to SARS. Many of the complaints relate to centres not refunding deposit and fees even though they were temporarily shut during the SARS period. Although parents' unhappiness was understandable, the complaints had no direct bearing on the centres' ability to provide good childcare services.

Out of the 138 complaints in 2003, only 13 related to inappropriate child management or discipline. This is consistent with the number of such complaints in previous years. For the first half of 2004, 75 complaints have been received*. Of these, 13 are feedback on inappropriate management of children. This increase could be attributed to increased public awareness due to the recent reports on the subject in the media. This is not necessarily a negative trend as the public and parents play an equally, if not more important role in helping to ensure the quality of care in our childcare centres.

All licensed childcare centres are required to meet the minimum standards stipulated by MCDS with respect to their operations, environment, safety and hygiene procedures, staffing and programme. All centres are aware of these standards. To check for compliance, MCDS officers conduct unannounced visits to all centres to ensure that these quality standards are met. We have also provided all centres with a copy of the 'Good Practices Handbook', to guide the centres along.

Both the child's family and the childcare centre play important roles in a child's development. MCDS has therefore been actively encouraging childcare centres to continually develop strategies to involve families and work closely with them. Parents too, should recognise that they can make valuable contributions, through monitoring their children's development and progress in the centres. Caring for children is ultimately a partnership involving parents, childcare centres and MCDS.

* The number of complaints has increased tremendously after the TNP report (for the months of May and June 2004, we received 46 complaints).

asked the Minister for Home Affairs what actions the police and immigration authorities will take to check the increase in prostitution activities by foreigners in HDB estates, private estates such as Katong, and shopping areas such as Chinatown.

Police has been closely monitoring the vice situation in Singapore. Let me assure the House that the situation is under control. While the media has recently highlighted prostitution activities in housing estates and shopping areas by opportunistic foreigners, the situation is not rampant. In fact, not all of them loiter in such areas for the purpose of prostitution. For example, in HDB estates, the majority of female foreigners arrested were found selling 4-D lottery and pirated VCDs, and not for soliciting for sexual services in public.

Nevertheless, Police has in recent months received more complaints about vice activities. It has stepped up enforcement actions. As a result, more arrests have been made. For the periods January to June 2004, 2,670 female foreign sex workers were arrested, compared to 1,221 arrests over the same period (January to June) in 2003 and 1,738 in 2002, and 2,301 and 3,422 arrests for the whole of 2003 and 2002 respectively. Police will, in particular, take enforcement actions to clean up vice activities taking place outside the traditional red-light areas so as to contain such activities within these areas. Any foreigner found to be involved in vice activities while in Singapore will be repatriated and banned from re-entering Singapore.

As a preventive measure, the Immigration and Checkpoints Authority (ICA) adopts a calibrated approach and regularly fine-tunes its visa requirements and procedures to deter entry of non-genuine visitors without affecting the arrival of bona fide visitors. Visitors to Singapore will only be granted entry if they meet our entry requirements, such as holding a valid passport, a confirmed air ticket, and a valid entry visa, if required. Visitors may be subject to further checks and interviews if they are suspected to be coming to Singapore for vice or other nefarious reasons. In such instances, ICA will not allow them entry.

I would like to assure the House that these enforcement actions will continue. We will monitor the situation closely and introduce new measures if necessary.

asked the Minister for Community Development and Sports in view of heart disease being the second biggest killer after cancer in Singapore, younger Malay women are most vulnerable to heart attacks as shown in a nine-year study in Singapore, and women who have attacks are more likely to die than men, whether the Minister will do more (i) to promote the message and to encourage the Malay community to seek and comply with effective treatment; and (ii) to effect lifestyle changes to reduce their risk of heart attack through Malay community bodies such as the mosques, Majlis Ugama Islam Singapura and Yayasan MENDAKI.

Dr Lily Neo's question is on a health issue. It would actually have been more appropriate for Dr Neo to direct the question to the Ministry of Health, which oversees and co-ordinates health promotion efforts.

The Government has always advocated that all Singaporeans should take personal responsibility for their health. Singaporeans can do this by adopting a healthy lifestyle which includes exercising regularly, eating healthily, not smoking and managing stress.

The risk factors for heart disease are obesity, physical inactivity, smoking, a diet high in fat and salt, high blood cholesterol, hypertension and diabetes. The Health Promotion Board (HPB) under the Ministry of Health has put in place health education programmes to educate the public about the risk factors. HPB carries out year long programmes to promote physical activity, no smoking and a diet low in fat and salt. These programmes are targeted at all age groups. HPB collaborates with voluntary welfare organisations and grassroots organisations to conduct a community health screening programme to detect hypertension, diabetes and high blood cholesterol early, so that they can be treated early to prevent complications such as heart disease.

The prevalence of the common health problems such as cancer and heart disease are different among the different ethnic groups and between the two genders. Heart attack rates are highest among the Indians, followed by the Malays and Chinese. A local study on heart attacks among adults aged 20-64 years from 1991-1999 showed that although Indians had the highest heart attack rates, Malays were most likely to die from heart attacks.

To address this, HPB works closely with various partner agencies which include Indian and Malay/Muslim organisations to promote healthy lifestyles and enhance knowledge and skills for healthy living. In the last two years, HPB worked with more than 20 mosques to jointly organise about 100 community-based programmes targeted mainly at women. HPB also collaborates with MUIS and MERAK (a network of the women's departments of 11 mosques) and other Malay/Muslim organisations to organise events such as health carnivals, health food expo and exercise @ the park. These events reach out to large groups of the Malay/Muslim community.

Another example would be the Gaya Sihat programme which was broadcast on television from December last year till February this year. The programme helped to educate viewers on healthy cooking practices and different types of exercises. In addition to this, HPB has also collaborated with Yayasan MENDAKI to conduct focus group discussions to gather feedback and inputs on health-related issues that affect the Malay/Muslim community.

HPB and the Ministry of Health are also working with Indian and Chinese community organisations to promote a healthy lifestyle and to reduce the risk factors for heart disease.

asked the Minister for Trade and Industry following the recent visits to China by several Ministers (a) what sectors of the Chinese economy

Singaporeans and Singaporean businesses (i) are already involved and (ii) can participate in as China continues to grow; and (b) how must Singaporeans prepare themselves in order to participate more significantly in the growth of China as a major trading nation.

Sectors of involvement, present and future

China is our fifth largest trading partner. It has been our top investment destination since 1997. At present, our investments are concentrated mainly in the coastal areas, primarily in Shanghai and the provinces of Jiangsu, Fujian and Guangdong.

Our economic engagement with China has increased significantly over the past two decades and now covers a wide range of sectors. Our firms are strong in real estate and infrastructure development, trading and manufacturing. For example, Ascendas and CPG group have leveraged on their successful experience in Suzhou and secured projects to do master planning and building infrastructure in other parts of China. Our manufacturing companies have established their presence in China, supporting MNCs there.

Singapore companies have also moved into other sectors like logistics, education and financial services. In port and logistics business, PSA operates ports in Dalian Container Terminal (Liaoning), Fuzhou Container Terminal and Guangzhou Container Terminal. SembCorp Logistics is active in Shenzhen and Shanghai. In the education sector, our companies have been successful in marketing their services and products in China. Times Publishing Group has established printing plants in Shenyang (Liaoning), Shanghai and Nansha (Guangzhou). The Singapore Institute of Management (SIM) has established a Sino-Singapore school with Chengdu University in Sichuan to offer English and Business programmes. Our banks are also making headway in China. DBS, UOB, and OCBC have established operations in Shanghai, Beijing, Shenzhen and Guangzhou.

As China continues to grow, new opportunities will open up. China has been liberating its services sector. With the rapid growth of the middle class, there are good prospects for our services companies. Singapore companies are strong in business services, infrastructure services, lifestyle products, transportation and logistics, international trading, engineering support and ICT.

China is keen on investments in the high-tech industries. Chinese President Hu Jintao proposed Sino-Singapore collaboration in high-tech industries when he visited Singapore in 2002 and several of our companies have already taken up this offer. For example, Hyflux has collaborated with Zhejiang University to establish an engineering company for water treatment and R&D for the production of purified water and has invested S$1.7 million in a biotechnology company in China.

Preparations for participation in growth of China

China is changing rapidly. However, it remains a complex operating environment. To succeed in China, it is important to have deep, up-to-date knowledge of markets, the regulatory and legal environment and local practices. We are building networks to facilitate information sharing and greater interaction among our businessmen. International Enterprise Singapore (IE S'pore) has helped to set up the Singapore Chamber of Commerce

and Industry in Beijing (SingCham) and Network China in Singapore. Singaporeans should not enter the Chinese market without doing their homework.

Familiarity with the Chinese environment is crucial. In 2001, MTI launched the Asian Business Fellowship Programme. Under this programme, young Singaporeans are sent to various parts of China on training attachments and scholarships. Over 150 Singaporeans have been sent to companies in cities like Shanghai, Beijing, Tianjin, Chengdu, Chongqing, Xiamen, Guangzhou, Dongguan and Longkou.

We have set up six IE offices* in various parts of China to provide our Singapore businesses and citizens in China with a strong support base. We expect to send about 50 business missions to China this year.

Government agencies like IE S'pore can only play a facilitating role. It is our businessmen who will have to assess market opportunities, analyse their own strengths and weaknesses, and decide what risks to take. China is a rapidly growing market and we want more of the businessmen to venture there.

* IE has six offices in Beijing, Shanghai, Guangzhou, Dalian, Qingdao, and Chengdu

asked the Minister for Trade and Industry in light of the reports in the press that students in the People's Republic of China are losing confidence in our private educational institutions and our reputation as an education hub being thus tarnished, has his Ministry plans (i) to maintain the quality and standard of privately run educational institutions and (ii) to regulate and accredit these institutions to protect the interests of students, both local and overseas.

The Singapore Government is committed to develop the private education sector and elevate its standards as part of our overall efforts to develop Singapore into a thriving education hub.

As a basic requirement, MOE already registers privately-run schools offering academic and commercial courses, as well as tuition schools, enrichment centres and foreign system and international schools. Individual persons or organisations intending to set up a private school must be able to provide evidence that they have adequate and relevant teaching and administration staff, a curriculum acceptable to MOE, and that the school is adequately and appropriately furnished and equipped.

On top of MOE registration, the Singapore Quality Class for Private Education Organisations (SQC-PEO) scheme was launched by SPRING Singapore in 2003 to recognise quality education providers for their business process excellence. But more can and will be done to encourage privately-run schools to upgrade and improve their standards.

Providing Quality Education - Accreditation

To recognise institutions for providing quality education, SPRING has, since October last year, been working with Government agencies such as MTI, MOE, EDB and STB to

set up an accreditation system. The accreditation scheme will be drawn up in consultation with industry players, and SPRING is targeting to launch the accreditation scheme for private education organisations in January 2005.

Honest Business Dealings

In choosing to study in Singapore, some students and their families have had to invest a significant portion of their life-savings. All private schools must conduct their business in an ethical, honest and transparent manner so that the students' interests are protected. This will help ensure that we remain an attractive destination for international students.

To this end, the Consumers Association of Singapore (CASE) is working on a CaseTrust for Private Schools scheme. This scheme safeguards the interest of the students by requiring private schools to have standard terms in their offer letters to students, establish clear policies for course refunds and transfers, and set up proper dispute resolution mechanisms in the event of disagreements between the students and the schools. Private schools that qualify for the scheme will then be able to display the CaseTrust logo as a mark of recognition. Details of this scheme will be announced in August 2004.

Reliable information for students

In addition, a public information system has been put in place to ensure that students have access to a trusted source of information. STB has launched the Singapore Education website last year. This website provides information to help all potential students who want to study here get reliable information about the private education sector in Singapore. STB is also working with the Chinese authorities to hyperlink the Singapore Education website to their official student information website. This will ensure that there is a conduit of trusted information for any student in China wishing to study in Singapore.

Industry-led Upgrading

While Government has an important role to play in creating the conditions for a vibrant education sector, the efforts of Government agencies are only one part of the equation. The private schools themselves must be willing to take action, upgrade and protect the good name of their industry. In this regard, we are pleased to note that various industry associations such as Singapore Education International (SEI), Association of Private Schools (APS), and the Association of Small and Medium Enterprises (ASME), have been stepping forward to help private schools upgrade. For example, SEI is exploring initiatives to identify and give awards to good quality agents, and ASME is exploring a new benchmark for SMEs for best business practices. Students, on their part, owe it to themselves to conduct their own checks before signing up for courses and to clarify the terms offered before enrolling in any school.

Sir, Singapore enjoys a good reputation as an education hub, with many world-class universities and educational institutions located here. We must continue to work together with our industry partners to raise the quality and reputation of our educational offerings so as to achieve our vision of Singapore as a Global Schoolhouse.

asked the Minister for Trade and Industry whether the Government should seriously study the feasibility of using solar energy for electricity generation.

The electricity market is open to new technologies and the use of different fuel types, including solar energy. Investors who are able to be commercially competitive using solar energy are welcome to enter the electricity market to be a power producer. Studies have shown that the cost of electricity generated from solar (also called photovoltaic or PV) energy is currently about 2.5 times higher than the current electricity tariff. At the current level of PV costs and efficiencies, PV systems for electricity generation do not appear economically viable.

Cost aside, solar energy may still not be suitable for wide-scale implementation because, even if the useable roof areas of all HDB blocks are installed with PV panels, the total amount of electricity that can be generated from solar energy is about 3% of the total electricity demand of Singapore.

Despite these factors, improvement in PV efficiency and reduction of PV costs, as well as volatility of oil prices could tilt the balance in favour of PV energy. The Government is closely monitoring developments in this area, which could also provide opportunities to develop a PV industry serving the region. Also, PV systems integrated into buildings as roofs or facade walls could serve dual functions of building construction and energy conservation. There is scope to explore this further. For example, JTC is working with NEA and a PV company on a project that integrates PV into a building at the Biopolis.

asked the Minister for Trade and Industry (a) what is the reason for the continuous upward adjustment of the electricity tariff since April this year; and (b) whether he is aware that the escalating electricity charges have become a financial burden to many households.

asked the Minister for Trade and Industry what is the basis for allowing an increase in the electricity tariffs when Singapore is using more natural gas than diesel to generate electricity.

I will answer MP Mr Low Thia Khiang and NMP Mr Steve Chia's questions on electricity tariffs together.

Approximately 60% of our electricity supply is generated from gas plants, with the remaining 40% from oil-fired steam plants*. The power plants do not usually run on diesel fuel. Diesel is only used as an emergency back-up. Fuel costs account for about half of the cost of generating electricity. Consequently, changes in fuel costs will affect electricity tariffs because we do not subsidise electricity.

The price of our natural gas is pegged to fuel oil prices under long term contracts. This follows international practice in this part of the world. Hence, when oil prices increase, gas prices also increase and electricity tariffs will have to increase.

Over the last one year, households have experienced both increases and decreases in tariff rates. Rates today are 1.3% lower compared to the same quarter (ie, July-September 2003) last year, even though oil prices have gone up by 5% in July 2004 compared with July 2003. This is a result of the electricity market becoming more competitive.

I have attached a chart (Annex A**) showing movements in electricity tariffs for households. Tariffs came down by 3.4% for October-December 2003. Rates then increased by 1.1% for January-March 2004, by 2.3% for April-June 2004, and by 3.5% for the current period of July-September 2004. Overall, tariffs will move in line with changes in fuel costs.

Most households are able to pay their bills. Data from SP Services show that the billing arrears rate has declined from 1.2% in May 2003 to 0.9% in May 2004 and stabilised at this new level.

Nevertheless, some households may face financial difficulties. In such circumstances, SP Services will assist them with suitable instalment plans to ease their cashflow. Electricity supply is disconnected as a last resort only if the households refuse to settle their arrears or commit to an instalment plan.

Any household facing financial difficulties may seek assistance from the CDCs and CCCs. CDCs administer MCDS schemes such as the Rent and Utilities Assistance Scheme, and the Interim Financial Assistance Scheme. CCCs also offer localised schemes to assist families who need help with their utilities bills.

* 60% of installed generation capacity comes from oil-fired steam plants and 40% comes from gas plants. However, because gas plants are more competitive, 60% of our electricity supply (as distinct from installed capacity) is generated from gas and 40% from oil.

** Cols. 291-2

asked the Minister for Trade and Industry (a) what is the economic outlook for Singapore for the second half of 2004 and for 2005; and (b) whether it will cause inflationary pressures and indirectly cause the cost of living to rise.

The Singapore economy expanded strongly in the first half of the year, growing by 9.5% compared to the same period in 2003. The strong growth reflected rising external demand for both goods and services that are produced in Singapore, as well as our recovery from SARS which adversely affected the Singapore economy during the same period last year.

The global economy is expected to perform strongly this year. The latest IMF projection puts world economic growth this year at 4.6%. The advanced economies are expected to grow by 3.5% this year, the strongest since 2000. The ASEAN economy is also expected to turn in its best performance since the Asian crisis, growing by 5.4%. These projections imply that our key export markets will continue to register healthy economic growth in the second half of this year. Initial forecasts by the IMF also show healthy growth for these economies in 2005. Although high oil prices may dampen growth

somewhat, a study by the International Energy Agency (IEA) has estimated that the impact of this is unlikely to pose a significant threat to global economic growth.

In view of the positive outlook for the global economy, demand for Singapore's exports should continue to grow. Domestic demand is likely to be lifted by better employment prospects and a more positive outlook.

For this year, we should be able to meet the 5.5-7.5% forecast that MTI had announced in May. An updated forecast for this year and the preliminary forecast for GDP growth next year will be made in August, when MTI releases the detailed economic results for the second quarter of 2004.

The Monetary Authority of Singapore expects 2004 consumer price inflation to be between 1.5% and 2%, slightly higher than the 0.5% last year. Inflation this year will be lifted by higher import prices for oil and other commodities as well as stronger domestic demand. First, the higher oil prices will raise costs, including electricity tariff and petrol prices. Second, commodity prices have risen sharply this year, which raise input costs for certain industries. Third, as the economy picks up further and job market conditions improve, there would be stronger demand pressures this year.

asked the Minister for Community Development and Sports (a) what are the reasons for the rising number of divorce cases in Singapore; (b) whether the problem is exacerbated by HDB's social agenda of forcing people to get married so as to purchase a subsidised flat; and (c) what is the Government doing about this rising rate of divorce and the subsequent social problems it will create.

The number of divorces granted has risen over the years. However, the proportion of our population who is divorced or separated is still relatively low compared with countries in similar state of development. As of June 2003, 2% of Singapore residents aged 15 years or older were divorced or separated compared to 3% in Hong Kong, 4% in Japan and 8% in Britain. Based on data on marriages registered since 1987, less than 10% of marriages end up in divorce within the first 10 years of marriage. This is lower than the "one out of three marriages" which has been wrongly reported in some media reports.

HDB policies are pro-family in nature, and do not exacerbate the problem. The Government has committed to keep public housing affordable for Singaporeans. There are no compelling reasons for couples to rush to marry so that they can buy an HDB flat. Marriage is a serious commitment. Couples must enter into it after careful consideration.

My Ministry has been working closely with the Courts and our community partners to run programmes and services to support marriage. These include marriage preparation and enrichment programmes to strengthen marriages, as well as initiatives such as marriage and reconciliation counselling for couples who are experiencing difficulties in their marriage. For the Syariah Court, approximately half of the couples manage to resolve their differences and withdraw their divorce application as a result.

The challenge to address the trend of rising divorce numbers requires a "Many Helping Hands" approach, with individuals, families, the community and the various Government agencies working in tandem. MCDS will continue to work hand-in-hand with our various partners to strengthen families, and reduce divorces.

asked the Prime Minister (a) how does the Government ensure that some of the scholars picked by the Public Service Commission (PSC) can be groomed to be entrepreneurs and that there is a more balanced distribution of returned scholars to the private sector; and (b) whether with a reduced PSC scholarship quota, there is a case for a joint public/private sector scholarship so that more of those who are eligible will stand a chance to obtain a scholarship.

PSC scholarships are awarded so that the Government can build up potential public service leaders, not entrepreneurs. We are careful not to take in more scholars than we need. In 2002, the number of scholarships that PSC awards per year was reduced from 120 to about 50-60. This year, based on our manpower needs and the pool of candidates who meet PSC's requirements, PSC has awarded about 30 scholarships.

About half of each cohort of scholars eventually leaves the public service. We do not know how many of them become entrepreneurs. The Government will not stand in the way of scholars who wish to leave after a few years if they do not see themselves making the civil service a long term career. We hope that the training and exposure we gave them in the civil service is useful for their next career. However, the Government should not provide incentives, support or fall back job guarantees to encourage scholars to go into business or to the private sector. To do so is to go against the enterprising spirit.

Where there is a need, such as the development of talent and skills for a specific industry, the Government has collaborated with the private sector to offer scholarships, eg, those offered by EDB.

asked the Minister for Home Affairs how can civil defence officers open lift doors and help people trapped in the lifts if the lift keys are kept by contractors appointed by the Town Council and the officers do not have any spare sets.

The Town Councils are responsible for ensuring that the Automatic Rescue Devices (ARDs) in lifts are properly maintained and work as designed to release trapped persons from lifts in the event of a power cut-off. They have also engaged Emergency Maintenance Service Units (EMSUs) to carry out lift rescues should the ARDs fail. They must ensure that their EMSUs have sufficient teams to deal with such rescues.

During an emergency, SCDF's priority is to respond to and deal with life-threatening situations. Nevertheless, if the Town Councils require SCDF's support in specific lift rescues, they should make available their personnel and keys to assist in the rescues together with SCDF.

asked the Minister for Home Affairs if laws regarding the abuse of camera-enabled phones will be introduced to safeguard the privacy of private individuals.

It is already an offence to use a camera-phone in certain ways, for example, a hidden camera in a changing room, or to photograph up a woman's skirt or take obscene photographs of any person. These are covered under section 509 of the Penal Code which makes it an offence for a person to intrude on the privacy of a woman and section 11(a) of the Undesirable Publications Act which makes it an offence for any person to make obscene photographs. The existing laws are adequate to deal with such misuse of mobile telephones.

However, merely taking photographs of people, with or without their knowledge, in a public place is not by itself an offence. There is no need to have a law on this to criminalise such an act.

asked the Minister for Home Affairs (a) whether Singapore has a significant human trafficking problem as suggested by the US Trafficking in Persons 2004 Report; and (b) whether his Ministry considers Singapore's placement in Tier 2 in the said Report as an accurate reflection of our country's efforts to combat human trafficking.

Singapore does not have a significant human trafficking problem as suggested by the US Trafficking In Persons (TIP) 2004 Report released in June 2004. While Singapore does not claim to be absolutely free from human trafficking for sexual exploitation, the instances of forced prostitution are few and far in between. There were only 11 and seven reports of forced prostitution in 2002 and 2003 respectively. Sixteen of these 18 reports could not be substantiated. There was only one case substantiated in each of the two years. We are therefore puzzled by the US TIP 2004 Report's conclusion that there are likely more than 100 cases per year of girls and women trafficked into Singapore for the purpose of sexual exploitation.

The TIP Report also alleged that Singapore has no national action plan to address human trafficking. This is far from the truth. It is widely known that we take a tough stance against illegal immigrants, whether they were trafficked or had entered Singapore on their own volition, and against those involved in human trafficking and human smuggling. We adopt a multi-pronged approach comprising enforcement actions and security checks at the various checkpoints to deter and detect the movement of illegal immigrants in and out of Singapore. Mobile x-ray machines are deployed at the land checkpoints to provide x-ray screening of goods vehicles. ICA also makes use of mobile gamma-ray machines to detect illegal immigrants hidden in containers. In addition, the Police Coast Guard's presence is strongly felt with its intensive patrols around Singapore territorial waters. These enforcement actions are complemented by the stringent laws against immigration offenders and those who traffic, harbour or employ them. Indeed,

these measures are widely publicised in parliamentary debates, in the media and in various other public education efforts aimed at raising public awareness. These efforts have borne fruits as seen from the improving Immigration Offender (IO) situation in Singapore in recent years. For instance, more stringent checks at the checkpoints resulted in a 30% decrease in the number of illegal immigrants arrested in 2003 compared to the year before. Therefore, the TIP Report's placement of Singapore in Tier 2 appears to be a sweeping generalisation and certainly does not accurately reflect Singapore's concerted efforts to combat human trafficking.

No country, not even the US, can claim to be completely immune to the problems of human trafficking. Singapore views the problem of human trafficking seriously. We have laws and procedures to deal with the matter in a practical way which has worked for us. My Ministry disagrees with the classification of Singapore by the TIP Report as a "destination country for girls and women trafficked for sexual exploitation". We will be issuing a detailed rebuttal to the US to point out the inaccuracies in the report.

asked the Minister for Transport what steps is LTA taking to ensure that the retrofitting works for facilities for the disabled and elderly at the 10 MRT stations (including the Newton and Orchard stations), which have been delayed due to the contractor's financial difficulties, are completed as soon as possible.

The contract to retrofit 11 underground MRT stations (including Newton and Orchard MRT Stations) with facilities for the disabled and the elderly was awarded to Hua Kok Realty (Pte) Ltd in October 2002. It was scheduled to be completed by third quarter 2005.

To-date, the retrofitting works at Toa Payoh station have been completed. Unfortunately, due to the financial difficulties encountered by the contractor, upgrading works at the remaining 10 stations have stopped since 31st May 2004. About 35% of the works have been completed at these stations.

The contractor is currently in discussion with a few other contractors to novate the contract in order to minimise disruption to the works and to ensure that the project can be completed as soon as possible.

If novation is not successful, the contract will be terminated and a new tender will be called. LTA is monitoring the situation closely. LTA is concurrently preparing for the re-tender process to ensure that it can be carried out quickly and smoothly should it be necessary. The project schedule will be reviewed after the tender has been awarded. LTA estimates that a new tender is likely to delay the completion of the project to end 2006.

asked the Minister for Trade and Industry (a) what is the rationale for Jurong International to acquire 49% of Synergy Construction from the rest of the shareholders despite the reported accounting irregularities; (b) whether the act by Jurong International is a bailout of the existing shareholders; (c) whether Jurong International has considered asking the 49% shareholders to come up with their share of

the settlement to repay creditors instead of buying them over; and (d) what is the basis for spending $23 million of public money to bail out the management and directors of Synergy Construction.

Jurong International, through its wholly-owned subsidiary, Jurong Axtra, acquired the rest of 49% of Synergy Construction to ensure that Jurong Axtra had control of the company when putting forward the Scheme of Arrangement. This was necessary as the 49% was indirectly owned by the three founding directors who were responsible for the alleged financial irregularities in the first place. They are also currently under investigation by CAD.

Jurong International and Jurong Axtra have acted responsibly at all times and after exploring all reasonable options, decided on one that would help the creditors achieve the best outcome and help ensure that Synergy can continue as an on-going concern. It is not a bailout of the existing shareholders.

Jurong International did not consider asking the 49% shareholders to come up with their share of settlement, as all efforts were concentrated on finding an expeditious solution for the creditors within a very short period of time. It was necessary to acquire the remaining 49% under the circumstances for purposes of getting control over Synergy, to expedite the Scheme. The three founding directors are also under investigation by CAD for the financial irregularities. The possibility for Synergy to pursue the three directors still remains even though they have sold their shares to Jurong Axtra.

Jurong International has clarified that the $23 million it will put into financing the Scheme is not money from Government budget, but sourced from its own commercial revenue through the growth of its business, local and overseas.

asked the Minister for Trade and Industry (a) if he will elaborate on the Prime Minister's recent mention that Free Trade Agreements will form the stepping stones for an Asian economic community; (b) what role does he envisage Singapore to be playing towards an Asian economic community; (c) what is the response of the Asian countries with regard to such a vision; and (d) what is the value-add to Singapore with the formation of an Asian economic community.

The Asian economic community is a long term vision for an economically integrated Asia. It is a vision of a community with a small 'c'. At the same time, an Asian economic community should be open and well-connected with other world regions and plugged in to the multilateral trading system.

The Asian economic community can be seen as comprising three core regions: Northeast Asia, Southeast Asia and South Asia. Collectively, the region already constitutes the fast growing region in the world. Over the next four years, Asia (excluding Japan) is expected to grow at a rate of 5.8%. China has averaged growth

rates of 9%. South Asia is expected to grow faster than the Asia average, at a rate of 6.9% over the next four years. Japan is growing at its fastest rate in 14 years.

Since the economies of Asia differ in levels of development, it would be difficult to realise the vision of an Asian economic community all at once. FTAs are needed as stepping stones. Countries and regions with complementary economic structures, and the political will to work together, can move ahead first to establish FTAs which would show the way for an Asian economic community.

This is already happening. Within Southeast Asia, the ASEAN Free Trade Area is already in place, and ASEAN is now working towards an ASEAN Economic Community by 2020. In Northeast Asia, the idea of an FTA involving Japan, Korea and China has been floated. In addition, these three countries are also exploring FTAs individually with ASEAN. In time to come, these initiatives could build an East Asia FTA. In South Asia, the South Asian Association for Regional Co-operation member countries have signed a Framework Agreement for the South Asia Free Trade Area. India, the largest economy in South Asia, is also exploring an FTA with ASEAN, and is engaged in a Joint Study on economic cooperation with China. Should all these FTA initiatives come to fruition, economic integration would become a reality.

Singapore plays an active role in this construction. Our FTA strategy has been a catalyst. We already have FTAs with Japan and ASEAN and are negotiating or will be negotiating with China, Korea, India, Sri Lanka and Pakistan. Many of our initiatives, such as our FTA with Japan, have led to our partner country's broader engagement with ASEAN. Other ASEAN countries are also beginning to follow suit, particularly Thailand, the Philippines, and Malaysia. At the same time, Singapore believes in promoting open regionalism. Hence, we have also negotiated free trade agreements with other countries, such as the United States, the European Free Trade Association, Australia and New Zealand, and are pursuing other initiatives with other trading partners outside of Asia.

An integrated Asian economic community will help to create peace and prosperity for over half the world's population in this century. It will not be easy and will take many years of effort. Even if we succeed only partially, the effort will be worthwhile. Singapore is well-positioned for this new Asia, not only economically but also culturally. We will benefit greatly from the growth around us.

asked the Minister for Trade and Industry (a) whether he agrees that having one source of fuel supply for several power stations will make us very vulnerable to power failures as indicated during the recent power failures; (b) what can be done to solve the problem; (c) why does it take so long, in some instances about three hours, to switch to an alternative fuel supply; (d) given the damage that it will cause to Singapore's reputation, what, if any, strategic plans his Ministry has to ensure that there is uninterrupted power supply not dissimilar to our water supply.

Our power stations are not dependent on just one fuel type. In fact, the gas plants are required to have a dual-fuel design feature, and are able to quickly switch to diesel in the event of a gas disruption.

The gas plants have the capability to switch to diesel, without turning off the turbines. This allows them to "hotswitch" seamlessly to an alternative fuel in the event of a gas disruption, without cutting electricity supply. The switching takes time to execute and has to be done before the gas in the pipelines runs out. The residual gas in the pipeline typically runs out in about 10 minutes, depending on the physical location of the shutdown and the rate at which gas is being drawn.

If the gas runs out before the plants successfully hotswitch, the gas turbines would trip and would take about one and a half hours to restart with diesel. This will lead to a temporary loss of power and cause a blackout. Power restoration takes time as supply and demand have to be kept in balance at all times. After each area is restored, the system has to be allowed to stabilise before restoration continues. For the power failure on 29th June 2004, full system recovery was achieved in about one hour and 50 minutes.

Energy security is a prime consideration for us as having reliable and competitive electricity supply is vital. Today, we are in a strong energy supply position. The installed generation capacity comprises a good balance of fuel types, with 60% capacity in oil-fired steam plants and 40% in gas plants. Our electricity market has excess capacity. The power stations are also required to stockpile at least 90 days worth of fuel reserves in the event of supply disruption, with 45 days storage on site.

Even in the event of a prolonged disruption in gas supply, our energy security will not be compromised. However, if we switch to oil-fired steam plants, or run the gas plants on diesel, there will be a cost impact as the price of electricity from oil and diesel will be 10% to 20% higher than gas.

Further measures are being taken to improve system robustness. EMA is working with the power stations to build gas supply redundancy into their operations so that they have access to gas from at least two separate sources to reduce their vulnerability to a gas disruption from one pipeline. Senoko Power already has two pipelines feeding into its station. PowerSeraya is commissioning its second pipeline. Tuas Power plans to have its second pipeline by mid 2005. Engineering studies are being done to work out how one pipeline can seamlessly support the other if it fails. The back-up pipeline will give power stations more time to switch from gas to diesel and make the system more robust.

EMA is also studying the viability of a liquefied natural gas (LNG) facility. From the security perspective, the facility will open access to natural gas from anywhere in the world and will provide LNG stockpile. EMA is finalising the tender specifications for a feasibility study, which will be called in July 2004. If approved, the LNG facility should be operational after 2010.

asked the Acting Minister for Education in view of the announcement on the reduction of student intake for lower primary classes for 70 schools, (a) why is there a long duration to year 2014 for the other remaining schools to eventually cut over; (b) how will the selection or registration process for students in these schools be affected; (c) whether there will be a change in the syllabus of the lower class enrolment and, if so, how will this affect the syllabus of the other schools with a higher class enrolment; (d) why is the reduction in class enrolment not compulsory for Government-aided, mission and dialect-related schools when these schools are getting a share of the

additional 700 extra teachers and how many of these additional teachers will be allotted to these schools.

In 2005, all 132 Government schools will reduce their Primary One class size from the current 40 to 30. This reduced class size will extend to Primary Two in 2006. Forty-four out of the forty-six Government-aided schools have also decided to reduce class size. The last two schools are undergoing PRIME and have decided to defer the implementation.

Concurrently, schools will move towards partial single session, where the Primary Three to Primary Six classes will be in one session and the Primary One and Primary Two classes will be in the other session. Together with the reduced class size, the implementation of partial single session will mean some reduction in Primary One places in certain primary schools. Schools located in areas of high demand will phase in their implementation of partial single session to ensure that there will be sufficient school places for all eligible P1 students in each planning area and across the entire primary school system.

In 2005, about two-thirds (65%) of all our primary schools will be able to implement partial single session or full single session. The other one third will introduce partial single session over the next 10 years.

It is appropriate to let the Management Boards of the Government-aided schools make the decision on whether their schools should implement smaller class sizes, taking into account the impact on their intake and the needs of their respective communities. MOE will provide them with the teacher resources similar to the Government schools. If they choose not to implement smaller classes, they can deploy these teachers in other ways to add education value for their students.

The introduction of smaller class size at Primary One and Primary Two, and the partial single session has no impact on the Primary One registration process or eligibility criteria for priority registration.

Schools will continue to be given the flexibility to customise their syllabus to cater to their pupils' needs. MOE is working with primary schools to share strategies that support meaningful and appropriate learning for lower primary pupils, taking advantage of smaller class size.