Govt to look at ‘most optimal way’ to fund mega projects: Indranee

SINGAPORE — The Government has to look for the “most optimal way” to finance new mega projects and would not rule out “different ways” of securing the funding, Senior Minister of State for Law and Finance Indranee Rajah told Parliament on Tuesday (Feb 6).

Her comments came as the International Air Transport Association (IATA), the airline industry’s most prominent trade body, publicly objected to suggestions in media reports that Singapore could charge travellers and airlines new or higher fees to help fund the construction of the new Changi Airport Terminal 5 (T5).

“We shouldn’t pay first without having the infrastructure ready to be operated and used by airlines and by the users,” Mr Alexandre de Juniac, IATA’s chief executive, told reporters on the sidelines of the ongoing Singapore Airshow on Monday (Feb 5).

In Parliament on Tuesday, Workers’ Party Member of Parliament (MP) Pritam Singh had asked Ms Indranee for the Government’s response to Mr de Juniac’s comments. Two MPs also separately asked about the Government’s measures to ensure that the costs for large-scale infrastructure projects, such as the T5, Tuas Mega Port and the Jurong Lake District, are well-managed.

Without naming any specific project, Ms Indranee said in response to Mr Pritam’s supplementary question: “When it comes to mega projects we have to look at what is the most optimal way to do the funding.”

She added: “We are still in the process of doing that and don’t rule out different ways of doing the funding. We will try to find the most optimal way to do the funding and spread it out over the proper period of time.”

The minister gave no further details on the funding alternatives being considered by the Government for T5, or other large-scale infrastructure project.

The Straits Times reported in January that passengers may have to pay S$10 to S$15 more as part of a new tax to fund Changi’s expansion, including T5. Charges for airlines may also go up by about 30 per cent. The new fees have not been officially confirmed.

MP Sun Xue Ling (Pasir Ris-Punggol) also asked Ms Indranee whether the public could track the spending for the mega projects over time.

The minister said the expenditures for such projects are reflected in the annual Budget book. “For mega projects, (their expenditures are) spread out but typically will be found in the budgets for the Ministry of Transport and Ministry of National Development,” she added.

MP Tan Wu Meng (Jurong) asked if long-term maintenance costs are taken into consideration, given that the design of some mega-projects could involve considerable upkeep over time.

Ms Indranee said the Ministry of Finance is studying the issue, adding: “Our view is that when you look at the cost of the project, you must consider not just the initial development but how much that project is going to cost you overtime. So we are looking to see how that should be dealt with and reflected.”