Speech by Minister For Transport, Mr Ong Ye Kung, at MOT Committee of Supply Debate 2021 on A Tale of Three Connections

Mr Chairman 

1.     The Ministry of Transport looks after three connections of Singapore - sea, land and air. In Chinese we call it 海陆空.  

2.     The seaport and airport, I described before,  are like the lungs of the country – they draw oxygen from the global ecosystem, vitalising the rest of the Singapore economy; land transport is like the arteries and vessels, providing mobility for each of us as we work, live and play across the island.  

3.     Today, my colleagues and I will update the House on key long-term challenges and developments of our three connections.  First, maritime. 

Maritime – A Struggle for Relevance

4.     The fortunes of a port city rise and fall.  Singapore suffered over three centuries of oblivion from the start of the 15th century.  So our status as a global transhipment hub today is not a right of birth, but an earned and constant struggle for relevance. 

5.     Fortunately, our maritime sector has been resilient throughout COVID-19.  In 2020 last year, container throughput was only 1% lower than 2019, the previous year.  We are cautiously optimistic that we will have a good year in 2021. 

6.     But we had to make difficult decisions to get here.  One critical decision was crew change. 

7.     Every day, more than 250 ships call at Singapore – to deliver and tranship cargo, for bunkering, and repairs.  And while they are here, many ships also want to change their crew, who have been out at sea for several months. 

8.     When the pandemic hit, crew change came to a halt because of border restrictions. Seafarers on the vessels cannot disembark, new crew cannot fly in to board the vessels. 

9.     The shipping community faced a looming humanitarian crisis – hundreds of thousands of seafarers stuck, stranded on board their work vessels, sometimes for more than a year. That was last year.

10.    Shipping lines urged Singapore, as a major transhipment port, to do something.  But to allow crew change in Singapore will expose ourselves to the risk of COVID-19 infections. 

11.    If we wanted to be absolutely safe, we would have said no, as many countries had.  But that would have turned our backs against the international maritime community.  They would have lost faith in us, and it would have damaged our standing as a maritime hub.

12.    Therefore, together with the industry and unions, we devised rigorous protocols to do crew change safely – repeated testing, quarantine, bubble wrap travel between the vessel, hotel, and airport, and vice versa. 

13.    It worked. To-date, more than 100,000 crew changes have taken place. Our practices have been held up as an example at the International Maritime Organization. Shipping lines saluted Singapore.

14.    It was not without cost.  As of end-February 2021, we had eight imported cases due to crew change for ocean-going ships. But none led to community infections.   

15.    Was it worth it?  I acknowledge that opinions differ.  Some feel that it is more important to eliminate the virus from Singapore altogether. 

16.    But I think we did the right thing.  For a city-state like Singapore, the fight against COVID-19 is not about eliminating all risks by isolating ourselves.    

17.    It is about how to keep our connectivity open, supplies flowing, protecting jobs and our economy, while keeping Singapore safe. And this is the real challenge of COVID-19 - not all-or-nothing, black or white, but the ability to navigate safely in a grey zone. 

18.    This will not be our last test.  The Arctic route, the possibility of a Kra Canal, competition from neighbouring ports, will continue to test Singapore’s maritime relevance. 

19.    SMS Chee Hong Tat will speak more about this.  

Land transport – The Question of Sustainability

20.    Let me now move to land transport, where our long-term challenge is sustainability. 

21.    There are two aspects of sustainability.  The first is environmental. We spoke a lot about it yesterday. I spoke about electric vehicles.  But EVs are at most a second-best solution. 

22.    The cleanest and most sustainable way to move is still by mass public transport – buses and trains. So in response to Mr Gan Thiam Poh, we want to raise the mass public transport modal share during peak hours from 64% now to 75% by 2030. Over the last ten years, it has increased by almost 10%. Mr Gerald Giam switched and I think he helped. Every commuter counts.

Expansion of Public Transport

23.    Members have asked about the plans for our public transport system.  COVID-19 has delayed our plans.  Over this decade, we will spend more than $60 billion to expand and renew our rail network, and we will open new stations or lines almost every year. Let me do a run down.

24.    Between now and 2025, we will progressively open the rest of the Thomson-East Coast Line. 

25.    By 2026, we will “close the loop” for the Circle Line, between Harbourfront and Marina Bay.

26.    By 2029, the Jurong Region Line will be completed.  In the 2030s, the Cross-Island Line will open progressively.

27.    With all these projects, the MRT network will grow from about 230km today to 360km in the early 2030s. And in that process, in response to Mr Melvin Yong, many jobs will be created. 

28.    By then, our network density will be comparable to London and New York City.  

29.    As suggested by Mr Melvin Yong and Mr Gan Thiam Poh, we will use technology wherever we can – big data to optimise routing and scheduling, sensors to carry out preventive maintenance effectively, kaizen projects to improve productivity, and apps to help commuters plan their trips. 

Men and Women on the Streets

30.    As for the men and women on the streets, we will bring buses and trains as close as possible to their final destinations and also their origins, with pedestrian pathways and covered linkways, wherever it makes sense. 

31.    For short trips, commuters are increasingly either walking or cycling.  That is why we are expanding the cycling network, and repurposing roads where possible. LTA has identified over 60 projects to convert suitable roads into footpaths, cycling paths or bus lanes. 

32.    Each project, we reckon, will have their pluses and minuses. For every project, we will work closely with the community, and proceed only when we assess that on balance, it benefits the commuters and benefits the community. So I don’t expect all 60 projects to proceed, but we will learn from each experiment.

33.    SMS Amy Khor and SPS Baey Yam Keng will elaborate. 

Financial Sustainability 

34.    The other aspect of sustainability is financial. Several members have shared your concerns on this, and I appreciate Mr Saktiandi for specially highlighting this aspect of sustainability.  

35.    Train lines are expensive to build.  Take for example, Thomson-East Coast Line, that costs more than $25 billion to build. 

36.    That said, capital expenditure is one-time.  What worries us more is whether we can afford the operating costs year after year on a long-term basis. This includes manpower, energy, maintenance, and renewal of operating assets like trains and signalling systems. 

37.    Train fares so far are not enough to cover these operating costs. So Government has been spending about $1 billion a year to subsidise rail operations. 

38.    The situation is the same for buses. SMS Chee Hong Tat gave an update to this House recently. Operating subsidy amounts to about $1 billion of taxpayers’ funds every year. 

39.    The Government needs to continue to subsidise the operations of MRT and buses. We can’t run away from that.  But the bill to taxpayers cannot keep ballooning.  If it does, we would leave our future generations a growing financial burden. 

Financing Framework

40.    So how do we square the circle? 

41.    Financing and subsidy policy matters.  For buses, we have settled on a bus contracting model that leverages competition to enhance efficiency of operations. 

42.    For MRT, we fully transited to the New Rail Financing Framework (NRFF), mentioned by Mr Ang Wei Neng, a few years ago. 

43.    So the first version of NRFF, Government takes over from the transport operator, the ownership and replacement of operating assets – trains and signalling systems.

44.    Government then charges the transport operator a fee for using these assets. It’s like renting on the part of the operator. Under NRFF Version One, which was implemented for the Downtown Line or DTL, the operator pays a fixed fee, like a rental.

45.    The public transport operator of the DTL still bears significant commercial risk.  If ridership is healthy and fare revenue far exceeds operating cost, they get to enjoy a good part of the profit. But if the reverse is true, they suffer losses. 

46.    This was not ideal. As a public utility, public transport should be a more stable business.  

47.    So we adjusted the NRFF, to reduce the commercial volatility. If the operators enjoy high profits, Government will cream off.  If the operator suffers big losses, Government cushions it. 

48.    This is NRFF Version Two, implemented in 2016 to North-South, East-West, Circle and North East lines. 

49.    For the most recent line TEL, we took on another approach – that is NRFF Version Three.  For the initial period when ridership is still not stable, Government collects all the fare revenue, bears all revenue risk and grants the operator a fee to run the line. So it is a bit like a contracting model. After ridership stabilises, we revert to NRFF Version Two. 

50.    So recognising that the NRFF has evolved over the years, we will review the arrangement for the DTL, given that it is still on NRFF Version One.  This will be done with a view to ensure that the operator will run the line reliably with high productivity, and that the line is sustainable. 

Ensuring Long Term Sustainability

51.    There are other things we need to do to keep our public transport system sustainable for the long run. 

52.    First, operators must train their workers well and find new ways to be cost efficient.  This includes keeping train services reliable, and not trying to penny-pinch on maintenance cost, thinking that this will translate to savings and productivity. It does not. We learnt this major lesson, the hard way. 

53.    Second, like before, we will need to adjust fares from time to time.  This is needed as costs do go up, including the wages of public transport workers, who look forward to earning more.  

54.    The Public Transport Council (PTC) makes a careful decision on fares every year.  Whenever there needs to be a fare adjustment, we will help lower income households through Public Transport Vouchers. We also have fare concessions to large groups, such as seniors and also young students. To the suggestion that we should maybe extend this to adults taking courses, I will be careful about it. Afterall, all of us are going to be lifelong learners.

55.    Third, we need to try to reduce excess capacity.  The majority of our bus services are trunk services to provide connection for commuters between towns.  It has never been a pure hub-and-spoke system, as mentioned by Mr Melvin Yong and Mr Gan Thiam Poh, and this will not change. There will always be a core set of trunk services of buses.

56.    But we should also try our best to reduce excess capacity in the system.  This is especially when new train lines come up, and ridership for bus services that run in parallel plunge, and then chalking up tens of millions of operating subsidies per service per year.  So we need to progressively adjust these bus services to better keep subsidies in check.  I used to be a union leader for the transport workers’ union, and bus drivers on these services will always lament, 很心痛，载空气 。In English, it means, when they drive, they have no passengers, they have a bit of heartache as they are ferrying air. 

57.    Fourth, COVID-19 has also opened up an opportunity for us to make the system more efficient, by making the morning and evening peaks less pronounced.  Mr Gan Thiam Poh mentioned that. 

58.    To achieve this, we will need the co-operation of employers, to stagger working hours, allow working from home even after COVID-19 passes.  

Aviation

59.    Finally, let me talk about aviation. 

Current Situation 

60.    When COVID-19 struck, passenger volume at Changi fell to 0.5% of pre-COVID-19 levels.  Almost a year later, the good news is Changi is running five times that – the bad news is that works out to 2.5% of pre-COVID 19 volume.  So we are still in crisis mode.

61.    Flight movements look better, at a quarter of pre-COVID-19 levels.  But this is, to a large extent, due to a larger number of cargo flights.    

62.    Changi Airport is now connected to 66 cities around the world, compared to 160 cities pre-COVID-19.  We expect connections to expand further in the coming months to about 80 cities. 

63.    In response to Mr Melvin Yong and Mr Dennis Tan, in a crisis like this, job prospects in the sector are naturally muted and subdued. 

64.    Based on the Labour Market Survey, up to 3Q2020, the air transport sector had lost 6,000 jobs.  About 500 are retrenchments, and the rest, non-renewal of contracts or early retirement.  Non-residents shouldered the great majority of the reduction. 

65.    Hiring of graduates, asked by Mr Dennis Tan have slowed, although there is still good demand for technicians, coming out of ITE, coming out of polytechnics.  I then checked with our universities, who told me that most aerospace graduates still found jobs this year, but likely in non-aviation sectors.  Fortunately, engineers are a very versatile bunch. 

66.    Mr Dennis Tan asked about help for the aerospace sector. There are three areas of help and this was covered in the Budget statement. One is the Jobs Support Scheme. The aerospace sector is now in the top tier – 30% for the next three months and then 10% for the following three months. They also enjoy the Enhanced Training Support Package, which provides stronger support – when they send their workers for training; thousands from the aviation and aerospace sector have gone, and it has been very helpful for the aerospace sector. And also, EDB puts in a lot of effort to temporarily redeploy talents to other sectors while the sector waits for recovery.

67.    Mr Dennis Tan asked what proportion of workers benefited from the COVID-19 related grants?  I will say everyone who kept their jobs. And this is the impact of the Jobs Support Scheme and the Enhanced Training Support Package.  

68. It helped companies stay above water, and retain core capabilities so that there is still a future, it is still possible for the sector to have a future. And that strategic outcome is either there or not there, either you believe it will work or you don't believe it will work and don't do it. You cannot quite measure or audit it. 

A New Normal Hub

69.    Ms Poh Li San asked how MOT plans to revive the aviation hub.  Unfortunately, I can’t answer that question with certainty.  

70.    We may have a plan, but this virus has no plan and it does not observe any rules. It is driven by an instinct to dominate the world.  To do so, it is transmitting without symptoms, and it is mutating.

71.    So in terms of prospects, I think I can only say this: 

72.    First, this year, I don’t think it is realistic to expect a V-shaped recovery for the aviation sector.  

73.    Second, it is also possible that the virus becomes endemic, meaning it is something we have to learn to live and cope with for the long term, like the Influenza virus. 

74.    Third, notwithstanding this, with vaccines, and the realisation of Governments around the world that they cannot perpetually close up their borders, I believe there will be some re-opening of borders this year, and some recovery this year.  

75.    So our mission this year is not so much to force this sharp recovery of the aviation sector, but to adapt to a new normal, to re-open safely, to build up confidence, to test workable concepts and strengthen the belief that Changi Airport will still be an international air hub post-COVID-19. 

76.    We are seeing signs of that happening.  When WHO scientists from around the world were planning their study visit to Wuhan, they decided to gather in Singapore before they made their way, and they flew through Changi. 

77.    The World Economic Forum has decided to hold its meeting in Singapore, in August. A few months ago, some Vietnamese trainees going to Japan to complete their apprenticeship decided to come to Singapore first and then up to Japan. It is a longer route but I think they like to fly SIA.

Enabling Safe Travel

78.    So the key question is: What are the steps we can take to re-open safely? 

79.    As I explained to the House before, what kills travel is quarantine and stay-home notice (SHN). Very few people want to travel abroad if they know they have to go through a lengthy isolation.  

80.    So to revive aviation, we need to replace quarantine and SHN with other methods that can also substantially mitigate the risk of transmission. And I think there are four ways after all these months of experience.

81.    The first is testing, which is key to re-opening borders. Nationally, we can now perform more than 60,000 tests a day. With tests, we can detect infections early, and prevent transmissions. 

82.    The second is to ‘bubble wrap’ travellers. Ensure that they are kept to a tight itinerary, in restricted premises, away from the community, don’t see anybody from the community.  This is how we managed to do maritime crew change, and this is how the new Connect@Changi facility works. 

83.    The third is to recognise that travellers from certain places are safe, because they have successfully controlled the virus. That is why we unilaterally opened our borders to places such as Australia, New Zealand, Brunei and China. And so far, this scheme has not led to any increase in our local transmission. It works. 

84.    If other places reciprocate what we do, we have an Air Travel Bubble or ATB for short. We have yet to launch an ATB successfully. We were close but we could not. But we have now an agreed text with Hong Kong, and the ATB can be launched when conditions are right. We have not given up on the idea. In fact, I think ATBs are going to be important, which I will explain.

85.    That leads to the fourth way, which is a new critical development, and that is vaccinations.  

86.    As more scientific data become available, we will be able to ascertain the extent to which vaccination reduces the likelihood of someone carrying the virus and passing it to someone else.  This will enable us to allow vaccinated individuals to travel with fewer restrictions, perhaps even without SHN. 

87.    It will require a system of certification, like the yellow booklet that some of us have, that records our vaccinations against Malaria and Yellow Fever. These discussions are happening bilaterally, and also at the International Civil Aviation Organization. Singapore has been active in all these discussions. 

88.    In aviation, -- I mentioned aviation is like the lungs of Singapore – our lungs need inflating, but our head is under water. But each of these four methods I mentioned are like snorkels sticking out of the surface of the water. They allow us to take in some oxygen, to keep Changi and to keep SIA going.

89.    And each snorkel cannot work in isolation. They must work together.

90.    For example, an ATB is a combination of identifying safe places and imposing test requirements. So I see ATBs playing a key role in safe opening this year. Because as vaccinations bring down infections across the world, more countries will be prepared to forge ATBs.

91.    We can also identify places with low to moderate infection rates, and combine vaccination with tests, even bubble wrapped travel, and to open up travel corridors.   We will do our best to make all these arrangements bilateral so Singaporeans can travel outwards too.

Conclusion

92.    Mr Chairman, COVID-19 has claimed many casualties – lives, careers, years of hard work wiped out in months. 

93.    Amongst them are notable brands – like Dan Ryans, like Robinsons.  I think we can get over the loss of these names – painful, but we can get over. But if we lose SIA or lose Changi Airport, life in Singapore will never be quite the same. We will be bereft. 

94.    The transport community knows this, and what is at stake. 

95.    On the first day of Chinese New Year, I joined the PM to send off three SIA flights. A cabin crew member I met told me she was issued quarantine orders three times, each time because she served somebody who later tested positive. Fortunately, the last one was rescinded, so she served two. Even then, it’s almost four weeks. But each time she emerged from quarantine, she was just as passionate about flying. That day, she was going to Manila. 

96.    When we rolled out vaccination for maritime and aviation front-liners, the workers turned out in force. Today, our frontline workers at the seaport and airport are substantially vaccinated – 92% have gotten their first dose, 85% with both doses. In the coming days, I think we will cross 90% for both doses as well. 

97.    I recently met a resident in my constituency. He greeted me warmly and gave me a fist bump. He told me he is a maritime worker. He said, ‘I have gotten the vaccination. I can now protect my family.’

98.    Crowne Plaza is our airport hotel, housing foreign air crew laying over in Singapore for one or two days. Unfortunately, there were transmissions in the hotel. Three local workers got infected. The whole kitchen staff got quarantined. So the General Manager and his executives rolled up their sleeves and took over the kitchen operations.  I hope the food tasted okay that day. They closed the hotel for a month, tightened the procedures, and today, it is open again.   

99.    Week in week out, I see for myself the fight in our workers at our borders.

100.   Mr Chairman, I have told the tale of our three connections. On the seas, we learn to adapt, find the courage and humanity within us to take reasonable risks, and to be of service to the world.

101.   On the roads, we will need to be greener, more sustainable – in both the way we travel, and the way we fund our infrastructure. 

102.   In aviation, it is the battle of our lifetime, and a story about our spirit of resilience - to press on with duties despite rounds of quarantine; of fortitude - to answer the call to be vaccinated to protect family and nation; of never-say-die - rolling up our sleeves and doing the hard work when duty calls. 

103.   So on the revival of aviation, I don’t have a water-tight and detailed plan to present to the House, one that meets the much-vaunted high standards of our civil service. 

104.   Instead, we can only be guided by an unfailing drive to keep pushing forward.  Knowing that for every two steps we move forward we may have to take one step back, sometimes even two steps back. And knowing that if we are too reckless and ambitious and take too big a leap, we may have to be set back by a mile.  

105.   With each setback, we – I – will be questioned why we even bothered with such an idea, why we did not plan properly, why so naïve. Fair questions. 

106.   But try we must. The worst thing to do now is not even try. That is giving up the fight.  With vaccines, the fight is in our favour.   

107.   We have strong lungs, and open arteries. Most importantly, we have an unwavering heart. This is what we need most, and perhaps as important as vaccines - to not just walk, run, ride, cycle or sail, but to fly and to soar in the skies. 

108.   Thank you, Mr Chairman.