Speech by Acting Minister for Transport Vivian Balakrishnan at the Ministry of Transport's Committee of Supply Debate 2019

Introduction

1. Mr Chairman. Minister Khaw has asked me to convey his apologies for missing COS. I can assure all of you that he is recovering well after surgery and in fact, has been following the debate assiduously. He also asked me to reassure you that he will actively pursue all your suggestions and advice when he returns. He has also asked me to remind everyone that every year in Singapore, one-third of seniors sustain injuries from falls. Many of these incidents occur at home, usually at night or early morning.  In fact, as a doctor, I can tell you that the most vulnerable moments are those few seconds or minutes when you wake up and get out of bed. 

Domestic Transport

2. Let me now turn to domestic transport. We all want a public transport system that is safe, reliable, convenient and affordable. Four worthy objectives, but sometimes you have to make some tough choices and trade-offs. Bear these four words in mind; safe, reliable, convenient, affordable. Our transport system is actually in a very strong position, that’s thanks to many generations of visionary leaders, meticulous planners and, of course, the transport workers themselves who work long hours. They wake up way before everyone else has woken up and they also work into the wee hours of the night to maintain and operate our bus and rail network. And all of them deserve our tribute. 

3. Mr Sitoh Yih Pin has emphasised that the Government’s spending on transport has more than doubled over the last ten years, from $5.4 billion in 2009 to now $11.5 billion in 2019. A doubling in ten years. 

a. We are expanding our MRT network, which after all is the backbone of the public transport system. Over the last five years, we completed the Downtown Line, Tuas West Extension, and we added close to 50 kilometres to our network. We will open the first phase of our sixth MRT line – the Thomson-East Coast Line (or TEL for short) by the end of this year. TEL will add another 32 stations and 43 kilometres more to our MRT network, and eventually serve up to one million commuters. By around 2030, we can look forward to the opening of the Circle Line Stage 6, the Jurong Region Line and the Cross Island Line. When all these new lines come on stream, we will achieve our target of having 8 in 10 households within a 10-minute walk from a train station.

b. We added 200 trains over the last 5 years. We also introduced 1,000 buses under the Bus Service Enhancement Programme, and this was completed in 2017. We are conducting trials with on-demand buses and cleaner, greener vehicles. We have also added 500 kilometres of road lanes over the last 10 years, and are building more. 

c. Mr Sitoh Yih Pin has noted the improved rail reliability. We achieved Mean Kilometres Between Failure (MKBF) of 690,000 train-kilometres in 2018, which is more than triple the 181,000 train-kilometres in 2017. But this is, as Minister Khaw has emphasised in the past, a multi-year effort. He has also said that we are not out of the woods yet. We will continue to work on improving rail reliability. In fact, we have to continue to work on this. We are also renewing and enhancing the Bukit Panjang LRT (BPLRT), which now requires new trains, resignalling and power rail system enhancements. With these efforts, we hope the BPLRT will also become a lot more reliable in the future. I must confess that I have a personal stake in this as one of the local MPs!

4. Our commuters have noticed the improvements. The independent Public Transport Council (PTC) tracks this through annual Public Transport Customer Satisfaction Survey. I think Dr Walter Theseira referred to this in his speech. The mean satisfaction score went up to 7.9 in 2018, which is the highest level since we started measuring in 2008.  

5. LTA embarked on its most extensive public engagement exercise thus far, for the Land Transport Master Plan (or LTMP) 2040. We are grateful to the more than 7,000 Singaporeans who have contributed ideas to this plan. The LTMP Advisory Panel chaired by SMS Janil has worked very hard to take all these views into account and submitted its recommendations to the Government on 15 February 2019. 

a. The Panel appreciated that a transport system does not just convey people to a place. It brings people together and if you think about it, it forms a significant part of our daily shared lived experience. A bad commuting experience can disrupt your mood and your day, almost as much as a domestic dispute at home. So this is why people feel so strongly about the quality, reliability, and experience of travelling. The Panel has therefore recommended enhancing the travel experience through greater connectivity and better service for everyone. 

b. The Panel also understood that there is ultimately a limit to infrastructure building on our tiny island. 

6. The Panel has proposed a bold new vision – healthy and safe 20-minute town travel and a 45-minute city travel for everyone by 2040. The Government accepts the Panel’s recommendations. SMS Janil will elaborate on the LTMP 2040 later.

Fiscal Sustainability

7. Let me now deal with the politically sensitive topic of fiscal sustainability. Many of you have brought this up. I agree with Mr Sitoh Yih Pin and Dr Walter Theseira that we need to exercise fiscal discipline in order to reduce costs and to maximise value for money. How is this being done? Let me cite four ways in which LTA is trying to achieve this.
 
a. First, always look out for novel design solutions. For example, LTA engineers saved about $2 billion in construction costs with the East Coast Integrated Depot. This depot is going to be a 4-in-1 with three MRT depots, for the East-West Line, Downtown Line and the upcoming Thomson-East Coast Line, which are stacked one on top of another, and there is also a bus depot for 760 buses. This is the first such facility of its kind. LTA engineers have also saved more than $3 billion in potential construction costs by shifting the depot and the reception tracks for the Cross Island Line above ground.   

b. The second way, always look at life cycle costs when procuring major assets that will last or operate for decades. When the first generation North-South and East-West Line trains were due for renewal, LTA challenged the train manufacturers to design systems using the latest technology that would be easier and cheaper to maintain throughout the 30-year life cycle of the trains. 

c. Third, leverage competitive market forces whenever appropriate and wherever possible. For instance, the Bus Contracting Model ensures contestability through open tenders for bus packages. This has brought down the average bus contract bid prices by about 20% since the first bus package was awarded four years ago. 
   
d. Fourth, incentivise, and you will notice I used the word ‘incentivise’, incentivise commuters to change their behavior where possible and where convenient, in order to optimise the overall performance of the system. This is something which I think Dr Walter Theseira has been pursuing for quite some time. I have noticed your speeches in this chamber. And he asked about differential fares. This was introduced by the PTC in December 2017. If you strip away the jargon, this is actually about saving money and improving the travel experience by encouraging more rail commuters to travel during off-peak hours. The number of commuters traveling during the morning pre-peak period has now increased by about 12%. We will continue to look for ways to smoothen out these peaks and troughs, which Dr Theseira as an economist will tell you, has a very important impact on overall long term system costs, but at the same time, improves the travel experience of people, as it is less crowded. It does so in a positive way through differential fares. But even as we do this, we need to be mindful that not all commuters have the flexibility to change their commuting patterns.

8. Now, even with such measures in place, the brutal hard truth is that a high quality public transport system still requires significant resources. The perennial question, and it is a political question as well, remains – how do we strike the right balance between the costs borne by taxpayers, commuters and operators? I emphasise taxpayers, because every dollar that the Government puts into the public transport system, ultimately comes from taxpayers. So remember, there is always a balancing act that is necessary. 

a. Now, on the Government’s side and that means on the taxpayers’ side of the equation, we will continue to keep fares affordable, by fully funding all infrastructure costs and providing significant operating subsidies. Over the next five years, the Government expects to provide $5 billion in subsidies for public bus services and around $4.5 billion to renew our rail operating assets. The Government will also spend another $26 billion to expand the bus and rail networks, also over the next five years. This is why, despite the improvements in capacity and reliability, public transport actually has become more affordable. In fact, over the last decade, monthly expenditure on public transport, as a proportion of household income for the lower income group, has come down from 4.1% to 2.7%. 

b. But I also want to say this, it is inevitable that fares will have to keep pace with costs. In 2018, the PTC introduced a Network Capacity Factor into the fare formula. I think Mr Dennis Tan also mentioned this in his intervention earlier. Basically, this factor allows the fares to be adjusted in tandem with capacity changes of our public transport network relative to commuter demand. What I am trying to say in simple terms is this, we would all like to increase capacity, to make it more convenient, and improve the travel experience. But all of you here also know, that an increase in capacity comes with an increase in cost. I would like, however, to assure Mr Dennis Tan that we will certainly calibrate the expansion of rail capacity so that it expands in tandem with ridership growth. It is not feasible anyway to have unlimited expansion in capacity, and I am sure that the impact of NCF will be managed in due course. 

c. Mr Dennis Tan also suggest factoring in service quality. And this is another example where I agree with his intention. I think the divergence is in the method. Service standards, including on-time performance and reliability are already regulated through existing frameworks, but these frameworks are outside the fare formula. What do I mean by that? In other words, these standards are imposed by LTA on the operators, as conditions for service. In addition, operators can be penalised for the breach of regulatory standards or breach of licence conditions, and the penalties paid are calibrated to ensure fairness and accountability. The penalties paid accrue to the Public Transport Fund which you all know, is then redistributed, especially to the lower income families. This is used therefore to provide financial assistance on one hand, but also to serve as a disincentive against operators taking shortcuts. 

d. Mr Dennis Tan also suggested factoring operators’ profitability into the fare formula. The profitability of public transport operators, in fact, is already taken into consideration in the fare review mechanism. For example, the productivity gains of public transport operators are shared with commuters through the Productivity Extraction Factor in the fare formula. A lot of words, if you look up the briefing, it is in there in the formula. I think PTC will happily have this conversation with you offline. The point is this, the operators also contribute a portion of the fare increase into the Public Transport Fund. Typically, they contribute about 20% to 50% of the expected increase in fare revenue for that year, with the more profitable public transport operators contributing more. I think this is fair. This puts in place a formal mechanism for the public transport operators to share their gains with commuters. 

e. Let me assure you that the PTC will continue to keep a close watch on fare affordability for all commuters, and especially for specific groups like senior citizens, low income individuals, persons with disabilities, The PTC has done well and I am confident it will continue to strike the right balance. The keyword here is balance. Balance between affordability and the long term fiscal sustainability of our public transport system. 

Bilateral Issues

9. I spoke last week in my capacity as the Minister for Foreign Affairs on managing relations with Malaysia. Let me now specifically address Members’ queries on transport-related issues with Malaysia.

10. As members know, several transport-related issues arose - the Kuala Lumpur-Singapore High Speed Rail (or HSR Project for short), the Johor Bahru-Singapore Rapid Transit System Link (or RTS Link Project for short), as well as the airspace and maritime boundary issues.

11. Our approach to engaging Malaysia remains unchanged. We have upheld international law and we respected the sanctity of international agreements. At the same time, we have been reasonable, we have been constructive in trying to resolve issues in a win-win manner. 

HSR Project

12. First, the HSR Project. In fact, this is a case in point. In August last year, Malaysia requested to defer the HSR Project. In the spirit of bilateral cooperation, we agreed to Malaysia’s request, and both sides agreed to a two year suspension up till 31 May 2020. As part of the agreement, Malaysia agreed and, I can confirm, has remitted to Singapore about S$15 million on 31 January 2019, and this is for the abortive costs that were incurred by Singapore due to the two-year suspension. 

13. Malaysia has requested that during the suspension period, both sides discuss the way forward for the HSR Project, with the aim of reducing the overall costs. We have yet to receive any new proposals from Malaysia on this, but we will certainly study any such proposals carefully when we receive them. We look forward to working with Malaysia when the project resumes.

RTS Link Project

14. On the RTS Link, this is another rail project that we have with Malaysia. And it was Mr Ang Wei Neng who quite rightly pointed out that the RTS Link should significantly ease congestion at our land checkpoints which, by the way, are the busiest land checkpoints in the world. This will make it much more convenient for people to travel between Singapore and Johor Bahru.

a. Minister Khaw updated this House in January that the RTS Link Project has seen some delays. Unfortunately, the project is likely to face further delays. We are now at the stage where both Governments are obliged to jointly call an open tender to appoint the RTS Link Operating Company (OpCo). Singapore fully expects both countries to fully abide by this obligation and has made this clear to Malaysia. Whilst emphasising the obligation of both Governments to call a fair, open and transparent international tender to appoint the OpCo, but in the spirit of bilateral cooperation, Singapore has been willing to engage Malaysia on its proposals for Malaysia’s Joint Venture (JV) partner for the RTS Link OpCo. Unfortunately, Malaysia has repeatedly delayed confirming its JV partner for the RTS Link OpCo. Most recently, on 28 February 2019, Malaysia asked for another deadline extension to 31 March 2019. We hope that they will reach a decision soon. Given these delays, the RTS Link service, quite frankly, is no longer on track to commence by the original date of 31 December 2024.

b. Singapore continues to believe that the RTS Link is a mutually beneficial project. I would like to assure Mr Ang Wei Neng that we remain fully committed to implementing the project as per the RTS Link Bilateral Agreement. 

Maritime Issues

15. We have also been engaging Malaysia in order to find constructive solutions to both maritime and airspace issues. 

16. On 25 October 2018, Malaysia decided to unilaterally extend the Johor Bahru Port Limits into Singapore’s territorial waters off Tuas. This purported extension goes beyond even Malaysia’s own territorial sea claims according to its own 1979 map, which Singapore has consistently rejected. The inescapable conclusion is that the new Johor Bahru Port Limits transgress into what are indisputably Singapore Territorial Waters. Since then, both sides have been engaged in intensive discussions to de-escalate the situation. We have made reasonable progress so far, and I hope to make some joint announcements with my counterpart Foreign Minister Saifuddin Abdullah within the next one or two weeks. So, akan datang.

17. Mr Ang Wei Neng asked if the ongoing maritime dispute will affect the viability of our future Tuas Terminal. The answer is ‘NO’. Development works are proceeding as planned, and there will be no impact to access for ships calling at the terminal in the future. I can assure Mr Ang that our security agencies will continue to be vigilant and safeguard the sovereignty and security of our territorial waters.

Airspace Issues

18. Now let me move on to airspace issues. It was Mr Pritam Singh who asked about Singapore’s air navigation arrangements with our neighbours. Let me start by emphasising that it is the safety and efficiency of civil aviation for tens of millions of passengers that are the paramount considerations underlying all airspace and air navigation arrangements. Those are the keywords - safety and efficiency. Air navigation arrangements, as Mr Singh knows, are complex, technical and operational matters which are under the jurisdiction of the International Civil Aviation Organization (ICAO). ICAO prioritises the safety and efficiency of civil aviation in all its policies, standards and recommended practices. 

19. Singapore’s provision of air traffic services (ATS) for the region actually started way back in 1946, when ICAO allocated to Singapore the responsibility, the task for the provision of ATS in the Singapore Flight Information Region (FIR). In 1973, ICAO approved the creation of the Kuala Lumpur and Kota Kinabalu FIRs, which in fact were carved out from the then Singapore FIR and allocated to Malaysia. At the same time, ICAO also approved the arrangements under which Singapore would provide ATS over portions of southern Peninsular Malaysia, within the KL FIR. The 1973 ICAO decision was a regional consensus, and struck a balance between the needs of both Singapore and Malaysia, and the international aviation community. Singapore and Malaysia concluded an agreement in 1974 to implement this ICAO decision.

20. Through these decades, Singapore has been providing ATS to the highest standards of safety and efficiency, in accordance with our responsibilities under international law, and ICAO’s stipulated standards and practices. In 2018, Singapore managed 740,000 flights in the Singapore FIR, half of these 740,000 flights landed at or departed from Changi Airport. The other half consisted of overflights, many of which were in fact to and from other airports in the region. The region’s aviation sector has benefitted greatly from all these arrangements. This has been a win-win arrangement for the region, for our neighbours and for us. 

21. Members are aware that our closest neighbours, Malaysia and Indonesia, have expressed their desire to see some changes to these existing airspace arrangements in our region. We are certainly willing to address their concerns and, let me also emphasise this, Singapore fully respects Malaysia’s and Indonesia’s sovereignty over their airspace. These are not boundary disputes. At the same time, discussions on air navigation arrangements must fundamentally be based on technical and operational considerations, for the purpose of ensuring the safety and efficiency of civil aviation. Any changes to these arrangements, if warranted, must be done properly, in accordance with the rules, requirements and decisions set out by ICAO. Any such changes must further enhance safety and efficiency, and must benefit all airspace users. And do not forget, stakeholders such as airlines who use this space must also be consulted. 

22. I agree with Mr Pritam Singh on the need to invest in technology so that Singapore remains the safest, the most reliable provider of air traffic services. Singapore has always recognised the edge that technology can bring, particularly in a highly technical field such as ATS provision. The Civil Aviation Authority of Singapore (CAAS) has consistently invested in its air traffic management (ATM) capabilities over many decades, focusing on three critical aspects – machine, man and methods.

a. Machine. Singapore’s ATM systems are one of the most advanced in the world, and highly customised, incorporating cutting-edge technologies such as space-based Automatic Dependant Surveillance (Broadcast) (or ADS-B) systems. Space-based ADS-B systems overcome the limitations of ground based systems, which cannot be deployed over the vast expanse of sea to track aircraft;

b. Man. CAAS’ air traffic controllers have been trained to a very high standard, and are internationally recognised to be highly proficient, and they contribute extensively to setting global standards in ICAO and to industry organisations. 

c. Method. CAAS’s ATM processes and operating procedures are highly advanced and innovative, while still maintaining fidelity to the highest safety standards. CAAS is a first-mover in developing and using advanced concepts in ATM. 

23. Let me give you an example. CAAS has pioneered the Distributed Multi-Nodal Air Traffic Flow Management (ATFM) network concept. ATFM basically helps to better manage traffic demand and capacity particularly during times when there is an imbalance, and they do so by regulating flight arrivals and departure times, taking into account live operational conditions. This project has succeeded in fuel savings for airlines, reducing the period of time that aircraft spend in airborne holding patterns. Now, even more Air Navigation Service Providers (ANSPs) and airports around the region are keen to increase their involvement in the project. Our neighbours Malaysia and Indonesia are also participants in the project. CAAS has set up a new ATFM operations centre in the Singapore Air Traffic Control Centre to fully implement this concept in order to enhance Singapore’s air traffic service provision and contribution to the region

24. Singapore takes the ATM responsibilities that we have been entrusted with by ICAO very seriously. We will continue to invest in enhancing these capabilities and to discharge our responsibilities to the highest standards of safety and efficiency, and it will benefit the region and indeed the international aviation community.  

25. Mr Ang Wei Neng asked about our bilateral discussions regarding Seletar Airport. Following Minister Khaw’s meeting with Malaysian Minister of Transport Mr Anthony Loke on 23 January, both sides agreed to extend the mutual suspension of the instrument landing system (ILS) for Seletar Airport, and the Restricted Area over Pasir Gudang until 31 March 2019.

26. We have explained to the Malaysians that Seletar Airport has been serving charter, medevac and MRO flights without issues for decades and should continue to operate normally. I have also personally spoken to Minister Loke on 27 February and we are both closely monitoring the progress of these sensitive discussions between our senior officials.

27. Mr Chairman, I will now invite SMS Janil to elaborate on our detailed plans for the land transport system.

28. Thank you.