Aviation (Miscellaneous Amendments) Bill

Mr Deputy Speaker, at the recent Committee of Supply debate for MOT, Second Minister for Transport Mr Ng Chee Meng shared with this House exciting plans for the further development of Changi Airport, specifically the building of Terminal 5.

Second Minister Ng told us that we have almost fully utilised all the 66 million passengers per anuum (MPPA) capacity and by 2019 Jewel Changi Airport will open and bring the total capacity to 85 MPPA.

We are further told that T5 will be, I quote, "a game changer" allowing an additional 50 MPPA even in its initial phase. As Second Minister Ng puts it and, I quote, "50 MPPA is a 60% increase from Changi's current capacity and is more than the combined capacities of Terminals 2 and 3".

Changi Airport has been facing keen competition from other airports, including, notably, Bangkok Suvarnabhumi and Dubai. There is competition from our neighbours or rivals. Suvarnabhumi is set for a 117-billion baht upgrade through 2021 which will include, like us, a third runway. Hong Kong also has plans for a third runaway.

Thailand's development plans for its aircraft maintenance, repair and overhaul (MRO) industry and aerospace manufacturing sectors include a 5.7-billion baht airport upgrade for MRO facility.

There is competition from other ASEAN airports as well for air cargo operations business. There is a constant fight against direct long-haul passenger flights between Europe and Australia bypassing Singapore.

It has not been easy. CAG has done a good job thus far and I certainly hope the new proposed levy will not have any negative effect.

The plans for T5 are bold and ambitious. At the business level, I hope these plans will augur well for Changi Airport's place as a world and regional air hub. It is exciting times for Changi Airport, indeed.

Just as the MPPA figures which Second Minister Ng just trotted out may have excited me in terms of the global growth of our airport in the near future, I have a concern with the possible increase in pollution any such expansion may bring.

Admittedly, the continuing success of Changi Airport and its future expansion are an important factor in our economy. However, these benefits must also be weighed against any environmental impact Changi Airport has on the quality of life of Singaporeans living near the airport and possibly on the eastern and north-eastern part of Singapore.

Apart from the impact of greenhouse emissions on a global climate, there are two kinds of pollution arising from airport operations which have an effect locally: air pollution and noise pollution.

In the case of Changi Airport, some relief that having its runways facing the seas will be useful in reducing land-based pollution although wind direction will play a part, too, for air pollution.

Having said that, it has been recognised that air pollution at airports arises from a combination of aircraft and road traffic emissions associated with the airport. Road traffic includes passenger vehicles like buses, taxis and cars visiting the airport to send or pick up passengers as well as maintenance vehicles, vehicles carrying luggage, personnel or catering and even security and fire safety vehicles.

Airports are known to produce large amounts of toxic emissions. They are a threat to human health, including nitrogen oxides, carbon monoxides, sulphur oxides, particulate matter and volatile organic compounds (VOCs). Air pollution through these pollutants can present a public health challenge. Elsewhere, it has been variously linked to cancer, asthma, stroke, heart disease, respiratory illnesses, liver damage, diabetes and even obesity, birth defects and dementia.

A bigger Changi means more than just an increase in flights but also proportionately more of the various ground vehicular traffic I have described above.

We should also not forget any increase in pollution from transporters if Changi should make use of its greater airport capacity to increase its business in air freight and logistics.

If an airport attracts significant local visitors to its retail and food outlets, it will also increase the amount of road traffic. Currently, many people love to visit the airport as a form of outing, attracted by plane spotting as well as the large number of retail and food outlets. With Jewel Changi Airport and the huge size of the proposed T5, the airport may attract more visitors for a day out at the airport.

Any increase in road traffic emissions does not just affect the airport location itself but also the roads leading to the airport.

Second Minister Ng had said that, with T5, there will be an additional 50 MPPA, which is a 60% from Changi's current capacity. Mr Ng cited 50 MPPA in its initial phase, so, the MPPA may possibly increase in subsequent years.

This Bill just proposed to enable the making of regulations to give effect to the Chicago Convention and any other international agreement to which Singapore is a party for mitigating specifically the environmental effect of international aviation emission.

But even as ICAO have painstakingly agreed in recent years to take various mitigation measures to reduce aviation emissions, such as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), our new aircraft CO2 emissions standards and so on, they alone may still be insufficient for various reasons, such as the non-application of emission regulations to older aircraft, given the relatively long lifespan of aircraft or the non-uniform application of regulations across different states. Another example is that carbon offsets alone may not guarantee no pollution on the ground. Regulations also do not adequately address ground vehicular road pollution.

Above all, in a case like ours where flight capacity may increase significantly, I wonder whether the measures will still not prevent a relatively notable increase in air pollution. Perhaps, the Second Minister can explain how the Government intends to use regulations to assist in the control of aviation emission and to control and minimise pollution.

Noise pollution is the other type of pollution we can expect from airports. Residents currently living near Changi or even the Air Force bases in Paya Lebar or Tengah may, perhaps, be more used to varying levels of aircraft noise pollution.

Unlike military airports which may have strict flight times in the evening, for example, between 7.00 pm and 10.00 pm, many passenger aircrafts depart Changi Airport after 10 pm, throughout the night and during the early morning hours.

With the projected 60% increase in MPPA, will it bring new levels of noise pollution to residents living in the east and north-east, such as Changi, Loyang, Pasir Ris, Tampines, Tanah Merah, Bedok and East Coast?

I would like to ask the Minister the following questions in respect of both air and noise pollution.

One, what are the current levels of nitrogen oxides, carbon monoxide, sulphur oxides, particulate matter, volatile organic compounds or any other types of pollutants that are currently generated at Changi Airport as well as the projected levels of such pollutants which can be expected to be generated when T5 opens?

Two, has the Government done any studies regarding the projected air and noise pollution that may come with the opening phase of T5 and, if so, when can the Government release the details of such studies?

Three, beyond the application of international regulations discussed above, will the Second Minister clarify what are the measures the Government may be considering to reduce or minimise the air pollution from aircraft using Changi? Will the Government consider measures, such as the additional tariffs for older aircraft, to discourage airlines from using older aircraft?

Four, what are the measures which the Government will take to reduce or mitigate the expected increase in air pollution around the airport caused by ground vehicular traffic?

Five, does the Government intend to introduce any air or noise pollution safeguards to protect people living within a certain distance from the airport, for example, say, a radius of 10 km to 15 km from Changi Airport and, if so, what are these measures?

Moving to a different issue, with the third runway going to be completed first ahead of the completion of T5 and with the siting of T5 at Changi East, will there be any security implications for our air force units and assets currently based in Changi? Is there any intention for our RSAF jets to share the use of any runway with civilian aircraft in Changi Airport and, if so, what measures will be taken to bolster security for our air force units and assets as well as for Changi Airport generally?

Finally, on the subject of the levy, what is the rationale behind the different levies for origin-destination passengers and transit and transfer passengers currently set at $10.80 and $3.00 respectively per departure, including passengers on one-way tickets to Singapore and thereafter on separate one-way tickets to elsewhere, also set at $10.80?

Thank you, Mr Deputy Speaker, for allowing me to speak on this Bill which makes changes to our Air Navigation Act and the Civil Aviation Authority of Singapore Act.

I will touch on two objectives of this Bill.

One, to safeguard the financial sustainability of the aviation system, comprising the airport licensee/operator Changi Airport and airport users, such as airlines and passengers; and two, to set up a new airport capacity management scheme.

There are two key amendments relating to the safeguarding of the financial sustainability of the aviation system. The two amendments allow for the following policies to be implemented.

The first is the collection of the new Airport Development Levy (ADL), which would form part of airport users’ share towards funding the new Changi East developments. The Second Minister has explained why we would need an ADL during the MOT Committee of Supply and that the Government had arrived at the ADL quantum of $10.80 for Origin-Destination passengers and $3.00 for Transit/Transfer passengers after studying the funding models of other airports and consulting the industry in Singapore.

Can MOT update us, after consulting the industry on ADL, whether it has received any feedback on this? Will MOT consider offering a staggered implementation of the levy so as to help airlines implement the new levy?

I have expressed during the COS debates that this increase should not affect the competitiveness of Changi and we do not want the airlines to feel that it is disadvantageous for them to operate here as that will affect our status as an air hub.

The second policy is that this Bill allows for the creation of a reserve fund from the Changi Airport Group’s profits. The aviation system is often subject to short-term shocks, as we have seen over the last decade, whether it is the global financial crisis, pandemics, wars or even oil price fluctuations.

The CAG, being a monopoly, has been able to weather such shocks better than the airlines and they have typically been able to generate a higher margin than the airlines due to their monopoly power. Since this Bill allows for a reserve fund to be built up from CAG’s profits, can the Ministry explain to us what this fund will specifically be used for. Could it elaborate the type of instance where this fund will be accessed?

Since the aviation industry is also a volatile one, vulnerable to external shocks, the workers in the industry have worked hard to help Singapore achieve its world-class aviation industry, can the reserve fund, fully or part thereof, be deployed to help low-income employees, such as ground handlers, tide over in times of need?

The other major amendment in this Bill aims to better optimise the use of airport capacity, by introducing a new airport capacity management scheme. This is particularly important as demand for air travel increases and we face terminal and runway capacity constraints before Terminal 5 is completed. This will allow Changi Airport to continue to grow, without sacrificing quality or efficiency in service standards.

I understand the new legislation will enable CAAS to set out the requirement for airlines to comply with allocated “slots”. A slot refers to the permission for an airline to use the infrastructure of a slot-coordinated airport, specifically runways and terminal building facilities, at a specific date and time. In capacity-constrained airports worldwide, slots are used to manage demand for limited capacity and ensure efficient airport operations.

In coordinating slots, Singapore currently follows the Worldwide Slot Guidelines published by the International Air Transport Association (IATA). These only provide administrative non-financial measures, such as de-prioritising a particular aircraft operator for future slots, or withdrawing grandfather rights for airlines that misuse slots.

As air traffic at Changi grows and we face increasing constraints, slot misuse, such as airlines intentionally flying into Changi or departing from Changi at a different time from that allocated, will impose greater productivity costs on airport users, airport staff and other airlines. Can the Ministry explain how the new airport capacity management scheme will allow for stronger deterrent measures and more efficient use of the airport? How does the Ministry plan to balance these deterrent measures so as not to create barriers for Changi to be the airport of choice for carriers in future? I just hope that Changi will not be perceived to be difficult or complicated to work with, considering our ambitious air traffic expansion plans and likely increase in competition from other airports in the region.

Mr Deputy Speaker, Sir, I support this Bill as it provides our aviation sector with the necessary legislation to keep track with updates and trends. It is also a step in the right direction to ensure that we have a vibrant aviation sector.

Mr Deputy Speaker, I thank the Members for their general support of the Bill and speaking on the Bill.

The amendments proposed in this Bill will ensure that our aviation sector remains robust and secure so that it will continue to grow and, in turn, support Singapore's growth. We have embarked on the Changi East project to position our airport decisively for the future. It is a large-scale and complex project, as I have said, to increase our capacity by 60% in the first phase, as Mr Dennis Tan had mentioned.

First, Mr Zaqy Mohamad asked about the industry's feedback on the Airport Development Levy (ADL). The last question by Mr Dennis Tan alluded to the ADL as well. Let me try to explain the issues. Our priority was, first, to set the ADL rates at a level that is competitive against other hub airports which have implemented similar charges for airport expansion. We also took into account our strategies for air hub competitiveness.

In deciding on the final quantum, we had taken into account the industry's feedback and suggestion for lower rates. For a fact, our initial proposal was to collect $12 from departing Origin-Destination passengers and $6 from departing Transit/Transfer passengers, but we had revised this downwards following our industry consultation.

Why we have a different scale is simply because the Transit/Transfer passengers do not use the full extent of the airport's facilities. And we thought this layering is a fair approach towards the charges. At the same time, we also noted concerns of the industry that they would need time to adjust to its implementation.

While there will not be a staggered implementation, the Government will put in place short-term measures to assist airlines. This will help to cushion the transitional impact on airlines and their business operations. Details are still being worked out.

Mr Zaqy Mohamad also rightly pointed out that the aviation industry is very volatile, easily susceptible to external shocks. Hence, we must have in place a robust system that can provide for the long-term financial sustainability of the aviation system.

Specifically, Mr Zaqy Mohamad also spoke about the deployment of the reserve fund. Indeed, the reserve fund will act as a buffer against significant shocks, such as a downturn in the economy, or a global pandemic, as I mentioned earlier, such as a SARS outbreak. When the SARS outbreak actually happened, CAAS, the airport operator then, introduced a temporary rebate in landing charges. This helped our airline partners tide over the challenging operating environment and ensured that the Changi air hub remained resilient.

The reserve fund aims to serve a similar purpose, to help our airport partners, which include airlines and also ground-handling agents, during these potentially difficult periods and to position them for recovery. This will then minimise the impact on businesses and workers in the aviation sector.

Beyond support for our airport partners, we are also strengthening our aviation system by optimising the use of airport resources and improving operational efficiency. Mr Zaqy Mohamad spoke about the new airport capacity management scheme and asked how the new scheme would enable more efficient use of the airport. As traffic through Changi Airport increases, slot misuse will place a heavy strain on our aviation system. The proposed scheme in the Bill will have a strong deterrent effect against deliberate and repeated slot misuse by airlines. For example, the maximum quantum of $100,000 would wipe out any profits from abusing any slots to operate a flight.

Mr Dennis Tan spoke extensively about the pollution issues. Let me try to address the five different questions as best as I can. On air pollution, I think this is why the Singapore Government has embarked on this Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) on a voluntary basis. We want to make sure that the aviation system is sustainable. So, together with the noise pollution that the Member mentioned, we have not done a study on air or noise pollution, but, from my own experience, the aircraft that come into Changi have newer technologies, newer engines. So, the pollution index is lower, the noise index is also lower. Furthermore, because of our urban planning, Changi Airport is situated to the east of Singapore, away from the populace. That is a design that has served us very well for the last 40 to 50 years – moving from Paya Lebar to Changi. So, the noise that aircraft bring in the dead of night is a lot lower and, as far as I remember, it does not impact the environment, in terms of noise, for residents in the east side.

The improvement of aircraft technology, basically the engines, will further allow us to have a sustainable regime for the air aviation industry to grow. So, beyond Singapore, internationally, aircraft engine standards in terms of air pollution and noise pollution are being enhanced each and every time new engines come online. We will consider Mr Dennis Tan's proposal if we should do a study, especially on air pollution.

For the pollution of vehicular support to the airport, there are various measures we take beyond the airport system. If you look at the whole MOT, we will encourage greater use of public transport. There will be an MRT line straight to Terminal 5. We hope to increase the public mode share of passengers to Changi Airport Terminal 5. And beyond this, we have put in place a vehicular emission regime for vehicles in Singapore, a new regime that raises the standards and minimises air pollution. We are already experimenting and promoting the use of electric cars on our roads. All these measures combined will, hopefully, dampen any increase in air pollution due to the new roads that may be leading up to Terminal 5. But, ultimately, the Government's position is to go car-lite. We have limited the growth of cars and other vehicles and, for car growth, it is down to zero now. So, we do take this very, very seriously and we continue to monitor the amount of pollution arising from these new roads in the future.

Mr Dennis Tan mentioned about the security issues with the RSAF. The third runway is not a new runway and operations between the Singapore Airforce and the Civil Aviation Authority have been ongoing for many, many years. Paya Lebar today is still a co-use airport even though it is hardly ever visited by civilian airliners. But Paya Lebar is ready for civilian diversions. Measures have been in place for many, many years to deal with civilian and military co-use. In fact, in Changi East, Runway Three used to be the military runway. For now, the airforce has moved out temporarily. In time to come, they will have to co-use the facilities again. The measures and the SOPs taken – I probably would not be at liberty to discuss here – have been in place for many years.

With that, I think I have addressed most of the questions from Members. And, therefore, Mr Deputy Speaker, may I conclude that, with this Bill, we will have the levers to support the air hub in growing from strength to strength so that it continues to remain a success factor for Singapore and bring benefits for Singapore and Singaporeans.

*Question put, and agreed to.*

*Bill accordingly read a Second time and committed to a Committee of the whole House.*

*The House immediately resolved itself into a Committee on the Bill. – [Mr Ng Chee Meng].*

*Bill considered in Committee; reported without amendment; read a Third time and passed.*