Debated in Parliament on 13 Mar 2015.
Order for Second Reading read.
Mr Deputy Speaker, I beg to move, "That the Bill be now read a Second time."
Earlier, I had taken the House through the State Lands (Amendment) Bill 2015, which clarifies the extent to which a landowner owns underground space below his land.
There is also a need to amend the Land Acquisition Act to permit the acquisition of a specific stratum of space belonging to the landowner. These amendments can be found in the Land Acquisition (Amendment) Bill 2015. The Bill also contains other technical amendments, including amendments to clarify the provisions relating to the temporary occupation of lands. I will discuss these amendments in turn.
First, allowing flexibility to acquire specific stratum of space. The amendments in clause 3 of the Bill allow for the acquisition of specific stratum of space. This provides the Government with the flexibility to acquire only a specific stratum of space that is needed, for example, a pocket of underground space, instead of having to acquire the entire column of land, including the surface land and the airspace, when developing public projects.
Where the Government acquires a specific stratum of space, the landowner will receive market value compensation for the acquired stratum. If the landowner's remaining land or surface development is damaged by the acquisition, he or she can claim compensation for the damages sustained. This is similar to other forms of acquisitions under the Act.
I turn now to the amendments which clarify the provisions relating to the temporary occupation of lands. Presently, the Act provides that where any land is required for temporary occupation and use for a public purpose, the President may direct the Collector to procure the occupation of the land for up to three years. The Collector, in turn, shall pay interested persons compensation that is agreed between the parties, failing which the difference shall be referred for the decision of the Appeals Board.
The Bill refines the framework for temporary occupation of land in a number of ways.
First, clause 9 of the Bill introduces a Schedule setting out the items that affected landowners may claim compensation for, such as loss due to displacement from the land or
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structural damage caused to the building on the land. The Schedule also sets out the basis on which compensation is to be assessed, to provide parties with greater clarity as to what may or may not be claimed.
Secondly, the Bill sets out the procedures and timelines for making a claim for compensation for the temporary occupation of land. This includes the timeframes within which such claims have to be served on the Collector, failing which the right to claim compensation is time-barred unless the timelines are extended by the Appeals Board. However, the Appeals Board may not grant an extension exceeding six years from the time when the right to compensate first arose.
Thirdly, the Bill permits those who are aggrieved by the Collector's award of compensation to appeal to the Appeals Board, in accordance with the procedure set out in the Bill. The decision of the Appeals Board is final and conclusive.
I turn now to the other amendments. The Bill provides that owners who suffer substantial impairment of their rights in land because of any temporary occupation, acquisition of specific stratum or severance may request the Government to acquire their entire property.
The Bill also makes a number of consequential amendments to the following Acts:
(a) The Rapid Transit Systems Act;
(b) The Street Works Act;
(c) The Land Transport Authority Act;
(d) The Public Utilities Act; and
(e) The Sewerage and Drainage Act.
Amongst other things, these amendments align the provisions relating to compensation for temporary occupation of land and the right to elect for acquisition within each of these Acts with the provisions of this Bill. Mr Deputy Speaker, I beg to move.
*Question proposed. (proc text)]
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Mr Deputy Speaker, last year, due to the development plans for the Thomson East Coast Line, several residents in my constituency had their properties acquired by the Singapore Land Authority to make way for the new MRT line. In total, 21 properties were acquired within my constituency.
I visited several of the residents to see whether I could assist them. When I spoke to them, I could sense their disappointment and frustration that their properties were being acquired and that they would have to be displaced from their homes. From their perspective, it does not matter that they would be compensated the market value for their properties. They would very much prefer that their properties not be acquired at all.
I acknowledge that in land scarce Singapore, the Government should have the power to acquire land for the common good or what section 5 of the Land Acquisition Act says as "public purpose". This will enable the state to build more public housing, more roads, MRT lines and other critical Government infrastructure which will be beneficial to the larger public.
Nevertheless, from this experience dealing with my residents, it is clear to me that the Government's decision to acquire land under the Land Acquisition Act would have deep impact on the lives of affected Singaporeans. Hence, I call on the Government to utilise the powers under the Land Acquisition Act sparingly and judiciously and only when there are no other viable options.
For this current amendment Bill, I wish to ask the Senior Minister of State the following questions:
Clause 4 of the Bill provides that the Board is to take into consideration the market value of the airspace or subterranean space acquired. Whilst I agree with the concept that we should continue to pay the market value of any land acquired, may I ask the Senior Minister of State whether valuers are able to determine the market value of airspace or subterranean space? Has the Singapore Land Authority consulted the professional valuers as to how they would be able to value such space considering that this is quite a new development?
Next, clause 5 of the Bill which amends section 42 of the Act, provides for the state to acquire land for temporary occupation and use for a public purpose. But the Bill states that the Collector may procure the temporary occupation and use of land for a term ordinarily not exceeding a total of three continuous years. Can the Minister confirm that in extraordinary circumstances, the State can procure the land for a term in excess of three
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continuous years? If so, can the Senior Minister of State indicate what would be considered extraordinary circumstances to justify the state taking away the land for so long? In many circumstances, sometimes three years may be seen as quite long and, certainly, not seen to be temporary.
Next, the amended section 42(3) of the Bill provides that the Collector is to provide at least one month's notice to the person interested and every occupier of the land. Does that mean that the interested person or the occupier must vacate the land and deliver possession within one month? Surely, the period of one month is too short for most occupiers or interested persons to deliver possession to the State or to the Collector. May I urge the Government to consider giving more grace period to the interested person or the occupier to vacate and surrender possession to the State?
Next, section 42(7) provides for the Collector to return all temporarily occupied land to the persons interested on the expiry of the term. In the event that there is a dispute about the condition of the land which is returned, what is the means of resolving the dispute? Would the person interested have to make a claim against the Government in Court or does he make a claim through the Appeals Board? Can the Senior Minister of State clarify the dispute resolution process? Can he make a claim for compensation for the reinstatement works that he feels is rightly due to the land?
The Schedule of the Bill provides for the basis on which compensation is to be assessed. May I ask the Senior Minister of State in situations where the land acquired or required for temporary use is zoned residential but has been given a Temporary Occupation Licence for use as commercial, would the State consider the financial losses arising from the loss of business? I am of the view that we should compensate an owner or land user based on what the landowner is actually using his property for and not what the property was zoned for. If a person interested has suffered financial loss because the temporary loss of occupation has disrupted his trade or business, why should he not be entitled to claim for losses? And section 43(3)(a) seems to be at odds with the principle of paying a fair compensation to the affected occupier or person interested.
Finally, I understand that the state does provide ex-gratia payment for some owners on a case-by-case basis. The ex-gratia payment is made outside the ambit of the Land Acquisition Act. Would the state consider amending the Bill to include a provision for payment of the ex-gratia payments as well as the basis for determining the amount payable?
Subject to the clarifications, Mr Deputy Speaker, Sir, I support the Bill.
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Mr Deputy Speaker, as the Senior Minister of State had explained, the amendments to this Bill are to enable the Government to acquire a specific stratum of underground space or air space to develop public projects, instead of having to acquire the entire column of land. It also elaborates on issues of temporary occupation of private land for public purposes.
I support the Bill. I have some clarifications regarding temporary occupation of land.
Part VI – "Temporary Occupation of Land" is proposed to be repealed and replaced by "Temporary Occupation and Use of Land".
Under clause 5 of the proposed Part VI, section 43(3)(a) of the Bill, financial loss resulting from the interruption of any trade or business carried out on any land cannot be taken into account in the assessment of any claim for compensation.
I noted the previously stated Government position on compensating for business loss. The then-Minister for Law Prof S Jayakumar had stated in April 2007 in an earlier amendment of the Land Acquisition Act that the Government will not compensate for business loss because "it is a very difficult set of factors to assess business loss and loss of goodwill."
While it is true that there are many factors affecting business loss or loss of goodwill besides the temporary occupation, business owners, especially the small business owners, can be adversely affected by temporary occupation. For example, if part of the land was occupied such that significant frontages of the land have been taken away or customers have to make big diversions to enter the business unit.
I would like to ask how the Government would view requests from businesses that have, indeed, suffered loss of business and loss of goodwill from temporary occupation. Would there be some form of Government assistance schemes that they can be provided with?
Also, what if the land was leased to tenants and the tenants quit due to the temporary occupation? The business associated with the land is leasing. Are landowners able to seek compensation due to the loss of tenants when the main business of the landowner is to lease out the land?
Next clarification pertains to the landowners requesting for acquisition. If the land owner is not happy with the compensation or other issues related to the temporary occupation, the landowner can ask for compulsory acquisition by the Government under
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clause 9. This is provided that the landowner has suffered a "substantial impairment of his rights in those lands", as defined by section 49A(8) of this amendment Bill. The definition of "substantial impairment" seems to require that no occupier can use the land for more than a year. So, the option to request the Government to acquire the space permanently is not always an option.
Assuming that the landowner has met the criteria of substantial impairment, there may be potential problems with requiring the Government to permanently acquire the land.
Under clause 7 of the Bill, the proposed section 49(3) states that, "Any notice under this section is irrevocable once given to the Collector."
I am concerned about this wording as this seems to suggest that once the landowner requests for the Government to acquire the land, that offer cannot be revoked even if the price offered turns out to be substantially below what the landowner feels is fair value.
What is the rationale for not allowing the notice to be revoked by the landowner? Is there a way for the landowner to be given an indicative value of the land before the request is made for the Government to acquire it? Is there any cost the landowner needs to pay if such a request for indicative value is allowed? And what will happen if the eventual price differs significantly from the indicative value?
Can the landowner challenge the acquisition price of the Collector in the Courts? And if a challenge is allowed, it may be costly and with unpredictable outcomes. Would it not be better to allow the landowner an option to revoke the notice for compulsory acquisition?
Mr Deputy Speaker, the power of the state to acquire land in Singapore traces its origin to the colonial era when the Indian Act 6 was passed by the Legislative Council in India in 1857, the territorial scope extending to the Straits Settlement.
When Singapore gained its Independence, the Land Acquisition Act was introduced in 1966 and this was a very important part of our development years. Back then, the philosophy behind land acquisition was based on this scenario – there were wealthy landowners who owned large tracts of land, the Government was relatively poor, there was a large population which did not live in very good conditions, there was high unemployment, there was lack of running water, electricity, utilities needed to be built, the city needed to be built.
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So, at that time the philosophy underlying land acquisition was that land acquisition should be facilitated, the Government should not pay too high a price for land and the main priority was that development should be facilitated for the people. And this was very important because what this meant was the compensation offered to owners was usually lower than the market value. The mechanism that was used for many years was either a statutorily fixed date or the market valuation and it was the lower one. Quite often, in the face of a rising market, landowners were offered lower compensation for land.
I believe that at that time this was passed, it served social justice because at that time large amounts of land were owned by very few people and those lands were taken for development and the majority people had benefited from that. We have seen infrastructure, public housing and a metropolis grow on the back of that land that was acquired.
As time went on, the philosophy underlying land acquisition evolved and changed. I think the next big land market legislation was probably in 2007 when legislation was passed to allow landowners to get the market value of land. And this was, I guess, in the face of a different context. Landowners, particularly those who owned private property, are still amongst the wealthier group in Singapore, but it is no longer a situation where you have a few landowners owning large tracts of land. Instead, what you have are many people who might own private property for whom the private property is probably their most important asset. So, in this regard, land acquisition, whilst still necessary, became more generous to the people whose land was being acquired. I think this is in line with the evolving philosophy of the context we are in.
In this regard, I think the current changes to land acquisition mark another important step, because it actually gives the Government more flexibility but to acquire less rights from people. It allows the Government to, one, acquire subterranean land; two, acquire airspace; and three, use land temporarily. The big challenge with doing this is that there is no easy mechanism to value these rights. How do you value subterranean space? How do you value airspace? How do you value temporary occupation? In that sense, the philosophy that an owner should be given fair value for the rights he loses I think is still there, but because the difficulties in valuing this, I believe the new Act comprises a set of guidelines of how this should be done, at least in the early stages.
As for why this Act is necessary, I think for many of us, the subterranean land, the importance of that is almost self evident. It is necessary for the building of MRT, for most things that come to our house, they run underground, whether it is water, sewerage, electricity, gas or even data. So, subterranean land is obviously going to be extremely important. Airspace – it requires a bit more imagination but I anticipate that this is in line with future development. More practically, it also allows the Government to acquire strata title, so this means you could potentially get rooftops of building, if necessary, for some
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future development. This Act gives the Government rights to acquire airspace but it may not be used fully now but in future one never knows what the imagination of builders can come up with. I think it is right to set it down in principle as well. It does not mean it will be used straightaway.
Temporary occupation – I have seen this, in fact, quite often especially when developments are coming up if, say, public works is being done to build a MRT station, you might need a temporary site office so that you do not have to acquire the land completely, you can just acquire it temporarily while that is being done. While all these things give the Government the right to take some part of the land without taking all the land, the underlying principle that the people whose rights are affected will be compensated is still there and I think in line with the developments from 2007.
The earlier speakers have asked for clarification on various points including how land will be valued. My own take on this is that a lot of this will be left to tribunals to develop. The tribunals have been given guidelines and these guidelines have actually set out quite specifically in clause 4 of the Act, for example – this is the compensation if you lose rights in your land such as airspace and subterranean space, it takes into account the damages and losses suffered by the owner, the market value of the airspace, and whether the person is required to relocate.
So, this sets out the criteria. These can be things that they look at. If you ask me, if a person has not been using his subterranean space, there might be no market value for it at the moment, but he could be compensated for any losses he might suffer of if he had to relocate. Whether there is a market value may depend on future evolution, so I think this Act gives the scope for tribunals to take those factors into account, and it does not mean they have to take it into account right now.
My own view is that I do not think there are easy answers to that right now. But that does not mean that should prevent the Act from being passed because this is an Act that will evolve as and when tribunals interpret it.
Section 43, likewise, says that the compensation for temporary occupation includes the losses the person would suffer if he has to relocate. It specifically excludes business losses and loss of profits. As a lawyer, I can see the reason for this. In any litigation claim we have, quite often lost profits are the largest component of any claim but also the most nebulous and difficult to quantify. So, I think excluding this is in line with making this Act easy to administer and not imposing too big a burden on the State when going through land acquisition.
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At the same time, I think the option there to compensate the individual who loses his rights for his losses is probably good protection for that individual whose land may be acquired. And if the individual is required to relocate or needs to relocate, he also has the option of getting compensation for any renovations that may be required at the new location. So, there are adequate avenues there.
The final point, of course, is the interesting provision that actually allows the individual to ask for land to be acquired. I believe the philosophy behind this is simple – the idea of taking away parts of the rights and land from a person is that you do not want to take away too much of a person's rights. So, for example, if you take away some subterranean space and that makes no difference to him, then you can carry on with your works without affecting his rights.
On the other hand, if he felt that his rights were going to be significantly impaired, he would have the option to ask the Government to say, "Hey, just take over the whole land, I'd rather you do that than to take over part of my rights." I think this provision is also there to actually protect individuals and give them one more remedy in the event taking away part of their rights turns out to be worse than taking all of their rights.
This is a new development in land acquisition. It is moving in somewhat unchartered territories for us, but I think it is in line with the development of the Land Acquisition Act over the years. I think it is an Act that goes along that same philosophy of reducing the need for the Government to take over all of an individual's rights. At the same time, to provide flexible mechanisms for compensation in what is obviously going to be new types of rights that are being taken away. With that, I support the Bill.
Senior Minister of State Indranee.
Mr Deputy Speaker, I thank the Members who have spoken in support of the Bill and would like to respond to the queries raised by them.
Mr Lim Biow Chuan asked how the value of airspace or subterranean space would be determined, given that this is new. What is new in our context is the provision to acquire the airspace or the subterranean space, but valuation of airspace and valuation of subterranean space is not new. There are existing methodologies and this has already been done, in fact, for example, in respect of the subterranean space for the Tangs ION Orchard underpass. So, this is something really for valuers to address. I do not think that it would be difficult for them to do so. But insofar as anything is new, it would develop in the way it usually does,
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which is: people will apply existing principles; where existing principles do not quite cover the scenario, they will apply them analogously and from the analogous principles, they will start to develop new principles to cover new situations. So, this is really a matter of valuers' expertise but they ought to be able to do it.
The second question Mr Lim raised was with respect to the period of occupation and he asked if the state can procure the temporary occupation of the land for more than three years.
The framework for temporary occupation of the land under this Land Acquisition (Amendment) Bill is being amended for clarity and obviously the agencies would want to be careful and would not ordinarily want to occupy the land for any longer than necessary. So, the general guideline under the Land Acquisition Act is that the agencies should not temporarily occupy private land for public works for a period of more than three years from the start of the occupation. But we do envisage that there may be instances where the work that needs to be done may take more than three years and that is the reason why the amendments provide some flexibility to cater for instances where a longer temporary occupation period is necessary. An example may be where the works suffer delay due to unforeseen circumstances and you have to extend the time. But throughout that period, of course, the owner will continue to be eligible for compensation.
Mr Lim asked if affected owners and occupiers must vacate the land and deliver possession within one month and whether that would be enough time. The provision under section 42(3) actually provides for notice of at least one month. So, it does not preclude the giving of longer notice. Certainly, the agencies will take into account the reasons for the temporary occupation of the land. In some cases, it could be minor works; in some cases, substantial work. As an example, the temporary occupation of land may be in respect of a small part of land, let us say a grass verge or a fence, and you need it urgently. In such a situation, a month should be sufficient. But in other scenarios where the work does not need to be done immediately, you can give the owner more time and that will also give them more time to make the necessary arrangements. But I think the agencies will be mindful to provide adequate notice, especially in cases where the owner or occupier has to relocate.
Mr Lim also asked about the basis on which compensation is assessed for temporary occupation. The Schedule sets out the categories of loss or damage for which compensation can be claimed and it also sets out the basis or the principles of assessing the compensation. The categories are under the first column of the Schedule, and the bases are in the second column of the Schedule. But the bases for assessing compensation – that means the second column of the Schedule – those are actually not totally new, because they are almost the same as those presently found in the Fourth Schedule of the LTA Act. Under the LTA Act, they often have to do these kinds of temporary works, so the compensation principles mirror
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those found in that Act.
And in any event, the agencies typically reinstate the land and where you have reinstatement of the land that is in lieu of compensation, they will work with the landowner in that process before returning the land. In those cases, where you have reinstatement, the issue of compensation will not arise, obviously because there has been reinstatement.
Mr Lim also asked whether zoning would be taken into account and if I understood him correctly, he raised this in two scenarios: (a) acquisition; and (b) temporary occupation. It would not apply in temporary occupation. Under acquisition, there is a particular regime and it is governed under the land acquisition principles; that is, willing buyer, willing seller and you take into account zoning density, and so on. That is because you are actually selling the land. For temporary occupation – you are not selling the land. The ownership does not transfer so it is a different regime and the idea of zoning would not come into play.
With respect to acquisition of land, it depends what the zoning or the purpose is. For example, if the use of the land is subject to certain qualifications and if that, for any reason, precludes taking into account that use for compulsory acquisition, then you have to go in accordance with the terms and conditions of the permission for the use of the land.
In short, just to remember, the principles of compensation for land acquisition is in one part of the Act; the principles for compensation for temporary occupation is another part. They are not exactly the same regime. So, we must not mix up the two.
Mr Lim had also asked about ex-gratia payment and the basis for determining such amounts and whether they could be included in the Act. Ex-gratia payments by definition are made outside of the statutory framework and the reason for having the ex-gratia payments was to enable the state to have the flexibility and the discretion to alleviate financial hardship.
We have used this on occasions, for example, with respect to the acquisition of certain units at Pearl's Centre. If the suggestion is simply to include a line to say that ex-gratia payment can be made, then today as ex-gratia payments can already be made, such an amendment would not really add to the framework. But if the suggestion is to start listing out the bases and factors for the exercise of the discretion to grant ex-gratia payment, then this would necessarily constrain the exercise of that discretion which would go against the purpose of such payments. One of the reasons for the policy of ex-gratia payments is so that you can be flexible enough to alleviate the hardship.
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Mr Yee Jenn Jong raised the question of business loss. The Bill provides for relocation expenses and, in some cases, re-configuration costs where the need to re-configure is the result of acquisition. But business loss can arise due to a whole host of factors – loss of goodwill, economic downturn, business management strategies and so on.
As Mr Yee noted, this had been explained before in this House by Prof Jayakumar, who explained that it is not the policy or intention to compensate for business loss or loss of goodwill because loss of goodwill of a business is usually due to a combination of many factors. It could be due to a downturn of the economy, business management strategies and not solely due to the relocation caused by the acquisition. So, it is a very difficult set of factors to assess business loss and loss of goodwill, and that policy has not changed. But, nevertheless, where the business affected faces significant hardship, we will of course look to see how we can assist.
Mr Yee had raised one other question with respect to substantial impairment. The amendment contemplates that if there is substantial impairment to the land, the owner can ask for his remaining land, together with the land that is temporarily occupied, to be acquired but Mr Yee asked whether the giving of notice to ask for the acquisition should be irrevocable.
The reason why the Bill is framed in this way is because, if not, then the person would ask you to acquire and then once the compensation amount is given, he could say, "Oh, I don't like it. Please, I don't want you to acquire it now" and it would allow somebody to play fast and loose which is not the intention behind the Bill. The intention behind the Bill is to assist somebody who, as a result of the temporary occupation, has found that the whole of his land is substantially impaired and he cannot use it for more than a year and it is really for all intents and purposes very difficult for him to continue with his land. What he can do is to ask the Government to acquire it, and the purpose of making the notice irrevocable is so that that person thinks very carefully and asks himself, "Is this the right thing to do in this scenario?"
Mr Yee's other concern was about the compensation amount, and what happens if the compensation amount is not to the person's satisfaction. That part is addressed by the Bill because once you ask for it to be acquired, and if it is found that it is substantially impaired and the state acquires it, then the whole framework and regime under the Land Acquisition Act for determining compensation will kick in. The Collector will give the assessment and if the person is not happy, the person can appeal to the Appeals Board. There is an established set of principles which will allow the Appeals Board to determine what the market value of the land to be acquired is.
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Do Members have any further clarifications to make?
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. – [Ms Indranee Rajah].
Bill considered in Committee; reported without amendment; read a Third time and passed.
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