Hansard, Monday, 1 August 2022

Order. I wish to inform hon Members that under the provisions of Standing Order No 102, Mr Speaker has on 27 July 2022 nominated Mr Chee Hong Tat to be a Member of the Public Petitions Committee to take the place of Deputy Prime Minister and Minister for Finance Mr Lawrence Wong, and Mr Leong Mun Wai to be a Member of the Public Petitions Committee to fill a vacancy. The nominations took effect from 27 July 2022.

Order. Presentation of Petition. The Non-Constituency Member Mr Leong Mun Wai wishes to present a Petition.

To be fair to you, Mr Leong, I should point out that under Standing Order No 18(2), you are allowed to provide a brief statement when presenting a Petition. I should highlight that the Standing Order states that you – or for that matter, any Member presenting a Petition – shall confine himself or herself to a brief statement. That statement should contain the parties from whom it comes, the number of signatures attached to it – in this case, I see from the papers you have shared that there are five signatures – and the material points contained in it, specifically the prayers you are seeking.

So, I would be grateful if you would contain yourself to a brief statement, Mr Leong.

Thank you, Mr Deputy Speaker. Mr Deputy Speaker, I present to Parliament a Petition from Ms Chua Shanyu, Mr Lim Cheng Kiang and others of like opinion. Including the two petitioners named above, there are a total of five valid signatures.

The petitioners are the affected residents under the Selective En Bloc Redevelopment Scheme or SERS, of Blocks 562, 563, 564 and 565 of Ang Mo Kio Avenue 3. They allege that there is a lack of transparency concerning various aspects of the SERS project and the treatment given to them is unfair. They are also concerned that this project may set a precedent which affects future SERS residents negatively.

The petitioners pray, and I quote the following points (a) to (f).

Review SERS in its entirety, which includes a transparent and independent evaluation of the reclaimed and replacement sites, options of compensation and Lease Buyback Scheme for senior citizens.

Consider in its review the intended use of the reclaimed site be made public so as to assess the actual and potential value of the site.

Consider in its review the priority of ensuring residents affected by SERS be relocated within the vicinity of the reclaimed site.

Consider in its review the waiver of the Resale Levy and full reimbursement of stamp and legal fees for the affected residents are applicable in all future exercise of SERS.

Consider in its review an ex gratia payment to affected residents to help defray renovation costs and for such a sum to be adjusted for inflation and other factors.

Consider in its review a moratorium on SERS until such a time that a review on SERS is conducted and the findings and recommendations be made for Parliament to deliberate. I will now hand the Petition to the Clerk.

[(proc text) Petition handed to the Clerk at the Table. (proc text)]

Pursuant to Standing Order No 18(6), the Petition shall stand referred to the Public Petitions Committee. Order. Questions for Oral Answer.

1 Ms Sylvia Lim asked the Minister for Education with regard to the findings of the Auditor-General’s Report for FY 2021/22 (a) what remedial actions are being taken by SkillsFuture Singapore in light of frauds and lapses in the disbursement of grants; (b) how much has been defrauded or overpaid since the inception of SkillsFuture; (c) how much have been recovered; and (d) whether any individuals overseeing the grant schemes have been or will be held accountable for the loss of public funds.

2 Mr Yip Hon Weng asked the Minister for Education regarding the FY 2021/22 Auditor-General's Report finding that SkillsFuture Singapore (SSG) was lax in collecting Skills Development Levy (SDL) funds (a) what are the reasons and root causes as to why the discrepancy is not detected over five years; (b) how long will it take for SSG to collect back the required funds; and (c) what does the agency intend to do to prevent such similar grant management issues from occurring in the future.

Deputy Speaker, Sir, may I have your permission to combine the response to Question Nos 1 and 2 by Ms Sylvia Lim and Mr Yip Hon Weng?

Please do.

The Auditor-General’s Office (AGO) had identified lapses in two areas in the audit of SkillsFuture Singapore (SSG): overpayment in grant disbursement and under-collection of Skills Development Levy. SSG takes these findings seriously.

First, AGO found lapses in SSG’s disbursement of grants, which led to estimated overpayments of about $4.22 million between 1 April 2018 and 30 June 2021. The main causes of these lapses were due to inaccurate or erroneous declarations by grant applicants and training providers that were not picked up by SSG’s internal checks. The bulk of such errors occurred prior to November 2020, when SSG’s previous IT system for grant administration had used a declaration-based approach. Other errors also occurred during manual processing of grants, including human errors made by the service provider contracted by SSG to perform grant administration functions.

SSG has contacted all affected training providers, companies and individuals for the necessary recovery. Parties will be given time to check their own records and return any confirmed overpayment.

To reduce reliance on declarations and manual processing, SSG implemented a new IT system for administering Training Grants since November 2020. The system uses administrative data in Government databases to determine and verify eligibility of the grant applicants. SSG is also streamlining its business rules to rely less on declared information and manual verification. Where these cannot be avoided, SSG will tighten its audits on payments disbursed and on the work of its service provider.

Separately, AGO found that SSG did not follow up adequately, on a variance of $43 million, between SSG’s estimate of the Skills Development Levy (SDL) that employers should pay and what was collected for the period 2015 to 2020.

Allow me to explain the SDL and how it is collected today. The SDL is a levy which companies pay every month for both their local and foreign employees in Singapore. The SDL payable for each employee is 0.25% of the monthly total wages. SSG derives estimates of SDL payable by companies based on existing Government data such as CPF. SSG’s estimates may differ from actual SDL amounts paid by the employers due to factors such as fluctuations in total wages paid to foreign workers every month, some of whom might be on home leave and not receiving salary during the period of home leave. In some cases, the variance may be due to employers using more updated employee data, instead of being an actual under-payment of SDL.

SSG has adopted a risk-based approach to follow up on estimated variances. The overall variance between the estimated SDL payable and the actual payments has fallen from 18% of overall SDL collected in 2008, to the current 3% to 4%, with the majority of companies compliant in paying their levy today. This was achieved through IT system improvements and SSG’s reminder letters and calls. Nevertheless, SSG acknowledges that more needs to be done to actively reconcile the remaining gap and help all employers pay the correct amount of SDL.

SSG will give affected employers time to validate the amounts owed. It has started engaging the affected employers and will contact all of them by the end of the financial year.

SSG will send timely payment reminders and develop more efficient processes to resolve differences in the companies' and SSG’s estimates of SDL payable. For the few recalcitrant employers who do not pay the outstanding levies despite reminders, SSG will take decisive punitive actions.

Finally, if there is any negligence found, individuals will be taken to task. Learning from the AGO audit, SSG will do even more to review and enhance its processes, policies and systems to prevent lapses.

Mr Yip Hon Weng.

Thank you, Mr Deputy Speaker. I thank the Minister of State for her reply. I have two supplementary questions. First, whether errant vendors will be closely monitored to prevent similar situations from happening in the future? Two, will SSG consider working with specialist agencies like GovTech to make sure that the computer system is up-to-date and to ensure that similar situations do not happen in the future?

I thank the hon Member Mr Yip Hon Weng for the supplementary questions. Indeed, SSG will work more closely with GovTech and is actually looking at rolling out a new IT system to be able to estimate more accurately and be able to track the employers in the payment of SDL. By the middle of next year, we are hoping to roll out a new system to help employers as well, to estimate much better what is the SDL that they are liable for and also for SSG to be able to verify.

Ms Sylvia Lim.

Thank you, Deputy Speaker. I have four supplementary questions for the Minister of State. The first is, AGO cited that there were $4.22 million of overpayment. I would like clarification as to whether this is based on a 100% check by AGO or this is just what was found based on test checks, meaning there could be others that have not been detected so far. So, that is the first question: whether $4.22 million is based on a test check or a 100% check.

The second question: one of the lapses found was that there were payments made for courses that were actually not approved by SSG. The remedial action cited in the report was that retrospective approval would be obtained for these courses to be approved. My question is: is this the correct approach to take? Meaning that funding was paid out for unapproved courses, but now retrospective approval is being sought to approve those courses retrospectively.

The third question: whether the Ministry is considering taking any action against the outsourced service provider?

The fourth question: earlier, the Minister of State mentioned that if there was negligence found in these lapses, then actions will be taken. AGO actually mentioned that the business rules of SSG were not well-defined. So, the question is: how far up should this accountability go?

First of all, I would like to say that the SDL Act has been around since 1979. Prior to SSG, the Government was already collecting the Skills Development Levy. Indeed, as AGO has pointed out, business rules have a certain looseness that needs to be tightened so that companies can better assess – more accurately as well – the SDL that is payable. SSG is in the process of reviewing this. In fact, we are also in the process of reviewing the SDL Act.

With the review of upstream business rules, it will make it easier for companies to be able to estimate the SDL that is payable and for SSG to be able to collect more promptly the amount that companies owe to the Government.

Ms Sylvia Lim also asked about whether AGO had conducted 100% checks when they detected the $4.22 million of grant overpayment. At the moment, I do not know if it was 100% checks, but to my knowledge, AGO normally does sampling checks over a period of time and in this case, they had checked for the grant disbursed between the period of 1 April 2018 and June 2021, I believe. And amongst the transactions that they had checked, they found overpayments. Actually, these overpayments are still in the process of being verified with the entities involved.

Just as an example, AGO found that through their own AGO database, there was overclaim of absentee payroll by employers. What AGO did was, they looked at the salaries paid by companies over a 12-month period and they divided it by 12 to estimate the monthly salaries paid by the companies. But actually, it is more accurate for us, for SSG, to take a look at the salary that the company had paid to its employees in the month that the course was conducted. So, what I am trying to say is that, it is quite a complicated process and for the amounts that are estimated to be over payment of the grant, SSG is now in the process of doing verification and using more detailed data with the entities involved.

To that question about whether retrospective approvals will be made, I think, what is more important is for us to understand the spirit of SkillsFuture courses. SkillsFuture courses are meant to help individuals as well as employers with upskilling. I think what matters to us most at the end of the day is, whether the individuals and companies are eligible for the grants that they have applied for. If the lapses in application were due to administrative errors, then we would want to look at how we can help these individuals, companies and the training providers in rectifying this in a proper way.

As to whether actions will be taken against the service provider, indeed, we discovered some human errors in the manual processing by the service provider. There are contractual terms and key performance indicators (KPIs) that the service provider is liable for and SSG will be looking through this.

At the moment, I think the root cause that we have identified is the massive volume of manual processing. It makes it very, very difficult for all the verifications to be done fully. And hence, there needs to be more upstream changes in policies and business rules.

Ms Sylvia Lim.

Thank you, Deputy Speaker. Sorry, I should have asked earlier also. I do not know whether part (b) and (c) of my filed Parliamentary Questions were answered. So, is the Minister of State able to tell us how much has been defrauded or overpaid since inception and how much has been recovered? I am sorry if I missed your answer, but I do not recall hearing that the answer to (b) and (c).

Actually, it has not been ascertained if the $4.22 million that AGO pointed out is fraud. We have not used that term yet, because, as I explained, there is a lengthy verification process with the individuals and the companies and training providers involved. Since SSG was formed, there have been fraud cases detected. I think the most significant one was in 2017. There was a syndicate that was found to have committed fraud amounting to $40 million. Besides that, similarly in 2017, there was a discovery of 4,400 individuals who made false claims for SkillsFuture Credit and that was also discovered and arrested back then.

As to how much is being recovered, SSG is still in the process of following up with individuals and the companies and they will need some time. It is not very easy to do the verification quickly. So, we ask the Members to allow SSG some time to recover the overpayments.

Mr Patrick Tay, last supplementary question, on this topic, please.

I thank the Minister of State for her response. I just want to make an appeal and ask MOE, especially SkillsFuture Singapore, to not because of this episode, hold back SkillsFuture funding for employers, workers, Singaporeans, who actually genuinely want to undergo lifelong learning and Continuing Education and Training (CET). Therefore, I really hope this does not hold back the generous funding and support for lifelong learning and CET.

MOE and SSG remain committed to providing sufficient and timely SkillsFuture support and grant to individuals as well as companies. It is our collective desire to make sure that Singaporeans have access to sufficient SkillsFuture opportunities and resources. We will continue to work on that. At the same time, we need to make sure that the money is being accounted for properly and being used wisely.

3 Dr Tan Wu Meng asked the Deputy Prime Minister and Minister for Finance regarding the finding of the Auditor-General’s Office (AGO) Report for the financial year 2021/2022 that GSTV – U-Save rebates could have been given to ineligible households (a) what are the reasons and root causes for the reported time lag issues in the data used to determine eligibility; (b) whether there are households that are eligible but do not qualify during the initial eligibility assessment; and (c) if so, how many are there and whether these households have since received their rebates.

Mr Deputy Speaker, the substance of my response today will also effectively cover a similar Parliamentary Question (PQ) filed by Ms He Ting Ru1 for a subsequent Sitting. If Ms He is satisfied with the response today, then she may wish to withdraw her question after this session.

Sir, MOF uses data from various Government agencies to determine the eligibility of households for the GST Voucher (GSTV) – U-Save rebates. This way, Singaporeans need not apply for the rebate and will automatically receive the rebates in their utilities accounts.

The data used include the identities of the owners and occupiers of HDB flats, the number and types of properties they own, and their citizenship and living status. The relevant Government agencies have processes in place to keep their databases updated. For additional assurance, MOF also engages an external auditor to conduct an annual audit on the allotment logic for U-Save rebates, to make sure that households are given the correct amount of rebates. For the U-Save payments that were the subject of AGO's report, no errors were detected during these prior checks.

One of the eligibility conditions for U-Save rebates is that the household must include a living Singapore Citizen. From AGO's observations, some households were given rebates that they were not eligible for, as the sole Singapore Citizen household member had already passed away as of the date used to determine eligibility. The error arose as there was a time lag in some deceased citizens' living status data, due to legal processing of records after their deaths had taken place. For example, the date used to determine eligibility was 1 December. The citizen's death on 30 November, that is a day before, might not have been updated in agencies' database until after 1 December, as some time is taken to document and process the death record. So, the household was tagged as being eligible. By the time of the AGO audit, the updated data showed the date of death as 30 November and the household concerned would not been eligible.

While we try to strive to keep our data updated as soon as possible, there are practical constraints. This time lag issue affected about 3,100 households, or about 0.3% of all households living in HDB flats. There were another 23 cases of U-Save rebates given even though there were no Singaporean Citizens in the household, due to errors in agencies' databases. Time lag and data errors were the two sources of errors found during the AGO audit.

On Dr Tan's question about those who qualify after initial assessment, eligibility is determined on a pre-determined cut-off date. Those who do not qualify on that date will not be eligible for the relevant round of rebates. However, should their circumstances change after that date such that they subsequently meet the eligibility criterion, they will be included in the later disbursements of the rebates, provided of course that they remain eligible at the next cut-off date.

As for Dr Tan's question on whether there are eligible households who have missed out on the U-Save rebates, we have not found any system flaws resulting in this. Any feedback or appeals regarding eligible households who may not have received their rebates is investigated to ensure that eligible households are not left out.

MOF has commenced recovery of the rebates given to ineligible households. We are working with data agencies to tighten our operational processes to ensure the use of latest available data to administer the GSTV – U-Save scheme.

Dr Tan Wu Meng.

I thank the Minister for her detailed answer. I have got one supplementary question. Sir, some of my Clementi residents have observed, that sometimes the GSTV – U-Save rebate for a particular month, might not be credited in time for the SP group invoice for that month. For example, we have met Clementi residents, who, for the April invoice by SP group received the April rebate, but for the July invoice, had not yet seen the July rebate in that July invoice. Can I ask MOF whether the Ministry tracks that the GSTV – U-Save rebates are distributed in a timely manner and in particular, implemented in the service providers such as SP Group so that they arrive in a timely way for families who need that help?

I ask this because some Clementi families have observed that when a family is facing cash flow problems in a difficult time with a rising cost of living, when the rebate that they expected to see in that particular month does not show up in the SP Group invoice, it comes as a surprise and a worry. We will help these families on the ground, but we hope agencies can close the loop with SP Group as well.

Mr Deputy Speaker, as a general rule, the rebates are given or credited into the households' accounts in the months that they are disbursed. So, if there are specific instances like this where that is not the case, then I would encourage the Member or other Members who encounter this, to raise this with us and we will see what is the cause. I mean, sometimes it could be, for example, that the resident opened the account after the crediting date, things like that on the ground, but those will be dealt with by appeal.

Ms He Ting Ru.

I thank the Minister for the response on my Parliamentary Question (PQ) that was filed for tomorrow. I take the point that there can be limitations on how quickly the data can be updated because, as the Minister explained, sometimes, there is a bit of a time lag. But given that there is going to be some clawbacks and reimbursement steps to be taken, and also, it probably is quite a stressful situation for the households involved, when previously, they received the rebates and now they are being asked for some clawbacks.

I am just wondering are there any steps that can be taken to prevent this from recurring? After all, over 3,000 households were involved. What are the steps being discussed between the agencies to prevent this from happening again?

The second point is, the Minister stated that action has already been taken to recover the sums that were erroneously disbursed. I am just wondering is there a timeline for this to take place and, at the moment, how far is MOF through this process? How many households have actually had the amounts clawed backed from them?

And the last point: there were 3,166 ineligible households identified. Is there any further action that will be taken to identify whether there are any other households involved in this or is the number of households already taken as 3,166?

I thank the Member for her supplementary questions. Let me deal with the last one first because she asked, are we just taking it at this figure? As I mentioned in my reply earlier, the eligible households number was taken at a particular date and then by the time the AGO audit was conducted, that would be a subsequent time and the databases would have been updated. So, it is essentially comparing what was the database as at the cut-off date, with the updated database. So, I think, that sort of circumscribes the numbers and that is how we were able to arrive at these numbers.

The other question she asked was, given that there is a clawback and it can be stressful for families, are there steps which can be taken to prevent this from happening? We would obviously do our best but perhaps it would be useful for Members to understand the process.

The process is the agency that has the information on living status, whether you are born, or whether you have passed on, is ICA. And ICA then passes that to HDB, who will then check who is the owner living there, whether it is a tenancy occupier and then they pass the information to MOF. So, the initial part is ICA receiving the information. And really, that information comes from the family. Even if we want to speed that up, you also have to be sensitive to the family because you cannot say, "Your family member is dead. Please go and file your documents now". That would not be sensitive either. So, I think we do have to be sensitive to the families and bear in mind that it may be unavoidable that there is a bit of a time lag. Of course, we will remind them as soon as possible. And, of course, if it comes to the attention of HDB or any of the agencies we would likewise remind them.

So, we will do as much as we can to tighten the process, but bearing in mind that you must also give some time to the residents to be able to update their records. And then in terms of the action taken to recover, what is the timeline? As soon as possible. The Member asked if I have the exact figures now, how many have been recovered or not? I do not have the exact figures at the moment, it is still in process, but I think the Member can have the assurance of knowing that we are doing this as soon as we can.

4 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Finance (a) whether the Government is prepared for the Monetary Authority of Singapore (MAS) to continue making net losses over the next one to two years should the tightening of monetary policy be maintained; and (b) whether and, if so, how will Government funding be affected by MAS’ financial position.

5 Mr Vikram Nair asked the Deputy Prime Minister and Minister for Finance (a) whether MAS’ $7.4 billion loss will have any impact on the Government budget; (b) if so, what is the impact; and (c) whether any reconsideration is needed on how MAS contributions in the Government budget is to be used given the volatility in its returns.

6 Mr Liang Eng Hwa asked the Prime Minister (a) whether he can clarify the context for the loss of $7.4 billion reported by MAS in their financial statement for FY2021/2022; and (b) whether the recorded loss will have implications on the Government’s strong Singapore dollar policy and overall budget position for the current financial year.

Mr Speaker, may I have your permission to take Question Nos 4, 5 and 6 together, as they pertain to the $7.4 billion loss reported by the Monetary Authority of Singapore (MAS) in its financial statement and the impact of the loss on the Government's Budget position?

Please do.

Sir, first, in my capacity as Deputy Chairman of MAS, let me explain the context of the net loss. The net loss of $7.4 billion reflected a currency translation effect, in other words the effect of translating the foreign currency value of the Official Foreign Reserves (OFR) into Singapore dollars. The negative currency translation effect is not relevant to MAS’ investment performance, which is measured in foreign currencies. It also has no bearing on the international purchasing power of the OFR, or on MAS’ conduct of monetary policy.

For FY2021/2022, MAS made investment gains of $4 billion on the OFR. These investment gains were, however, outweighed by the negative currency translation effects of $8.7 billion arising from a stronger Singapore dollar. As MAS tightened monetary policy in October 2021 and January 2022, the Singapore dollar had strengthened against several of the foreign currencies in which the OFR are held. This meant a currency translation loss when the OFR were reported in Singapore dollar.

The negative currency translation effect has no implication for the international purchasing power of the OFR. In fact, given the purpose of the OFR in safeguarding the international purchasing power of the Singapore dollar, it is the foreign currency value rather than the Singapore dollar value of the OFR that matters.

MAS’ net loss in Singapore dollar terms also has no implications for its conduct of monetary policy. The aim of MAS' monetary policy is to secure low and stable inflation as the basis for sustained growth over the medium term. MAS, as Members know, conducts an exchange rate-centred monetary policy, managing the Singapore dollar against a basket of currencies of Singapore’s major trading partners. When inflationary pressures build up, as they have over the past year, MAS allows the trade-weighted exchange rate to appreciate faster. Negative currency translation effects do not have any bearing on MAS’ ability to manage the exchange rate; rather they are a consequence of MAS’ conduct of exchange rate policy.

Next, let me, in my capacity as the Minister for Finance, answer the questions relating to the impact of MAS’ net loss on the Government’s Budget position. At the outset, let me clarify that MAS’ overarching mandate is to ensure macroeconomic stability. The Government does not expect MAS to deviate from this mandate in order to maximise its contributions to the Government.

MAS contributes to the Government’s Budget in two ways.

First, under the Net Investment Returns (NIR) framework, the Government can spend up to 50% of the expected long-term real return on the net assets invested by MAS, GIC, and Temasek. The NIR framework is designed to provide a steady, sustainable stream of income to help meet the Government’s expenditure needs. The NIR is based on the long-term expected returns of the three investment entities and therefore, is not affected by their short-term performance. MAS’ reported net loss in the last FY has no impact on the NIR that is available to the Government.

Second, similar to other Statutory Boards, MAS makes contributions to the Government in lieu of corporate income tax. This is based on 17% of the net profit for the year after offsetting cumulative losses from previous financial years.

In the case of MAS, the Government recognises that its contributions will vary considerably from year to year due to the combined effect of currency translation and investment returns on MAS’ balance sheet. This is why, since FY2019, the Government has smoothened the revenue volatility by requiring the annual contributions made by MAS to be paid in equal proportions over a period of three years. This means that even though MAS recorded a net loss for FY2021/2022, the Government will receive $1.1 billion from MAS, based on the contributions accrued for the previous two financial years, when MAS recorded net profits. The smoothening formula has helped to mitigate the impact of MAS' net loss on the Government’s Budget.

Investment returns are inherently volatile reflecting market conditions. The Government has taken steps to ensure that this volatility does not unduly affect the Budget. It is neither responsible nor prudent for us to rely on windfall surpluses in any given year to fund our increased structural spending needs.

Mr Ang Wei Neng.

Mr Deputy Speaker, thank you. I also thank the Deputy Prime Minister for the comprehensive reply. Can I clarify a couple of points? How much has MAS contributed to Government's consolidated funds in the past five years, beyond FY2021/2022 that was reported in the press? How does MAS decide how much money MAS needs to contribute to the consolidated fund every year?

Sir, I do not have the specific figures with me right now. I have explained just now that MAS' contributions are in lieu of corporate income tax and there is formula for it. It is based on 17% of the net profit for the year, after offsetting cumulative losses from previous years. On top of that annual contribution, in FY2019, we also introduced a smoothening formula so that the contributions made by MAS are paid in equal proportions over a period of three years.

These are all based on a formula and MAS will publish every year in its annual report the contributions it makes to the consolidated fund based on these formulas.

Mr Liang Eng Hwa.

Thank you, Sir. I would like to further ask the Deputy Prime Minister this. We know that for the investment returns, we do have the NIRC framework where it smoothens out over a long period of time. We call it the long-term expected real returns. So, I would like to ask the Deputy Prime Minister, why are these investment returns from OFR, and hence, the foreign exchange translation effects and fluctuations, not counted under the NIRC framework where the returns are smoothened out over the long period of time, through that methodology?

The second question, in MAS' annual report, it also mentioned the higher interest rate expenses. Can I ask if the rising interest rates will add to the overall interest expenses of the Government, given the size of securities the Government intends to issue going forward?

Mr Deputy Speaker, I should clarify first of all on the first question that, in fact, MAS' investment returns are part of the NIR framework. The NIR framework covers our investments by MAS, Temasek and GIC – three investment entities. The investments are largely in foreign currencies, they are in foreign assets. So, they will be converted, translated into Singapore dollars, into a net asset base, which is smoothened out. The smoothening formula for the net asset base computation, in a way, helps to moderate foreign currency effects. So, in fact, MAS' contributions through the NIR mechanism to NIRC is very much incorporated already into the present NIR framework.

On the second question of the impact of interest rates on interest expenses, that is something that will happen. With rising interest rates, there will be implications for MAS' interest expense. But it also has an implication for MAS' investment income. On the expense side, MAS will have to spend more, perhaps, when it needs to borrow as part of money market operations to manage banking system liquidity. But on the investment side, over the medium term, rising interest rates will also help to raise investment income from our foreign asset holdings.

So, taking both into consideration, over the longer-term, MAS should be able to manage the effects of rising interest rates on its financials.

Any further supplementary questions? Mr Leong.

Thank you, Deputy Speaker. I would like to ask the Deputy Prime Minister and Minister for Finance one supplementary question. While MAS had chalked up a $7.4 billion loss in 2022, both the investment companies Temasek Holdings and GIC have chalked up hundreds of billions of dollars of additional profits because of the good markets in 2021 and 2022. Can I ask the Minister, overall, are we expecting a further increase in our foreign reserves in 2023?

Mr Deputy Speaker, Temasek and GIC have reported their performances in their annual statements. I am not sure where Mr Leong Mun Wai got "hundreds of billions of dollars" in returns, but the performance by Temasek and GIC have been published, we can find out what they are.

In the end, regarding these performances, it is not so much whether they do well, or not so well on an annual basis, because what matters to us is the NIRC that comes into the Budget. And as we have explained time and again, that is not based on short-term investment performance, which can be up or down, depending on market volatility, but it is on the long-term expected real rate of return, which is determined and then applied, as I have mentioned just now, on the net asset base of MAS, GIC and Temasek respectively for us to work out the NIRC into the Budget.

So, that is what matters for budgetary matters. When we work out next year's Budget in 2023, Members will see what is the NIR contribution. This framework has been worked out, I think it is something that is sound and it is something that we will continue to manage prudently and responsibly.

7 Ms Joan Pereira asked the Minister for Health (a) whether the Ministry is observing an increasing trend in the COVID-19 reinfection rate given the continued emergence of new Omicron sub-variants; and (b) whether there are any plans to further expand the eligibility for second booster shots for younger age groups, especially when the vaccines are updated to deal with new variants or subvariants.

8 Ms Joan Pereira asked the Minister for Health in view of the current wave of COVID-19 infections (a) what measures are in place or planned to be put in place to cope with the spike in the number of patients at general practitioner clinics, polyclinics and hospitals’ emergency departments; and (b) whether there are plans to further support the growth of the telemedicine sector in Singapore to provide medical services for mild cases and to reduce the number of infected persons visiting physical clinics.

9 Mr Liang Eng Hwa asked the Minister for Health (a) whether the recent wave of COVID-19 infections has resulted in much longer waiting times for patients at polyclinics and neighbourhood general practitioner clinics; (b) whether the waiting time and services can be improved; and (c) whether the capacity for primary care at the heartlands can be further stepped up.

10 Mr Seah Kian Peng asked the Minister for Health (a) what proportion of the Singapore population does the Ministry estimate has been infected with COVID-19, including unreported cases; and (b) whether Singapore has attained herd immunity with such an infection level.

11 Dr Wan Rizal asked the Minister for Health whether an update can be provided on the study by the Health Sciences Authority and the Expert Committee on COVID-19 Vaccination on the safety and effectiveness of COVID-19 vaccines formulated for young children aged under five years old.

12 Mr Chua Kheng Wee Louis asked the Minister for Health (a) what is the number of foreign patient arrivals in Singapore in (i) 2022 year-to-date and (ii) each of the last five years; (b) what are the current utilisation rates of existing capacity by foreign patients in private and public hospitals respectively; and (c) what is the bed capacity in private and public hospitals (i) currently used and (ii) set aside, for COVID-19 hospitalisations in light of the rising number of COVID-19 cases.

13 Mr Dennis Tan Lip Fong asked the Minister for Health (a) whether the Ministry plans to allow all adults below 50 years old to take their COVID-19 vaccination second booster under the National Vaccination Programme (NVP) and, if so, when is this expected; and (b) will all adults below 50 years old who wish to take their second booster due to travel requirements or concerns arising from travel plans be allowed to do so under the NVP.

14 Mr Dennis Tan Lip Fong asked the Minister for Health whether the recent deaths of two young children from COVID-19 on 27 June and 17 July 2022 raised any cause for concern regarding the susceptibility of young children to the recent COVID-19 strains, bearing in mind the relatively higher number of daily reported COVID-19 cases in recent weeks and the infectiousness of the recent strains.

15 Ms He Ting Ru asked the Minister for Health whether he can provide an update on the progress of the Ministry's evaluation of (i) COVID-19 vaccines for children under five years old and (ii) other types of COVID-19 vaccines that can be administered to children.

Mr Deputy Speaker, with your permission, may I and Senior Minister of State Janil Puthucheary address the COVID-19 related Parliamentary Questions (PQs) for oral answer, Question Nos 7 to 15 in today's Order Paper; and then those filed by Mr Saktiandi Supaat1 and Mr Yip Hon Weng2, filed for 2 August; and Parliamentary Questions for written replies filed by Mr Zhulkarnain Abdul Rahim, Dr Shahira Abdullah and Mr Shawn Huang, please.

Please do.

I will touch on the COVID-19 situation, healthcare capacity and vaccination programme. Thereafter, Senior Minister of State Janil Puthucheary will address PQs for our treatment and vaccination plans for children. And if the Members who filed tomorrow's questions are satisfied with the answer, they may wish to withdraw their questions.

My Deputy Speaker, we are still in the middle of an infection wave driven by the Omicron variant BA.

5. Over the last 10 days, infection numbers have been falling and the week-on-week ratio has dipped below 0.9 over the last week. We should see the wave subsiding further this week.

We did not tighten any social restrictions during the current wave. Everyone went about our lives normally: going to work, visiting families, going out with friends, travelling in and out of Singapore.

However, life is not as normal in our hospitals. Without additional social restrictions, our healthcare system is bearing the brunt of the current wave. Healthcare workers have been very busy. Polyclinics and our general practitioner clinics also saw higher patient volumes.

To answer Ms Joan Pereira, we are indeed promoting the use of telemedicine for mild COVID-19 cases. It is now a lot more accepted by patients than before. But even so, we need to be realistic that in a big infection wave, the healthcare system will come under stress, notwithstanding the common usage of telemedicine. Waiting times at private clinics, polyclinics and hospitals will inevitably go up and I seek the patience and understanding of all our residents.

In such a situation, the key is to ensure that hospitals are not overwhelmed and that those who need urgent care can be attended to promptly. By and large, we have been able to achieve that.

The first important measure to achieve that is to set aside sufficient bed capacity to cater to COVID-19 patients. So, in response to Mr Louis Chua, based on our worst-case scenario projection for the current wave, we have plans to set aside up to about 1,000 COVID-19 hospital beds for COVID-19 patients.

This is a dynamic plan and fortunately, in the course of this infection wave, we did not have to activate all of those beds.

In the same question, Mr Louis Chua asked about foreign patient arrivals for the last five years. I think that this is a non-COVID-19 related question, we will answer it separately and Senior Minister of State Janil Puthucheary will touch on that.

Second, we eased the workload of hospitals by transferring lower-risk patients to COVID-19 Treatment Facilities and discharging long-term stayers back to community care facilities, like nursing homes. Many of these facilities and services are run by private or social sector providers and we are deeply appreciative of them for doing this work.

Compared to the last Omicron wave, the transfer processes are now a lot smoother and patients and their families have also become a lot more understanding when hospitals say that your loved one needs to be transferred. As a result, for this infection wave, we have been able to make many more transfers than the last and this has made a significant difference to the workload of hospitals.

Finally, hospitals also have to manage their own demand for beds. They have cut down on "business-as-usual" workload, by about 5% and this comprises of mostly elective surgeries. This is not ideal, because it builds up the backlog of work which have to be attended to eventually. However, the 5% cut today is far less than the 15% cut that we had to implement during the first Omicron wave in the beginning of this year.

Hospitals restricted but did not suspend visits to patients. We also did not suspend the leave of healthcare workers, so they can still take breaks, including flying to their home countries to see their loved ones and their family members. This is extremely important in maintaining the morale of our healthcare workforce.

Mr Yip Hon Weng asked if hospital-acquired COVID-19 infections is contributing to a bed crunch. The answer is no. Absenteeism in hospitals due to the current COVID-19 wave has been lower this time round, at about 2%. As far as we can determine, while there had been some transmission within hospitals, overall, hospital-acquired COVID-19 infection has been low and very likely, lower than community-acquired infections. This is because of good infection control measures in hospitals.

We need to recognise that bed crunches are mainly caused by high case numbers because of an infection wave and how those case numbers translate into severe illnesses that need hospitalisation.

There are only two ways to minimise this: one is social restrictions, two is to ensure good coverage of vaccination amongst the population. All of us do not want to bring back social restrictions as far as possible. The rule of five, the rule of two – we try to avoid that. And so, therefore, we need to rely on vaccinations.

In that regard, like many Singaporeans, I am very proud that Singapore has achieved what many countries want to achieve, which is that most people have gotten up-to-date vaccinations. The resilience has been further strengthened as many people recovered safely from COVID-19 infections.

Mr Seah Kian Peng asked what percentage of our population has been infected. On record, we have about 1.7 million reported cases, which is about 30% of our population. MOH also systematically monitors blood samples from routine polyclinic cases and other healthy volunteers for signs of previous infection. From these samples, we estimate about 60% of local residents are likely to have been infected with COVID-19.

Notwithstanding that, this does not confer us "herd immunity". By and large, scientists around the world do not think herd immunity is achievable because the virus will continue to mutate, escape the protection of vaccines and then, infect people.

What is achievable is population protection against severe illness through vaccinations. This is what enables our healthcare system to weather through an infection wave, even with high case numbers, because the translation of case numbers into severe illnesses is very low.

During the last Omicron wave at the beginning of this year, 2.4% of infected persons needed hospitalisation. During this wave, 1.9% ended up in hospitals. The actual percentages are likely to be lower because not all cases are reported.

Notwithstanding our strong resilience due to good vaccination coverage, MOH still has some concerns and we can never be complacent.

First concern, coverage of the vulnerable, especially our seniors. To get good vaccine protection against severe illness from the Omicron variants, we need three doses of mRNA shots. It is no longer a two-dose vaccination; it is three doses.

However, we have more or less hit a plateau – there remains 40,000 seniors, aged 60 and above, who have not received their booster shots, even though they are eligible. Another 40,000 seniors have not completed two doses yet. All of them are vulnerable to severe illness, if infected. We will continue to try to reach out to them through our Mobile Vaccination Teams, through our home vaccination teams.

The second concern – MOH knows that vaccine protection against severe illness will not last forever. So, Mr Shawn Huang has, therefore, filed a very pertinent question on when this will start to wane.

MOH monitors this data closely. Mr Deputy Speaker, Sir, with your permission, may I show some graphs on the screen, please?

Please do. [A slide was shown to hon Members. Please refer to Annex 1.]

At the top left-hand corner, the line shows "Vaccination Effectiveness Against Severe Illness"; at the top left-hand corner is for the age group above 80; top right hand, 70 to 79; bottom, 60 to 69. And Members can see that the graphs are not dipping; in fact, they are staying at a high level. And that is 10 months' worth of data.

So, our empirical data shows that after 10 months, the protective effect of three doses of mRNA vaccines remains very strong in preventing severe illnesses. That is why as of now, our recommendation is for those who are 80 and above to receive their second booster, or fourth shot, to better protect against severe illness.

Members will notice that at the top left-hand corner is the chart for those aged above 80. In fact, it has not dipped, but in general, the protection level is lower than younger cohorts, which is why we recommend that they take a fourth shot, or the second booster.

As for those aged 50 to 79, although the protection levels continue to be strong, this is also the age when chronic illnesses start to set in. So, they have been offered the second booster if they want to take it, either because they are travelling, or they are worried about their health because of underlying chronic illnesses.

Our experts are actively studying the benefits of a fourth shot, or a second booster, for the age group of 60 to 79, in further reducing the likelihood of severe illnesses. We will announce their recommendations shortly, once they are ready.

As for the younger individuals below 60 years old, they have the protection of both the third shot, as well as age. Currently, they do not require a second booster if they are healthy. MOH will continue to study the emerging data, including the benefits of newer vaccine formulations, weigh against the risk of new variants and update our recommendations, as and when necessary.

Ms Joan Pereira asked about the incidence of reinfections. It does occur in Singapore, but by and large, reinfection rate during the current wave has been low in Singapore and we recorded reinfection rates that are lower than many countries. This is likely because we have very good vaccination coverage and that we just went through a fairly large BA.2 infection wave, just at the beginning of this year.

MOH has been watching the reinfection numbers very closely, because it will inform us of the likely timing of future waves. Our observation is that for those who were infected over the last three months, the chance of getting another infection is very rare. For those infected four to seven months ago, the probability of getting infected again is about 3% that of an uninfected or naïve person. If you have been infected with the Delta variant last year, the probability of getting infected again is about 20% that of an uninfected person, or COVID-19-naive person.

Of course, this picture will change as time goes by and the protective effect of prior infections wanes. Hence, having been infected by COVID-19 before, should not be a reason to let your guard down.

In the meantime, reinfections are taking place, albeit not as frequently in Singapore, compared to other countries, but they are likely to increase as protection of prior infections wanes. We should, therefore, start to include reinfection numbers in our daily reported case counts. In the past, we report the number of patients who had been infected every day. So, a patient who has been infected twice, we count him only once and there are very few of them. With more reinfections, from today, we will report the infection episodes instead of infected persons. This will be a more accurate reflection of the pandemic situation.

Mr Zhulkarnain Abdul Rahim asked about COVID-19 therapeutics. All polyclinics and more than 130 participating PHPCs can prescribe oral antivirals to clinically eligible patients in the community. To date, more than 3,200 patients have been prescribed such therapeutics across different healthcare settings. It is a small percentage of all infections, reflective of the fact that the vast majority of infected cases are of low risk.

Mr Saktiandi Supaat asked about the Flu Subsidy Scheme. As at end FY2021, the Government has spent about $178 million on the scheme for over 11 million attendances at private clinics and polyclinics for the treatment of acute respiratory infections.

As we progress towards living with COVID-19, Singaporeans have become familiar with exercising social responsibility through self-testing by following Protocol 1-2-3. By keeping ourselves healthy, getting up-to-date vaccinations and with employers and education institutions not always insisting to see medical certificates, most COVID-19 patients can recover uneventfully by resting at home and seeking care only when needed.

Our policies will, therefore, need to evolve with the state of our preparedness. For safe management measures, we refrain from imposing additional restrictions even as we ride through a wave now. Likewise, healthcare financing policies would also need to start evolving and progressively scale back from subsidy policies that were enacted under exceptional pandemic circumstances.

I want to reassure Members of the House that for residents who see their primary care doctors, they will continue to receive institutionalised, pre-COVID-19 subsidies, such as CHAS, polyclinic subsidies, health screening subsidies and so on. PHPCs and polyclinics will also continue to provide Government-funded swabs to eligible symptomatic individuals at no charge.

Mr Deputy Speaker, Sir, while the current wave is subsiding and I think the worse is over, it is important that we do not be complacent.

As the protection of vaccines and prior infection wanes, the virus will circulate in our society again and cases will rise. We must anticipate when that will happen and take the necessary precautions, including the most important of all, which is to keep our vaccinations up to date.

I have deliberately used the term "up-to-date vaccinations", rather than a second, third or fourth booster shot. This is because, at some point, just like flu vaccinations, we have to stop counting the number of boosters we have taken. Instead, we must ensure that we get a jab at a suitable interval – maybe nine months or a year. This is something MOH will try to determine in the coming months.

As of now, there is no change to MOH’s guidance and recommendations. It remains what have already been announced.

We need to be alert to the threat of a new variant that is more infectious, leads to more severe illnesses or evades the protection of current vaccines. We hope it will not happen, but many countries in the northern hemisphere are worried about that and what might come up in the coming winter. If we encounter such a variant, I am afraid social restrictions will become necessary again.

Mr Deputy Speaker, Sir, notwithstanding these words of caution, let me underscore the importance of what Singapore just went through.

With each wave, we are coping better. We are riding through this current BA.5 infection wave without imposing further social restrictions or imposing border measures. In our hospitals, we imposed fewer restrictions and hospitals are, generally, able to cope better than the last wave.

That means that the Singapore society has taken another major step forward in living with COVID-19 as an endemic disease and I think this is a big National Day present for all Singaporeans.

Senior Minister of State Janil Puthucheary.

Mr Deputy Speaker, Sir, there were several PQs on our treatment and vaccination plans for children.

I was saddened by the recent deaths of two young children from COVID-19 and offer my deepest condolences to their families.

Based on local and international data, the BA.4 and BA.5 Omicron subvariants have not been observed to affect children more severely than past variants and severe COVID-19 infection continues to be rare in children, especially amongst those who are vaccinated.

For children aged five to 11, a third mRNA dose may be necessary at some point to keep protection levels high and MOH is making the necessary preparations to roll out vaccination booster doses for this age group in about two months’ time. At present, the Pfizer-BioNTech/Comirnaty COVID-19 vaccine remains the only vaccine authorised for use in children aged five to 17 in Singapore. Children who are not medically eligible for the Pfizer-BioNTech/Comirnaty COVID-19 vaccine may receive the Sinovac-CoronaVac vaccine under a dedicated public health programme, while Moderna’s vaccine for this age group remains under evaluation.

Children under the age of five are, currently, the last group not yet protected by vaccination. MOH is preparing to start vaccination for those under five towards the fourth quarter of this year. The Health Sciences Authority (HSA) is currently reviewing the data submitted by Pfizer/BioNTech and Moderna on their COVID-19 vaccines for this age group. We will provide an update when an assessment of the quality, effectiveness and safety of the vaccines has been completed.

Members asked what could be done to detect, diagnose and treat COVID-19 in children. Currently, children under the age of five remain more vulnerable to COVID-19 infection and have higher rates of severe outcomes, as compared to older children. This is similar to other respiratory diseases. However, the overall incidence of severe outcomes from COVID-19 infection remains much lower amongst children, compared to adults and the elderly.

Children needing medical attention should be seen by a general practitioner (GP) or polyclinic if unwell and the clinical team, the doctors there, will test children with acute respiratory infection (ARI) symptoms using an Antigen Rapid Test (ART) by default or a Polymerase Chain Reaction (PCR) test, if indicated. Children under three months of age are admitted to hospital by default, whereas older children are treated under the Home Recovery Programme (HRP) and reviewed by doctors via telemedicine. This service is available round the clock. Our hospitals continue to prioritise care for children with urgent medical conditions and those who require further observation and treatment will be admitted. MOH regularly reviews and updates the screening and review criteria with inputs from a panel of specialists.

Oral antivirals are licensed for use under HSA’s Pandemic Special Access Route for patients aged 18 and above only. For children aged between 12 and 18, local and overseas treatment guidelines indicate that Paxlovid may be considered on a case-to-case basis. We will continue to review the evidence for the use of oral antivirals for children under 18 years of age.

We will continue to monitor the incidence of severe illness and deaths due to COVID-19 closely and adjust our processes to protect our healthcare system and patients. We ask everyone to take the necessary precautions and remain socially responsible by self-testing if unwell, getting vaccinated and boosted, and avoiding social interactions if you have a fever or respiratory symptoms.

Lastly, Sir, to address Mr Louis Chua's question on foreign patients, the number of foreign patients who come to Singapore to specifically seek inpatient treatment or day surgery at our hospitals has, historically, been small. Between 2017 and 2019, our public and private hospitals saw about 32,000 foreign patients annually, or about 3% of all inpatients and day surgery patients. These numbers have since fallen by 80%, compared to pre-COVID-19 levels. In 2021, there were just 6,000 episodes, comprising less than 1% of total cases seen in hospitals.

Ms Joan Pereira.

Mr Deputy Speaker, I have two supplementary questions for the Minister. A recent study from Portugal suggested that the current lead dominant Omicron BA.5 subvariant is linked with higher odds of causing reinfection, regardless of the vaccination status. Is the Ministry considering conducting similar studies and would such findings affect our country's vaccination and treatment strategies?

Minister Ong Ye Kung.

I heard only one question. I will try to answer it.

As I have reported just now, MOH, likewise, is monitoring empirically the rate of reinfections in Singapore. By and large, we have noticed that our rate of reinfection is lower than many other countries. We are at a stage where every country's experience is different because they experienced different waves with different dominant strains and different vaccination and booster rates and also different age profiles, old and young. So, when you take all that into account, every country's experience is now unique.

We know Portugal's experience. In fact, Portugal has gone through a wave with many hospitalisations. Australia is undergoing a BA.5 wave with many hospitalisations. In our case, due to a combination of factors – high vaccination rate, high booster rates and the fact that we recently went through a BA.2 wave which gives better protective effects against BA.5 – we have waded through this current wave much more smoothly, compared to Portugal.

We will continue to monitor the reinfection rate. As I have mentioned, what is important is whether reinfections or infections translate into hospitalisations. So, what is important is vaccination effectiveness against severe illness. We will monitor that closely. As I have mentioned and as I have shown in the chart earlier, after 10 months, the protective effect is still strong but we will monitor closely.

Mr Saktiandi Supaat.

Thank you, Mr Deputy Speaker. I would like to thank the Minister for his answer earlier with regard to my PQ scheduled for tomorrow. I have two supplementary questions which are related to the PQ which the Minister probably did not get the chance to answer.

The first is whether the Flu Subsidy Scheme has encouraged more eligible residents to seek medical treatment. One of the reasons I asked the PQ for tomorrow is that some residents have come to me on the scheme because they have found it to be useful, especially in the current context of rising costs.

The second supplementary question is with regard to the deactivation of the scheme, whether it will hamper early detection of efforts in terms of data collection for COVID-19 by MOH as well, going forward.

Notwithstanding deactivation of the Flu Subsidy Scheme, as I have mentioned, the current subsidy schemes, especially CHAS, polyclinic subsidies, continue to be there. Does the Flu Subsidy Scheme increase the number of people seeking medical treatment? I believe that is a reasonable effect that we should expect of any subsidy.

I think in the community, we have seen and we have probably met residents who say, "Since there is the Flu Subsidy Scheme and it costs $10, no harm. I think I might have COVID-19. Just go to the GP," and when they are very well, young and probably can recover uneventfully at home, drinking more water, rest, taking ART.

I think, when we have a subsidy scheme like that, on the one hand, more people may come forward; on the other hand, you can also overcrowd the GP clinics. As we enter into a phase where we are more prepared and better able to live with COVID-19, just as we wound back our SMMs, we also need to go back to the subsidies schemes, pre-COVID-19. That is what we are trying to do for one of our smaller schemes, which is Flu Subsidy Scheme. Hospitalisation, testing – all these continue to be fully subsidised. And that is an even larger amount that we continue to support.

Will this therefore reduce the detection rate of COVID-19? I think a lot depends on self-testing, much more than testing at the GPs. You can now use telemedicine, as Ms Joan Pereira said. Using telemedicine, test in front of a camera on Zoom and the doctor can record it in the system. So, by and large, people know how to use the system and we continue to be able to monitor our epi curve with the reports from people, very promptly and quite accurately.

Mr Leon Perera.

Thank you, Mr Deputy Speaker. Just three supplementary questions for the Minister for Health.

Firstly, he shared some data on the mRNA vaccines being effective – three shots against seriously falling ill. Could he give us a sense of that data for the non-mRNA vaccines, the traditional vaccines? Are these less efficacious than the mRNA?

The second supplementary question is: would MOH consider sending mobile vaccination teams to individual homes to vaccinate them even if they are not seniors, if there are strong mitigating factors? For example, if the individual is diagnosed with a mental health condition that makes it hard for them to leave their home.

The third supplementary question is: would the Ministry consider tweaking its systems and processes to encourage people who go for the COVID-19 vaccines to also get the regular flu vaccine at the same time if, indeed, that is scientifically feasible?

We have a few non-mRNA vaccines. Novavax has shown to be efficacious in preventing severe illnesses. The other two slightly less. I do not have the data. But the data has shown that these are slightly less efficacious; not just us, but Chile, Malaysia and other countries have also published similar data and admit similar observations. Having said that, they do have a protective effect. Having those vaccinations is better than not having vaccinations. So, please encourage residents to take them.

As for mobile vaccinations, for those who are not seniors, we will do so and we have been doing so. If you come across any residents that need them, you can always raise with MOH and we will assess and try to be as helpful as we can.

Do we administer flu vaccines together? In practice, we can. But unlike many other countries where there are four seasons and there is a winter and a flu season, they find it useful to administer flu vaccines and COVID-19 vaccines concurrently, which is what Australia is doing currently. And towards the fall, many Northern Hemisphere countries intend to do so.

We do not have a flu season. It comes and goes. It could be anytime. So, it is harder for us to combine two vaccinations at the same time because of the lack of a flu season. But theoretically, it is possible. And if someone wants both together, we should think of a way to administer both.

Mr Seah Kian Peng.

Just two supplementary questions for the Minister.

First, Minister mentioned that the current 60% infection does not accord us "herd immunity". I would just like to ask at what level would it be considered that we have "herd immunity"?

My second supplementary question relates to the seniors. I am concerned that there are 80,000 of our seniors who either have not gotten their second vaccination or have not had the booster jab. Eighty thousand seniors is a lot of people. I know we are still trying to reach out to them through our mobile vaccination teams. I think that will take too long; we have been trying that for quite a while. I think to cover the entire 80,000 will take a long, long time. So, my question is: what other solutions are there beyond the current mobile vaccination teams?

I am sorry to disappoint Mr Seah Kian Peng. But even if we hit 100%, we will not have "herd immunity". It is no longer a function or percentage coverage of vaccinations or infections but it is the fact that it is a fast mutating virus and it will escape prior infection protection as well as vaccine protection. So, therefore, do not aim for "herd immunity" where we think the virus will disappear but instead live with the virus and protect ourselves against severe illnesses.

What other solutions are there? Mobile teams have been useful; home vaccination teams have been useful. Eighty thousand is a big number. But on the other hand, compared to other countries, we are 93% covered by vaccinations; 79% covered by booster. These are very, very high by international standards. We will continue to try hard. But I suspect, especially the 40,000 seniors who have not even taken two shots, they must have deep personal reasons not to do.

For the other 40,000, they have taken two shots but somehow have not taken the booster. For them, I am a bit more sanguine because they have taken two before; I think we can persuade them to take a third. But those who have not taken, we have met them and we have tried to persuade them; it is difficult. The better way now is for us to be considerate that there are such vulnerable seniors amongst us. So, we must always exercise our social responsibility. If we do not feel well when we are meeting one of these seniors, avoid meeting them or test yourself before you meet them. In other words, the rest of us who have been vaccinated or have been infected, we have to protect those who are not protected and are vulnerable.

Mr Dennis Tan.

Thank you, Deputy Speaker. I just want to seek clarification from the Minister regarding my Question No 13, part (b). I am not sure I heard the answer. For Singaporeans under 50, if they wish to take the second booster because of travel requirements or because of concerns arising out of travel, will they be allowed to do so under the National Vaccination Programme?

Currently, our rules do not provide for that. If you are below 50, you have taken three shots already and you are healthy, our rules do not provide for them and they would not be offered. But if they have underlying conditions and they suspect they are sick, they can let us know and we will offer it to them. The reason is, as I mentioned earlier, protection against severe illness is what is important and it continues to stay very high, especially if you are young. And towards year end, we do not know what is coming our way. In the Northern Hemisphere, many countries are worried about new variants. So, therefore, sometimes, it is also worthwhile to keep our powder dry, especially for the younger group.

We will take the last two questions on this topic. Mr Yip Hon Weng and then Mr Louis Chua.

I thank the Minister for his reply and response to my PQ slated for tomorrow on hospital-related infections. I have one clarification for the Minister on whether his response on hospital-acquired infections include our community hospitals and nursing homes, because many of the patients there are seniors and vulnerable patients.

Yes, it does. And thankfully, we have been able to keep our nursing homes safe. It makes all the difference. We will continue to try hard to protect our nursing homes and community hospitals.

Mr Louis Chua.

Thank you, Mr Deputy Speaker. I just have one supplementary question for the Minister.

On 9 May, in a report in The Straits Times, one of the private hospital groups shared that it has stood down its ringfenced general ward capacity. I note from the Minister's response that about 1,000 hospital beds are being set aside for COVID-19 purposes. I just wanted to understand – the healthcare system today across both the public and private hospitals, what is the current level of bed utilisation as a whole? And if the need arises, where would these additional 1,000 beds come from and how quickly can they be activated?

The 1,000 beds I mentioned referred to public hospitals only. If we include private hospital beds that we can acquire, that is another couple hundred more – I cannot remember the number. Today, hospitals are busy, not because of COVID-19 patients, but a lot of business-as-usual patients. Ninety percent occupancy is quite common. And this is after taking into account, setting aside some beds for COVID-19 patients.

As I mentioned, it is a dynamic plan. When we see a curve going down, numbers going down, we may release more beds. When we see the epi curve going up, we may take out more beds and inch towards the 1,000-bed scenario. So, it is a dynamic plan. But what is important, what I mentioned, is that for this wave, we managed to ride through it. I think the worst is over. We managed to go through it better prepared and better response than the last wave.

Because the presentation of the Petition took six minutes, I have been informed that Question Time will be extended to 3.06 pm. So, we can carry on with the PQs. Dr Lim Wee Kiak.

16 Dr Lim Wee Kiak asked the Minister for Health (a) whether there is any new evidence of community spread of local monkeypox cases; (b) how many doses of smallpox vaccines have been administered; and (c) whether there is an adequate stockpile of vaccines to protect the vulnerable groups.

Sir, as of 31 July 2022, Singapore has had a total of 11 monkeypox cases reported in 2022. None of these cases are linked to each other. All the cases have had mild symptoms and are clinically stable; they were promptly isolated until non-infectious; contact tracing was initiated and 45 close contacts were identified.

All close contacts who remained in Singapore are well and 11 of them have completed their quarantine. Thus far, none of the local contacts had developed symptoms compatible with monkeypox nor tested positive for monkeypox. There is, therefore, no evidence of further spread in the community from the reported cases.

Close contacts were offered the smallpox vaccine as post-exposure prophylaxis, which is reported to be 85% effective at preventing monkeypox infection. To date, 11 close contacts have taken up the smallpox vaccine.

However, and as recommended by WHO, mass population-wide vaccination with the smallpox vaccine is currently not recommended as a preventive strategy for monkeypox as the benefits do not outweigh the risk.

Individuals who are at higher risk of infection due to exposure to confirmed cases or their specimens, including healthcare and laboratory personnel, may be offered the smallpox vaccines to protect them from getting infected. There is an adequate supply of smallpox vaccines.

Based on international data, the current monkeypox outbreak generally causes a mild and self-limiting illness. With globally three deaths out of more than 20,900 cases reported outside of Africa, the case fatality rate currently stands around 0.01%, or approximately one in 10,000. As we learn more about the disease, MOH will continuously review and calibrate our response measures to be commensurate with the public health risk. In line with WHO's recommendations, MOH has also provided appropriate advice and precautionary measures to the public, including the at-risk population, to raise awareness and reduce the risk of onward transmission.

MOH will continue to monitor the monkeypox situation closely and further calibrate our preparedness and response measures, including vaccination strategies, as needed.

Dr Lim Wee Kiak.

Thank you, Deputy Speaker. I would like to ask the Senior Minister of State that since WHO declared monkeypox as a global health emergency on 23 July and New York City has just declared monkeypox as a public health emergency two days ago, what is the status of the monkeypox threat in Singapore with the rising numbers and when will it become a public health emergency in Singapore? And if it ever does become one, what are the measures that MOH will take?

Sir, I thank the Member for his question. I think I have answered the issue of the current status of monkeypox in my original answer.

Notwithstanding the declaration by WHO and the status in New York, the public health response measures adopted Singapore prior to these declarations and the status in New York remain relevant and they are in line with WHO's recommendations after the declaration. Early detection and isolation of cases, prompt contact tracing, quarantining of close contacts – all of these are important strategies and all of these were in place prior to the declaration.

17 Mr Liang Eng Hwa asked the Minister for Manpower (a) whether the Ministry will consider reviewing the criteria of the Silver Support Scheme so that more seniors in need of the support can be assisted; and (b) whether the criteria for the scheme can be better communicated and explained to the seniors.

Mr Deputy Speaker, the Silver Support Scheme provides quarterly cash supplements to seniors who had lower incomes during their working years and now have little or no family support in their retirement. Lifetime wages, housing type and the level of household support are used to decide who is eligible.

MOM reviews the Silver Support Scheme regularly and enhanced the scheme last year.

First, we have raised payouts for recipients by 20%. Second, we have expanded the thresholds for lifetime wages and household monthly income per person to cover more seniors. We have also added a new payout tier that provides a payout to seniors with household monthly incomes per person above $1,300 but not exceeding $1,800.

With the enhancements, the number of Silver Support recipients has increased from one in five seniors in 2020, or about 150,000 seniors, to one in three seniors this year, or about a quarter of a million or 250,000 seniors. Total Silver Support payouts have also nearly doubled from $330 million in 2020 to $600 million per year today.

Seniors do not need to apply for Silver Support. They are automatically assessed annually, and the payouts are directly credited into the senior's registered bank account or sent to the senior's registered address via a cheque.

Currently, all seniors who are eligible for Silver Support in any given year are automatically notified by the CPF Board in December of the preceding year. For newly eligible recipients, the notification letter contains an accompanying infographic which explains the qualifying criteria in all four vernacular languages. We also disseminate information on Silver Support through Community Centres and Silver Generation Ambassadors who are trained to explain the scheme to seniors during their house visits.

If Members have suggestions on how the Silver Support eligibility criteria can be better communicated, we are happy to take these comments on board and we are happy to look into them as well.

Mr Liang Eng Hwa.

Mr Liang Eng Hwa (Bukit Panjang): Thank you, Sir. My question is more for seniors who used to receive and depended on the payouts, and subsequently, the payouts stopped because of changes in their household income and so on.

I understand that the CPF Board does review seniors' eligibility annually but I want to ask the Minister whether for those who used to receive and subsequently do not receive payouts, how does the CPF Board communicate this to those seniors? What are the reasons that are given to them – whether they used to receive for many years and then they do not receive payouts. Should there not be a clarification as to how that happens?

Secondly, for those who have received payouts for many years, can the Minister consider, perhaps, a phased stepdown from the Silver Support Scheme? Because many of the seniors depended on the payouts for some years and suddenly, it just gets removed. There could be some problems for them to manage their monthly expenses and so on. Would the Minister consider that as well?

I thank Mr Liang for his supplementary question.

The CPF Board automatically reviews a senior's eligibility for Silver Support every year. The main reason for seniors becoming ineligible usually could be due to a combination of reasons. It could be due to increases in their household monthly income per person, which is a broad indicator of the level of household support which is available to the senior. In many of these circumstances, the senior's financial situation has actually improved.

For those seniors who no longer qualify for Silver Support in the following year, they will be notified in the preceding year – in December of the preceding year. For instance, if the senior no longer qualifies for Silver Support for 2023, they will receive notification in December 2022.

To the Member's suggestion about stepping down, seniors who are no longer eligible for Silver Support will receive two tranches over two quarters of a stepdown Silver Support payment to help ease their transition out of the scheme.

Having said that, the CPF Board also considers appeals. When seniors find that notwithstanding the support that has been withdrawn, they are not able to be able to transition appropriately, we are prepared to consider each appeal.

Order. End of Question Time. Ministerial Statement. Minister for Culture, Community and Youth.

[Pursuant to Standing Order No 22(3), written answers to questions not reached by the end of Question Time are reproduced in the Appendix, unless Members had asked for questions standing in their names to be postponed to a later Sitting day or withdrawn.]

Mr Deputy Speaker, Sir, I thank all members of the public and Members of this House who have shown a keen interest in the Government's move to take over the Sports Hub and have filed various Parliamentary Questions. My Ministerial Statement today will address the 25 oral and written questions that were filed for the Parliament Sittings in July.

Sir, the Sports Hub we see today is a fully integrated sports, entertainment and lifestyle hub across a 35-hectare site in Kallang. It is anchored by the National Stadium and the Singapore Indoor Stadium, with a range of indoor and outdoor sports and retail facilities in the surroundings. It has been in operation since 2014 and was designed, built, financed and operated by Sports Hub Pte Ltd (SHPL) under a Public-Private-Partnership, or PPP, agreement that was signed between SHPL and SportSG in 2010.

Over the last 12 to 18 months, we spent some time closely evaluating the performance of the Sports Hub project, including its performance in the pre-COVID-19 period, with a view to assessing if we should continue with the partnership. We took a holistic long-term look at the changing environment in the sporting, lifestyle and also entertainment ecosystem in Singapore and what we wanted to achieve in our sporting and social policy outcomes.

In our assessment, the interests of Singapore and Singaporeans would be better served by the Government taking over the ownership and management of the Sports Hub instead of carrying on with the PPP arrangement. A main consideration was our desire to bring stronger community participation and activities to the Sports Hub.

Once we reached that view, a detailed financial, legal and operational due diligence was carried out with the support of external consultants and advisors to satisfy ourselves that taking over the Sports Hub would indeed be a viable option. Thereafter, we engaged with SHPL to inform them of our decision and worked through the details of the handover. SportSG formally served notice to terminate the Sports Hub PPP with SHPL on 10 June 2022 and reached a mutual agreement with SHPL over the termination and the process of the handover.

On 9 December 2022, a few months from now, SportSG will assume full ownership and management of the Sports Hub and begin a new chapter for the Sports Hub.

Sir, in my Statement today, I will address the range of issues raised in the various Parliamentary Questions that Members have filed. I will organise my response along the following lines: first, set out the historical and contextual reasons leading to the development of the Sports Hub via a PPP – I will explain why we chose the PPP model for this case; second, explain the changed environment and the reasons which led to the termination of the partnership as well as the details around the termination, including the financial information; finally, I will touch on what we envisage for the community and Singapore following the change of ownership and management of the Sports Hub.

Sir, by way of background, let me begin by briefly sketching out some key points in the history of the Sports Hub.

Prior to the development of the Sports Hub, the former National Stadium stood in the same location. This was officially opened in 1973 and hosted its first major event in September that year – the seventh Southeast Asian Peninsular Games – the SEAP Games.

It was a place where major national, sports and entertainment events were held, such as the Malaysia Cup – which Members, I am sure, will recall – where the stadium echoed with the "Kallang Roar" and concerts by global stars like Michael Jackson, Stevie Wonder, Bon Jovi and Mariah Carey. I am not sure if this is all in our generation but I am sure you recall.

It also hosted 18 National Day Parades before the last in 2007.

In 2001, the Sporting Singapore Report set out how the former National Stadium, whilst one of the best in Southeast Asia when it was first built, had become quite inadequate to support our ambitions to stage major sporting events of international or world repute. The report recommended that the National Stadium be redeveloped into a multiuse Sports Hub with top-tier infrastructural facilities for both sporting as well as lifestyle and entertainment activities.

This would give us a world-class venue that could compete with the world's best in attracting major sporting and entertainment events into Singapore. This would in turn also help in the larger development of our sports and lifestyle entertainment industry.

Following the report, the Government commissioned an in-depth feasibility study. It then announced plans in 2003 for the redevelopment of the former National Stadium into the Sports Hub that we see today to achieve the outcomes stated in the Sporting Singapore Report.

The Sports Hub was to be a new best-in-class international stadium envisioned to bring our sports, social and lifestyle offerings to the next level and position Singapore as a leading venue for local, regional and international events.

With this in mind, the Government had to decide on the best way to design, finance, build and operate the Sports Hub.

Broadly, there were two options available to us at that point in time.

First, the traditional procurement method. Under this model, the Government fully finances the upfront capital investment for the project and thereafter either pays a service provider to run the project or does it on its own. The Government would also bear the costs and risks of undertaking the project from the start, including the design and construction and in also getting suitable parties to come in to operate the project.

Alternatively, a public-private partnership model. Under this arrangement, the Government could tap into current international private sector expertise, particularly where the project was innovative and cutting edge, as the Sports Hub was intended to be.

A suitable partner would fully undertake the design, the construction as well as the financing of the operations and management of the project and thus, in this way, also directly bear the risks. The Government would not have to incur any upfront capital costs or financial outlay until the project was completed or operational.

Thereafter, the Government would then commit a steady stream of payments to the private sector partner for the entire duration of the project term.

Given the unprecedented scale and complexity of such a major sports infrastructural project in Singapore and the limitations at that time of not having sufficient depth and breadth of such expertise in Singapore, including in the private sector, we chose to adopt the PPP model.

These reasons have previously been fully explained in this House but let me briefly emphasise a few points in relation to the choice of the PPP model for this project to address the various questions raised by hon Members.

First, as I said earlier, the PPP approach allowed us to benefit from the expertise of major international private sector partners with worldwide experience. This, to us, was an important consideration.

The Sports Hub development as an integrated sports, entertainment and lifestyle hub was to be the first of its kind in the region. In terms of infrastructure, it was to be a new innovative, forward-looking world-class sports facility that was intended to be configured for different events, be it sports, entertainment or lifestyle. As a global events venue, it had to be able to attract live entertainment events from all over the world as well as provide a first-class spectatorship experience.

Sir, we have to remember that when we first started exploring this, it was in 2003, or close to 20 years ago. At that time, neither the Government nor our local sporting or lifestyle entertainment industries had sufficiently matured and developed depth of experience, networks and contacts in bringing in marquee sports and entertainment events from all over the world.

Thus, besides needing to tap on market leading experts with not only the right technical expertise to build the infrastructure, we also needed the experience and connections of someone with international sporting and entertainment networks.

Based on our assessment, SHPL was chosen as the PPP partner because each of the consortium members of SHPL brought with them substantial expertise that was relevant to certain key aspects of the project. For instance, InfraRed Capital Partners for project financing; Dragages Singapore to design and build the project; Cushman & Wakefield for the subsequent facilities management; and Spectra for the venue operations.

At the same time, we also wanted to ensure that our partners would have skin in the game. The PPP model was useful for this because it allowed risks to be shared with the private sector in two material ways. And I would illustrate this by outlining the terms of our own PPP with SHPL.

First, as I mentioned earlier, there is no upfront cost to the Government. The entire project design, planning and construction were borne by the PPP partners, from the time the project started in 2010.

The Government did not pay any of the upfront construction costs at all. The entire sum, an amount in excess of S$1.3 billion, was borne by the consortium upfront and they took out a loan to finance this cost.

The Government only started paying the annual availability fee, at $193.7 million per year, subject to inflation and other benchmarking adjustments, when the project was ready and operational in 2014. Under the terms of the agreement, this was to be paid to SHPL every year until 2035, which is the end of the project agreement period.

These annual payments go towards SHPL's debt service repayments for the loan they took out to finance the Sports Hub construction, as well as day-to-day maintenance and operations of the asset. These are payments which we would have had to make, had the Government chosen to undertake the project on our own.

These payments were also subjected to and moderated by SHPL's achievement of a broad and comprehensive range of Key Performance Indicators (KPIs) which were set out expressly in the project agreement.

These KPIs included the availability of Sports Hub facilities and performance of services, such as events and activity programming, infrastructure maintenance, cleanliness, estate management, security and so on.

Overall, having no upfront costs for the Government turned out to be useful. For instance, when the Global Financial Crisis in 2008 hit unexpectedly, as the Government's fiscal resources were not tied up, we were able to use those resources to meet other pressing economic and other needs.

Second, this structure also allowed the Government to mitigate the, sometimes, unexpected risks of such a major project undertaking. In fact, these risks did come to bear. For instance, the project encountered construction delays, for which SHPL underwrote the costs. SHPL also bore the costs of addressing the defects such as the roof leaks, the inadequacy of the pitch and poor sound quality for concerts. In all of these cases, whether in delay to the project, or to the cost of rectifying the project, the associated costs were borne by SHPL because, under the PPP, it assumed the risks for both timing and quality.

Third, the PPP structure ensured that there would be inherent financial discipline in the project. As I explained earlier, this was a ground-breaking, novel project and we had not undertaken such a project, at least on this scale before. It was therefore important for the Government to ensure that the costs would not run away.

This was achieved by ensuring that the consortium would have to bear any costs above their expectations and also return the assets back to the Government at zero cost at the end of the project period in 2035.

As such, this was an effective incentive built into the PPP model to ensure that they align and maintain commercial discipline and minimise the risks of any budget overrun.

Finally, when considering the use of the PPP model in this case, it is also useful for Members to have this in mind. This was essentially a project that had two parts: the design and building of a world-class sporting, entertainment infrastructure, or the hardware – which took place at the outset – and the subsequent running and operations of the project to meet sporting, lifestyle and community aspirations, spread over about two decades.

On the infrastructure, it is vital that we get it right, from the get-go, from the start. It would be difficult, if not impossible, to change the hardware mid-stream, or once it is built. And we needed the relevant expertise to achieve this, to get it right, build a world-class cutting-edge facility.

As to the operations and running, I have explained how the consortium's know-how and networks and connections were key to the initial periods, when international marquee events were attracted to the Sports Hub in Singapore.

But we also envisaged that there could come a time when Singapore would be ready to operate this project, after it has been built – both in terms of expertise in the Government and also growth and maturity of the industry and the broader ecosystem.

And that is why the structure of the PPP provides for a unilateral right on the part of the Government, but not SHPL, to terminate the project, to take over ownership and management at any time it wanted, before the expiry of the project, with no penalty for such an early termination.

This reserves to the Government the right to assess, at any time, if its interests might be better served by stepping in to run the Sports Hub directly – run, own and manage, directly. If so, there is an agreed mechanism upfront, right at the start of the arrangement, for such a mechanism and there is a clear formula that defines what happens consequent to that decision.

Overall, this structure enabled the Government to manage its interests, through the different phases of this project, to mitigate its financial risks, to drive greater economic efficiency and also align the parties, particularly in relation to the upfront design and construction of the new infrastructure.

Sir, various Members have asked about the termination. Mr Sitoh Yih Pin, Miss Cheng Li Hui, Mr Xie Yao Quan, Mr Leong Mun Wai, Mr Lim Biow Chuan, Ms Sylvia Lim, Ms He Ting Ru, Mr Edward Chia and Mr Sharael Taha asked about the roles of SHPL and the Government in the PPP; what the arrangement entailed; the ways in which SHPL had fallen short; and the reasons why the Government decided to terminate the PPP.

Sir, there is a confluence of several reasons, and not just any single one, which has led to our decision to terminate the partnership. Let me explain them.

The first reason is this. The current arrangement has helped us achieve the world-class sporting infrastructure. I have explained that. Nonetheless, it still falls short of promoting sufficient community vibrancy in and around the Sports Hub.

At present, it has been about eight years since the Sports Hub first opened in 2014, though the operations of the last two and a half years have affected by the pandemic. So, it has really been about five, five and a half years, with another 13 years to run.

In terms of getting a world-class sporting infrastructure, I have explained that and I think we have achieved that.

When we set out to redevelop the former National Stadium, the intent was to have a Sports Hub capable of staging major events and entertainment events of world standards. And through the PPP, which has worked well, we now have a world-class Sports Hub. It has won international accolades for its architectural design, hosted multiple major international events such as the International Champions Cup, HSBC Rugby 7s and also, more in line with today's concert-goers – BTS, U2 and Coldplay.

Members in this House know that there were some early infrastructural problems that occurred after operations began, such as the roof, the pitch, the lights and so on. When these occurred, we imposed the suitable and relevant financial penalties to hold them accountable.,By and large, SHPL made efforts to work with SportSG to correct them.

However, when it came to promoting and enhancing the vibrancy of community sports and lifestyle activities at the Sports Hub, the project did not do so well. The quality and volume of its calendar of events and programming fell short of what we had envisaged, even taking into account the private sector interest in this project.

We wanted to see SHPL invest in the creation of their own new event intellectual properties and building on existing event properties, but these did not come to fruition.

Apart from the Super Rugby event from 2016-2019, SHPL has not secured any recurring or marquee sport events at the Sports Hub on a multi-year basis.

Sir, the Sports Hub is a world-class sporting facility and, of course, international marquee events are important.

But it is also an iconic national sporting asset and there must be a strong sense of affinity and connection between Singaporeans and the Sports Hub. There ought to have been more community participation and activation around the Sports Hub. For instance, we would have liked to see the sporting community from the grassroots, from schools and junior national athletes, having more access to the Sports Hub. Hosting National School Games – key events like the finals – could be at the Sports Hub, or grassroot programmes and activities, family days or carnivals around sporting or social objectives.

These are programmes for which there will not likely be any or much commercial return. But there is an intrinsic social value in realising a young athletes' aspiration to play in the national stadium, cheered on by his or her schoolmates, or having seniors take part in a social event at our iconic stadium grounds.

This is where the profit-driven model of the SHPL consortium, which had worked well in the infrastructure phase of the project, was not sufficiently aligned in the current phase of the project, where greater emphasis was needed on community programming and driving social outcomes, even if such programmes did not always resonate with commercial returns.

Our assessment is that this would be difficult to change by just adjusting some KPIs or trying to improve the outcomes with SHPL via negotiation. We had in fact tried this for some time, but the difficulty lies in the inherent structure of the project terms. For example, SportSG had wanted to bring in ActiveSG academy programmes such as the Basketball Academy at the OCBC Arena but encountered resistance as such programmes were not revenue generating.

The costs of hosting school sport events, such as combined sports days and National School Games, were also high and in some cases, prohibitive.

Due to SHPL's exclusive subcontracting arrangement with its catering subcontractor, community events organisers that wanted to cater for their own food and drinks also had to pay high levies for doing so. These costs were then either borne by the event organisers or passed on to participants.

Accordingly, terminating the present arrangement and taking over the infrastructure on a clean break basis, would allow us better flexibility and discretion, in being able to drive our own policy outcomes.

A number of Members – Mr Darryl David, Mr Sitoh Yih Pin, Mr Seah Kian Peng, Mr Christopher de Souza, Mr Shawn Huang, Miss Cheng Li Hui, Miss Cheryl Chan, Ms Poh Li San, Mr Gerald Giam and Dr Wan Rizal – asked about the Government's vision and plans for the Sports Hub moving forward, after we take over and how it would benefit Singaporeans.

Besides what I have already outlined, let me share a few ideas which SportSG and other agencies are already working on.

As an over-arching consideration, the Sports Hub will be made more accessible to Singaporeans. We want to make it a community icon that Singaporeans can identify with and feel a part of in their social and sporting activities.

We are thus planning regular Sports Hub and National Stadium Open Houses with activities for the young and the old, and of course, everyone else in between.

For instance, as part of our Unleash the Roar! national project, children who have joined our new ActiveSG Football Academies can also participate in the year-end football tournament at the National Stadium.

We are also working with MOE to host even more National School Games, such as the Track and Field, Netball and Rugby competitions, as well as the Singapore Youth Festival performances, or even some Sports Days for schools, at the Sports Hub.

Our children can then aspire to play and compete at the National Stadium, or simply come, soak in the atmosphere and cheer on their schoolmates.

The plans for the National Day Parade for the next few years are not out yet, but regardless, the Sports Hub will be a place where all of us – both young and old – will be able to build treasured memories and meaningful shared experiences.

Seniors from all walks of life can also participate in mass events such as GetActive! Singapore at community spaces in and around the Sports Hub, including the 100PLUS Promenade, OCBC Square and the nice space along the waterfront.

We also hope to see the return of the casual stroller or jogger to the stadium, by enhancing access to the stadium.

Where community programmes such as ActiveSG events and activities are concerned, we will also aim to keep them affordable and accessible to all and we will ensure that as many community spaces as possible are open and free for all to use.

Sir, the objectives I have set out above – enhancing sporting and social outcomes and driving greater community affinity with the Sports Hub – will be complemented as well by the impending development of the Kallang precinct in our Kallang Alive plans, which aims at developing the area in and around the Sports Hub. Therefore, the second key reason for the taking over the Sports Hub is to achieve greater integration with the broader Kallang Alive plans.

Sir, let me say a bit about the Kallang Alive precinct. Kallang Alive will be an 89-hectare site along Kallang River and the Kallang Basin. For comparison, the Sports Hub is 35 hectares. So, this area of 89 hectares, including the 35 hectares, will be two odd times larger than the current Sports Hub. This area is envisaged to transform into a vibrant sport, entertainment and lifestyle precinct by 2030.

Sir, because a picture really speaks volumes, may I have your permission, Mr Deputy Speaker, to display some slides on the LED screen.

Please do. [Slides are shown to hon Members.]

Thank you, Sir.

The Kallang Alive Precinct development is on a much larger scale and magnitude, as I have said, about 2.5 times that of the 35-hectare Sports Hub. This picture provides an overview of the future Kallang Alive Precinct. This is what it looks like today.

As part of the Kallang Alive Precinct plan, there will be an expansion of sporting facilities around the Sports Hub, which will be developed, owned and operated by SportSG directly. I will show Members some photos of the ongoing developments.

This includes the Kallang Football Hub, which will be our national training centre, to be ready as soon as the end of this year. Here, we see the ongoing construction and a close-up shot of one of the turfs that is already completed and an artist’s illustration of what it will look like when fully completed.

We have also started work on the Kallang Tennis Centre, which would be ready by next year. Here, we see the ongoing construction and an artist’s illustration of what it will look like when completed.

All of these that I have just shown are assets which sit outside the current Sports Hub group of assets. They are part of the Kallang Alive Precinct but not within Sports Hub.

There are also other facilities, such as the Youth Hub, in the longer-term pipeline with youth-centric activities and "young" and "youth" here include those who are young at heart as well.

Beyond these sporting assets, SportSG also plans to launch a tender for the redevelopment of the Kallang Theatre Precinct into a mixed-use development, comprising a multi-purpose indoor arena, office spaces to bring sport-related businesses and entities together, commercial facilities, such as a hotel and other hospitality offerings.

Once ready, these entertainment and lifestyle offerings will integrate with and support the activities of the Sports Hub. These are exciting plans which we have in store for the future.

But these are not our only plans. We have a vision to transform the entire Kallang Alive Precinct, including the Sports Hub, into one single integrated ecosystem which is not only capable of hosting world-class events, but also to be the home ground for our national athletes as they train and compete. We want this to be the beating heart of our community, grassroots and school sports and the testbed and breeding ground for sports innovation and growth.

Taking over ownership and management of the Sports Hub will enable SportSG to unlock the Sports Hub’s full potential for Singapore. We will integrate the Sports Hub more closely with its upcoming facilities within the precinct to deliver more seamless offerings and capture stronger precinct synergies. Members might ask, what does this integration entail and what does this mean?

I will give a couple of illustrations.

First, integration from a physical perspective, which will allow us to do more with one event. Members would have seen a glimpse of this at the recently-concluded WTT Grand Smash earlier this year, where we had table tennis tables set up around the main event, which the public could use to play with family and friends while they waited for the elite matches, and these were matches that were taking place with some of the world's best and we had tables around to engage the community. People come freely and play while waiting, engaging the entire community in the precinct.

With the fuller integration with Kallang Alive and the upcoming facilities, we can step up on this and activate more of the Kallang precinct. For instance, we can seamlessly combine the facilities at the OCBC Arena, the Singapore Indoor Stadium and the new Kallang Tennis Centre and can confidently bring in marquee sports events, such as an ATP1000 tennis event.

High-quality international marquee events will be complemented side by side with local programming. We can use the entire spread, all 89 hectares of the Kallang Alive Precinct seamlessly to do so.

By concurrently integrating community programming on the sidelines and in the months running up to the event, many more Singaporeans can benefit. These could include community tennis for the masses to try out the sport, tennis clinics for social competitive players and aspiring athletes, youth competitions and so on.

So, we will have a whole ecosystem of sports – our professional athletes competing in the arena, our budding young athletes training on the sidelines and in the facilities, and the general public enjoying a social game, all integrated with the other lifestyle offerings which will be coming up. It will also provide for better and dedicated experiences for participants and audiences.

Second, integration from a user point of view. With different ownership structures and different commercial profit and loss, it can be incredibly challenging to achieve seamless integration in the delivery of services across the entire suite of facilities. In fact, adversarial competition between the facilities is the more likely outcome.

So, by taking over the Sports Hub, we will be able to give users a more integrated service experience across the entire precinct, for instance, precinct-wide promotional and marketing activities and hospitality offerings that span across multiple facilities and programming.

Beyond just integrated service experiences, users are likely to enjoy cheaper costs as SportSG will now be able to reap precinct-wide economies of scale through shared functions and services.

Overall, taking back the Sports Hub and integrating it with Kallang Alive will enable us to unlock greater value and achieve our broader social and sporting vision for the wider precinct as a whole.

Finally, the third reason for taking over the Sports Hub at this time is because the wider sporting and entertainment ecosystem has since matured. I spoke a little bit about this earlier. One of the key reasons for working with SHPL and choosing them as a partner was to rely on their expertise and networks with many other networks and international players around the world.

Over the years, our own sector in Singapore has grown and matured and we are now much better placed to continue making Sports Hub a premier hub for sports and entertainment.

Our own internal capabilities have grown. Over the past few years, SportSG had played a key role alongside SHPL to bring in major sporting events, such as the WTA Finals, International Champions Cup and Rugby Sevens and so on. We have developed the know-how, links, networks and the experience to continue doing this.

Besides that, our local and locally-based companies have also matured. Companies, such as UnUsual Limited and LiveNation, are now much more established and can bring in larger gigs into Singapore. Group One Holdings and Ironman Asia have also continued to grow, introducing several flagship events that Singaporeans can identify closely with and actively participate in.

Our growing capabilities and international recognition as a premier hub for sports and entertainment can be seen in major names that have set up operations in Singapore as well, such as AEG and IMG, as well as NBA which has announced the set-up of their Singapore office.

Third, demand for these events has also grown. With our recovery from the COVID-19 pandemic, there is now greater demand and we see that gradually ramping up, both locally and regionally, for larger-scale sport, lifestyle and entertainment events.

Overall, the limitations of the current arrangements, the changing environment and our growing capabilities and ambitions are all factors that we considered when deciding on terminating the relationship. I would add that this was not a decision taken lightly. We felt that, however, having done our due diligence, as I have explained at the start and a confluence of these factors in the ecosystem all coming together, this was now a right time for the Government to exercise its right to step in, take over ownership and continue the management of the Sports Hub.

Members Mr Edward Chia and Mr Sharael Taha asked about the impact which the termination in this case might have on the guidelines and considerations for future PPPs.

Sir, each venture, whether PPP or otherwise, has to be considered on its own merits and to consider the purposes for which you enter into an arrangement in the first place. In this case, we foresaw in this arrangement that it was long term, that circumstances could change along the way and we provided upfront for an agreed no-fault termination without penalty in the PPP.

As I have outlined above, we had good reasons to terminate the PPP, with regard to the reasons I have outlined. But having reached this decision does not necessarily mean in all cases, that the Government should no longer be open to other PPP projects.

Regardless of how projects are financed, we have a sound evaluation process to review the business case, scope, lifecycle cost, implementation approach and also the relative risks between Government and private sector for each of these projects.

For PPPs, in particular, a framework is in place to assess the suitability of undertaking the PPP, including tangible outcomes, potential for downstream lifecycle cost savings, the nature of project risks, which will differ from industry to industry and project to project, the available private sector expertise in that area relative to what the Government can offer and the need for flexibility or the likelihood of downstream changes. All of these are factors to be taken into account and I would say that no two projects would be similar.

This framework is continuously refined and builds on the lessons learnt both here, locally, our own experience, as well as internationally elsewhere. We will, therefore, continue to be open to leveraging PPPs as a model, where suitable.

Having explained the reasons for termination, let me turn now to explain the costs of termination and how it might compare with carrying on with the PPP project till its conclusion in 2035.

Members Mr Seah Kian Peng, Mr Sitoh Yih Pin, Mr Edward Chia, Mr Lim Biow Chuan, Ms Sylvia Lim, Mr Sharael Taha and Mr Raj Joshua Thomas have all asked about the costs of termination.

Sir, the key questions are: how much is the Government paying in total for this termination? How does it compare with what we would pay if we had continued with the partnership till 2035? And if it is different, how do we account for it?

Let me address these points. To do so, let me just quickly recap a few financial points on the PPP which I had raised earlier.

First, SHPL funded the full initial capital expenditure for the construction of the Sports Hub. They did so by taking out a loan. This meant that the Government did not have to contribute any upfront capital for the construction in 2010. So, we did not pay upfront and it is also now that the cost of the loan for the financing of the infrastructure, the capital cost, is still being borne by SHPL.

Second, the Government would pay SHPL a fee of $193.7 million each year from the time the project started operations in 2014 all the way until the end of the project in 2035.

Third, with this fee from the Government, SHPL would then be responsible for the full operating expenditure, including daily operations, maintenance, security and lifecycle costs for the entire project term.

Fourth, the assets would be returned to the Government at no cost in 2035. So, that is the framework of the PPP.

Therefore, if we had continued with the PPP arrangement, the Government would continue to pay SHPL approximately $193 million each year, every year, from now until 2035, and that works out, from 2022 onwards, to be approximately $2.32 billion. That is a committed sum under the PPP. This sum does not take into account net present value and other financial or accounting adjustments.

With the termination, the Government would have to pay two main buckets of costs and let me explain them to Members.

The first is the amount to be paid to SHPL for the termination. This amount is made up of several components, derived from the financial terms stipulated in the Project Agreement. I had explained earlier that this Project Agreement contemplated this early termination on a no-fault basis without penalties and the agreement itself provides for the formula by which such a termination sum can be calculated.

Conceptually, the single largest component which accounts for about $1.2 billion, or slightly more than 80% of the total sum to be paid, is the capital expenditure that the Government would have had to bear. In other words, the $1.2 billion or so of the sum that would be paid will go towards the capital expenditure. As I explained earlier, this is the capital expenditure that the Government would have had to bear if it adopted the traditional procurement approach of proceeding with the Sports Hub on its own.

The remaining components, or about $300 million, are due to the fair market value of the Sports Hub, which is commercially negotiated and also other costs, expenses and deductions, based on the Project Agreement.

At present, the sum to be paid to SHPL for termination is projected, therefore, to be around $1.5 billion. But the final amount will be based on the accounts as at the date of handover, which is December. So, there could be some fluctuations and variations, but we do not expect there to be material variance from this figure.

The second bucket of costs is the costs of the future running and operating of the Sports Hub, post-handover. So, for parity of consideration, let me sketch out what this cost is projected to be. Ms Sylvia Lim and Mr Sharael Taha asked about this.

We will take, as a benchmark, the current operating assumptions and costs incurred by SHPL which include, as I mentioned earlier, maintenance, operations, security, future lifecycle costs, replacement, programming costs, day-to-day costs and so on, all the way until 2035, which is the comparable period.

Based on this, and we use data from actual incurred, that means, this is from SHPL's actual incurred, we expect to incur approximately $68 million per year doing this for operations.

If we were to draw a parallel comparison against the balance tenure of the Project Agreement, in other words, if you compare like-for-like until the end of the period in 2035, at $68 million per year for operational costs, that brings us to approximately $800 million over the balance period until 2035.

If this $800 million is added to the termination sum, this makes the full projected costs of termination at around $2.3 billion. So, it is roughly the same, although I have not gone into the decimal places. The termination sum, added to the projected cost of maintenance and operations, is roughly comparable to what it would cost had we chosen to continue with the PPP and incurred the availability payments over the rest of the project period until 2035.

So, with the component figures taken at face value – and as I have said, without taking into account accounting and other net present value adjustments – this aggregate sum would be comparable to the financial obligation committed under the PPP if we had chosen to continue with it.

Sir, we have carefully examined the finances to ensure proper due diligence and that we can reach a financially rational outcome when we are doing this. Taking the two buckets of costs to be paid for the termination – the sum to be paid to SHPL, which largely reflects the upfront capital expenditure and future operating costs – this would be a fair deal for the Government on which to take back the assets.

None of these components are penalties to the Government, as I have said, because the project agreement provides for a no-fault termination. These are simply the costs that we would have had to incur, or would have incurred, going forward, in terms of the capital expenditure and the operating expenses.

Sir, the financial calculations and their due diligence, as I have said, it is to ensure that we reach an outcome that is financially rational. I want to make it clear that the decision to terminate the Sports Hub project was not driven by financial considerations or to save money.

Indeed, we do not plan to operate the Sports Hub at status quo or on the same assumptions as SHPL.

As you heard me say earlier, we want to make the Sports Hub more accessible, invite more participation, bring more people into the Sports Hub, make it more accessible. To do this, we would have to have more community programmes, invest to bring more world-class events into the Sports Hub and open up the Sports Hub and the National Stadium to general community use.

All of this would probably mean higher expenditures and increases in daily operating and maintenance costs. As such, we should probably expect our operating expenditure on an ongoing basis, once we take over, to likely be higher than what it was previously.

At the same time, however, this might be balanced off against the future revenue generated by the events and activities at the Sports Hub. Previously, under the PPP, any revenue that was generated by these commercial activities would go into the project. When we run it, albeit we want to do it in a different way on different assumptions, the revenue that we generate will go back directly to mitigating and defraying any of the increased costs in maintenance.

Sir, let me be clear that, even as we do this and we have these considerations, even as we want to enhance community participation at the Sports Hub and enhance our programmes, we must also do it judiciously. We must still operate within financial prudence and ensure that we are not profligate in spending, that we are careful in how we spend.

But, taking back the Sports Hub from the private sector will also mean being able to redefine our outcomes away from being mainly or predominantly commercial in nature, we will be able to better realise our sporting and social objectives, open up the Sports Hub to more Singaporeans and bring greater value and outcomes for us, the future of sports in Singapore, our athletes and the everyday Singaporean.

Sir, Members Mr Mohd Fahmi Bin Aliman, Mr Shawn Huang and Ms Sylvia Lim asked about SportSG's confidence and ability to take over and how SportSG will continue working with the private sector.

The PPP project has enabled us to have a strong foundation of a world-class infrastructure. We intend to build on that and continue to bring in top-tier international sporting and entertainment events whilst, at the same time, incorporating our ambition of attaining wider and better social and sporting outcomes for Singapore.

To achieve this, SportSG will incorporate a holding company to own and operate the various pieces of assets within Kallang Alive. A subsidiary of this holding company will be set up specifically to own and manage the Sports Hub.

This structure will enable SportSG to focus on the Sports Hub, but also, at the same time, have regard to the wider Kallang Alive Precinct and what could be done in those cases, when the other projects that I have mentioned in the Kallang Alive precinct come onstream.

Where necessary, it can be operated as a single, integrated entity, able to reap synergies and economies of scale across the entire suite of sporting and lifestyle assets of Kallang Alive. A team of officers from SportSG has already been earmarked to move into the Sports Hub holding company and manage Sports Hub on a full-time basis.

These are officers who have had years of experience with the Sports Hub, many of them having worked alongside SHPL since the inception of the project in 2014, gaining experience and know-how along the way.

These officers within SportSG have already been functionally organised in a structure that coheres with the structure of SHPL, suited to running the Sports Hub. They have been in this position for the last few years, readying for a takeover if and when needed.

Beyond the internal capabilities of SportSG, we value the expertise and experience of existing SHPL employees and would like to retain them.

All SHPL employees have been offered an opportunity to cross over into the new corporate entity and continue on this mission to make Sports Hub the centre of sports in Singapore.

Beyond the internal structure and resources, we intend to continue working and partnering the best providers in the private sector in the areas of programming, broadcast, hospitality, facilities upkeep and management, to name a few.

We will, therefore, continue to retain the contracting model. In other words, the model where we can subcontract and work with external parties in the private sector. This allows us to work with market-leading, optimal partners to provide the best services and facilities fit for the particular purpose in question, for a particular occasion or event.

In the mid to longer term, we also intend to tap into the private sector, to explore the prospects of redeveloping some parts of the Kallang Alive precinct. For instance, projects, such as the redevelopment of the Kallang Theatre into an integrated multi-purpose sport, entertainment and lifestyle hub. Or even turn the Kallang Wave Mall into a one-stop sporting, health and wellness destination. Those are just some ideas.

Overall, with SportSG taking over, the Government would be better placed to drive a synergised and coherent vision for the whole precinct and achieve internal synergies while providing more integrated offerings and programmes to the public.

Finally, Mr Deputy Speaker, as I wrap up my speech, let me bring us back to the very initial vision of a Sporting Singapore more than 50 years ago, all the way back to the early days of our Independence.

Then, at that time, we had the "Pesta Sukan Minggu Merdeka" or Sports Festival Week of Independence, which was an annual feature in our National Day celebrations from 1966 to the early 1970s.

This was an event which was not just about excellence in high performance sports, but really, sports for all, as part of our culture and in our everyday life.

As then-Minister for Social Affairs, Encik Othman Wok, put it in his speech at the ground breaking of the former National Stadium in 1966, he says and I quote, "Sport… must be an essential feature of our way of life. The new generation will not fear stagnant thinking because they will have dynamic reflexes built into them".

We must go back to that spirit and conviction to make sports an essential feature of our everyday life, because of the impact it can make in our own lives and in the lives of others around us.

Some of my own fondest memories growing up were the excitement of being able to play at the Zone or National Finals at the old National Stadium, or simply being in the stands, skipping class, supporting and cheering my friends as they competed against rival schools.

It made me feel like I was part of something bigger, larger, something more. And it connected me with my school, friends and, certainly, with the sport in a way which no other way can – intangible.

Sport has this immense power to bind us as one, to be hungry for more and to strive to be the very best. This is what our TeamSG athletes embody when they compete under the Singapore flag and it is the spirit that we want to see in every Singaporean.

Together, sport can make us more resilient individuals and strengthen our sense of unity as One Singapore.

At the heart of it, this next chapter of Sports Hub is about sports being a part of the life or everyday life of Singaporeans.

As we close the previous chapter, let me also acknowledge SHPL for its contributions. The partnership between SHPL and SportSG has given us a strong foundation from which we can now proceed to drive our social and sporting ambitions confidently. And we look forward to working with SHPL for the next few months to ensure a smooth handover and to welcoming SHPL employees to continue with the new corporate entity which we will set up.

Even so, as we leave this partnership, as SportSG assumes full ownership and management from December this year, the efforts towards Sports for Singapore still remain a partnership. Between the Government and the private sector partners, we will have to continue to work to provide top-class services.

We want to partner with the many community stakeholders, as I have mentioned – students, young athletes, junior athletes, seniors, NSAs and, of course, the many Singaporeans who will participate and make the place even more vibrant and alive.

I am, certainly, excited about the potential we will be unlocking, as we build on what we have achieved to turn Kallang Alive into a larger, more diverse and more vibrant sporting and lifestyle hub for everyone.

The Sports Hub will be a place where our students grow to be resilient, as they deal with wins or losses in their school colours; where we bond with our family and friends, as we enjoy running around the jogging track, participating in the community sports events and enjoying international concerts. And we cheer our athletes on, as they take on their competitors from around the world.

So, let us write this next chapter together to make Sports Hub and our National Stadium, our Home Ground and a place which we can all be proud of. [Applause.]

We have some time for clarifications. Mr Darryl David.

Thank you, Mr Deputy Speaker. I thank the Minister for that speech. I have a clarification that is linked to an oral Parliamentary Question (PQ) which I filed previously. The Minister talked about going beyond sports and about involving the community a lot more in the Sports Hub. That is very heartening.

I would like to ask the Minister if there is any consideration being given to perhaps having one of the, if not the biggest, community event of the year, which is the National Day Parade (NDP), held at the National Stadium at the Sports Hub.

I had the privilege of marching in the PCF contingent for the only NDP held at the Sports Hub since – I think it was in 2016 – and I can say it was a wonderful experience.

So, Minister, in the past, as you know, the NDP would be held one year at the old National Stadium; one year at the Padang. Are there plans to perhaps commit to a more regular schedule of having the parade held at the Stadium, at the Sports Hub and perhaps even involving the Kallang Alive area, in a month of celebrations, say, across the entire month of August, that leads into a meaningful celebration at the NDP?

I thank Mr Darryl David. I am glad that he enjoyed marching in the PCF contingent. I take it that he was leading the contingent. [Laughter.]

Yes, I was, Sir.

We will, certainly, be open to it. I think what this taking back of the ownership and management of Sports Hub was designed to do is to give us more flexibility and the ability to not let cost, which was otherwise a serious prohibitive factor, constrain the organisation of events, such as the NDP, at Sports Hub.

At the same time, we also want to be circumspect about having it there every year, or even every other year, because there is a five- to seven-month lead time before and after, where much of the facilities will have to be decked up for rehearsals and cannot be used. So, you have to think about it in terms of the programming that we want to do for the Sports Hub, the availability and the options around how to organise the NDP at the Sports Hub. But, certainly, Mr Darryl David can be assured that this will be a consideration and, at the very least, the Sports Hub will be open for MINDEF to consider hosting the NDP there.

Mr Xie Yao Quan.

Mr Deputy Speaker, I thank the Minister for his comprehensive update on the decision to take back ownership and management of the Sports Hub and also the plans to unlock the Sports Hub's full potential for Singapore and Singaporeans.

I am very glad to hear about the move and I have a clarification for the Minister about the leadership of the Sports Hub going forward, starting with the CEO. I think we will need a CEO going forward who is able to understand the vision, execute on the vision and really bring it alive.

And importantly, a CEO who is able to build the leadership team to help him or her to achieve all of this. Can the Minister give some update about what is the selection process that we can expect, maybe in the months ahead and what are some of the principles or qualities that we would be looking for in a CEO to lead the Sports Hub in its next chapter.

Sir, I thank Mr Xie Yao Quan for his support of this takeover and the project that I have laid out before Members over the last 45 minutes or so.

We are considering various options for the CEO of the Sports Hub. I do not want to go into specifics at this point in time, but I agree with Mr Xie Yao Quan that we do have to look out for qualities, such as an ability to integrate with the rest of Kallang Alive. That is, after all, one of the fundamental raison d'être behind why we are doing this. That person must have strong organisational skills because they are several components that come together that are not just sports, but also lifestyle, entertainment. You have got to deal with the local ecosystem, have an eye for who our best international and private sector partners might be, liaise with them externally, bring in international events into Singapore.

And there must, most importantly, also have a clear eye on being able to use the Sports Hub's assets to be able to drive our sporting, social and lifestyle outcomes. And those are the key qualities that we will look out for, for the leadership of Sports Hub.

Mr Sitoh Yih Pin.

Thank you, Sir. I am heartened to hear from the Minister that once the Government takes over the Sports Hub's management, we are going to do a lot more things for a lot more Singaporeans. But, Sir, that will also mean that we need a lot more resources. Bearing in mind that the MCCY budget is always amongst the smallest in every Budget, I would like to ask the Minister whether he can go to the Finance Minister and ask for more funding because, Sir, especially when we celebrate National Day next week, the lion must roar.

Sir, the Deputy Prime Minister and Minister for Finance is grinning at me, from behind the mask.

Sir, I think that is a good question. Before we embark on this, we satisfied ourselves that at least for the baseline of what we say we want to achieve, we have enough resources to drive towards. But, obviously, the details as to what an enhanced budget might look like is something we will have to discuss closely. And we have to bear in mind our current fiscal constraints and position as well.

Mr Gerald Giam.

Sir, could the Government not have tapped on international private sector experience using the procurement model?

Secondly, how would SportSG bring in more marquee events when SHPL, with all this international experience, could not?

Lastly, will the Sports Hub and Kallang Alive precinct be used to host all national sports competitions and national school games and can SportSG make greater efforts to market such events to a wider audience? This will inspire our young athletes to push themselves harder, increase the public attendance at such competitions and also free up other community sports facilities to the general public. These facilities, as some might be aware, tend to be blocked booked by the National Sports Associations for competitions and training, to the consternation of some members of the public.

I thank Mr Gerald Giam. On the first point, yes, it would have been possible to work with third parties and private sector partners in the traditional procurement model. Indeed, that is the case in many procurement models. But the reasons I outlined earlier carefully about the unique nature of this project, the fact that it was innovative, cutting-edge and we were moving into an area which, frankly, in Singapore, we, at that time, did not have much experience in. And also, it was a question of risk allocation, having a PPP project in the way I have described, puts this partner in the context of having some skin in the game. And to ensure that every delay, every failure of availability, in other words, when the stadium or the facility is not available because of a defect or a problem with the facility, that is a responsibility they bear.

If you went to a third party and you bought those services, then the Government will bear the risk of that. Quite apart from that, the Government would also have had to bear the risk and the financial obligation of incurring the capital expenditure (capex) from the start. So, having regard to what I have said earlier, I think I have explained why, whilst we could have in the way Mr Gerald Giam has put it, we chose not to do so in a procurement model but to do it by way of a PPP.

On Mr Gerald Giam's last question whether we want to host all national school games and all other community games there because, as Mr Giam puts it, facilities are block booked and unavailable, we have to be clear. The Sports Hub, obviously, is a top-class infrastructure and you cannot conflate that with training and more local, domestic events for which we have many of the ActiveSG facilities available in the stadium and other facilities around the island. And we got to make sure that the relevant level of facility is used to host and cater for the relevant level of sporting activity.

Yes, I did say we do want some national school games to be there – the finals or key moments – but we cannot turn the Sports Hub into a place where every school event is being held there. I think that will be difficult.

Can Mr Gerald Giam please repeat the second question on SportSG?

Yes, my second question was how will SportSG be able to bring in more marquee events when SHPL, with all its international expertise, was not able to?

Well, first of all, that has been done. We have had some experience. As I have mentioned earlier, we have built up our expertise over the years. We also worked with developed partners in the private sector today. So, I have mentioned UnUsual Limited, LiveNation being here, AEG and so on, located in Singapore, having a vested interest in making sure that they bring these products into Singapore. So, it is not just about SportSG, but, as I have said, the maturity and development of the entire ecosystem in Singapore.

Mr Gerald Giam's other point I think presupposes that when PPP partner, SHPL, did not bring marquee events into Singapore it is because they were unable to do so. Part of the reason is because the cost structure of the project disincentivised them from doing so on a freely available basis because the cost structure meant that they would have to bear the risk of there, for example, not having a good turnout or good take-up of the ticket sales for such events, then the losses would be borne by them.

So, there were a number of structural problems with the current arrangement, which made it harder, not impossible, but harder for SHPL to have done so.

Mr Lim Biow Chuan.

Sir, I want to thank the Minister for sharing with us the Kallang Alive plans. I am very excited to hear about it, especially since the bulk of it falls within my constituency. But, Sir, Members of Parliament in this House need to hold the Government accountable for Ministries' expenditure. The Minister has explained that the cost of taking over the Sports Hub is about $2.3 billion, which is about the same price as what the Government would have to pay to 2035.

May I ask the Minister, what about revenue from sports or entertainment events that SHPL would have carried out during this term between 2014 and 2035? Does the Government take a share in any of this revenue taken from sports or entertainment events? For example, I think Liverpool played recently at Sports Hub. Did the Government take a share in any of these major events? Because if it does, then we also need to balance how much we will lose in terms of lost revenue in taking over the Sports Hub.

I thank Mr Lim. The project agreement provides for a waterfall formula by which such costs would be apportioned, how payments would be apportioned and the priorities by which they meet the costs. There is a formula which cascades down the takings from these events and they are then put it into a fund and, in some cases, shared with the Government. So, there is a formula for that.

The cost of running is high. In most cases, there is not much that comes down to a level which allows the Government to share and that, itself, is also one of the considerations behind this decision, because if we were to take on board the entire project and run and manage it ourselves, as I mentioned earlier, then we would avail ourselves entirely of the upsides of any of these projects. Of course, these are things which we should not automatically assume that just because a team like Liverpool comes here, that there will automatically be a tremendous upside, because you have to weigh up these commercial considerations. But the point is, once we take back ownership of this, the structure allows us to then directly manage it. We will assess the risk and if it is something we can get into, then the commercial revenue and the upsides can be taken by the Government in this case.

So, currently, there is a formula that prescribes the usage and the allocation of these takings. After we terminate it and we do it on our own, then all of these would be within SportSG and within the Government to control.

Mr Leong Mun Wai.

Thank you, Deputy Speaker. Please allow me to have one or two minutes of preamble, before I ask my questions, okay?

Perhaps, I can restrict you to half a minute, please.

Okay. There has been a lot of aspirational delivery throughout this session. I must also share my experience, that, first, I support the Government taking back the Sports Hub. We are all very attached to the old National Stadium. Ministers past and present have participated in the opening of the old National Stadium together with me in 1973. So, we are very attached to the old National Stadium. We do not know why the Sports Hub was given to a private consortium.

Secondly, throughout the discussion we had today, no one asked the question – is the $1.5 billion compensation or termination cost given to the private consortium fair or not? Of course, then, we have to go into a lot of details of financial calculations and all that, but we still need to debate about that. But so far, no question has been raised. So, let me ask two questions. The fact remains why the decision was made at the beginning —

Mr Leong, please ask your questions.

Yes, my question is —

Be fair to the Members who are after you also wanting to ask clarifications. So, please keep it short. I will give you the leeway, but please keep it short.

Yes, my first question is, why was the decision made in the first place when it is quite possible that we can run on the procurement model?

The second question is, looking at the financial numbers – and bear with me a little while on that ‒ basically, SHPL seems to have failed in its job, failed in the expectations that we have on them. Of course, when we ask international companies to come in, I am in business for many years, I know! When I use the international partners, we expect them to bring in the marquee events. If they did not bring in the marquee events, they have failed in their job. So, why, for example, in the compensation formula, do we pay for the $1.2 billion, which, I presume, is the outstanding bank loan?

Mr Leong, I have been listening to you quite carefully. You have asked your first question quite succinctly.

Yes.

I invite you to ask your second and final question now succinctly.

My second question is, is it fair for us to pay $1.5 billion to SHPL? And I have to elaborate, right?

Thank you, Mr Leong. We will allow —

So, I will let the Minister elaborate first then. Thank you.

Thank you, Mr Leong. I think I have spent the better part of the last 45 minutes precisely doing that, elaborating at some length, because I think Mr Leong did ask that question about why we chosed the PPP model. I thought I had explained in some detail why we considered the procurement model but it was not appropriate, why we wanted to put the risk-sharing allocation mechanism to work, so that our partners would have skin in the game, that they would bear the risk as well, that there will be financial and market discipline in the way we structured the arrangement. I think all of this Mr Leong would understand very well.

So, in the first place, why we went into it, why we chose this model, I think I have explained that in some detail.

Then, the question about whether it is fair. This is a termination sum that is based on a formula in the PPP. So, it is the defined formula. The majority of this cost is the capex, as I have explained and this is the capex that we would have had to bear had we undertaken the procurement model anyway.

To give Mr Leong an example, if we had taken the procurement model, we would have had to raise the entire cost of the construction upfront and paid it by around 2010, which was when the project started, even before it became ready. So, a full commitment of the sum in 2010.

And over the years, we would have had to make at least two large payments every year. One, to service the loan that we would have taken, or at least to account for the interest of that loan; and second, a commitment to an income stream that would allow the project to run, operate, maintain, keep a sinking fund for lifecycle costs and so on.

And when we pay every year, the $193.7 million towards SHPL, that is what those sums are for. It goes towards, as I have explained earlier, for SHPL to meet their loan obligations and to meet their expenses for operations, maintenance, lifecycle costs and so on.

Instead of paying the sum upfront, what we did was we asked SHPL to come in. You have heard me explain it earlier, so, I would not go further into it. And they bear the risks and the costs. And once it is ready, and only when it is ready, we then make the payments each year to SHPL.

On that basis, when we take over, these are costs that we would have had to bear anyway, at least for this portion. The rest of it, as I have said, is an open market valuation, because they are the current owners of the asset, and then there are some items like deductions, more minor items, how we deal with the debt reserve account and so on. But those are all minor.

So, in that regard, I have set out the premise of the payment, the formula by which this is done and why I believe this is a fair assumption.

I will come back to you, Mr Leong Mun Wai. Ms He Ting Ru.

No, Mr Deputy Speaker, Sir, it is a continuation. Minister has not answered my question.

No, I will come back to you. I think there is a point of order, Mr Leong. We have to give people a chance in the House to ask their clarifications. The next person the Chair is calling is Ms He Ting Ru.

Thank you, Mr Deputy Speaker. I just wanted to follow up on the question that I asked the Minister previously. I am not sure whether it was answered. It was whether a review would be held to look into the circumstances that basically led to this early termination of the PPP project. This is really very much in the spirit of taking up learning points to be applied to similar projects in the future, whether it is for a vibrant sports and events scene in Singapore or, in particular, in terms of our negotiation and structuring or usage even of the PPP projects in the future, whether or not there is anything to be learnt from this. The Minister has described that some parts of the project have been assessed to be successful, but, other parts have fallen short.

So, I am just wondering in terms of the learning points, making sure that any mistakes are not being repeated in the future, whether this is something that is going to be taken and whether this review and the results would be shared with the public.

Sir, I thank Ms He Ting Ru for the question. In terms of doing a review, what had been done leading up to this decision was a very thorough review already. And that review went into aspects, such as where they performed well, where they did not perform so well, looking at the internal capabilities within SportSG, whether we could muscle up enough resources to do what they are doing, the extent to which we feel we can commit to doing this on an international marquee basis, the kind of partners that we might have in Singapore. Everything I mentioned in my speech earlier are all factors that we took into account to reach this decision.

So, that review actually had been done and that is why we are confident and capable of coming to Parliament and explaining this to Members and embarking on this termination.

To Ms He Ting Ru's point about whether all of these learning points would become something that we take on board, obviously, yes. With each PPP project that we do and indeed, for the Government, with each project that we do, large or small, there are always continual learning points. We look back, we reflect and we think about what we could have done better and take all those learning points into play as we embark on new projects.

I also want to emphasise that, in this project, it is somewhat unique and different as well, for the reasons I have set out earlier. And also because, as I have said, this is a multi-year project over two decades, for which at different junctures of this project, there are different objectives. That is why the agreement is structured this way – to put financial discipline, to put technical expertise at the forefront, at the start of the project, but, along the way, to give us the ability to step in to manage when we feel that we were able to do so. And that is exactly how this project was done.

But, obviously, these are learning points that we will take on board and in subsequent projects, whether it is PPP or otherwise, they will feature in the thinking as we embark on this with third parties.

Mr Sharael Taha.

I thank the Minister for the comprehensive statement. I believe many sportsmen and women and athletes in our national schools feel the excitement on the vision on the integrated sports precinct. The Minister mentioned that sports, such as football, tennis and track and field, would have world-class facilities at the new sports precinct. Is that list exhaustive?

How do we create equal opportunities for other sports, such as floorball, netball and even boxing, to benefit from this vision and investment in our sporting future? I say this because some in the fraternities, for instance, the netball fraternity, are worried that they have got to move out of their Kallang Netball Centre, a much beloved location with facilities for netball.

I thank Mr Sharael Taha. It is not an exhaustive list and there are various other plans in the pipeline. But I mentioned these because you do need something specialised for these sports. You need a specialised facility to play tennis. Whereas if you have a hall that has a big space, it can be reconfigured for various purposes. As you know, the Indoor Stadium can be reconfigured for basketball. Floorball has taken place there in the OCBC Arena. We can also reconfigure it into one that deals with netball competitions as well. So, there are a number of options when you have these spaces. Whereas for cycling, football, tennis and some others, you will need a specialised facility to play that sport.

Having said that, the Member's point about netball, I understand that they are moving out because that area is part of the area that, from memory, will be developed into the Youth Hub in time to come. Netball, we have been in touch with them and will ensure that they will have a place that they are comfortable with and that they will be able to continue training and take care of the national players and their training needs as well.

I see two hands. We will have Mr Leong Mun Wai and we will end with Mr Pritam Singh.

Thank you, Deputy Speaker. But actually I have to be given the right to ask because the Minister did not answer the question.

I am giving you the ability to ask, but not to elaborate in a speech.

Thank you. Okay, I will ask a question. Can I ask the Minister why the Government is so generous to pay $193.7 million a year to the private consortium when he just mentioned also that the operating cost, after we take over, will be about $68 million?

Two points. One, it is not about being generous, this is what the contract says. And the contractual agreement provides for the way in which the sums are calculated. Secondly, Mr Leong Mun Wai may not have heard me. But the $193.7 million is not just for operation and maintenance. It is for debt service as well. From my memory, the single largest portion of the $193.7 million goes towards debt service.

Okay. Deputy Speaker, can I ask —

One more question and then we will go to the Leader of the Opposition.

Can I ask the Minister what is the debt servicing amount inside the $193.7 million?

The debt servicing amount, to my memory, is about 65% of the $193.7 million.

Mr Pritam Singh.

Deputy Speaker, we have not got to the bottom of the thing.

Well, if you need to, you can file a specific Parliamentary Question. But to be fair to the Members, this is a topical issue —

But what is the point of having the debate without getting to the bottom of the thing, having all kinds of questions? We must get to the bottom of the issue.

Mr Leong.

I am asking and I do not think —

It is a point of order, Mr Leong. I have been very fair to you and the Chair has called Mr Pritam Singh. But before that, I think Leader of the House would like to have a word. So, I invite you to take your seat, Mr Leong.

Okay. Thank you.

Mr Deputy Speaker, a point of order, what the Standing Orders require is for a Minister to answer a question that is put. In this case, Mr Leong Mun Wai had put a couple of questions. Mr Edwin Tong had answered the questions. I think the fact that Mr Leong does not understand the answer does not mean that the question has not been answered.

Mr Pritam Singh.

Deputy Speaker, point of order, please. Can I answer the Leader? Because the Leader is accusing me of not understanding certain things.

Mr Leong, I invite you to ask Parliamentary Questions, which any Member is capable of doing, if you think that your questions have not been suitably answered by Minister Edwin Tong.

But now, not only my question has not been suitably answered but the Leader is accusing me of something. She said I —

I am not sure that the Leader of the House is accusing you —

She is accusing me that I do not understand the financials behind all the questions I am asking.

Mr Leong, I am going to say this as a final position to you. The Chair has been very fair. I think you have spoken on this issue three or four times in this debate alone and I asked you to give way to the Member whom I have just called, Mr Pritam Singh. Mr Singh.

Thank you, Mr Deputy Speaker. Just one question for the Minister. In 2014, I asked a Parliamentary Question with regard to non-performance by SHPL. This was on the back of the Brazil-Japan football game when there were concerns about pitch quality and so forth. The then-Minister for MCCY confirmed that there was a provision for deductions in the event of non-performance or non-availability for use.

Can I just confirm that from 2014 to date, how much has the Government, by way of liquidated damages or whatever the clause in the PPP contract states, charged SHPL for non-performance?

Mr Deputy Speaker, subject to checking this – and I am just answering Mr Singh based on memory – I believe the figure is around the order of $44 million for defects rectification, non-availability payments and so on. But as I have said, I will check the precise figure since he is asking for something from 2014 until, I take it, this point in time.

Order. End of Ministerial Statement. Introduction of Government Bills. Minister for Home Affairs.

[(proc text) "to regulate the operation of debt collection businesses and the conduct of certain debt collection activities and to provide for other connected or incidental matters", (proc text)]

[(proc text) presented by the Minister of State for Home Affairs (Ms Sun Xueling) (on behalf of the Minister for Home Affairs) read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Registration of Criminals Act 1949 and to make consequential and related amendments to certain other Acts.", (proc text)]

[(proc text) presented by the Minister of State for Home Affairs (Ms Sun Xueling) (on behalf of the Minister for Home Affairs) read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Singapore Tourism Board Act 1963 and to make a consequential amendment to the Maritime and Port Authority of Singapore Act 1996.", (proc text)]

[(proc text) presented by the Minister of State for Trade and Industry (Ms Low Yen Ling) (on behalf of the Minister for Trade and Industry) read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.50 pm.

Sitting accordingly suspended

at 4.28 pm until 4.50 pm.

Sitting resumed at 4.50 pm.

[Deputy Speaker (Mr Christopher de Souza) in the Chair]

[(proc text) Order for Second Reading read. (proc text)]

Mr Deputy Speaker, Sir, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time."

I will speak about the broader policy and principles behind this Bill, as well as the specific provisions of the Bill.

Let me start with the backdrop to this Bill.

In April this year, the Minister for Law delivered a Ministerial Statement on the establishment of a Public Defender's Office to deliver criminal defence aid. Minister said that this is a significant shift in policy.

Before this, in 2015, we began directly funding CLAS. This is the Criminal Legal Aid Scheme run by the Law Society Pro Bono Services. In 2019, we began studying how else we could make criminal legal aid available to the vulnerable in society. We decided that setting up a Public Defender's Office, or PDO, is the right model for Singapore.

This is a very significant move as the state is taking on a direct role of providing criminal legal aid.

Today's Bill provides for the establishment of a criminal defence aid scheme, to be administered by the PDO. This has come after intense consultations – at least 10 consultations with the Law Society and Criminal Bar over the last two years. And we considered their feedback carefully.

I will now sketch out the reasons for setting up the PDO and explain the shift in our philosophy towards criminal legal aid.

The previous view taken, in light of the developments in Singapore then, was that the state should not be paying to defend accused persons. There are good reasons for this. Before accused persons are charged, there would have been thorough investigations done by the Police. The Attorney-General's Chambers (AGC) would also have reviewed decisions to charge.

However, this would have to be balanced against the need for accused persons not to be denied representation, in their defence.

For a long time, the balance has been struck against providing representation. This is a question of judgement and our view is that the right balance was struck at that time. However, in today's Singapore, we think that the balance has shifted.

With this, we need to consider, first, who we should help.

A study conducted by MinLaw showed that accused persons whose monthly per capita household income, or PCHI, is less than S$950 cannot afford legal representation. These households are around the 25th percentile of resident households by income. Those whose monthly PCHI is less than S$1,500, or around the 35th percentile, will also find it challenging to afford representation even for plead guilty cases. Thus, we are expanding our coverage from the 25th to the 35th percentile of households by income. We will, at the same time, increase aid coverage to all criminal offences, with some exceptions.

Second, we need to consider how our existing model of criminal legal aid can be improved. Today, criminal legal aid is provided through CLAS, which we began funding in 2015. This has helped more accused persons.

However, the number of cases that CLAS could handle, is dependent on the support from the Bar. Whereas if the Government steps in, the assurance level for the provision of legal support can be higher.

Our assessment is that the Government should provide more assistance to help needy Singaporeans who cannot afford legal representation. Hence, we will be establishing the PDO to help such accused persons.

This is a significant move as it will institutionalise public defence within our criminal justice system. The PDO will have its own full-time officers. This will allow us to deliver timely and higher quality representation. The PDO will also help to build up the capabilities of the criminal bar.

The Minister for Law had spoken at length during his Ministerial Statement about the experiences of other jurisdictions with Public Defender Schemes. He mentioned an example of escalating costs in Hong Kong. They spent S$217 million on criminal and civil legal aid in 2016. This was due to continual increases in lawyers' fees of around 4% to 10% every year.

He also shared other examples of abuse from various jurisdictions and how these strained the public purse, and led to cuts in funding. For instance, some asset-rich individuals managed to find ways to meet the eligibility criteria. These legal aid recipients would show up in Rolls Royces and other fancy cars, which they said were not theirs.

Thus, while we press ahead to establish our own PDO, we must be careful to avoid the challenges of escalating costs and abuse by accused persons who can afford representation. It is important to learn from others' experiences and avoid making the same mistakes. We are determined not to run down their routes. This includes instituting various safeguards into the Bill.