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Lawrence Wong urges stronger public-private tie-up in developments
MINISTER for National Development Lawrence Wong called for a strengthening of partnership between the government and the private sector through new partnership models for Singapore's development plans to realise its plans of optimising space options and preparing for the digital economy.
Speaking at the 57th anniversary dinner of the Real Estate Developers' Association of Singapore (Redas), he tossed up two partnership models that could be further deliberated on.
One is the "master developer" approach in the development of new districts. This is similar to the approach taken for developments at Marina Bay where the government sliced out large land parcels and allowed developers to optimise the different land uses and build in a more integrated manner, while the risk for such large-scale projects was also mitigated by giving developers options to phase out the projects.
Such an approach is also demonstrated in countries such as the UK, where private firms work with local authorities in London as master developers for the Canary Wharf and King's Cross Central - both of which were dis-used industrial and port facilities and for which developers took a long-term view in developing. Canary Wharf has now become a global financial centre and King's Cross has become a successful mixed-use development.
In the case of King's Cross, developers took it upon themselves to conserve old buildings with the view of enhancing its long-term value, which Mr Wong deemed as a "very enlightened view".
"There are many opportunities for us to think about effective public-private partnerships. Our context may be different from other countries but we can work more closely with the private sector to jointly develop our future city," said Mr Wong, who is also the Second Minister for Finance.
Another partnership model that the government is studying is through the setting up of Business Improvement Districts (BID). These are business-led and business-funded bodies formed to improve a defined commercial area. Such BIDs already exist in many countries such as Germany, Japan, Australia, New Zealand, the US and the UK.
Under a BID, property owners and retailers are represented and have a say in what they want for the BID area. They contribute funds which would be ring-fenced for use in the BID area and come up with their own solutions to make the BID area more attractive.
"It allows stakeholders to have direct ownership and responsibility in implementing plans for an area," Mr Wong said, adding that this helps bring in vibrancy and generates footfall for the district.
Even as the government keeps tabs on the short-term challenges facing the industry, Mr Wong said that the government is training its eyes on longer-term strategies to keep Singapore in the premier league of global cities.
Since the formation of the Committee on the Future Economy (CFE) earlier this year, the committee has been deliberating ideas with many stakeholders including Redas.
One of its key priorities is to expand Singapore's space options and broaden its infrastructure and economic development across the island. This goes beyond reclamation plans to embarking on new methods of reclamation like the polder, which will reduce significantly Singapore's reliance on imported sand, and studying how to create more underground space.
The second priority is to ensure Singapore's infrastructure plans keep pace with the digital economy. On that note, Mr Wong said the government is studying how to strengthen its digital network infrastructure, which could include better connections through sub-sea fibre optic cables, and enhancing domestic wireless networks to create a "plug-and-play" environment for connected devices and Internet of Things applications.
In his speech at the dinner, Redas president Augustine Tan also concurred that it is timely that Redas step up its cooperation with the public sector in view of the challenges ahead and to "collaboratively conceive ideas in various forms of real estate".
"The real estate industry needs to harness innovation and technology to build the infrastructure of the future that will be more sustainable, smart and responsive to the ever-rising expectations of Singaporeans and commercial realities," he added. "We must continue to work closely with all stakeholders, from researchers and academia, to the rising start-up ecosystem."
Among developers, UOL deputy group CEO Liam Wee Sin voiced his support for the idea of developers master-developing a precinct and not just a single plot. But the challenge is how to align the interest of the developers with the government's and share the risks and rewards.
One way is to provide some flexibility such as having a mechanism for the master-developer to call on options for subsequent phases of development, given that huge land holding costs may be prohibitive for a master-developer. There could also be staggered land tenures for each phase of development given the long duration of such projects, Mr Liam suggested.