Singapore 2025

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Archive for February 2017

Parliament: Budget Speech (2017) Pritam Singh – 28 Feb 2017

Water – Understanding how it is priced in Singapore

Mr Deputy Speaker, this year’s budget has brought the focus on cost of living issues by way of an increase in water prices. This increase comes on the back of a 15%-odd increase in HDB car park charges, higher electricity and gas charges and the announcement of higher Service and Conservancy rates all in the space of about three months. The Straits Times noted that the government feedback channel REACH, had identified cost of living as a key pre-Budget concern among Singaporeans.

I have a few questions for the Minister so as to understand the decision-making processes around the latest round of increases in water prices. The last time an announcement was made to raise water prices in 1997, prices were raised by 120% for households and 30% for industrial and commercial users over a four-year period.

Singapore’s Water Pricing Principle – Long Run Marginal Cost

The Government has stated in previous parliamentary replies that its prices water according to its Long Run Marginal Cost or LMRC. To this end, the water tariff, water conservation tax and used water charges or waterborne fees are priced to reflect the cost of producing the next drop of potable water, which is (I quote) “likely to come from desalination and NEWater.” (unquote)

In announcing the opening of the 5th NEWater plant last month, the Minister for Environment and Water Resources noted that there has been upward pressure on costs because of increases associated with asset replacement, energy and manpower. Can the Government share details on how the components of Long Run Marginal Costs for water pricing are computed by the Public Utilities Board (PUB) and how it assesses when to increase the price of water? Can the Government also clarify if the maintenance and upkeep, and the associated manpower costs of current PUB assets, including thousands of kilometres of transmission networks etc. would have already been factored into the calculation of LRMC before the latest round of price hikes? Even so, it would be helpful to understand which variables of LRMC have changed from 1997 when the last price hike was announced, what is the range within each variable, and how often is the LRMC determined or re-determined. Can the Government also share how much it costs each desalination and NEWater plant to produce water today, especially since some of these plants operate on a private-public partnership basis? How do they compare with plants run directly by the PUB?

Finally, when the PUB refers to the long-run in LRMC, what sort of time horizon is used for projection purposes and what are the population parameters for these projections? Are we looking at 2061 when the Water Agreement with Malaysia comes to an end, or is it when the PUB expects a doubling of Singapore’s consumption in absolute terms for a much larger population and when 85% of our needs are projected to be met by NEWater and desalination? If this is so, what are the projections for expected water price hikes as the population grows?

It is noteworthy Mr Deputy Speaker that PUB was able to bring down the cost of NEWater production from 2002 to 2004 from $1.30 to $1.15 per cubic metre as a result of more competitive membrane technologies. In 2003, a Straits Times article quoted then Prime Minister Goh assuring Singaporeans that (and I quote) “the price of PUB water, which now costs $1.52 a cubic metre, would stay below $2 for some time, reversing all earlier projections. The sums were redone because desalinating sea water was cheaper than thought; and NEWater, even cheaper to produce.” (unquote) The same year, it was also reported that the Tuas desalination plant desalinates water at the cost of $0.78 per cubic metre. This compared very favourably against about $0.90 per cubic metre produced by the Ashkelon desalination plant in Israel, considered in 2003 to be the one of the cheapest producers of desalinated water. In 2008, Sembcorp, which secured the bid to design, build, own and operate the fifth and largest NEWater plant submitted a first-year price of about $0.30 to produce a cubic metre of NEWater. A 2011 Business Times report also noted that Singapore would produce the world’s cheapest desalinated water by 2013. How does the PUB adjust its Long Run Marginal Cost projections with the advent of new technology so as to keep the prices of water affordable and to keep its profits within reasonable limits, on an ongoing basis?

From parliamentary replies in the past, it would appear that energy is the real cost variable that can be difficult to track with a sufficient degree of accuracy. In view of the lower cost of producing water over the years, can the Government reveal how much NEWater and desalination costs have fluctuated over the years as a result of energy prices? In 2008, the Siemens Water Technologies Team was awarded a $4m grant from the Environment and Water Industry Development Council (EWI) for successfully designing a more energy efficient desalinisation technique which produced a cubic metre of drinking water on 1.5 kWh of power as compared to PUB’s current desalination method uses 3.5 kWh. In addition, the 2015 PUB annual report highlights PUB’s collaboration with a US water technology company which has piloted electro-deionisation technology which has achieved reductions in energy consumption in the desalination process by more than 50%, and this pilot would be expanded in 2016. Can the Government share details of this project and its prospects going forward?

The Linggiu Reservoir Factor

Separately Mr Deputy Speaker, the announcement of an increase in water tariffs bookends a two-odd year period when Singaporeans were repeatedly reminded of water scarcity issues as a result of very low water levels in the Linggiu reservoir in Malaysia, a water supply source five times the size of all of Singapore’s reservoirs. At the start of each respective year, the water levels were at 84% in 2015, 49% in 2016 and 27% in 2017. We have been informed by the Minister of Foreign Affairs in response to a parliamentary question in January this year that there is a significant risk of the water levels in the Linggiu Reservoir falling to 0% this year should there be a dry spell in Johor.

In view of the low water levels in the Linggiu Reservoir from 2015 onwards in particular, how often has Singapore drawn less than the 250 million gallons a day it is legally entitled to under the 1962 Water Agreement and what has been Singapore’s average daily rate of abstraction from the Linggiu Reservoir since 2014? To that end, what role, if any, have the low water levels in the Linggiu Reservoir played in the latest water price revision especially since the Government’s position as late as 2013 confirmed no need to raise water prices?

In the middle of last year, on the back of the Singapore International Water Week, a PUB official stated that should the Linggiu Reservoir fail, there ought to be no cause for panic in Singapore as there were new and indigenous capacities in Singapore to meet such a contingency in the form of NEWater and desalination. However, the Minister of Foreign Affairs last month stated that the failure of the Linggiu Reservoir would cause severe problems for Singapore and Malaysia. Can the Government elaborate what are its contingency plans in the event of such an eventuality – do these contingencies include the possibility of another rise in water prices, especially the water conservation tax since its policy rationale is aimed at reminding the taxpayer about the importance of saving water and separately, to account for the Long Run Marginal Cost of desalination and NEWater? That would also prompt a corollary question as to whether the latest water price revision was set with a view to account for the complete failure of the Linggiu Reservoir.

Even so, in the middle of 2016, it was reported that Johor was studying plans to divert water from two rivers into the Linggiu Reservoir. The first proposal was to build a low wall to channel about 50mgd of water from the Sayong River catchment area at the cost of about RM$250m. The second plan called for the building of a dam at the Ulu Sedili Besar River to transfer about 110mgd to the Johor River at the cost of RM660m. At the end of the last Leaders Retreat between Prime Ministers Lee and Najib in December last year, it was reported that Malaysia was looking at measures to increase the supply of water at the Linggiu Reservoir. Can the Government comment, in the event Malaysia successfully diverts water to the Linggiu Reservoir allowing Singapore to draw its full entitlement of 250mgd or more, would such an outcome end up reducing the price of water for consumers in Singapore? If so, would Singapore consider co-funding the diversion of the two rivers or renegotiating some aspects of the Water Agreement with a win-win prospect in mind especially since Singapore has not hesitated to supply Malaysia with more treated water than it is required to in its time of need particularly during times of drought and over the Ramadan period last year?

Is Water Scarce Or Not?

This brings me to my final point about the public messaging on water conservation policies and the outcomes the Government seeks from the water conservation tax and how these outcomes can be improved. About a month before the 2015 General Elections, the Prime Minister said and (I quote), “In Singapore, water will always be a precious resource. Never take it for granted or waste it.” (unquote) In the middle of last year, on the back of the Singapore International Water Week in a piece titled How Singapore Will Never Go Thirsty, the PUB CEO announced that Singapore, in spite of being water-poor, had (I quote) “significantly overcome the challenge of water scarcity” and later on that “Singapore is not short on water” (unquote). While I understand the PUB official was showcasing to an international audience the good work over many decades of our water specialists, there is a risk that over amplifying self-sufficiency can have a dampening effect on efforts to encourage water conservation. The fact is that self-sufficiency comes at a high price for the consumer.

In fact, Singapore’s per capita water consumption rates have been dropping steadily from 2005 when it was 162 litres per day to 151 litres per day today. It would appear that the answer to the question of whether we can reduce consumption without price increases is a yes – perhaps not as resounding a yes as the experts would wish for – but a yes nonetheless. Even with our hot and humid climate and cultural practice of not using dishwashers, perhaps as result of the spices, sauces and seasonings in Asian cooking, progress on water conservation has been steady and continuous. Rather than to look solely at water pricing to promote conservation, the Government should look at new policies to further tighten regulations on the sale of sanitary appliances such as mixers and shower heads which discharge excessive water so as to nudge consumers to use more water-saving appliances.

Some experts have also proposed pricing strategies used elsewhere like Spain which hosts a pricing structure that provides for a 10% rebate should a household’s water consumption pattern show a 10% decrease compared to the year before. What these creative pricing strategies suggest is the prospect of a different approach towards water conservation taxes to promote a more efficient usage of water. We already see PUB nudging Singaporeans in this direction by informing consumers of the consumption patterns of their neighbours and the national average in our monthly bills. What may truly push a renewed commitment to a water conservation drive is to significantly alter consumer behaviour towards a tax regime that differentiates between efficient and inefficient usage of water by lowering taxes for consumers who use less water.

For example, a household of four which meets the national average consumption can have their water conservation tax remain at the current 30% of the tariff rate. Depending on additional usage, PUB could establish an ascending and descending scale relative to consumption. This has better prospects for water conservation as real savings would be given to individual households, building on the current two tiered approach set between households that consume more or less than 40 cubic meters of waters. This approach would also be more targeted and would cohere with the objective of saving water as opposed to the budget announcement which bluntly increases the water conservation tax from 30% to 50% or 35% to 65% for all households.

Conclusion

To conclude Mr Deputy Speaker, a piece in the Straits Times last week argued that the water price only reflected the reality of increasing water stress worldwide and that bigger hikes were needed to curb wastage. The comments to that story were unexpectedly, rather animated. I believe a deeper explanation from the Government about how it prices water and its long-run cost imperatives would enable the public to better understand and rationalise this water hike in addition to improving public understanding on this issue. This would be important as the water price hikes occurred on the back of many other municipal prices increases which could arguably have been better phased to reduce the impact on the average Singaporean for whom cost of living issues are an increasing concern. There remain concerns among Singaporeans who fear the knock-on effect of the water price hike on daily necessities and I hope the Government will address this point too.

Thank you.

Written by singapore 2025

28/02/2017 at 7:34 am

Posted in Uncategorized

Parliament: Presidential Elections (Amendment) Bill – Reserved Elections for the Presidency: Does Form follow Function? (Pritam Singh) – 6 February 2017

Introduction

Madam Speaker, the Workers’ Party opposes this Bill. The Workers’ Party believes that Singapore is best served by an appointed President and a system that would allow the Government to appoint a President, regardless of race or religion.

One of the most significant aspects of this Bill is the establishment of the Community Committee that ensures that in a reserved election, only persons who see themselves as belonging to a particular community for which the election is reserved, qualify to stand for the Presidential election.

As the Presidential Elections Committee (PEC), and by the extension the Community Committee’s decisions are not justiciable in a court of law, Parliament is effectively the last place for Singaporeans to gain some insight into how the Community Committee will operate in practice. The decision-making processes of the Community Committee and it sub-committees will be the focus of my speech.

Considering oneself a part of a minority community: How are minority applications assessed?

Clause 8(G) is scant on detail as to how the relevant Community Committee sub-committees would assess a potential candidate as to whether he or she is a member of a particular minority community.

With the prospect of reserved elections for minorities, it should be reasonable to assume that the Government expects form to follow function. It cannot be the Government’s intention that a bare declaration stating that a candidate considers himself or herself to be part of a particular community as stated in clause 8(F), would carry overwhelming weight for candidature to the highest office in the land.

To this end, Clause 8(G)(4) states that the Committee must be guided by the merits of the application by a prospective Presidential candidate. But what defines a meritorious application and on what basis will an application be deemed so? What factors are assessed to determine if an applicant sees himself or herself as a member of a particular community?

Is language a relevant consideration?

To begin with, and in step with the Government’s decision to institute reserved elections, the Government must concede that language is an important criteria that is intricately tied to race. To that end, does a minority applicant’s language abilities in his or her mother tongue matter to the relevant Community sub-committees, the same way it does for Singaporean students through their educational journey?

Would an applicant be expected to have passed his or her mother tongue at the ‘O’ or ‘A’ level? For example, should a Presidential candidate who sees himself as part of the Indian community pass muster if he or she can barely get on by in Tamil or the other MOE-recognized Indian languages for example? Can the Minister confirm if language proficiency is a consideration of the Community Committee? And if it is not, why not?

Ought the President’s spouse be a member of the same community?

Secondly, the President’s spouse is, for all intents and purposes a customary but central part of the Presidency, reflected most vividly with the portraits of both President and First Lady prominently displayed in all government buildings. Former Speaker of Parliament, Mr Abdullah Tarmugi put it differently when he told the Straits Times about his possible candidacy in the upcoming reserved Presidential elections (and I quote), “I’d be lying if I say that friends have not been asking me about it….if you look at the people who qualify, it is not that big a pool…..I have got to think of my own preferences, my life, my family and my privacy. This is not a journey I take myself.” (unquote) The last point is worth repeating and needs to be stressed, “this is not a journey I take myself.”

On that note, has the Government deliberated whether the background of an aspiring President’s spouse is a factor for Community Committee’s consideration in assessing whether the applicant is a member of a particular community? For example, in the case of an interracial marriage, what if the spouse of the applicant does not see himself or herself to be a part of the Indian community whereas the aspiring Presidential candidate does? What if a spouse has converted to Islam in order to marry but does not partake in the practices of the faith? Madam Speaker, these questions are central to the symbolic role of the President as a unifier of the country, and even more so after the Government has determined that some Presidential elections ought to be reserved for specific races. Should there be residual doubts about how Community Committee makes its decisions, the Presidency could be anything but a unifying office not just for Singaporeans in general, but the respective minority race in particular.

Is prior community work a requirement of candidature?

A third aspect of this Community Committee I wish to clarify with the Minister is whether the Community Committee would expect an applicant to be active in community work and what this entails. This expectation has also been referred to by one academic who was quoted in the media as saying that if an applicant has not been (and I quote) “in the public eye and is not active in community work, it is much harder to make the case for seeking election to the highest office of the land.” (unquote) What are the expectations of community service among the candidates and if so, are the expectations the same with regard to all four classes of candidates, namely the public sector track, public sector deliberative track candidate, private sector or private sector deliberative track?

A National Service requirement for male candidates?

Fourthly, during the recent debate on the Constitution, one PAP MP suggested that the presidency ought to be reserved for individuals born in Singapore. The Government did not address this point during the debate but perhaps it can today. Can the Government at least affirm that the Presidential Elections Committee shall not issue a certificate of eligibility to any male candidate who has not performed his two years of national service? This would be in line with the reality that National Service brings Singaporeans of all races together towards a common purpose and would serve as an important foundation for the life experience of any future President.

Not lowering the bar for minority candidates: the public sector deliberative track

Fifthly Madam Speaker, I take the position that because minority candidates are likely to be few to begin with, many candidates are likely to enter Presidential elections through the public sector track or public sector deliberative tracks rather than the more stringent private sector track with its $500m threshold. This may render hollow the Government’s claims that it is not relaxing the criteria to make it easier for minorities to assume the Presidency as a result of the latest constitutional changes. If so, the more accurate statement would be that the stringent private sector requirements simply do not apply for public sector track or public sector deliberative track candidates, minority or otherwise. What this point does reiterate however, is the importance of the Government sharing what criteria will be used by the PEC to determine if a public sector deliberative track minority candidate qualifies for candidature as President in the first place.

What happens when a minority MP steps down from a GRC?

Finally, the very idea of race poses other considerations in certain cases of reserved elections involving public sector track or public sector deliberative track candidates. For example, in the case of Madam Speaker, should the Honourable Speaker decide to stand as a candidate, what happens to the very existence of the Marsiling-Yew Tee GRC, which by law requires a Malay MP as one of its political representatives in parliament? Should it be passed, does this Bill herald a new precedent in marked contrast to the scenario in Jurong GRC some years ago when the late PAP MP Mr Ong Chit Chung passed on? Does the Bill, and the prospect of reserved Presidential elections change the Government’s thinking on this question: Would a by-election be called in a GRC when the minority member of a GRC steps down to contest in a Presidential election? Can the Government set its position out on this matter in light of the introduction of reserved Presidential elections?

Thank you.

Written by singapore 2025

06/02/2017 at 7:40 am

Posted in Uncategorized

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