Speech by Minister Khaw Boon Wan at Ministry of Transport’s Committee of Supply Debate 2017 on 8 March 2017

1.     Madam Chair, Budget 2017 positions Singapore for an uncertain future. There will be challenges, but we will be in a good position if we can succeed in capturing the many opportunities that will also arise. Budget 2017 calls on all stakeholders to work together to seize these opportunities. The transport sector will play its part. 

Transport and the Economy 

2.     The transport sector is a key pillar of our economy. Many Singaporeans make a good living working in it. Collectively, the industry employs more than 300,000 workers. The potential for further growth is also great. Many well-paying jobs are waiting to be filled.

3.     More importantly, the transport sector is a key enabler for our economy. It connects us not just within our island, but to the rest of the world. This started from Singapore's early days as a centre for entrepot trade, and allows Singapore to thrive as an international hub today. This is why we are continually upgrading our infrastructure. This year, we are working concurrently on multiple projects, including Changi Airport Terminals 4 and 5, the Pasir Panjang and Tuas Terminals, the KL-Singapore High Speed Rail, the JB-Singapore Rapid Transit System Link, the Downtown and Thomson-East Coast Lines. 

4.     The transport sector is also a crucible of innovation. It is ripe for disruption and transformation. The scope for using technology to raise productivity is substantial - self check-in facilities at the airport, robotics for baggage handling, driverless cargo vehicles, automated cranes at our sea-ports, LTA using big data to optimise traffic flow, predictive maintenance for trains, and drones for all kinds of deliveries. Who knows what else the future will bring? Working with EDB, we offer Singapore as a test-bed, an incubator for new ideas, and for companies and start-ups to run trials here. What works can then be commercialised elsewhere. Along the way, we hope some local companies can acquire new capabilities and business opportunities. 

5.     Later, Second Minister Ng Chee Meng and Senior Minister of State Josephine Teo will elaborate on some of these exciting initiatives and trends. Many of these changes will happen during their career. It is appropriate for the young Ministers to spearhead these developments and see them through. As for me, I shall look forward to enjoying the benefits as a consumer during my lifetime!

Riding the Wave of Change

6.     I agree with Mr Sitoh Yih Pin on the inevitability of technology advancements.  The human mind is wired to explore new ways of doing things. And we will always seek to better our lives. Last week, DeepStack was reported to have beaten the world's best poker players. Artificial intelligence had already beaten chess grandmasters and Go champions several years ago. 

7.     These technology advancements will create opportunities to change and improve our lives. If Netflix offers better value than StarhubTV, consumers will switch. I am familiar with Netflix, but I don't use it. I still enjoy going to the cinema, for its old romantic ambience. This is the hard reality of the market that the incumbents will always suffer. Such competition is unsettling for them, but it is good for consumers. As regulators, our job is not to stifle innovation but to be fair to all players, and we should always put consumer interest as our top priority. But I agree with Mr Sitoh that as a Government, we should also be concerned about the workers who will be impacted. He highlighted the stress on the taxi drivers. We should help them, not by insulating them from innovations, but by alerting them to the potential disruption, and preparing them for change. Change is unpleasant. But everyone can be helped to adapt to change.  

8.     As noted by the Committee for Future Economy, the best way to ensure relevance is to acquire and develop deep skills. And going beyond that, to master competencies. Last month, I launched the Singapore Rail Academy, which aims to nurture a Singapore core with deep technical expertise. As a start, the Academy has partnered e2i, the Employment and Employability Institute, to develop a foundation programme for both fresh graduates as well as mid-career upgraders. Mr Melvin Yong was there with me at the launch. We have great ambitions for the Academy. It will develop programmes to train workers in critical areas of rail operations and maintenance. It will work with the rail operators and Institutes of Higher Learning to offer pre-employment programmes, as well as continuing education and training. An example is the part-time Diploma in Rapid Transit Technology. I agree with Mr Yong that we should also learn from good rail operators overseas, by attaching our professionals there to pick up best practices. 

9.     The Academy will develop a competency framework for railway professionals, and also accredit training programmes. This will facilitate job upgrading. The Academy will also take charge of industry branding, and work with industry partners to improve working conditions by utilising technology to lighten workloads, and enhance employee health management.

10.    But what is most critical is for our transport workers to be open to learning new skills. Then they can ride the wave of technological change. I agree with Mr Yong that we must tap on the strong tripartite relationship and platforms to help our workers adjust. So for taxi drivers affected by competition, we are working with the National Taxi Association and taxi companies to help them cope. For bus captains, we are working with the National Transport Workers' Union and public bus operators, to help them adapt. 

Car-lite 2030

11.    Madam, new technology, disruptive business models and commuters' demand for higher levels of service are transforming the way we move about. History is truly in the making. Where these will lead us, we cannot be sure. But it sure is exciting!  We have simplified the evolving drama under the banner of making Singapore car-lite by 2030. But it is much more than about cars, or their depopulation. It is also about making it easier and more enjoyable for everyone to walk, cycle and take public transport. There will be less need to own cars, and we can look forward to reclaiming many road lanes and car-park spaces and using them instead for the community and for greenery. It is about a lifestyle change, a mindset shift, and improving the quality of life for all.

12.    We are testing many of these ideas in Ang Mo Kio by making it a model cycling town.  Phase 1 is done.  Phase 2 will begin shortly.  We are making Tampines Town the second model walking and cycling town. Design work will start soon.  Today, many residents there already use bicycles and personal mobility devices (PMDs) to get around. Many who work in Tampines live in adjacent towns. So, we will provide trunk cycling routes connecting Tampines to neighbouring towns, and also to Changi Business Park and Singapore Expo. We will improve crossings, we will widen footpaths, and we will improve safety at bus-stops. We are determined to make cycling and the use of PMDs both pleasant and safe.

Public Transport

13.    At its core, our public transport system will have a high capacity, highly connected and reliable public train system. 

14.    We are making progress. The expansion of our rail system is on track. Our rail network is growing on average by 1 km every month. This year, we will extend the East-West Line by four stations to Tuas West, and the Downtown Line by 16 stations to Singapore Expo. We will soon select and appoint the operator for the Thomson-East Coast Line. We have begun to call tenders for the Circle Line Stage 6. We have started planning for the Jurong Region and Cross Island Lines. When all these lines are completed, 8 in 10 households will have a train station within a 10-minute walk. I will be one of them 
 
15.    We particularly look forward to the opening of Downtown Line 3.  It will be a game-changer for residents living in the East, just as Downtown Line 2 was for the West and North-West residents. When in full operation, the entire Downtown Line will serve a daily ridership of more than half a million commuters. A recent study found that one out of six rides on the Downtown Line was made using new EZ-Link cards. So, these are new travellers. This suggests that a sizeable number of commuters perhaps living along the Bukit Timah corridor are switching to rail. The experience of the Downtown Line gives us confidence that car-lite Singapore is achievable. 

17.   Over at Bukit Gombak, Mayor Low Yen Ling has called for Hume MRT Station to be opened. I heard her appeal. The long term development of that precinct, including the upcoming Rail Corridor development, can justify an MRT station. And that is why we have made provision for it. However, the pace of development will determine the timing of the opening of the station.  As soon as there is sufficient ridership justification, we shall open the MRT station. This is our commitment.

Raising Rail Reliability

18.    Mr Ang Wei Neng observed that train reliability is improving. Indeed, it is. Although we are not yet where we want to be, but we will get there, not to worry. As he has noted, we have an objective measure called the Mean Kilometres Between Failure, or MKBF, to track our progress objectively. Our MKBF crossed 160,000 train-km in the first half of last year. It further improved to 192,000 train-km in the second half, close to my target of 200,000. That is why I am raising the bar to the next target of 300,000 train-km. And next year, we will shoot for 400,000. It can be done.

19.    As I previously explained to Mr Dennis Tan in this House, raising train reliability is a multi-year effort. It is not multi-week or multi-month, it takes years because replacement of ageing assets takes time.  We have replaced all the old sleepers. This year, we will replace the old third rail system which has been causing some problems to the East-West line recently.  We will soon complete the upgrade of the signalling system for the North-South Line which will bring a lot of benefits to many residents including the residents of my favourite MP Er Dr Lee Bee Wah. Next year, we will do the same for the East-West Line. But let me sound an alert. Re-signalling is a complex engineering operation. Er Dr Lee Bee Wah knows that. Getting it done perfectly and flawlessly is almost impossible. That has been the painful experience of London, Hong Kong and Taipei.  They warned us that we should expect many teething problems when we cut over the signalling system to the new one this year. So I am all mentally prepared for criticisms by Er Dr Lee Bee Wah. We will do our best to minimise inconvenience, but be prepared for some hitches.  So, please bear with us.

20.    Mr Ang highlighted the recent hitches between Jurong East and Joo Koon stations on the East-West Line. We have very old signalling components there which need replacement. We are planning to replace them but sometimes maintenance and replacement works may not be completed during the limited engineering hours. That is why train service for that stretch was occasionally impacted when planned works extended into revenue hours. I have heard Mr Ang's suggestion and I shall ask LTA and SMRT to consider ending the revenue service for that stretch of the East-West Line earlier so that we have more engineering hours for these works.  

21.    Meanwhile, we have completed the transition of SMRT Trains to the New Rail Financing Framework (NRFF). We took ownership of SMRT's rail assets last October, and Temasek's delisting of SMRT also allows it to focus on its core responsibility without the short term pressures of being a listed company. This is an important achievement. It took us many years and I am glad that we have now completed it.  The rail industry structure is now in a better shape to allow us to replace and upgrade ageing assets promptly.  This should improve reliability.

22.    We will soon call tenders to upgrade the North-South and East-West Lines' power supply system. It has been a source of problems for the last few years and now that we have taken over the assets, we are going to change this - replacing of the power supply system and also to replace all our first-generation MRT fleet with 66 new trains. And it will not just be a mere one for one replacement. We will, in the process, upgrade the train as well as the power supply system to tap on new technology which is now available. For the North East Line, we are also working with SBST to refurbish and upgrade their first-generation trains. For the Bukit Panjang LRT, we have started the process for its renewal. We target to call a tender this year for a complete replacement of its ageing components and an upgrade of its systems.

23.    Mr Zaqy Mohamad asked if we can do predictive maintenance for our trains and tracks. Indeed, predictive maintenance is the way to go.  We are acquiring the necessary tools and capabilities for this purpose. These include new generation automatic track inspection systems and condition monitoring tools for real-time data collection and analysis. I also heard Mr Zaqy's concern about the noise generated from passing trains in his constituency. We are aligned with the NEA on what is acceptable level of noise. We are closely monitoring the situation, and are implementing system-wide noise mitigation measures. Our trains have noise-dampening wheels, and our operators are servicing the train wheels and tracks more frequently. Where necessary, we will install noise barriers. This is however a major multi-year programme, as we have to coordinate it closely with so many other maintenance, improvement and upgrading works that compete for precious engineering hours.   

Improving Public Bus Services

24.    Buses complement our MRT. Under the Bus Service Enhancement Programme (BSEP), we have injected 850 buses, and introduced 70 new or amended routes. The improvement has been felt on the ground.  I appreciate Mayor Low's feedback on new bus services in Bukit Gombak.  But I know that we can never do enough.  I heard her call for better connectivity to the upcoming Community Club in Bukit Gombak. I also heard Er Lee Bee Wah's feedback on Services 811 and 860, and more covered walkways.  We will see what else we can do.  But let me also plead and seek MPs' understanding that for financial prudence, bus service provision requires a minimum ridership. And if ridership goes down as commuters switch to rail, we have to remove or amend existing bus services. Otherwise, we have half empty buses running on roads causing pollution and are a waste of taxpayers' money.

25.    Meanwhile, our bus infrastructure has expanded in tandem with the larger bus fleet. We have now three new interchanges and more parking lots at existing interchanges. Critically, we have moved all the bus operators to the Bus Contracting Model, with LTA taking over bus assets and infrastructure. This is another major transformation in the transport sector and for the bus industry. Next month, we will be awarding the tender for the third bus package at Seletar. The tender has now closed. I was looking at the bids and it has attracted very competitive bids, with lower prices on average compared to the previous two tenders. This is good for taxpayers. Later this year, we will call the tender for our fourth package at Bukit Merah. With competition, bus operators are working harder to improve their service.  And this is good for commuters.

26.    As Mr Melvin Yong pointed out, our bus captains are the key to delivering higher service level. Our bus captains strive to improve bus arrival regularity and reduce bunching, a very big complaint from the ground. LTA has set fair but ambitious standards, and our bus captains are work closely with their service controllers to manage bus arrivals real-time. That is why sometimes, some buses on certain routes have to drive very slowly to arrive punctually as scheduled because road conditions can vary during the day. This is the only way to solve the bunching problem. If you want bus drivers to drive as fast as the roads can take, then sometimes they may arrive too early and there will be complaints on bus bunching. But I accept that this is still a new system for both the regulator and the regulatee and we shall see how else we can calibrate the system to make it work better for us. But it has worked very elsewhere, in London and Australian cities, and I see no reason why it cannot work here too.  

Private Transport

27.    As our public transport system improves and expands, fewer people will need to own a car. Going car-lite is, however, a journey.  Meanwhile, our various vehicle control policies, like COE and ERP remain relevant.  But, from time to time, we refine them as circumstances change. 

28.    One major move this year is to stop the contribution of motorcycle COEs to the Open Category. Very few motorcycles have been registered using Category E COEs due to the high COE Category E premiums. This recent move will stabilise the motorcycle population.  It is in response to many MPs' and motorcyclists' as well as Chambers of Commerce's concerns that the motorcycle population is shrinking. 

29.    Another move is to improve the progressivity of the vehicle tax system. In 2013, we introduced the tiered Additional Registration Fee (ARF), for cars, taxis and goods cum passenger vehicles. This year, we extended the same to motorcycles. So this is the reason behind this move, because MP Faisal was asking about the rationale behind this move. We are increasing the ARF only for the high-end models. The large majority of motorcycle buyers will not have to pay higher ARF. 

30.    I thank Mr Thomas Chua for his comment, and yes indeed, we always consult the   industry. I think LTA's dialogue with them is at least twice a year. And in fact both ideas came up from the industry in the process of brainstorming and we are happy to be able to implement it this year. As I said, the Singapore Motor Cycle Trade Association is an important stakeholder and is our partner. We are on the same side. Other than market sensitive information, we share with them as much as we can.

31.    Mr Henry Kwek voiced the challenges faced by businesses and we are mindful of their difficulties. That is why there are several concessions to help them manage costs so the ARF for commercial vehicles are low, motor taxes are low and road taxes are low for them. Secondly, commercial vehicles can go for repeated 5-year COE renewals to help businesses better manage cash-flow. 

32.    Euro 6 emission standards are regulated by my colleagues in MEWR but we did discuss in Cabinet and the intention to move to Euro 6, next year, having served the industry notice since 2014, I think that is sufficient time for the industry to respond. I know there are some concerns: Will there be enough vehicles and why can't we go through Euro 5 first etc? But having decided on Euro 6, I think we should just move. There will be enough models to meet the demand. The Minister for the Environment and Water Resources will share more details later. My own take on this issue is that transport does impact our health. Europe's embrace of diesel vehicles has now made many cities highly pollutive. It is a sad case of unethical commercial practices making money at the expense of public health.  They are now trying to reverse the trend. Paris, Madrid, Athens and Mexico City have all announced that they will ban diesel vehicles from their city centres, latest by 2030. I think we too, should nudge down the population of diesel vehicles and work towards becoming a diesel-free city. The restructuring of the diesel tax should be read in that context.

Financial Sustainability

33.    Madam, as we work towards Car-Lite 2030, let us be also mindful that the significant improvements to our public transport network require high capital investments and incur higher operating costs. 

34.    Under the new Bus Contracting Model, the Government is now responsible for buying and replacing buses. We pay bus operators a fee to run the bus services. Although fare revenue goes to the Government, it is not enough to cover operating costs, and the Government has to top up the deficit. And it is a huge deficit. Over the next five years, we expect to subsidise public bus services by close to $4 billion. Similarly, with the transition to the New Rail Financing Framework, the Government is now responsible for replacing rail assets. Over the next five years, we also expect to spend $4 billion on rail.  And all this is on top of about $20 billion we will be spending to build new public transport infrastructure. 

35.    We must ensure that the fiscal burden does not become too excessive for taxpayers. In the earlier years, I remember as a young officer in civil service, our objectives were to split the responsibility in transport by having taxpayers pay for the construction of infrastructure. But commuters bear the operating costs through transport fares. In other words, transport fares must be able to cover operating costs. But over the years, as fares have not kept up with rising costs, taxpayers have to subsidise more and more of the operating costs, especially as we have been raising service standards significantly.  

36.    This is clearly not sustainable. While the Government will continue subsidizing public transport heavily, we must find a fair balance in the relative burden to be borne by commuters, taxpayers and operators. Remember that commuters are also taxpayers. Fares are regulated by the independent Public Transport Council, through a multi-year fare formula. The current fare formula will expire after this year's fare exercise. The Public Transport Council will be reviewing the formula. They will consult widely. I am confident that they will decide wisely. Last year, they took a big step to standardise the train fares across all MRT lines, and no longer make a distinction between aboveground and underground lines. This was a major step. They slayed a sacred cow! Many commuters have benefitted. They have seen their fares reduced. I know. As a regular user of the Circle Line, I have seen my fare reduce from 92 to 87 cents. But remember: the PTC cannot always bring good news, sometimes they have to adjust fares upwards. And when they do, I hope commuters will be understanding.

Conclusion

37.    Madam Chair, we are enhancing our transport system to meet the needs of Singaporeans and also to support our future economy. A good transport system connects people to places, and also connects people with one another. Public transport is a common space, where we interact with fellow Singaporeans, and where collective memories are made. So let us shape this common space together, to raise our quality of life and make Singapore among the most liveable cities in the world.

38.    Thank you.