Response Speech by Minister for Transport and Second Minister for Finance, Mr Chee Hong Tat, at the Second Reading of the Transport Sector (Critical Firms) Bill

08 May 2024In Parliament

1.     Mr Speaker, I thank Honorable Members for their support of the Bill, as well as their comments and suggestions.

Rationale for Bil

2.     To Mr Dennis Tan and Mr Don Wee’s question on there are risks in the prospective designated entities or recent incidents that have prompted the introduction of this Bill, I wish to clarify that the introduction of this Bill is not to address existing risks or current problems. It is to put in place safeguards to protect critical transport firms from extreme scenarios in future, and ensure the continued resilience of essential transport services in Singapore.

3.     Mr Saktiandi, Mr Wee and Mr Louis Ng asked about the potential overlap between this Bill and SIRA.

a.     SIRA is designed to complement sectoral legislation and safeguards. Where possible, the preference is for sector leads to enforce controls over the entities under their purview, as they are most familiar with their sectors.

b.     To avoid duplication, we do not intend for entities adequately regulated under sectoral legislation, including critical transport firms covered under MOT’s sectoral Acts, to be designated under SIRA. 

Controls are Targeted

4.     Mr Wee and Mr Saktiandi asked about the criteria for designation, and Mr Ng asked about the number of designated entities under the Bill.

5.     As we plan to cover only essential transport services under the Bill, we expect to designate a small number of firms for each sector.

a.     There will be various criteria that will be taken into consideration for designation, including whether the entity is involved in the provision of essential transport services, and whether it is strategically important in the sector.

b.     An entity may be considered strategically important if it has significant market share or specialised expertise in the industry. Designated entities are thus unlikely to be smaller companies with lower market share in the industry.

c.     Designated entities may include firms owned by the Government or Temasek Holdings, they could also include firms owned by other shareholders.

d.     Mr Saktiandi and Mr Ang Wei Neng asked whether we will consider designating point-to-point (P2P) operators under the Bill. We have no plans to do so at this juncture, as the P2P sector is still evolving. It serves a complementary role to public transport to meet the commuting needs of Singaporeans. We have an on-going review of the P2P industry structure and regulatory framework, and a decision can be taken after the review is completed.

e.     Mr Dennis Tan asked whether Seletar Airport will be covered under the Bill. We have not included Seletar Airport in the definition of essential transport services in the Bill, as it functions as a secondary airport to Changi Airport.

f.     The respective Authorities will review the list of designated entities from time to time. They will engage and consult the entities prior to designation, and the notifications of designation will be published in the Gazette at least 14 days before the date that the designation takes effect.

6.     Mr Ang asked whether equity interest holders that are predominant owners of a designated operating entity will be required to seek approval for Chairpersons and CEOs. As mentioned in my opening speech, we may designate equity interest holders that have a strong nexus of control over the designated operating entity. If designated, these equity interest holders will also need to seek approval for appointment of their Chairpersons and CEOs, to protect the interests of Singapore and Singaporeans.

7.     Mr Ang asked if we will mandate larger entities to restructure and register specific departments that manage essential transport services as separate entities.  This is a commercial decision for companies to make. The Bill does not impose such requirements.

Consultation Process

8.     Mr Saktiandi, Mr Wee and Mr Ng asked for more details on our consultation with entities on the Bill.

a.     We have engaged key transport firms on the Bill, and the relevant Authorities will finalise the list of designated entities after the Act comes into force. The initial list of entities will be designated by the end of this year. 

b.     If the relevant Authorities have not engaged your company on this Bill so far, it means there are currently no plans to include it as a designated entity.

c.     We have taken onboard the feedback from the engagements. For example, some firms asked for more clarification on the “materiality” threshold for notification. We will prepare guidelines to provide greater clarity on the types of events that would require notification.

Controls are Carefully Calibrated

9.     Mr Yip Hon Weng, Mr Wee, Mr Ng, Mr Tan and Ms Poh Li San asked if the Bill’s controls could affect the economic competitiveness, innovation or growth of the transport industry, as they felt that it might disadvantage foreign companies, discourage new investments, or increase barriers for new enterprises.  Let me assure Members that the Bill will not have these downsides.

10.    The proposed Bill is about enhancing the resilience of essential transport services in Singapore, by safeguarding strategically important transport firms against adverse influence.

11.    It will not adversely impact the transport industry or create significant compliance costs and regulatory burden for entities. Neither will it affect the day-to-day operations of the transport firms.

12.    Many of the controls under the Bill are not new and already exist in our sectoral Acts or licence conditions today. What this Bill seeks to do is to consolidate some of these existing controls under a common legislative framework, and extend it to other entities, including some non-licensees.

a.     The existing licensing regimes remain in effect, and will continue to regulate the standards and performance of the day-to-day operations of our licensed entities to ensure that they continue to operate their services in a safe, reliable and efficient manner.

b.     Mr Saktiandi asked how the requirements under our Bill would be deconflicted with overlapping requirements in shareholders’ agreements or the law in the home jurisdiction of foreign-owned entities.

i.     Just like today, such an entity would have to comply with two sets of requirements, one in their home jurisdiction and another in Singapore. 

ii.    Shareholders can continue to appoint Board members as provided for in their agreements, but the relevant appointments will require approval from the Authorities.

Iii.   Each decision for approval will be reviewed on a case-by-case basis. The Authorities will assess the circumstances of each case, and try to process the application as quickly as possible.

13.    We have also carefully calibrated the controls to impose only what is necessary to achieve our policy objective of safeguarding the provision of essential transport services in Singapore, while ensuring that our transport industry remains open, pro-business and investor-friendly.

a.     One example is how we have differentiated the controls for designated operating entities and designated equity interest holders. As designated equity interest holders are not direct providers of essential transport services, they will be subject to less onerous requirements than designated operating entities.

b.     Designated equity interest holders will not be subject to a Special Administration Order, and will only need to seek approval for Chairperson and CEO but not the rest of their board directors.

14.    Ms Poh asked about the criteria for assessing changes in ownership and the appointment of key personnel in designated entities. We will consider a range of factors before coming to a decision, but the main focus is to protect Singapore's national interests and safeguard our critical transport firms against adverse influence.

a.     We will not assess applications based on nationality alone, and we are not reserving appointments for any particular nationality or group of persons. 

b.     Mr Tan also asked whether the Government will be publishing guidelines on what a “fit and proper” person is, as this is one of the approval criteria for ownership controls. This criterion is also found in SIRA and some sectoral legislation. Our approach will take reference from these legislation as far as possible, while taking into account the needs of the respective transport sectors.

15.    Ms Poh asked whether ownership controls would apply to the non-transport related business arms of designated entities. While our main focus is with parts of the business related to the provision of essential transport services, the controls will have to be applied at the entity level, so it depends on how the entities structure their business operations.

16.    This Bill does not interfere with the day-to-day operations or private commercial decisions of the critical transport firms. It is to protect Singapore and Singaporeans against potential threats to the safety and reliability of our essential transport services. In such scenarios, MOT could use the proposed safeguards in the Bill to prevent undesirable individuals from being appointed to key positions in these firms, or to disallow certain persons from acquiring significant shareholdings. 

17.    In response to Mr Yip’s question about the possible time delays associated with approvals, the relevant Authorities will endeavour to minimise undue delays. For bona fide applications, the firms should have nothing to worry about, as the approvals will be given expeditiously. For problematic cases, I think Mr Yip would agree that it is not in Singapore’s interests for the Authorities to give quick approvals in such situations.

Ownership Controls

18.    In response to Mr Saktiandi’s question, the relevant Authorities will monitor ownership changes in designated entities, but it is ultimately the responsibility of those becoming or ceasing to become controllers of a designated entity to ensure that prior approval is obtained or proper notice is given, where applicable. There may be remedial directions and penalties if they fail to do so.

Implementation of Special Administration Order

19.    Mr Tan, Mr Yip, Ms Poh, and Mr Ang asked about the triggers and implementation process for the special administration order.

a.     There are questions on when such orders would be issued on the “public interest” grounds, and what this might entail.

b.      This is not a new concept, and can be found in MOT’s existing laws, as well as legislation in other sectors.

c.     “Public interest” considerations will evolve over time. Keeping the scope broad would provide us with sufficient flexibility to respond quickly to new risks that may emerge over time, or unexpected scenarios in future.

d.     But I would like to assure Members that we will be judicious in exercising these powers. The order will only be activated as a last resort, and in the extreme scenario and unlikely event that a designated entity becomes unable to provide essential transport services safely and reliably.  This is similar to the step-in arrangements for critical firms in other sectors, such as power and water.

e.     When an order is issued, the Minister will appoint a person, who may be the respective Authorities, operators or other third parties with the requisite competencies, to manage the affairs, business and property of the designated entity. The main objective is to ensure the entity can continue to provide the essential services. In such situations, it is a safe assumption to make that many of the employees of the entity will still be working there. Thus, we will also be working together with the employees who are there and familiar with the operations. The key, as I mentioned, is ensuring that the entity can continue to provide essential services.


20.    Mr Saktiandi asked why the penalties for non-compliance differ across the four Acts, and whether the penalties are sufficient to incentivise compliance.

21.    In deciding the penalties under this Bill, we took reference from existing penalties within the framework of each of our sectoral Acts, and the different considerations and needs of entities across the transport sectors. The existing penalties have worked well thus far in deterring errant behaviour, without imposing excessive burden on bona fide firms. 

Accountability and Safeguards

22.    Mr Yip asked about the safeguards in place to ensure transparency, as well as the appeal process under the Bill.

a.     Any aggrieved party may appeal to the Minister against certain decisions made by the Authorities, including the designation of an entity, refusal to grant approvals required for controls over ownership or management appointments, and the issuance of remedial directions.

b.     There is no appeal provision for the special administration order under our existing Acts, as prompt action is required in such situations to respond quickly and safeguard the continuity of essential transport services. I hope that Members understand why the Special Administration Order is a separate process.

c.     This is similar to the approach taken in other sectoral legislation. Step-in powers are a measure of last resort, and before these powers are activated, it is likely that the Authorities would already be in conversations with the entity to explore different ways to improve the situation.


23.    Mr Speaker, we must continue to safeguard Singapore’s transport connectivity to protect the interests of Singapore and Singaporeans. This Bill will strengthen the resilience of our transport sectors in an increasingly complex operating landscape.

24.    I agree with Members that it is important to assure investors and businesses, both local and international, that our doors remain open, and that our system continues to be transparent and fair.  The proposed Bill does not change our longstanding position on this.

25.    We have therefore calibrated our controls to only what is necessary to enhance the resilience of our essential transport services, and ensure that the requirements are not overly onerous to the companies and investors.

26.    The Bill does not interfere with the day-to-day operations of the entities or their commercial decisions, and bona-fide approvals will be processed expeditiously. All powers under the Bill will be exercised judiciously and in accordance with clearly defined procedures.

27.    I thank Members for supporting this Bill, to strengthen the resilience of our transport sectors and protect the interests of Singapore and Singaporeans.

28.    Sir, I beg to move.



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