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Finance Minister Heng Swee Keat announced on Monday (19 February) that the government plans to create a new Rail Infrastructure Fund with an initial allocation of $5 billion this year to finance upcoming large-scale train projects.
“This can be topped up in future years when our fiscal position allows,” he said when tabling Singapore’s 2018 Budget yesterday.
Heng noted that one key challenge for the city-state’s infrastructure investments is that some expenses can be hefty and require a large amount of upfront funds. “Yet, the benefits are enjoyed many years down the road.”
To address this challenge, the authorities are considering to allow Statutory Boards and government-owned entities to borrow or issue bonds for infrastructure construction.
“This will help spread the cost of certain larger investments over more years. These infrastructure projects, once completed, will generate economic returns over many years. The borrowing arrangements for these project will hence help distribute the share of funding more equitably across generations,” he explained.
In particular, Heng revealed that the National Environment Agency is mulling to borrow or issue bonds to fund its future Integrated Waste Management Facility.
The Land Transport Authority (LTA) is also considering this move to finance the Johor Baru-Singapore Rapid Transit System Link (RTS Link) as well as the highly-anticipated High-Speed Rail (HSR) that will connect the city-state with Malaysia’s Kuala Lumpur.
Likewise, Changi Airport Group mulls borrowing for Changi Airport Terminal 5. Previously, the government established the Changi Airport Development Fund in 2015 for the said terminal, and it has currently saved $4 billion.
This article was edited by Keshia Faculin.
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