Budget 2024: Improving Management of State Lands

Mr Chairman,

Last year, Singaporeans learnt that two of our ministers were renting large black-and-white bungalows, sitting on hundreds of thousands of square feet of prime land, from the Singapore Land Authority (SLA) for twenty to thirty thousand dollars per month.

The subsequent debates on the issue made Singaporeans aware of a large underutilised asset that forms part of our Past Reserves.

My cut today will focus on some questions regarding how State lands, including black-and-white bungalows, are managed.

SLA has a responsibility to judiciously manage these assets. This is especially important for cases where the lands are rented out for less than 10 years, because in these cases, the rents do not form part of the Past Reserves protected by the President.

For Financial Year 2022, it is stated in the Government Financial Statements that the Government received $1.48 billion in rent, presumably from the 2,600 state properties managed by SLA, which includes about 600 black and white bungalows.

However, we have little other information on the management of State lands and properties.   We do not know the total cost of maintenance for example.  We also do not know how many of these properties are vacant and for how long.

For example, No. 26 Ridout Road was vacant, and in a very bad condition, for more than 4 years before it was rented out. Are there any other similar cases today?

We believe that no landlord would allow this to happen with their properties. Why did SLA and the Managing Agents allow this to happen?  Who are the Managing Agents and how are they appointed?

Such a situation should never have been allowed to happen. While the Government has been very careful to recover the market value of land even if it is for public housing, it seems much less concerned about the fact that state properties can be vacant, not generating any income, and falling into disrepair for years, even if they are in prime and prestigious areas.

In August last year, I asked a Parliamentary Question (PQ) about the occupancy rate and median vacancy period of black-and-white bungalows, but these specific numbers were not revealed.

PSP calls on SLA to reveal these statistics, not only for black-and-white bungalows, but for all state properties under its charge.

The rental values of many black-and-white bungalows are negatively impacted because they are not retrofitted to modern standards. My colleague Hazel Poa asked Minister Edwin Tong why SLA does not install modern amenities to improve demand and rental rates. The Minister’s response was that modernisation could be carried out if SLA was able to cluster and rejuvenate these bungalows.

PSP urges SLA to conduct a cost-benefit analysis to determine whether higher rents would make it worthwhile for SLA to modernise black-and-white bungalows with amenities like air-conditioning, like what other private landlords do.

Singaporeans would also like to know what is the total land area occupied by the 2,600 state properties and SLA should look into making better use of large land parcels that currently form part of state properties.

These large land parcels are currently not attached value because it is market practice to use Gross Floor Area as the guiding component in determining rents. They are also considered “liabilities” to the tenants.

Where appropriate, SLA should review whether it would make better economic sense to keep the land parcels in the land bank or develop these land parcels in line with the URA Master Plan and invest the land sales proceeds as part of the Past Reserves.

Sir, there needs to be greater transparency and accountability over how SLA is managing State lands. This House has a responsibility to ensure this. State properties like black-and-white bungalows should generate good value for the taxpayer. Under no circumstances should they be allowed to be under-utilised, fall into disrepair, and be vacant for years.

We can do better. Thank you.

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