Speech by Minister for Transport, Mr S Iswaran at the MOT Committee of Supply on Emerging Stronger as a Resilient, Sustainable and Inclusive Transport Hub

Introduction

1.     Mr Chairman, I would like to thank all Members for their questions and suggestions for my Ministry, which SMS Amy Khor, SMS Chee Hong Tat, SPS Baey Yam Keng and I will endeavour to address. 

2.     Sir, Connectivity is the lifeblood of Singapore. We depend on our transportation links, domestic and international, for our lives and our livelihoods. Hence, MOT’s aim is to build a Resilient, Sustainable and Inclusive Transport Hub. 

3.     I will focus my response to Members’ cuts on four themes – first, the recovery of our Aviation Hub; second, our sustainability initiatives; third, keeping land transport accessible and affordable; and fourth, creating good job opportunities in the transport sector.

Borders Re-opening

Recovery of our Aviation Hub

4.     Let me start with the re-opening of borders and aviation recovery, which Mr Melvin Yong, Mr Gan Thiam Poh, Ms Poh Li San, Mr Dennis Tan and Mr Raj Thomas have asked about. This is our immediate priority. 

5.     Changi’s air connectivity anchors the Singapore economy. Many companies choose to be in Singapore because they can easily reach their customers and suppliers in our region and beyond. To lose Changi’s connectivity, is to lose this key competitive advantage, and our livelihoods that depend on it. 

6.     In the early stages of the pandemic, we were faced with a stark and difficult trade-off between protecting public health and opening our borders. Fortunately, we are in a different situation today, thanks to a better understanding of the virus, well-established safe management measures, and high levels of vaccination in our population. 

7.     Hence, we have been able to take careful and calibrated steps to reopen our borders. In early 2021, the passenger volumes were at 3% of pre-COVID levels. We introduced Vaccinated Travel Lanes (VTLs) from September last year, barely six months ago, although it feels like a lifetime. Today, we have VTLs with 32 countries and regions. These VTLs have enabled us to attain passenger volumes of about 15% of pre-COVID levels in December 2021; flights at Changi have reached 38%; and city links are at 58%. Many have finally been able to reunite with family and friends abroad.

8.     We must sustain this momentum. Other aviation hubs, like Dubai, Qatar and Istanbul, are already at up to 70% of their pre-COVID international passenger traffic. In our region, Malaysia, Vietnam, Thailand and the Philippines have announced plans to re-open their borders to all vaccinated travellers. In short, the world is learning to live with COVID. 

9.     We now have the confidence and opportunity to move decisively. IATA forecasts that international passenger volumes in the Asia-Pacific will recover to about 40% of pre-COVID levels this year. We aim to restore Changi’s passenger volumes to be at least 50% of pre-COVID levels in 2022. 

10.    We are now in the first phase of this plan, launching VTLs with specific countries and regions. Just last week, we announced further VTLs with Vietnam, Greece, Malaysia, Indonesia, India and Europe.

11.    The next phase will entail a more fundamental shift – from Vaccinated Travel Lanes to vaccinated, quarantine-free travel. Our aim is to allow all fully vaccinated travellers from countries and regions under the Ministry of Health’s “Low Risk” and “General Travel” categories to enter Singapore without having to serve Stay-Home Notice (SHN), or quarantine. This will effectively reopen our borders to the rest of the world.

12.    The Ministry of Transport will work closely with the Multi-Ministry Task Force (MTF) and the Ministry of Health on the timing of this transition, which will depend on the public health situation in Singapore and the world, among other things. 

13.    We share Ms Poh Li San’s concerns about the potential impact of the situation in Ukraine. It has already affected fuel prices and could impede the recovery of the global economy and international aviation. We are monitoring the situation closely with our aviation partners, and will mount an appropriate response should the need arise. 

Support for aviation sector

14.    In the meantime, our airport community is gearing up for higher travel volumes. 

15.    During the pandemic, the workforce in Changi Airport Group, SIA, SATS and other aviation companies fell sharply. Based on MOM’s latest published employment data, as of September 2021, the air transport sector employed about 25,000 workers, nearly one third less than pre-COVID levels.

16.    Our companies are now ramping up recruitment. SIA has started hiring new cabin crew, and SATS is bringing back experienced workers. This is an important effort, but by no means an easy one.

17.    The Government will continue supporting our aviation sector amidst continued uncertainty with a $500M “OneAviation Resilience Package” in the coming financial year. Of this, $60 million will go towards manpower support, as companies build up capacity ahead of demand; $390 million for continued cost relief and measures to safeguard public health at the airport; and $50 million to support long-term industry digitalisation and transformation efforts via a top-up to the Aviation Development Fund. 

18.    Mr Melvin Yong and Mr Dennis Tan asked for an update on Terminal 5 (T5). In 2020, we announced a two-year pause in the development of T5. We have used the opportunity of this pause to review the T5 design in light of the pandemic experience and the heightened sustainability ambition. But there should be no doubt that we are firm in our resolve that Changi must have the capacity and the capability to seize opportunities that arise from aviation growth, especially in Asia, and we will provide an update on the review in due course.

Environmental Sustainability

19.    Let me now turn to Environmental Sustainability. Yesterday, in the Joint Segment on the Singapore Green Plan, I announced our land transport emissions target, and explained how vehicle electrification will contribute to that effort. Today, I will cover other sustainability initiatives in the transport sector. 

Sustainable aviation hub

20.    Let me begin with our Aviation Hub. Ms Poh Li San asked about the Sustainable Air Hub Blueprint which is key to Changi’s future competitiveness. The Blueprint will establish emissions reduction targets for 2030 and 2050, and the specific measures we will take at the airport, with airlines and in air traffic management. All of these can contribute to a more sustainable air hub. Besides lowering emissions, it will also create new opportunities for Singaporeans in fields like data analytics and engineering. The detailed plans will be announced in early 2023. 

21.    Ms Poh also asked how we will help aviation companies cope with increased business costs arising from carbon taxes, which would include higher electricity charges. The Ministry of Transport and the Civil Aviation Authority of Singapore (CAAS) are working with our aviation companies to adopt new technologies and other measures to enhance energy efficiency, reduce electricity usage and lower carbon emissions, such as through the deployment of solar panels at the airport. I should add that our aviation enterprises should also view this as an opportunity to differentiate themselves and enhance their competitiveness given the global focus on sustainability.  

Sustainable maritime hub

22.    In a similar vein, I would like to inform Mr Dennis Tan that we are making significant efforts to build a sustainable maritime hub. International shipping accounts for about 3% of global greenhouse gas emissions. Maritime centres like Singapore can play a meaningful role in achieving the emissions targets set by the International Maritime Organization.

23.    As a follow up to last year’s recommendations of the International Advisory Panel for Maritime Decarbonisation, MPA has held extensive consultations with the industry. This effort has culminated in the Maritime Singapore Decarbonisation Blueprint, which I am happy to launch today. Let me highlight three aspects of the Blueprint. 

24.    First, we will reduce emissions from our port terminals and harbour craft. Our terminal operators will electrify equipment, optimise energy usage, and leverage renewable energy. We aim to reduce emissions by at least 60% from 2005 levels by 2030, and achieve net-zero emissions at our port terminals by 2050. For harbour craft that operate in our port, we will first use low-carbon fuels such as biofuels, LNG, and diesel-electric hybrids. This will enable us to reduce emissions by 15% from 2021 levels by 2030. In parallel, we will develop and deploy zero-carbon vessels such as those using electricity, to further halve 2030's emission levels by 2050. 

25.    Second, we will support global efforts to decarbonise international shipping. We are working with the industry, research community, and international partners on R&D, pilots, and standards development for low and zero carbon fuels, especially at the new Global Centre for Maritime Decarbonisation. We expect hydrogen and its carriers, including ammonia and methanol, as well as bio-LNG, to be important components of the future fuel mix. We will therefore prepare our Port for this multi-fuel transition. 

26.    Third, the Maritime Port Authority will commit an additional $300 million in funding over the next ten years to reduce emissions from our port terminals and harbour craft, and support the development of green technologies and fuels for international shipping. 

Sustainable land transport network 

27.    Finally, public transport is a core element of our sustainability efforts. As I shared yesterday, the adoption of EVs can make an important contribution, but the greenest modes of mobility are walking, cycling and the use of public transport. And we will continue to enhance these options for commuters. 

Resilience: Maintaining high-quality transport services 

28.    Let me start by first assuring Members that notwithstanding the disruptions wrought by COVID-19, the Government is committed to continue expanding our rail network. It is a critical investment in the capacity of our public transport system, the productivity of our economy, and effective mobility for our people. 

29.    We are making good progress in this regard. LTA’s 2021 Household Travel Survey shows that 7 in 10 households now live within a 10-minute walk of the nearest train station. This brings us closer to our target of 8 in 10 households by 2030. 

30.    Trips during peak hours are also shorter. The proportion of peak hour walk, cycle or ride journeys completed within 45 minutes has increased from 66% in 2019 to 71% in 2021. We aim to raise this to 90% by 2040. 

31.    In August last year, we opened the second stage of the Thomson East Coast Line, or TEL. We expect 11 more TEL stations to commence service in the second half of 2022. This will connect residents in the north directly to many destinations in the city, and significantly shorten travel times. Those who live or work near stations like Great World, Maxwell and Shenton Way will have direct connections to the entire MRT network. When TEL is fully opened over the next few years, more than 240,000 households will be within a 10-minute walk from a TEL station. 

32.    Beyond the Thomson East Coast Line, the Jurong Region Line and Cross Island Line, JRL and CRL, will open in stages from 2027 and 2030 respectively. The JRL serves the north-western part of Singapore, connecting towns like Choa Chu Kang, Tengah and Jurong to Nanyang Technological University and the Jurong Innovation District.  For CRL, we had earlier shared details about the first stage comprising 12 stations from Aviation Park to Bright Hill, as well as the extension with three stations from Elias to Punggol. The second stage of the Cross Island Line will extend further west, and run through areas such as Turf City, Sunset Way, Clementi, West Coast and Jurong Lake District. We will release more details later this year. 

33.    The Cross Island Line will have interchanges with all the radial lines, giving commuters more travel route options. A wider and denser network also strengthens resilience at the system level. When these lines are completed, we would have increased our rail network by 50% to 360 km.

Inclusiveness: Ensuring affordability amidst rising costs 

34.    The rail network is complemented by bus services. As we expand our public transport system, and the asset and operating base grows, costs will inevitably rise. One way to sustain this growing network and manage costs is to optimise the provision of bus and rail services holistically at the system-level. This may entail reallocating capacity and resources. SMS Chee will elaborate on how we seek to achieve this, with a focus on the overall benefit to commuters.

35.    Mr Ang Wei Neng suggested giving discounts to encourage more off-peak travel. Indeed, this is another way to better utilise our existing public transport infrastructure. Today, commuters who tap-in at any MRT or LRT station before 7.45am on weekdays, excluding public holidays, enjoy a discount of up to 50-cents. With changing work and travel patterns, we will continue to work with employers and study various options to smoothen peak demand. 

36.    Some Members like Mr Lim Biow Chuan have pointed out that a high-quality public transport system must be resilient, yet affordable and accessible. The challenge is in striking the difficult but essential balance, between quality, affordability and financial sustainability of our public transport system over the long-term. 

37.    In particular, even as we manage increasing costs, we have always sought to keep public transport affordable for all Singaporeans, especially for vulnerable commuters like our seniors and persons with disabilities (PWDs). Indeed, that is why we tilt public transport subsidies towards more vulnerable commuter segments. In addition, in the last two Fare Review Exercises, for example, we set aside approximately $20 million a year in Public Transport Vouchers to help defray the impact of the fare increase. Senior citizens and PWDs from lower income households can benefit from this additional support.

38.    So, when Assoc Prof Jamus Lim suggests making public transport free for seniors and persons with disabilities, we understand where he is coming from, but don’t necessarily agree with where he suggests we go. To address the Member’s proposal, it is worthwhile to first understand what we are already doing today, and what his suggestions mean for commuters and taxpayers.  

39.    Overall, the Government spends more than $2 billion dollars annually in subsidies for public transport commuters – about $1 billion for bus operations and $1 billion for train operations. On average, we subsidise more than a dollar for every journey taken on public transport.

40.    As of January this year, there are around 975,000 seniors and persons with disabilities who hold concession cards – that’s nearly one million. Depending on the trip, they receive a discount of up to 55% from what an adult commuter would pay. The Member has estimated that his proposal will cost $300-400 million annually, which he has acknowledged has to be paid for by commuters or taxpayers. Using his numbers, for taxpayers, this would mean a 15-20% increase to the $2 billion in subsidies already borne by them. If borne by commuters, adult fares will have to be increased by around 20-25% today, or 30-40 cents on average – this is up to 11 times the fare increase last year. 

41.    This financial burden is by no means insignificant, and it will only grow by 2030, when the number of PWDs and seniors aged 60 and above is expected to increase, by about 28%, to about 1.2 million. 

42.    In contrast, the Public Transport Council, or PTC, which is cognisant of the need to ensure that fares remain affordable for vulnerable commuter groups, adopts a different approach. When fares are increased, PTC has apportioned less of the increase to concessionary commuter groups, and more to other adult commuters. But everyone pays a share, and those who can pay more, do so. This is a more equitable approach which has served us well over the years. 

43.    Looking ahead, several converging trends will affect our public transport system over the next decade. A growing rail network, shifting work and travel patterns, our ageing population, and volatile energy prices. Amidst these changes, it is important to have a fare formula for long-term financial sustainability. The current fare formula is valid until 2022. We will commence the fare formula review this year and conclude the exercise by next year. The PTC will continue to strike the delicate balance across cost pressures faced by public transport operators, the burden on taxpayers of public transport subsidies, and fare affordability for commuters. 

Accessibility: A land transport system that works for all commuter segments

44.    Mr Chairman, let me now turn to active mobility and private transport. 

45.    Walking and cycling complement our public transport network, especially to bridge the first and last mile connections. Many different groups of commuters use our various paths, and I note Members’ comments on the nature of these interactions on the various pathways. These paths should not be territory that is jostled or contested over. Rather, they should be common spaces that we share and enjoy with a culture of graciousness. To balance the needs of different users and promote safety and graciousness, the Active Mobility Advisory Panel, or AMAP, was first formed in 2015. I would like to thank the Panel for their good work over the past few years, under the strong leadership of Minister of State (MOS) Muhammad Faishal Ibrahim. SPS Baey has taken over from MOS Faishal as Chairman since the start of the new term of AMAP in January this year and he will elaborate more on the steps that we have taken and on AMAP’s key priorities going forward. 

46.    Next, private transport. Given our limited land, we have long pursued a car-lite strategy. The COE system is an allocation mechanism that responds to market forces. 

47.    Mr Liang Eng Hwa, Mr Murali Pillai and Mr Abdul Samad raised questions about motorcycle COEs, where prices have been high in recent times. Mr Henry Kwek and Mr Murali Pillai have also suggested increasing the motorcycle COE supply. I understand the reasons for their suggestions, and share their concerns for those who may depend on motorcycles for a living. However, it is important to note that there has been strong and persistent demand for motorcycles. This is reflected in the utilisation rate of motorcycle temporary Certificates of Entitlement, or TCOEs, which has remained consistently high at over 99% since bidding resumed in July 2020. 

48.    TCOEs mean that the bidder has six months – so it’s a temporary COE –six months within which they can then utilise that COE. And the fact that over that six-month period, the utilisation rate has been high, consistently, at 99%, underscores the point that demand has been high. 

49.    The distribution of these COEs is also noteworthy. 70% have been used for motorcycles with 200cc engine capacity or less. About 20% in the 201cc to 400cc range, and 10% are more than 400cc. There have been some suggestions, like from Mr Murali Pillai, that perhaps we can consider a special sub-allocation. But the problem is the overall number of COEs available is between 400 to 600 per exercise. That being the case, if we further sub-divide the category, the likelihood of greater volatility of prices is significantly increased. 

50.    Having said that, we have observed early signs that the utilisation rate may be softening for TCOEs obtained in more recent months. So I want to assure Members that I have asked LTA to study this very carefully and they will be completing their review soon. 

Frontline Workers and Developing good jobs

51.    Several Members asked about job prospects and how we will develop local talent. 

52.    Mr Chairman, the changes I have outlined will need the support of our transport workers and unions. The past two years have been difficult for the entire transport community, especially for our frontline workers in our airport, seaport and land transport system. With hard work and grit, they have kept Singapore connected. I want to thank the entire transport community, especially our frontline transport workers, for their tenacity and forbearance in this most challenging of times.

53.    Beyond COVID-19, as we forge ahead with electrification, digitalisation and automation, I know that many of our workers in the workforce may be worried about their jobs and their future. 

54.    Our commitment to you is that we will be with you every step of the way. We are working with unions and employers, our tripartite partners, to ensure that you navigate this transition successfully. We will help you to upskill and retrain so that you can seize these new opportunities. SMS Khor and SMS Chee will elaborate on how we will do this.

Conclusion

55.    Mr Chairman, a resilient, sustainable, and inclusive transport network is essential for Singapore’s survival and success, and to safeguard the lives and livelihoods of our people. Our world class aviation hub, maritime centre and land transport network of today, are the fruits of the labour of earlier generations who adapted to the challenges and needs of their times, while planning and investing for the future. The critical decisions our transport pioneers made were not necessarily conventional wisdom of the time nor were they self-evident – building Changi Airport, betting on containerised shipping, constructing an MRT network and introducing vehicle population control measures are just some examples. But with the passage of time and the benefit of hindsight, we can appreciate how their decisions, some even unpopular, positioned Singapore strategically for the future. 

56.    In the same way, the responsibility now falls upon us to steward our world class transport ecosystem, adapt it to the evolving circumstances and emerging trends, and ultimately, pass on an even more resilient, sustainable and inclusive transport hub to, and for, future generations of Singaporeans. 

57.    Thank you.