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Speech by Second Minister Ng Chee Meng at the Ministry of Transport’s Committee of Supply Debate 2018

07 Mar 2018 Speeches

1.     I thank MPs for their cuts on aviation and PHCs.

2.     The air hub is a cornerstone of our economy. It contributes significantly to our GDP, and provides many good jobs. The excellent connectivity that our air hub provides also helps to facilitate trade, investments and tourism. Singaporeans, our businesses and our economy continue to benefit from a strong air hub.

2017: Good year for Changi Airport, supported by air travel growth in Asia Pacific

3.     2017 was a good year for Changi. We handled a record of 62.2 million passenger movements, a 6% increase from the previous year. Airfreight throughput grew by 7.9%, and reached 2.13 million tonnes, crossing the 2-million tonne mark for the first time.

4.     Changi Airport is currently connected to over 400 cities around the world. It is well connected to the three most populous Asian countries, with links to 34 Chinese, 16 Indian, and 14 Indonesian cities. The number of passengers in the wider Asia Pacific region is also expected to grow from 1.4 billion to 3.5 billion in the next 20 years. This is 2.5 times today’s number, and more than double the  expected passengers in the next biggest region, Europe1. As air traffic in our region and the world continues to grow, the Government is committed to ensuring that Changi Airport remains best positioned to capture its share of the growth. 

Need to enhance airport infrastructure to meet future demand

5.     For 2018, Changi Airport is projected to grow between 3.5% and 5.5%. In the coming years, traffic growth is expected to be at 3% to 4% annually.

6.     To ensure that Changi Airport has sufficient capacity to capture this growing demand, we need to enhance our airport infrastructure.  

7.     Infrastructure development is a long-term endeavour. We have successfully built up a strong air hub over the last 30 years, in large part due to our bold and forward thinking approach to anticipate our future needs. Some members in the House might recall that the government decided to build Terminal 2 (T2) in 1975, even before we moved our airport from Paya Lebar to Changi. This was 15 years before its opening in 1990. We then made plans to build a new Terminal, T3, and decided to build it in 1996. When we opened T3 in 2008, Changi Airport was serving close to 38 million passengers, and at that time, there were some who wondered if we needed such a large increase in capacity. Today, we have almost fully utilised all 66 million passengers per annum (mppa) capacity across Terminals 1 to 3.  

8.     If we had not built T4 in good time, Changi Airport would have reached its maximum capacity in the next 2 years. T4 added a capacity of 16 mppa. By 2019, Jewel Changi Airport will open and bring the total capacity in Changi Airport to 85 mppa. It will also further enhance the passenger experience by providing a wide range of new retail and dining offerings in what would be Singapore’s largest indoor garden to come. 

9.     Our longstanding approach of building ahead of demand has served us well. It has allowed Changi Airport to consistently deliver a high standard of service to passengers, even during the peak hours. This “Changi Experience” is what distinguishes Changi from all other airports around the world. We have therefore adopted a similar approach in planning and building T5.

Changi East – a large-scale and complex project to ensure long-term aviation growth

10.    T5 is an integral part of our airport expansion at Changi East. It is a bold move to firmly cement Changi Airport’s position as a premier air hub for the future. This is important. Air connectivity is a key link for Singapore. It is critical that our aviation sector can continue to grow and support the growing needs of our economy. 

11.    As Minister Khaw said earlier, building Changi T5 is not just building another new terminal, it is akin to constructing a second airport. The project’s scale and complexity is unprecedented. Our airport expansion thus far has largely consisted of the construction of new terminals. But the Changi East project goes far beyond the terminal building itself. 

12.    Extensive land preparation and drainage works at Changi East have been on-going since 2014. The works for a three-runway system have commenced since 2016. We are extending an existing military runway and constructing a network of taxiways to allow for Changi Airport to cater to more flights. If we actually lay out the runway and taxiways in a long line, it would stretch from Changi Airport, all the way to Tuas, almost as long as the PIE of 42.4km!

13.    Next comes a network of tunnels and systems, including a baggage handling system and automated people mover system. These will allow for the efficient transfer of passengers, baggage and airside vehicles within Changi East itself, and also between Changi East and the existing Terminals 1 to 4.

14.    Last but not least is the T5 terminal itself. 

15.    T5 is going to be a game changer. This will be a mega terminal with satellite terminals. It will allow Changi Airport to serve up to an additional 50 mppa in its initial phase. 50 mppa is a 60% increase from Changi's current capacity, and is more than the combined capacities of Terminals 2 and 3. T5 will allow better integration of airport operations, improving their efficiency as it allows us to pool resources. It will benefit passengers like you and me by offering quicker access to boarding gates and convenient transfers. The “Changi Experience” will be further enhanced and new standards for passenger experience will be set.

16.    Mr Zaqy Mohamad raised a pertinent question about the cost and funding of T5.

17.    The entire Changi East project is expected to cost tens of billions of dollars. The Government will invest substantially in Changi East, and foot the majority of the costs. To date, the Government has committed more than S$9 billion into the project. The airport operator, Changi Airport Group (CAG), has also committed S$3.6 billion to date, and will commit its reserves and future surpluses, as well as take on substantial borrowing to fund the project.

18.    Airlines and passengers will also need to contribute towards enhancing this airport infrastructure. Currently, airlines and passengers pay various aeronautical charges to CAG. As announced last week, to help fund airport infrastructure enhancement, passengers departing from Singapore Changi Airport from 1st July 2018 will also pay a new Airport Development Levy (ADL). 

19.    Some have questioned why we are increasing the charges now when T5 will only be completed around 2030. As I have explained, Changi East is not just about Terminal 5. It is a massive project with many phases. Airport users will start to benefit from Changi East progressively. For example, Runway 3 will be ready for civil aviation by 2020, and the three-runway system will be operationalised in the early 2020s, even as T5 will only be completed around 2030. Having users start paying earlier will also avoid large spikes in the amount they have to pay later on. 

20.   I would like to thank Mr Zaqy for his suggestion to differentiate the ADL by distance. We have indeed considered it carefully, but decided on the current option which is a flat rate regardless of the distance travelled. Passengers use the same facilities at the airport, regardless of where they are flying to. So it is only fair that the charges that they pay are the same. This is the same principle that has been used for other passenger charges such as the Aviation Levy and the Passenger Service and Security Fees.    

21.    Mr Zaqy also asked why the Government is funding the majority share of the project. Changi Airport is vital to Singapore’s economy, and connects us to the world.  It yields significant economic benefits for Singapore beyond the airport directly and the aviation industry. By funding Changi East, the Government is making a strategic investment into Singapore’s future. Without Government funding, airport charges will also have to increase much  more. Given the importance of the air hub to Singapore, we need to strike the right balance, and keep charges for airlines and passengers at a level that will ensure that Changi remains competitive, and continues to be the air hub of choice. 

22.    Mr Zaqy also highlighted the example of Seoul’s Incheon Airport. When comparing the costs of that airport expansion, we need to take into account the difference in scale and complexity of each project. Seoul Incheon expansion adds 18 mppa, equivalent to our T4. In comparison, Changi East and T5 is like building a brand new airport, 50 mppa with possibilities of growth. 

23.    The Government will ensure prudent spending on Changi East. The project will deliver good value for money. We have thoroughly analysed the traffic projections for Changi. We are also carefully scrutinising the cost of Changi East. We will strive for the most cost-effective way to develop Changi East, and ensure that Changi continues to be world class. 

24.    In developing Changi East, we are building for the long term. This is a major investment, to meet our future needs, and reap benefits for Singapore and Singaporeans in the long run. 

25.    CAG is in the midst of evaluating proposals from three consortiums bidding to be the Master Building Consultant for T5. The three consortiums have all submitted designs that will set T5 apart from other airports around the world. I am confident that Singaporeans will be proud of our new T5 when it is completed around 2030. 

Transport infrastructure projects create opportunities for local enterprises

26.    Mr Chairman, we are at an exciting time in Singapore’s transport history. Besides Changi East, we are also building the new mega-port at Tuas, the High Speed Rail and Rapid Transit System connecting us to Malaysia, as well as extending our MRT network. These enhancements and investments will enhance our transport infrastructure and bring with them a multitude of benefits. First, Singaporeans will enjoy the direct benefits of greater convenience and access in their travel around the island and to other parts of the world. Second, local enterprises and their workers will have valuable opportunities to gain new expertise and enhance their capabilities. I thank Mr Lee Yi Shyan for his suggestion to place concerted effort to develop a new industry cluster to generate more economic spin-offs.

27.    As highlighted by Mr Lee Yi Shyan, our transport infrastructure investments create new and exciting possibilities for our businesses. Singapore businesses have the opportunity to work on complex projects which, in some cases, are of an unprecedented scale. Many of our transport projects in fact have stringent and unique requirements for which they need to apply innovative solutions. For example, a joint venture (JV) formed by our local companies Hock Lian Seng Infrastructure and Sembcorp Design and Construction are working on a part of the 3-runway system under the Changi East development project. The works involve extensive aircraft pavement and drainage works. On the maritime side, SurbanaJurong is the engineering design and construction supervision consultant for Tuas Terminal, and has taken the opportunity to apply many innovative engineering solutions in the planning and construction process. Our companies will gain valuable expertise and knowledge, deepen their experience and burnish their credentials from working on these and other projects. In fact, a number of projects and initiatives that the Government is supporting will result in the creation of valuable intellectual property (IP). Where there is IP created as a result of such projects, companies would typically have the rights to use the IP for their commercial purposes. And we encourage them to do so, including to develop exportable solutions to seize opportunities abroad, especially as Asia’s demand for infrastructure and transport solutions grow. One example is Singapore Technologies Kinetics (STK), which has partnered with MOT and LTA to develop autonomous buses and shuttles. I hope that one day, we can see STK-developed autonomous vehicles driving around in other cities. The Government will continue to champion R&D in the transport sector to ensure that local capabilities continue to grow, and are showcased globally. There are already many such opportunities, such as the Singapore Airshow, the Singapore Maritime Week, and the Singapore International Transport Congress and Exhibition.

28.    I thank Mr Lee for his suggestions, which we will explore further. 

Harnessing technology and innovation to ensure the continued growth of our air transport sector 

29.    As Mr Lee also highlighted, the Government can spur industry development and the growth of the transport sector by championing R&D and working with industry players to develop new technologies and adopt innovative processes.

30.    In air transport, there are two areas of focus to leverage technology developments. The first is airport operations, and the second is in the area of unmanned aircraft systems or drones. 

31.    First, let me touch on leveraging technology for airport operations. Passengers using T4 today will be familiar with some of the new technologies, such as the use of facial recognition to get passengers from the kerbside to the plane in a speedy fashion. Advanced CT X-ray machines have also been deployed at T4, which do not require passengers to remove their laptops from their bags during security checks. These are examples of the suite of Fast and Seamless Travel (FAST) self-service options which we have already tapped on to create a better, smoother and more seamless travel experience for those using Changi Airport.

32.   We are also excited about the possibilities of using such technologies to change the way we work. By automating the routine processes, we free up workers’ time to focus on areas where the human touch cannot be replaced. For example, passenger service agents at T4 now don’t stay behind the counter. They roam around helping passengers. They feel more fulfilled, contributing in more meaningful ways. This has re-affirmed their commitment to continue working as part of the Changi Airport community. 

33.    The Government is prepared to collaborate with industry to spur further adoption of technology. For example, Singapore Airlines (SIA) launched its Digital Innovation Blueprint programme in January this year, in collaboration with the Agency for Science Technology and Research (A*STAR), the Civil Aviation Authority of Singapore (CAAS), the Economic Development Board (EDB) and the National University of Singapore (NUS). SIA aims to set up a Digital Innovation Lab and tap on data analytics to further enhance customer experience as well as boost the operational efficiency of its aircraft maintenance process. This is an example of how the Government’s partnership with industry can help support companies and their staff in their digitalisation efforts, so that they can bring service standards to even higher levels.

34.    The Government will also invest significant resources into developing innovative processes and technologies to entrench Changi as the world class hub it is today. CAAS will launch an Aviation Transformation Programme (ATP) to promote the use of new technologies like autonomous vehicles, artificial intelligence, and augmented reality, to improve airport operations. The ATP will focus on four crucial areas for the continued success of Singapore’s air hub : Strategic Air Traffic Management; Seamless Ground Operations; Effective and Efficient Security; and Premium Travel Experience.

35.    The ATP will not only level up the system capabilities of our air hub, but also ensure that our workers remain at the forefront of their fields. For example, as air traffic volume grow, our air traffic controllers (ATCOs) will have a more challenging job. We will therefore leverage technology to further enhance our Air Traffic Management (ATM) capabilities. This will provide our ATCOs with a wider range of tools to do their job well, and ensure that Singapore remains a leading Air Navigation Services Provider in our region. 

36.    As we tap on advancements in technology to manage our skies, the ATCO’s job will also evolve, and require deeper skills and wider ranges of expertise.  

37.    Recognising this, CAAS has taken the initiative to introduce a new scheme of service that will better enable ATCOs to hone their skills, provide them with more exposure across the range of ATM functions, and allow them to delve even deeper into specific functions, if they are so inclined. They will even participate in the development of advanced software and hardware that are more sophisticated than those available today. Under the new scheme, ATCOs can progress along two tracks – Management or Specialist, and build their expertise along either track. The new scheme will allow ATCOs to progress to higher grades compared to the past. By providing more avenues for progression and targeted professional development based on the aptitude and interest of each ATCO, the new ATCO scheme of service will further professionalise the job of the ATCO. It will also deepen our ATCOs’ expertise, and allow us to develop a pool of ATCO professionals who will help to drive CAAS up the ATM value chain. 

38.    The levelling up of capabilities of workers in our air transport sector is part of the vision we set out to achieve through the Air Transport Industry Transformation Map (ITM). The ITM aims to create 4,700 good jobs by 2020 and grow the value-add per worker. In the third quarter of this year, we will launch a Skills Framework for Air Transport which will set out the core competencies and skills for all key air transport jobs. This will serve as a reference for those who are already in the sector or for those wanting to join the aviation industry. 

39.   It is paramount for us to support workers in the air transport sector to continually retrain and upgrade themselves, even as we leverage more advanced technologies to improve the sector’s productivity. 

40.    We want our air transport workers to be able to manoeuvre technological changes at the workplace to their advantage, and take on new roles that will challenge and fulfil them even more. This will also allow them to add greater value to their jobs and their companies, and overall to our economy.

Unmanned Aircraft Systems – Transforming mobility and logistics in urban cities

41.    The second key technological development in the air transport sector is the Unmanned Aircraft Systems (UAS). Today, UAS are already being deployed for tasks such as worksite inspections, and surveying and mapping, improving processes and saving time and manpower. There is huge potential for UAS to spur new and innovative applications across industries. This would further increase productivity and enhance service delivery. One such area is in logistics, where UAS can quickly deliver parcels by air to the end-customer. In time to come, UAS can potentially even ferry people through the air, adding a new dimension to urban mobility. At the same time, we recognise that UAS operations could pose concerns about safety and security. These concerns must be addressed before the full potential of the UAS can be realised. In particular, given Singapore’s busy airspace and dense urban environment, we need to be extra careful that UAS do not pose risks to manned aircraft operations or public safety.

42.    The Government, having said all that, has been pushing the boundaries in exploring UAS in our urban environment so as to seize the potential benefits that the use of UAS could bring. For instance, the Land Transport Authority (LTA) is trialling the use of UAS to perform rail and road tunnel inspections with greater ease and accuracy. In addition, LTA has also deployed UAS at selected Thomson East-Coast Line worksites to help our engineers monitor construction progress and identify defects.

43.    The Government also recently designated one-north as a drone estate to serve as a living lab and test bed for drone solutions, which Mr Ang Wei Neng also highlighted. We are indeed excited about the drone estate’s potential to spur more R&D on UAS technologies, and foster meaningful commercial partnerships. We intend to progressively expand the scope and scale of the UAS activities there, bearing in mind that we must do so responsibly and not compromise safety. I thank Mr Ang for his suggestions, and we will look into them. Recreational UAS flying may take a while longer.

Technology transformation in the point-to-point industry

44.    Mr Chairman, let me now turn to how technology has transformed the point-to-point industry, or the P2P industry for short. The introduction of third-party booking apps and private hire car, or PHC, services has revolutionised the P2P industry in Singapore. 

45.    The PHC industry has significantly expanded the supply of P2P services, especially during our peak hours. There are now more than 40,000 PHC drivers, in addition to 96,000 licensed taxi drivers. The matching of demand and supply is also enhanced through the platforms and through dynamic pricing.

46.    Commuters have benefitted the most. Commuter satisfaction has risen significantly. Based on PTC’s latest survey, almost 99% of commuters surveyed were satisfied with taxi and PHC services in 2017. Complaints about taxi unavailability, which were prevalent before, have also come down significantly.  

47.    Taxi drivers who were initially affected, are now starting to reap some of the benefits too. Taxi companies are offering more flexible rental schemes, lower rental rates and more choices of service platforms to drive for. Additional booking channels have also given taxi drivers an additional revenue stream, and have helped reduce empty plying of roads. Take Mr Luen Chi Keung, for instance. Mr Luen is a GrabTaxi driver currently driving for SMRT. He likes that there are multiple rental schemes now that he can pick from. While he is currently paying a daily rental for his taxi, he is looking to switch to an hourly rental scheme which may better suit his needs. 

48.    At the same time, I also note that there is some concern on how taxi and PHC drivers could be impacted by technology changes. I thank Mr Ang Hin Kee for his suggestion and he will be pleased to know that we will continue to work closely with the National Taxi Association and National Private Hire Vehicle Association to up-skill taxi and PHC drivers. We will also explore having modules in the Taxi Driver’s Vocational Licence and the PHC Driver’s Vocational Licence courses to help equip taxi and PHC drivers with digital skills such as using navigational apps.

Review of our Regulations for the PHC Industry 

49.    We had decided a few years ago, when the PHC industry was still in its early stages of development, to impose minimal conditions on PHC booking service operators. This is to avoid stifling innovation in the then nascent industry. This is why the current regulatory regime for PHCs focuses primarily on protecting commuter safety and interests via licensing of PHC drivers and PHCs. The PHC booking service operators are required to only despatch licensed drivers and cars.

50.    However, since then, the PHC sector has grown and changed the P2P industry significantly. From an emerging fringe transport mode, PHCs have become an important part of our land transport system. Based on PTC’s latest survey, it is estimated that there may be more than twice as many rides taken on PHCs as compared to taxis. The PHC industry has evolved and consolidated rapidly. There are currently two large players – Grab and Uber. Both companies also allow taxis to use their booking services, which blurs the lines between the PHC and taxi industries. 

51.    Mr Ang Hin Kee asked whether the Government will be reviewing our regulatory approach for the P2P sector. The answer is yes, given how fast the industry is changing. First, the sheer size of the PHC industry means that the actions of PHC booking service operators affect a significant number of commuters and drivers today. Second, today, there are limitations to our current regulatory regime. We only have basic requirements on booking service operators to protect commuter safety. In exceptional situations, LTA can issue a suspension order to forbid drivers from driving for these PHC booking service operators. But this is a very blunt tool, which impacts commuters and drivers as well. Given the growing PHC industry, it is imperative that the Government has sufficient regulatory oversight over the PHC booking service operators to protect the interests of commuters and drivers. Third, PHC booking service operators should bear greater responsibility in ensuring the safety of commuters, beyond the requirements today. Finally, as the PHC and taxi industries consolidate, as the regulator, the Government has to act in good time to ensure that it remains open and contestable. We must make sure that commuters and drivers continue to have options, and that no single market player will dominate the industry to the detriment of commuters and drivers.

52.    Hence, we are reviewing the broader regulatory framework for the P2P sector, including studying how to structure the industry and license PHC booking service operators. Licensing will give the Government a broader range of regulatory levers to ensure that the rapidly evolving PHC industry grows in a manner which meets the needs of commuters, drivers, and our broader transport policy. More details will be made known in due course. 


53.    Mr Chairman, MOT is committed to making travel even more convenient and seamless, across our island and beyond, for Singaporeans. Our efforts to develop Changi East will help to achieve this, as will our investments in more advanced technologies. At the same time, we will help our workers to keep up with the changes and have good careers in the transport sector. We are confident that besides Singaporeans, Singapore companies will benefit from these efforts, as they harness new productivity gains throughout the entire transport ecosystem. We can look forward to a more liveable and well-connected Singapore, supported by robust and effective transport systems. Thank you.

1 IATA Press Release (24 Oct 2017). 2036 Forecast Reveals Air Passengers Will Nearly Double to 7.8 Billion.