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Speech by Senior Minister of State Josephine Teo at Ministry of Transport’s Committee of Supply Debate 2017 on 8 March 2017

08 Mar 2017 Speeches

1.     Madam Chair, I thank members for their interest in the continued success of our air and sea hubs.

2.     The aviation and maritime sectors contribute around 10% of our GDP and provide nearly 250,000 jobs.  They are anchored by well-connected ports that link Singapore to the rest of the world.  As noted by Minister Khaw Boon Wan, they are both pillars and enablers of our economy.  

3.     Our approach has been to plan ahead, and yet remain responsive to new developments and market opportunities.  We invest heavily to develop infrastructure and human capital so that Singaporeans can take up the good jobs created. 

4.     Over the next 10-15 years, many of our infrastructure investments will take shape.  With the new Tuas Terminal and Changi Terminal 5, we will have the capacity to comfortably handle twice the volumes of passenger and container traffic today, and still have room for growth.  

5.     However, we will not need twice as many people.  Innovation and the intensive use of technology will transform the way people work and companies do business.  Ms Cheng Li Hui and Mr Lee Yi Shyan asked about the two sectors' industry transformation maps or (ITMs).  CAAS will launch the Air Transport ITM in April this year, while MPA will develop the Sea Transport ITM over the course of the year. 

6.     My response to Members' cuts will outline the three key strategies embedded in our ITMs that will strengthen the competitiveness of our aviation and maritime hubs.  They are: Smarter Ports; Vibrant Enterprise Ecosystems; and Systematic Manpower Development. 

Smarter Ports: Scale matched by superior connectivity, efficiency and reliability

7.     I note Mr Ang Wei Neng, Mr Zaqy Mohamad, Mr Yee Chia Hsing and Ms Cheng's concerns about the regional port developments.  Given that it will take some time for the Malacca Gateway project to be fleshed out, and the uncertainty surrounding the Kra Canal project, it is still too early to determine their impact on us. 

8.     But international competition has never been far away from our aviation and maritime sectors.  Our starting point is that others can and will up their game.  Whatever the analysis, the only response that will serve our long-term interests is to keep improving to stay ahead.  Therefore, it is not enough to build bigger ports.  We will need Smarter Ports. 

9.     We have two strong industry champions - PSA in maritime and Changi Airport Group (or CAG) in aviation.  So what kind of Smarter Ports are they developing?

10.    Put simply, our Smarter Ports will apply advanced technologies to achieve scale that is matched by superior connectivity, efficiency and reliability. So you need scale but what you really want is to deliver superior connectivity, efficiency and reliability. That's what the customers want. 

11.    In our sea port, it will not simply be about buying automated guided vehicles (or AGVs) or installing automated cranes.  Rather, it will be about advanced planning and optimisation of equipment deployment to allow the seamless transfer of containers from vessel to wharf, and then to truck and then to yard, and then vice versa.  

12.    It may sound easy but is actually very difficult to execute.  As a transhipment hub that is connected to over 600 other ports - if you take Shanghai for example, they are connected to under 300 ports while we are connected to over 600 ports - container movements here are much more complex than ports that mostly handle origin-destination cargo.  In other words, cargo that is either coming out from your own port city or going in to your own port city. Here we are transhipment, where we do connections for shippers and vessel calls involve mind-boggling permutations of synchronised unloading and reloading.   When 30 million containers are moved each year, even a small margin of error is highly problematic.  Imagine at Tuas where we will double that volume to 65 million. 

13.    The complexity of container movements will increase as we enhance the connectivity of our port and attract higher volumes.  That is why PSA is studying the use of data analytics that will generate insights about the flow of vessels and containers, and test-bedding automation solutions that will optimise processes and the use of equipment.

14.    What we learn at Pasir Panjang will be used in the planning of Tuas Terminal, which when fully developed will have a capacity bigger than  Tanjong Pagar, Keppel, Brani and Pasir Panjang Terminals combined.
15.    Likewise, the bigger challenge for us at Changi is Terminal 5 which, Members may recall, will have an eventual capacity bigger than Terminals 1, 2 and 3 combined.  This will enable us to host more flight connections and tap the growth of civil aviation in the Asia-Pacific region.  Ms Cheng asked for an update on developments at Changi.  T4 will begin operations in the second half of this year. So there is a lot of testing going on.  Planning for T5 is on track, and CAG will soon begin to identify the architects to take on the challenge of designing it.

16.    T4, which is smaller than the existing terminals, is in some ways a test-bed for T5.  On opening day, passengers will have a full suite of self-service and automated options for check-in, bag drop, immigration clearance and boarding.  Airports elsewhere may have implemented some of these components, but not the entire suite as far as we know.

17.    Beyond what passengers see, at the back-end, T4 will have automated baggage screening, sorting, and storage.  Smart cleaning initiatives, centralised support functions for retail and F&B will further reduce the manpower needed.  Mr Ang Hin Kee will be pleased to know that at steady state, we expect T4 to realise up to 10% in manpower savings due to automation.  The experiments at T4 will also shape what is possible at T5 in future, where the bigger savings have to be. 

18.    Our existing terminals, too, are raising their performance. CAG and CAAS are bringing airport stakeholders onto a common collaborative decision-making platform to share operational data.  For instance, airlines and ground handling agents now can view real-time flight movements on the airfield.  This helps them efficiently deploy resources to quickly rectify problems.  Since its implementation last year, one benefit has been the reduction of aircraft taxiing time by 90 seconds during peak hours. 90 seconds may seem negligible, but we must remember we have about one thousand aircraft movements every day. So the cumulative impact on runway productivity and fuel cost savings for airlines is really not trivial at all. 

19.    So why does it matter that PSA and CAG develop Smarter Ports? Ultimately, their customers - the shipping lines and airlines - and the end users - the shippers and passengers - they all vote with their feet.  To keep the customers and end-users coming back, scale must be matched by superior connectivity, efficiency and reliability.   This is what will help Singapore to build a sustainable edge. 

20.    For Singapore to extract the full value of our Smarter Ports, we will also need Vibrant Enterprise Ecosystems and Systematic Manpower Development.

Vibrant Enterprise Ecosystems: Anchoring key players to stay relevant and spur innovation

21.    So let's talk about vibrant enterprise ecosystems. With well-connected ports as anchors, our maritime and aviation hubs have grown far beyond PSA and CAG.  Today, Singapore is ranked as the world's top international maritime centre (IMC), with a diverse maritime services cluster comprising over 5,000 establishments.  In aviation, Singapore is home to world-class air freight, aerospace, and maintenance, repair and overhaul companies.  

22.    When we ask companies why they choose to be in Singapore in spite of our higher costs, they tell us that it is the value of being plugged into a vibrant network, a thriving ecosystem.  Through this network, they can be closer to their customers, and gain quick access to market intelligence which helps them make timely decisions to respond to market shifts: pricing, what to do with commercial arrangements - all of these require intelligence. They can also find good partners more easily to share risks in business ventures or jointly develop new projects.  

23.    A vibrant enterprise ecosystem is a natural magnet that attracts and retains more businesses to weave a denser network. That makes it harder to replicate.  This is why we actively seek to anchor key players across many types of aviation and maritime services in Singapore - to stay relevant and strengthen our hub competitiveness. 

24.    Our international maritime centre continues to grow in breadth and depth.  New companies like LH Shipping from Switzerland and the West of England Protection & Indemnity Insurance Club set up shop in Singapore last year, while those already here such as K Line and Marubeni expanded their operations.  

25.    Through new joint ventures with PSA, major shipping lines like CMA-CGM and China COSCO Shipping are shifting more of their activities to Singapore. It is helpful that both CMA-CGM and China COSCO are also leaders in the ever-shifting landscape of alliance partnerships among the container lines.

26.    When companies open up new lines of businesses, it enables our aviation and maritime hubs to capture emerging opportunities and stay relevant. Take for example the movement of time- and temperature-sensitive pharmaceutical products.  Singapore will be the first in Asia to build up a cluster of businesses certified by the International Air Transport Association in pharmaceutical handling. With this, companies like Global Airfreight International, SATS and SIA Cargo will be better placed to benefit from the growth in pharmaceutical trade as the region becomes more affluent.   Similarly, the recent acquisition of the Baltic Exchange by SGX will allow Singapore to take active part in the fast-evolving landscape of maritime risk management.

27.    But perhaps the biggest value of vibrant enterprise ecosystems is that they help Singapore's drive for innovation.   

28.    This year, we will see the results of our first two Aviation Challenges, one of which focuses on automating baggage handling for narrow-body aircraft.  As Members know, the process today is largely automated - screening, sorting, storage - but there are some parts that still require manual handling.  Behind the scenes, bags have to be transferred from a baggage carousel to a baggage trolley which is towed to the aircraft.  They are then unloaded and moved into the aircraft belly hold, which for a narrow-body aircraft is eleven metres deep but just one metre high.  We ought to salute our baggage handlers who do this back-breaking work.  But we should not leave this process unchanged.    

29.    We searched all over the world for solutions, but found none that would fully meet our needs.  So we resolved to develop our own solution.  As we speak, five teams from industry and academia are developing prototypes to automate this laborious process.  

30.    Platforms like Aviation Challenges are attempts by CAAS to bring together the best minds to develop innovative solutions for our airport.  But these attempts will not succeed unless we have a vibrant enterprise ecosystem to draw on. The first two challenges have drawn on the capabilities of over 100 engineers and researchers from several entities.  

31.    We are involving local companies such as Cyclect Electrical Engineering and ST Dynamics, and I have asked CAAS and CAG to bring more on board.  It is not just the airport that will gain from the innovations.  Businesses too can capture value through deepening their capabilities and spinning off other innovative products and services to support their internationalisation.   
32.    Start-ups are also getting into the action.  

33.    Take for example Ascenz Solutions which started in 2008 as a two-man show. With co-funding from MPA's Maritime Innovation and Technology Fund, Ascenz created a system called Shipulse that collates data from sensors installed on board ships and transmits it back to shore.  Shipulse allows ship-owners to remotely analyse a ship's speed and fuel efficiency in real-time, and then instruct the crew to adjust the ship's route or carry out energy efficiency measures to save fuel and improve vessel performance.  Shipulse has been installed on over 400 vessels and thousands more could use it.  Having expanded to a team of more than 30 with operations in nine countries, Ascenz is now eyeing the European market.

34.    A likely shift towards digitalisation in the aviation and maritime sectors can give more start-ups like Ascenz their big breaks. You know this is serious stuff when even an established giant like AP Moller-Maersk decides to nominate as its new Chairman someone with a track record as “Mr Digitalisation”. This is going to be a harbinger of major industry transformation.

35.    Interestingly, the maritime sector is not usually thought of as a beacon of innovation.  But I'm bullish about the prospects for Singapore because the market here for innovative products and services is significant and quickly evolving.  As their innovations gain market acceptance in Singapore, start-ups will be in a stronger position to internationalise.  PSA has already taken the lead by launching PSA unboXed last year. And what PSA unboXed does is to invite start-ups and potential partners to propose technology solutions for the port in which PSA unboXed may then decide to take an equity stake and try to make a success of them.  I have asked MPA to work with SPRING to see how best to expose more local start-ups to opportunities in maritime businesses.  

36.    To give a further boost to innovation, MPA will set up the “MPA Living Lab” at our port by the end of this year. The MPA Living Lab will provide the essential “live” operating conditions that will facilitate the test-bedding of potential innovations. Because this is critical - you can have a great idea but if you are not able to prove the concept in the “live” operating conditions, there will be a gap in the innovation journey. Areas being explored include autonomous vessels, multi-purpose drones, and next-generation vessel traffic management systems. We believe this could be a game-changer for Singapore, bringing together technology developers and industry players to anchor their innovation activities in Singapore and help our sea hub stay ahead.

Systematic Manpower Development: Deeper skills and better jobs for all

37.    Let me turn now to manpower development. Smarter Ports and more vibrant enterprise ecosystems bring many more good jobs.  All in all, we expect some 13,000 new jobs in the air and sea transport sectors by 2025. 

38.    The jobs created over the next decade will be markedly different from today. The increasing deployment of smart technologies means that new jobs will be more knowledge-intensive.  At the port, more data scientists and operations research analysts will be needed to optimise shipping routes, port operations and vessel traffic management.  At the airport, we will require data scientists skilled in air traffic operations research and analysis, to optimise our runway and airspace capacities through modelling and simulation.

39.    Technology will also transform existing jobs into higher skill, higher value-added jobs.  For instance, port equipment engineers today are responsible for maintaining and repairing the port's equipment and facilities.  With the introduction of AGVs, they will also plan and design operations to segregate manned and unmanned activities, and to synchronise the AGVs' operations with other automated equipment. We are also investing in baggage and cargo robotics systems at the airport that will leave the more repetitive tasks of lifting and loading to the machines, freeing up our workers to oversee other parts of operations.

40.    We are committed to helping Singaporeans make the most of the exciting and rewarding career opportunities, by working closely with our tripartite partners. 

41.    For fresh school-leavers, CAAS and MPA are working with institutes of higher learning to develop new industry-specific training schemes. Two SkillsFuture Earn-and-Learn Programmes (ELPs) for passenger service agents and ground operations specialists at the airport were introduced in October 2016.  The next intake for these two programmes is scheduled for April this year. Three other Earn-and-Learn Programmes were launched last year for port operations officers, deck officers and marine engineers.  

42.    We are also helping mid-career Singaporeans switch to maritime and aviation careers. To prepare them for roles in flight operations, baggage, catering, maintenance, and cargo, Professional Conversion Programmes (PCPs) will provide structured training and career progression, with corresponding salary increases. PCPs for more occupations will be launched in due course.

43.    For Singaporeans already in the aviation and maritime sectors, we will help them progress in their careers. MPA will enhance the Maritime Cluster Fund for Manpower Development to support a wider range of training. This will enable Singaporeans to be trained in new and increasingly important areas, such as data analytics and new maritime technologies.  We expect this to benefit some 5,000 locals annually. 

44.    To help Singaporeans better plan their careers, we will develop Skills Frameworks that help them identify those which are relevant and necessary for advancement. The Skills Framework for the Sea Transport sector, which was developed in consultation with the industry and unions, will be launched in April.  A Skills Framework will also be developed for the Air Transport sector. But let me make clear that we can't make this work without the companies taking an active interest and the workers being willing to adapt. So tripartite involvement and commitment will be key. 

Open and Connected, Safe and Green

45.    Madam Chair, even as we strengthen the competitiveness of our aviation and maritime hubs, we should remember that our fortunes are closely tied to those of the region.  We will therefore continue to promote a region that stays open and connected. 

46.    In aviation, last year, all ten ASEAN countries ratified all the ASEAN open skies agreements. ASEAN has also started negotiations on an EU-ASEAN Comprehensive Air Transport Agreement which would be the first bloc-to-bloc air services agreement in the world.  

47.    Open sea lines of communications, too, are critical to trade.  Today, almost half of the world's seaborne trade by tonnage passes through the Straits of Malacca and Singapore, and we must ensure that these waters remain safe and secure for ships.  Through MPA's Safety@Sea campaign, the number of marine incidents has been kept low.  There was only one major shipping incident in our waters in 2016, no easy feat considering that Singapore is one of the world's busiest ports with over 130,000 vessel calls every year. 

48.    We also look to more environmentally-friendly and sustainable growth.

49.    For example, CAAS has worked with neighbouring airports to develop an Air Traffic Flow Management (ATFM) system. It sounds a bit abstract - Air Traffic Flow Management system. What it really means is that you want to regulate the flow of aircraft even before they take off from their departure airports. Why? Because you want to have more certainty in managing at the receiving airports the incoming flights. So to passengers, what this would mean is that you could spend less time circling in the air before landing because the airport is congested. But to airlines, the fuel cost savings is very much appreciated.  A 2016 operational trial showed that on average, each aircraft saved about 300kg of fuel burn. With more than 150,000 landings at Changi each year now, the cumulative effect on the environment is quite significant.

50.    On the Maritime side, MPA already has a Maritime Singapore Green Initiative with five programmes - the Green Ship, Green Port, Green Technology, Green Awareness and Green Energy Programmes. 

51.    To promote the adoption of cleaner marine fuels, MPA will soon pilot LNG bunkering operations in Singapore.  MPA has been working with industry and like-minded ports around the world to harmonise LNG bunkering processes, and to grow a global network of LNG-ready ports. There is no use if we are LNG-ready but other ports are not. The ships can't move this way. These efforts have seen good progress, with authorities in Japan, Korea and Norway recently coming on board. 

52.    Mr Louis Ng asked about our response to oil spills. We are highly vigilant towards environmental incidents and have a well-established, multi-agency response plan which is regularly exercised. 

53.    During the oil spill off Pasir Gudang in January, agencies responded swiftly and effectively. Within hours, MPA, which is the coordinator for the interagency response, had already modelled the spilled oil's trajectory, and worked with agencies to take measures such as laying out oil-absorbent booms to prevent its spread. As a result, traffic in the East Johor Straits and Singapore's port operations were not affected. Affected beaches were quickly cleaned up and key biodiversity areas at Pulau Ubin, Coney Island and Pasir Ris were protected. They were not harmed. We are now working with the insurers of the vessels responsible for the incident to compensate affected parties, including fish farms. The Bunker Convention puts the responsibility on the ship owners. 


54.    Madam Chair, to conclude, our aviation and maritime sectors not only provide critical connectivity for our economy, but are also growth engines that create exciting and rewarding job opportunities for Singaporeans.  We will strive to strengthen the competitiveness of our air and sea hubs through Smarter Ports, more Vibrant Enterprise Ecosystems, and Systematic Manpower Development.   

55.    Through initiatives like the Aviation Challenges and MPA Living Lab, we will help the businesses in these sectors help themselves by deepening their capabilities and developing innovative products and services. Through tripartite cooperation and enhanced funding support, we will help Singaporeans acquire and master the deep skills that are needed to stay relevant.

56.    Our officers have been working quietly but tirelessly and I am mighty proud of them. Whether in 10, 20 or 50 years, we still want to be leading aviation and maritime hubs.  Our businesses and workers will have every opportunity to be at the frontier of the industry transformations and ride this wave of growth.  

57.    Thank you, Madam Chair.