Good morning, ladies & gentlemen.

This morning's ground-breaking ceremony is a milestone in the history of Toa Payoh as well as public housing in Singapore.

When HDB was formed in 1960, the PAP Government, which had just come into office the year before, was pre-occupied with the problem of an acute shortage of proper housing for Singaporeans. The priority for HDB then was to build as many flats as possible within the shortest time. The emphasis was on quantity.

Over the years, as the pressure for quantity gradually eased, HDB started to build bigger flats and paid more attention to design and workmanship. Today, HDB’s capability to provide high quality housing at affordable prices is widely recognised, as was demonstrated when HDB won the United Nations World Habitat Award in 1992 and the Singapore Quality Award last year.

As buildings and facilities get older, however, the contrast between the old and new estates will become increasingly stark if nothing is done. The old estates will gradually degenerate. To prevent this, the Ministry of National Development has embarked on an Estate Renewal Strategy or ERS. This is an integrated and systematic approach to rejuvenate older HDB towns and estates to make them more compatible with the newer ones. Under ERS, residents can continue staying in their estates and still enjoy a quality lifestyle. At the same time, ERS enables valuable land to be developed to its maximum potential.

Toa Payoh is the first town to be comprehensively planned by HDB. It is also the first town to benefit from ERS. Since the ERS for Toa Payoh was announced in September 1995, rapid changes have been taking place. The first blocks of SERS replacement flats are completed. Eleven precincts in Toa Payoh, or about half of those eligible, have been offered the Main Upgrading Programme. The MUP in 3 of these precincts has been completed. More than 5,300 new HDB flats, including SERS replacement flats, have been built over the past 5 years. In addition, there are three private developments and a regional sports centre. When all the proposals are implemented in the next 8 years, Toa Payoh residents will enjoy a better lifestyle in an improved living environment, complete with quality housing, pleasant surroundings, bustling commercial activities and sports and recreational facilities.

Under the ERS for Toa Payoh, the town centre will be transformed and made young and vibrant again. The new HDB Centre is the main project in the comprehensive redevelopment of the town centre. When completed in 2002, the HDB Centre will be a new landmark for Toa Payoh. The $450-million HDB Centre will provide 125,000 sq metres of office space and 44,000 sq metres of retail space. This relocation of the HDB Centre to Toa Payoh is also part of the overall plan to move large government agencies to suburban sites served by MRT stations. This will not only ease congestion in the central area but also make it more convenient for the thousands of Singaporeans who visit HDB each day. A new bus interchange will be built and integrated with the new complex and the nearby Toa Payoh MRT Station to provide a pedestrian-friendly environment.

The new HDB Centre will be an intelligent and user-friendly building complex, even during its construction stage. I understand from HDB that the project’s contractor will adopt a new system of construction, called SMART, which is being used for the first time in Singapore. Under this SMART system, the construction site at the twin tower blocks will be enclosed by all-weather protective roofing to create a safer and more efficient working environment. A production yard making precast and prefabricated components will be located within the site itself. The latest technologies in highrise reinforced construction will be used. The net result will be higher productivity and less wastage.

The decision to build the new HDB Centre in Toa Payoh was taken in 1995. Our economy was then growing robustly. However, the situation has changed drastically over the last one year. With an economic slowdown, the natural reaction would have been to cut back on development spending. Instead, we are going ahead with the new HDB Centre. We are able to do so because the Government has always been financially prudent. Development projects are evaluated on their individual merits and only those which are viable are approved.

This philosophy of financial prudence has enabled the Government to take a two-pronged approach to resuscitate the economy during this difficult period. Firstly, we have cut various business costs by reducing property taxes and other government tariffs and charges, rentals for HDB and JTC shops and factories, development charges, etc. As a result, the Government has incurred its first ever budget deficit in many years. The budget is expected to run into deficit again next year and perhaps even the following year. The market has not reacted negatively to the prospect of budget deficits because analysts know that government spending continues to be prudent and based on sound decisions.

The second approach taken by the Government is to generate new economic activities. In this regard, we will continue to offer incentives and attract foreign capital to invest in Singapore, particularly in knowledge-based industries. We will broaden our markets and seek out new markets. We are also liberalising our banking and finance sectors.

At the same time, we are bringing forward our major infrastructure projects, such as expanding the building programme for primary schools, and road networks. We are taking full advantage of the current situation of lower tender prices and lower cost of materials to invest in and build up our infrastructure. This way, when the economic crisis blows over, these investments in infrastructure will enable us to push ahead of our competitors in a new era of high economic growth.

Today’s ground-breaking ceremony is an example of the Government’s ability to steer Singapore through this challenging period.

Thank you.

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