clc interview with mr s dhanabalan

7/25/2019 CLC Interview With Mr S Dhanabalan

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CLC Interview with Mr S Dhanabalan

20 December 2011

Interviewer 1: We are trying to document as much of the knowledge of what has gone

into making Singapore the city it is into case studies that we use in training.

So the process we are going through is really about talking to people, doing

research and writing up these case studies. We felt that underpinning the

more technical aspects of urbanization planning and development

was the role of urban governance, namely, leadership at the ministers

level, the policies, the thinking. We thought you would be one of the key

persons we should interview given that a lot of changes were made during

your tenure as Minister for National Development.

The reality of political imperatives in urban development

S Dhanabalan: Well, you know it is all very well to talk about land use, urban governance,

and all the logical and rational ways of approaching the planning and

building of the city. But to be able to do that well requires a very

competent and influential group of technocrats, people who really know

the subject. Unfortunately, they are not the ones who will determine what

the outcome is. The outcome is determined by political imperatives. The

political imperatives are such that when you look back, you can see many

mistakes that were made but those mistakes were not mistakes at the time

that the decisions were taken. So in the case of Singapore, in terms of land

use and urban planning, when the government came into power in 59, the

top priority was housing the population. Of course we had other priorities

like creating employment, building up a manufacturing sector so that we

were not so dependent on entrepttrade. Those were all great economic

imperatives. But in terms of the subject that we are talking about, housing

was the key priority. And so at the political level, it was clear that unless

you solved the housing problem, you were not going to be able to solve

many other problems. And the public servants and the civil service had to

take that priority into account in the way that they spent. Since housing

people was the top priority, questions about where the housing was, what

kind of housing was built and where, and how the land was used was

completely, I would say, secondary. I mean these were not even considered.

It was: Find a piece of land, build houses and decant people from the slum

areas into the houses.

Early disregard for the value of land

The whole of idea of land use and urban planning has an underlying

concept about the value of land. And value of land depends on location,location, location. But that was completely ignored. As I said, the priority


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was to build houses. So you would just build houses wherever land was

available or on whatever land that was easily cleared.

Example 1: Public housing in prime land

So what you find are two things. One, public housing, which in the earlystages was basic housing, was built in prime locations. I mean look at the

two blocks of flats near MacRitchie Reservoir, right on Thomson Road.

Lakeside, I think it is called. Can you imagine? Its HDB (public housing). I

think these were three- or four-room flats, in a point block. I mean can you

imagine a piece of land more valuable than that? With water, surrounded

by forests, wooded. And you put public housing there. Then along Farrer

Road, as you go up towards the city, on the right side bordering Kings

Road and so on, there is high-class private housing and on the left side,

Wollerton Park, which is also very high-value private housing. But they put

public housing there. Basically they were driven by the housing priority.

Secondly, I think since the focus was on the poor and those who couldnt

afford housing, and there was a kind of socialist overlay on the political

philosophy, the idea that one should not bring down the value of land of

private housing areas was almost questioning that political philosophy. I

mean who was more important? The poor, or the rich who were enjoying

all the very private, well-wooded, valuable land? So what if the value came

down? There was a little bit of that kind of thinking, probably not clearly

articulated, but a sort of underlying lack of concern with people who were

really well-off and who were sitting on valuable land.

And then they needed a simple system of pricing public housing. There

was some vague idea that near the city, land was more valuable, but as you

go outside the city, land became less valuable. It was a very crude one-

dimensional approach for valuing land near the city. So this is roughly the

shape of Singapore, with concentric circles, semi-circles. The tighter circle

is around the city, and all housing in that area was at the same price.

Outside this first circle the second band, third band, etc.the prices

went down according to the distance from the city. Which was okay, I

suppose, in the very beginning, as public housing was rented in the

beginning. It was only in 1967 or so, that people were allowed to buy. And

then it was, I think in the early 70s, that they were allowed to sell the flat

after five years. I am not sure of the exact dates. And once people were

allowed to sell these flats, all the other factors that determined the value of

land came into play it was there, staring into the faces of the policy

makers. The location of your house in any of those bandswas not the

way the house were priced and sold. It was sold according to whether it

was next to a park, next to a bus station, next to other amenities that you

needed. I mean, many, many other things which go into the valuation of

land came into play and people were already factoring these in when

buying and selling houses. But that was not reflected in public housing

prices nor in what to build and where, even as late as the 80s. In Yishun,


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for example, there was a huge reservoir created where the Orchid Country

Club is. So you have on the road, Orchid Country Club on the right, and on

the left is public housing. And all these flats have a fantastic view of the

reservoir and across the reservoir. I mean that would be considered prime

land. The first two or three blocks were put there, three-room blocks. I wasquite horrified when I went to MND and saw that there was no

consideration given to location in the valuation and no consideration given

in planning such that you maximize the value of land.

Let me give you an example. Everywhere you will find that the land next to

water has a premium. In Europe, for land next to a canal, if the canal is kept

clean, there is a premium because you have a space which is not built up

and so you have a greater ability enjoy a view. So one of the first things we

did was decide that land next to water must be properly used.

Example 2: The Central Expressway

One example that comes to my mind when the first plans for the Central

Expressway, CTE, were drawn up. The plan underwent quite a bit of

change partly because it had to be built through the city. The question that

arose in the minds of the road planners was: what can we move in order to

build this expressway?

We had to tunnel through the city, it was quite clear. We had to go under

the Singapore River. If you see the CTE now, it goes by the Istana, and then

goes down all the way under the river and then comes out at Chin Swee

Road. But at the time it was planned, the road would have run more or less

under where the National Theatre used to be. However, the National

Theatre was a politically iconic structure. So if you had to build a tunnel

there, it would have affected that structure. And the notion that you could

ask that the structure be removed was deemed awkward and quite rightly

so, you know, because so many people were involved in building the

theatre and it was a political project. So the plan was for the road at

Clemenceau Avenue to go above ground, past the National Theatre, and

then dive under the Singapore River. So for the CTE, I dont blame the road

planners because they had to take certain things as given. Then, for

completely other reasons, nothing to do with the CTE, we decided that

National Theatre had to go. And as soon as we said it had to go, they

readjusted the plan and we decided to go underneath. That is fair enough, I

mean that has nothing to do with the planners approach to the road

building.

But where the expressway came out after the river, this was where the

idea of how to maximize the use of land in urban design never occurred to

the road planners. The road came out and some of the exits ran smack next

to the river. When we looked at the plans in the ministry, I said, If you

already know that we need to maximize land next to water, we should becreating more land next to the river and not be putting a road next to a


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river. So put the exits away from the river and create land which will be

very valuable, which can be sold for all kinds of things. They adjusted the

plan but in doing so, we had to knock down a community centre which Mr

Hon Sui Sen had built. But fortunately, Lee Yock Suan was the MP at that

time as Hon had already stepped down Hon had passed away, I think.We said we would give money to build a new community centre. We would

knock down the existing community centre and have the exits coming out

from the land there, and create land between the exit and the river it is

valuable land that could have more expensive usage. So you see it took

some time for everybody involved in urban land use, roads, housing, and

other public facilities to begin to ask themselves: how do I maximize the

value of land for Singapore as a whole?

I dont think the issue was whether the people in the planning department

before URA, there was a planning departmentwere unaware of how

land should be used. I think they were not strong enough when telling the

politicians that something was not really good for Singapore in the long

term. And so they allowed themselves to be persuaded or pressured.

Example 3: The LTA building

I can give you other examples. The LTA (Land Transport Authority) and

MRT (Mass Rapid Transit) headquarters opposite Capitol Building [in the

city] should never have be put there. That building just makes the place

dead because what you have are blank walls facing the road. So why was it

allowed?

It was because the most important project of that day was the MRT. I

wasnt in MND at that time when the decision to put the building there was

taken but I do remember raising the question: Why are we having this

building there?And we were told that it was where the junction of the

two MRT lines, the East-West line and the North-South line, would be, and

that the controls needed to be there. Yeah, in the old days, you would

actually have had people pulling levers so that you would need to be there

where the tracks cross. But now, you are using buttons and electrical

motors. So you could be ten miles away and still do it. It was a spurious

argument but it was accepted. Frankly, I think the poor planners didnt

have much of a say because there were powerful ministers in charge

Ong Teng Cheong was in charge and then later Yeo Ning Hongso they

allowed it to happen.

Now I think we have a much stronger professional group in URA who are

prepared to make their views known. The trouble then was that the issue, I

think, was not even really presented to the political leaders that if they

did this, that is what would happen, and that there are better solutions

and then let the political leaders choose from the options. But the

professionals just assumed that the MRT was politically too important aproject and for them to even question the location of the MRT building. I


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think the professionals were not strong enough or the risk of challenging

or questioning was too great. So they just let it through.

I would agree that at the end of the day, the politicians have to make the

decision as to what it is politically more important. But they must know

that there is a cost of doing what they are doing. Now I think we have a

system in place that does inform the decision makers and politicians:

These are the alternatives and you choose.

The responsibility of civil servants

Interviewer 2: Can we expand a bit further there? There are some views that actually the

reverse is happening now. At that time, there were stronger professionals

who had working relationships with the older ministers and who could

stand up to those ministers.

S Dhanabalan: My point is not so much that you stand up to the ministers, but that you tell

the ministers the implications. As a professional, you can say to the

ministers: This is what we recommend but you make the decisions.But

to your point, I would say that probably those younger civil servants

thought that they would jeopardize their career if they were even to

suggest an alternative way, that it would endanger their career. Probably

that is it.

Frankly, in those days, under the old ministers, among the old civil

servants, they were very few who would question the ministers, very few.

Howe Yoon Cheong would be one of those. Others would just say: Tell mewhat to do, I will do it. LikeTeh Cheang Wan, who was outstanding in the

sense that you just needed to tell him what to do, and he would do it. You

need civil servants like that too. But before you get it done, you have got to

present the political leaders with the alternatives. You have got to go

through the process of actually making the choices clear to the political

leaders. And if the political leaders choose an alternative which you dont

agree with, but they know all the various options, then it is your job to get

it done. You dont at this point say: I dont agree and I am going to make it

difficult to get it done.

Central area redevelopment and the issue of conservation

The real rejuvenation of the business district and all that came in the

1980s and 90s, when the thinking had already changed. We asked

ourselves: What is the most valuable use of land in a particular area? Ill

give you another example. All the land at the foot of Bukit Timah Hill, from

Seven Mile up to where all the factories and warehouses were, is very

valuable land. Okay, in those days, that was way out in the outskirts, so fair

enough, nobody wanted to go and live there. But the moment that we said

that the land was much better used for housing, we gave an incentive to all

the owners to convert the use to residential and gain from the increased

value. Or rather, half the increased value, because of the development


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charge that the government imposes when a landowner changes the land

use. I was surprised that within ten years, the whole place had changed. It

is all condominiums, all the way from Princess Elizabeth estate, which had

been an industrial estate. But I would say that it was not a mistake then to

not to use the land for housing initially, as in those days, it really was inboondocks, way out there. The value of land as I said depends on location,

location, location and that is also relative. I mean what is the value of land

there in those days? Nobody wanted to go and live there. I was just

reminding my wife that when we first built HDB flats in Queenstown,

people didnt want to go there.

Interviewer 1: It was too far from town.

S Dhanabalan: Because it was too far from town. Just like Yishun was.

Interviewer 3: Even Toa Payoh.

S Dhanabalan: Even Toa Payoh. So I would not say it was a mistake in land use as it was

due to conditions prevailing at that time and you have got to act according

to that. But within the city, I think there were mistakes made in terms of

land use but fortunately not many like the MRT building. Some might have

been considered mistakes but I am not too sure now. In todays

environment, I do not know whether Raffles Institution would have been

knocked down to build Raffles City.

Interviewer 1: We preserved CHIJ [former site of a convent school], thanks to the MRT

control station.

S Dhanabalan: CHIJ, St JosephsInstitution and Raffles Institution with todaysthinking,

they probably would not have been knocked down. But is the city much

worse for that? I am not so sure.

We really damaged the city by putting Raffles City [commercial building

and hotel complex] there, by the way. The one mistake that we would have

committed but fortunately did not, thanks to the sheer delay in execution

and then a change in thinking, was the preservation of Chinatown. There

had been some idea of conservation but there was no clear plan nor an

economic and urban planning justification for conservation. So if you

remember, all those houses along Neil Road and Duxton Plain were cleared,

boarded up and ready to be knocked down for public housing. But then

there were people in URA who had been mulling over this and who were

very concerned about conservation. There were a few ladies in URA who

were strong and were prepared to speak up. And fortunately there was a

change of the ministers. I came in and they presented the plan to me and I

thought it was something that really was worth attempting to save. And

the argument that I put to cabinet, and which cabinet accepted, was that

we could clear everything and not even have public housing, but have

modern housing, modern buildings. Then I asked: what is the difference

then between Singapore and any city in the West? Because the


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architectural profession is pretty international, they tend to design things

more or less the same everywhere, everybody wants to have an iconic

structure. I mean Raffles City could have been a building anywhere in the

world and there are similar buildings now in Shanghai, Beijing,

everywhere. So we asked ourselves: should we knock down the whole ofChinatown, all those low-rise houses and build modern buildings? Then

the question was: if you dont knock them down, what could they be used

for? Can we go back to using them the way that they used to be used,

basically housing? And what would be the cost of such housing? And what

would be the change in the street environment?

We said that if we wanted to have a city that had some distinctiveness

about it, we should conserve the area because with all the reclaimed land,

we had enough land to build a new city. But we were also quite clear that

there was no way that we could recreate the Chinatown that was there.

This is what a lot of the social critics dont quite understand the life in

the street of Chinatown was the result of poverty. People spent their lives

on the street and only went back to the house to sleep because housing

conditions were so poor, and all they could do was find a bed to sleep on.

The whole life, social interaction, eating everything was out in the

streets. Why would people want to go back to that kind of lifestyle? Even if

we kept all these houses as residential properties, the atmosphere would

be quite different. In fact, it would have been worse. Commercial use at

least brought some life to the street. If they had all been kept for

residential use, each house would be for one family and that would be it.

Why would they come out to the street? Everything would be inside. It is

just like the difference in life in the common areas between a one-room flat

and a five-room flat. I had the largest number of one-room flats in Kallang

when I was a Member of Parliament (MP). You walk down central corridor

of the one-room flats and very few doors are closed because the flat is

small. They leave the doors open. They go out, people come in, people say

hi. The sense of privacy was not there. For the five-room flats, the people

go back home, close the door, and that is it Dont bother me.So it was

the same with Chinatown. There was no way we were going to be able to

recreate the bustling street life which many hankered for, especially those

who lived in better surroundings and went to Chinatown to eat on the

streets. But we knew that we could at least conserve the physical

landscape and then introduce new uses. Maybe gentrify it, make it

commercial, whatever, but keep basically the landscape of the place.

At that time we hadnt thought of Little India and Kampong Glam yet, that

we needed to preserve something that was reflective of Singapore culture

and history. That came later as a result of Chinatown. So from that, the

whole idea of conservation really began to be accepted. So the idea of

maximizing land use depends a lot on the timing, as there are times in the

history of a nation when other priorities take over and you have to meetthose priorities. And as I have said, housing was a top priority and we


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focused on housing but by the mid-80s the housing problem was more or

less resolved. We could have started a little earlier in looking at proper

land use. And the State gets a lot more money for the sale of the land for

private use, which can then go into public coffers to do other things.

Changing the pricing system for HDB flats

And then we decided that we should not have this concentric semi-circles

system for pricing. Every time we changed the price of HDB housing in an

area, we made it a public announcement, and people kicked up a big fuss as

always why are you increasing the prices?So then we did not

announce any increase, but would say what was the basic price that was

prevailing at that time, but we would have on top of that basic price, a

premium for location. A premium for location not just according to the

housing estate but also according to whether you were next to a park or

next to water, whether you were on the second storey, third storey, fourthstorey, or tenth storey. Every flat was priced differently and that was how I

would say we surreptitiously changed the whole pricing policy of HDB

without announcing a change in the pricing. Every development had its

own price. No more was the price according to the price zone. But we

never announced that we were deviating away from the price zone

approach to housing. We just kept that as a base and added on all the other

things, a design premium and so on. Such that now, every HDB block is

priced differently. But we had to move to that point rather slowly because

politically it would have been difficult if we had said that we were

abandoning the old housing pricing policy and going to somethingcompletely different.

Interviewer 3: How much of this was really thought through and how much was it really a

result of watching what happens and then kind of adapting things as you

go along?

S Dhanabalan: The change of pricing policy was definitely discussed in the ministry and I

said that it would be politically sensitive to announce a change in the

whole policy. So keep the prices as a base and then add on everything else.

Interviewer 3: But the change in the pricing policy itself looks like it was kind of learningfrom the past and then adapting. I am trying to understand how much of it

was really because you came in with a different way of thinking as a

minister versus something that lets say the ministry had already been

thinking about, planning, and it was only a question of when to execute it.

S Dhanabalan: Well, you have got to go and check the records. I may be a bit selective in

my memory but I dont think there had beena feeling that the old pricing

policy was wrong, that we needed to move to something new. It was a

natural outcome of thinking that public housing should reflect the value of

the land where it was being built. And you cannot have a broadband value,one value for all the land around the city. You must take specific factors


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into account. And then there was the question: do we announce that we

are going to have a new pricing policy? Or do we just keep the present

pricing policy but add on top of that other things which would ultimately

result in each housing block having its own price? The principle was we

must have a pricing policy that reflects location, not that we wereabandoning the old policy and coming up with something new.

Howe Yoon Chong a civil servant who dared to have different ideas

Interviewer 3: In fact, what you have just described is really very interesting in the sense

of how decisions and choices were made within the government. Can you

reflect, given the experiences that you have had, on the role of the political

leaders, the role of the civil service, and related to that, how much of what

was done was due to planning, how much of that came from really

experiential and pragmatic learning as you all went along? When we

reflect on our major urban decisions or the policies of choices, how wouldyou describe what was really at play in terms of our governance?

S Dhanabalan: Well, the government that came into power in 1959 had certain

imperatives and there was no question that the civil service had to work

with the political leaders to address them, whether it was employment,

housing or whatever. So I would say that in the initial phases, the public

service was really very much focused on how to execute what the political

leaders had decided on. I didnt come into politics until 1976, so that was a

good 17 years after the first government came into power. By the time I

got there, things were already beginning to change.

We also knew right from the very beginning that there were civil servants

who had different ideas. Howe Yoon Chong was a clear example. Check this

with the records in HDB or elsewhere, but I think he helped to moderate

the old focus that we had to produce flats to house the population and

asked about the kind of housing we were building. In the initial stages,

some HDB blocks were built with a common kitchen, common bathroom

and so on. But he felt very strongly that would not do Singapore any good.

We had to do something better than that, and better than what he told me

the political leaders were prepared to accept as one-room flats which were

self-contained. He felt that we should go for three-room flats two

bedrooms and a halland he actually got HDB to build some of these

residential dwellings which were above what the political leaders thought

was necessary because it would mean that we would build fewer. So there

were people like him, but not many I would say. He also was well advanced

in thinking about maximizing the potential in a piece of land in terms of

density or in terms of plot ratio. The planning department in those days

was still very much thinking of fairly low-density usage or low plot ratios.

He felt that land was too valuable.

I remember the big battles that we had. I was then in DBS and he was inPSA, as well as the chairman of DBS. He was also a civil servant by


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secondment, and the first condo that we built was in Ulu Pandan. Pandan

Valley. And the planners fought very hard and said it was too dense and

should not be allowed. He said no, and because he was a very powerful

man and very forceful, he managed to persuade people.

Pandan Valley was a DBS development. DBS bought that piece of land and I

had negotiated the purchase. He kept on pushing the density to be higher

and higher. In those days, the term used for residential use was density

and the term for commercial use was plot ratio. At that time, to be fair to

the planners, it looked a bit too aggressive because this was way out at the

end of Holland Road, surrounded by very low density. How could we allow

that kind of high density? But now, it doesnt look so dense compared to

when you look at other condos. So in that sense, Howe Yoon Chong was

quite farsighted. I think Pandan Valley was among the first condos if I am

not mistaken. And of course when we were completing it, we were hit with

the oil crisis in 1973, and the market just fell and we had to find many

creative ways of selling those apartments.

The ports at Pasir Panjanga misstep

Interviewer 3: Since we are talking about Howe Yoon Chong, and PSA, the location of the

port at Pasir Panjang, do you think that was a mistake?

S Dhanabalan: He knows that. This is one of my biggest regrets. When I drive along Pasir

Panjang, I feel very, very upset because MND resisted it, the planners

resisted it. We all said the port should not be there. It should go to Jurong.

I thought it must go to Tuas or Jurong. But PSA resisted that. They wanted

something closer to where they already were, because transshipment

requires a lot of to-ing and fro-ing of containers. I think that there is no

doubt that if the port had gone to Jurong at that time, the transportation

cost and the time taken to go between Tanjong Pagar and Jurong would

have been quite prohibitive. We were finally persuaded but when I now

look back at this, we were misled into thinking that there were technical

reasons for wanting the port to be in Pasir Panjang. So that upsets me.

Pasir Panjang really should have been residential. But I think this is being

rectified. A decision has been taken now that the port, both Tanjong Pagarand Pasir Panjang, will move to Tuas, but over the next 15-20 years.

Interviewer 3: That will be very costly.

S Dhanabalan: Well, it is costly in a sense, but you are looking at a 50-year time frame. So

you have got to do certain things first and then knock them down.

Just like, if you recall, Bukit Timah Road and Farrer Road. There was a

flyover that went over Farrer Road. Then when we widened Lornie Road,

Adam Road and Farrer Road, they wanted to build a flyover over the

flyover. That was the plan, a flyover which would have been very high andreally ugly and destroy the value of land around there. So the alternative


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was to do a tunnel beside the Bukit Timah Canal which meant that we had

to knock down that flyover that went from Bukit Timah Road over Farrer

Road. It was definitely more costly and we were going to be criticized for

building something and knocking it down, but we said that in the long term,

this was the better solution.

I went to cabinet, showed the plans and models and I said that it cost more

but over the long time, the value of land around the area would not be

destroyed. Cabinet agreed and therefore we decided to knock that flyover

down. So it is just like that. When it was first built, it was necessary and

then as time goes on, things change, other opportunities come, and so you

knock down what you had built. It is like Paya Lebar Airport, you see. We

finally decided to abandon it it was expensive. So I would say that

moving the port is also something similar. So it will be another, maybe, 20

years. Pasir Panjang will become residential again. And then of course the

other big container warehouses across the road in Tanjong Pagar, those

will also go. Then as you look out [to the water] from Mount Faber, you

will have a better view.

Trusting the professionals

Interviewer 3: Let me go back to when you became MND minister in the late 1980s and

there were a lot of changes the integration of planning in URA, the

changing of URA, a change in the whole way that MND actually operates.

How much of that was due to what happened to Teh Cheang Wan1and how

much reflected your own personal philosophy and thinking?

S Dhanabalan: I think it will be very wrong to give you the impression that I had clear

ideas as to what had to be done. But the one thing that I was quite clear

about, and that has been my philosophy wherever I have been, was to

recognize that people who are actually on the ground doing the work have

many good ideas. But you have got to be prepared to listen to them and

encourage them. To pretend that you have a solution or ideas that others

will implement is completely wrong.

So the idea, for example, of having a development guide plan that is

exhibited to the public. All that came about during the course of adiscussion. I was open to it because I had been meeting architects and so

on and they had ideas. So I said yes, that we should tap the private sector

knowledge, private sector ideas as to what should be done. So I would say

that it is very difficult to pinpoint exactly who generated the idea but it was

an interactive process. And as people found that I was receptive, they gave

more ideas and I found the ideas good and decided to proceed with them.

1

Teh Cheang Wan was the Minister for National Development from 1979 to 1986. He was under investigationfor allegedly accepting two bribes in the early 1980s. He committed suicide before being charged for the

offences in 1986.


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Interviewer 2: During your tenure, I think there were lots of ideas from the ground

because you encouraged that?

S Dhanabalan: Yes. My idea was that the people who were professionals, engineers and

architects, they have lots of ideas. Not all of them are acceptable but they

challenge your thinking.

Interviewer 2: Like the idea to have park connectors?

S Dhanabalan: I dont know whose idea it was to have the park connectors. What many

people dont realise is that because birds fly, they think they can fly miles

across to another place. They dont. Bird go from tree to tree. So

connectors enable birds to go from one place to another. You cant have

one park here and another park two miles away and the bird will fly two

miles to other park. They dont. They fly from tree to tree. These are not

migratory birds they are your orioles and your sparrows. So the parkconnectors were a way to get bird life all over Singapore. Actually, bird life

in the city has increased in spite of urbanisation, in spite of more buildings.

Interviewer 1: Its interesting that NParks has been part of MND rather than Environment.

It actually shows perspective.

S Dhanabalan: The Botanic Gardens and NParks were combined together during the time

I was Minister. We wanted to bring it all together.

Centralising urban planning in URA

Interviewer 3: What about the formation of the new URA as the central planner. How did

that come up? Why was there a need at that time or how was such a need

recognised?

S Dhanabalan: At that time, URA was looking at redeveloping the central business district.

There was another aspect of course, which was the rent control law. We

are the only city in the world now which has completely removed the rent

control law that was introduced during the war. London still has it, and

you should check this, but I think New York still has it.

Planning was within MND. I cannot recall offhand how exactly the ideacame about. The permanent secretary then was Ngiam Tong Dow and Lim

Hng Kiang was the deputy secretary I brought him over from MINDEF. It

was later that Joe Pillay came. Frankly I cannot recollect exactly where the

idea for reorganizing URA came from but it was a major move because the

new URA would centralize everything.

There were a couple of actions that we took. One was that we said that in

order to get the city redeveloped, we must deal with the rent control act.

At the same time, we wanted conservation so we had to redefine what

development was.


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In the past, development had beenabout the owner of the old rent

control properties coming to you to say, I want to build an office block.

Then he comes with his plan, you award the tenants certain compensation,

clear the land, and then build. So we redefined developmentto mean not

just build something completely new but also conservation. This extendedthe idea of the development plan for the Golden Shoe area in the central

district. Then we began to add areas which would came under the

decontrol of rent such that by the 1992 or 1993, the whole of Singapore

had become rent decontrolled.

But that did not mean that when the land was rent decontrolled, we would

rebuild. We had to marry that with conservation, like all the warehouses

along Singapore River which we cleared but we did not acquire. We told

the owners, You have got to redevelop or do conservation. Many of the

shop houses were owned by families which were in dispute over who

should get what share of the property. So we set a date and if by that date,

they had not developed the land, we would acquire the land and redevelop

it along the conservation guidelines. Everybody then settled their quarrels

in the family and decided that they would go ahead with the

redevelopment. So we didnt acquirethat land. We just had to tweak the

policies as we went along. But the big thing was having the development

guide plans for the whole of Singapore and then opening these up it to the

public for comments. We took in ideas and then from there, we made the

final plans. These plans are then revised every few years. That was a major

change and that was the time when we got Liu Thai Ker from HDB to URA.

Interviewer 3: But he didnt stay very long.

S Dhanabalan: No, he didnt stay very long but the basic things, the foundations were laid.

He has got a more aesthetic sense. He is not a pure land-use planner. So in

that sense, he brought a sense of how the city should look like. We began to

be more concerned with aesthetics. But of course at the end of the day we

had to make decisions based on reality.

Development of the Marina Area

Like Marina South, for example. Marina Centre and Marina South, wherethe Marina Bay development is. That went through many changes. We had

I M Pei and Kenzo Tange do a master plan. I cannot remember exactly

you have to checkbut the original shoreline was a curved shoreline

where the Marina Bay Sands is now. The master plan conceived by Tange

and I M Pei was based on that kind of shoreline which was much broader

and also curved. Finally we didnt accept either of the two designs and I do

not know who came up with the idea that we could actually reclaim more

land and make it a straight shoreline which was what we did. So we

created a bit more land. And then it became a little easier to do the

planning and again, there were differences of views as to how the landshould be released and what kind of use should be planned for it.


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Originally there was, of course, no idea of having a casino. So it was

basically supposed to be commercial. And I had very different ideas from

MND by that time I was already out. And I felt that in order to really get

maximum value, we should sell the piece of land at the end first, the one

closest to where the walking bridge is, the new Double Helix bridge. I had aselfish reason as DBS had put up a proposal to put a DBS building there, a

huge development, and we had a very good plan from a New York architect.

I said that the land between that and Customs House is completely empty.

It would be a big development at one end with nothing in between. But

then all the pieces of land would become more valuable because of that big

development, you know.

But MNDs idea was to sell the land contiguously, one piece of land, then

next piece of land. I said that every piece of land will become the end of the

street. You are getting further and further away so you are not going to get

the maximum value. Whereas if you get a huge development on one end,

then for the land in between, people are actually getting closer to the big

development, so the land increase would increase in value. I couldnt

persuade them and that was the end of it. Finally, came the casino and that

was when they adopted my approach and sold the endpiece of land first.

And now all the other pieces are being sold. So these were differences in

views as people had different ideas as to how things should be executed.

Decision-making in the government

Interviewer 3: How were the differences in views, when there were strong disagreementsamong strong personalities, how did we deal with that?

S Dhanabalan: Well the difference of views can be within a ministry, in which case, at the

end of the day, the minister decides. It can also be between ministries and

then it has got to go to cabinet.

Interviewer 3: Then the prime minister more or less decides? Is it that simple?

S Dhanabalan: Not so much the prime minister alone but the Cabinet as a whole would

have to decide. I can give you an example.

When the Bukit Timah Expressway (BKE) was planned, it was going to be

built through the water catchment area and the Ministry of Environment

Ong Pang Boon was the minister at that timewas against it because

they said it would pollute the water and so on. MND it was Teh Cheang

Wans timecame up with the idea that we could do enough buffers and

take enough measures to make sure that the adverse environmental

impact is kept to the minimum.

Of course we needed the road so Cabinet discussed it as a whole and felt

that we should take the risk of building the BKE. It was not the prime

minister who decided it, it was cabinet. So that is the way in whichdifferences are settled. Just like when Sumitomo built its petrochemical


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plant here. The Ministry of Environment said that there must be certain

environmental requirements Sumitomo must meet in terms for the kind of

investments they were making, to make sure that the effluent from the

stacks are of acceptable quality and so on. Sumitomo said no, saying, If

you insist on this, the costs will go up so much that it becomes not viableanymore. Of course EDB and MTI felt strongly that we should concede to

Sumitomo so that they could build the petrochemical plant. But the

Ministry of Environment said, No, we should not concede. It will pollute

Singapore.The matter went to Cabinet, and Cabinet agreed with the

Ministry of Environment. So we said no to Sumitomo. Then Sumitomo

proceeded to put in the investments necessary to do what we required. So

you see, both sides were bargaining. At the end of the day, we debate. No

one minister can decide on these kind of matters. That is why we have a

clean system. You have to persuade.

Corporatisation of government entities

Interviewer 3: What role does Temasek Holdings (investment company owned by the

Singapore government) play in all this? Is there a role for Temasek here?

S Dhanabalan: Temasek officially doesnt have a role except in the companies in which we

have an interest.

So when Temasek has a point of view, sometimes we join in to try to

persuade the regulators or authorities in change towards a decision that is

more, what we think, is in the interest of Singapore. But as you know, we

are owners of companies and these companies have to take care of their

business. So at the end of the day, we cannot say that our view as to what is

good for Singapore is the only way to view things. We may be colored in

our view because we are investors. Companies should run their business

and if the business works, they make a profit. The regulator has to decide

but the regulator would need to understand that, maybe, they have not

considered certain aspects of an issue and this we bring to their attention.

So we try to take a view which is good for Singapore as a whole we dont

say that it is for the companys good. It doesnt mean that people accept

our views.

Interviewer 3: But even the creation of those companies are often times through the

privatization of previously government-run, government-owned or

government-run activities and they are now part of Temasek? Did you take

a view as to whether it made sense to create companies and structures to

run those activities? Whether it made sense for Singapore? Or did you just

take it and then run it as best as you could?

S Dhanabalan: No. We look at it and ask ourselves whether the regulatory and legal

frameworks are in place, whether the economic framework is in place for

the company to be a viable proposition.

Example 1: Changi Airport


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Like Changi Airport. Changi Airport had been corporatised but we decided

not to take it over because we thought that the regulatory framework and

the policy framework were not right for it to be a business. And at the

same time, we also knew that there had not been not enough experience in

running Changi as a corporation for one to say, Look, now we can run itcompletely as a company, as a business. There were too many unknown

factors, too many regulations that had to be tweaked which would all

become very difficult once it became a separate company. So we came to a

mutual agreement with the Ministry of Transport that they had better keep

it. So it is corporatised but it is owned by the ministry a government

corporationand then because it is a hundred per cent government, they

can do what they like in terms of tweaking the rules, and this and that,

until finally it is ready to be privatized. Because once Temasek takes it over,

we want to run it like a private company. So in that way, we do have a say.

Interviewer 3: How much of that has influenced government thinking about the structure?

S Dhanabalan: We recognised that in the case of Changi Airport, it was difficult for the

government at that stage, not having the experience, to be able to say,

Look, I agree with what you want.And therefore we recognized that it

might not be fair to ask them to meet our terms. So they run it for another

five and ten years and see whether the model that they have in mind is a

workable model, which we think is not workable. But it would be much

more difficult for them to change the model once it comes to us. But now it

is within their own control, owned by them, legally corporate. They can do

whatever change they want to make it a workable proposition. Theexperiences from elsewhere have been both good and bad. London has had

a bad experience especially when they sold the airport to Spanish

investors. So we are quite careful.

Example 2: Singapore Power

In the case of the electricity companies, we had many generation

companies. Here again, we had to work very hard to get the government to

change the model because when the PUB electrical department was

corporatized into Singapore Power, handling both gas and electricity, they

had a very strange notion I dont know who in the Ministry of Trade and

Industry came up with this ideathat there had to be competition, which

is okay, but it was specified at what level and in what area you compete. I

do not know who the consultants were who made this recommendation

but they made the recommendation that the ministry wanted. So that is

why I dont trust consultants. And the recommendation which was

implemented was that Singapore Power owned the total grid, all the

distribution from the grid, and all the generating companies (gencos)

except Tuas Power. Tuas Power was the latest power station and had a

huge generating set. One set, 500 megawatts. Then you have, I think, four

or five generating companies with many generating sets, 50, 100, 250. 250

I think was the maximum. So you could bring on the sets according to the


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load with these. But a 500 megawatt set? You are either on or you are off,

okay? The government said that it was competition between Tuas Power

and Singapore Power, which owned the grid and all the other power

stations. So when I came here in 1996 and I looked at it, I said that it did

not make sense. How can one power station with one generating setcompete with a company that is completely integrated generating and

transmitting, distributing but this chap, Tuas Power, is only generating.

What kind of competition is that?

It took us a long time to persuade the government to dismantle the model

and take all the generating companies out of Singapore Power which

Singapore Power was very unhappy about because they wanted to own

everything. The chairman at that time, Ho Kwon Ping was very annoyed.

But I said, No, we cannot have it this way.So finally, the ministers agreed

and took all the gencos out and said to Singapore Power, You are just a

transmitter and distributor. Then we restructured each genco, and Tuas

Power had a second set put in. Then we sold off one genco at a time.

So we do work with the government to make sure that the structure is

right.

The importance of an appropriate corporate structure for privatized government

entities

Interviewer 1: We talked about Changi Airport and the increasing outsourcing or

corporatisation by the government in terms of what the market can do

versus what the government can do. Are we also in danger of going too far

and as a result, losing some of the capabilities within government that

actually have been quite critical in our ability to do the things that we

talked about previously, whether it be Changi, or Surbana2or PWD. As we

corporatized, privatised and later sold off entities, did we lose something

in the process? Does it matter?

S Dhanabalan: It depends what you do with the sold-off entity. Surbana is a positive

example where the expertise that we had gained by building public

housing in Singapore can now be applied elsewhere. We can sell these

services. But we have to be clear in our own mind that Surbana should stillbe controlled by us because they have a big role to play in Singapore. But

HDB itself is asking whether it is safe for it to completely depend on

Surbana or if they should rebuild some of their own capability, which I

think they are doing. Okay, fair enough, but I dont think they need to build

up the capability to do all that they want to do. They can still outsource to

Surbana and other companies. But there are others, like you mentioned

CPG that came from PWD. That was sold to us on the condition that we

2Surbana was formerly the Building and Development Division in Singapores Housing and Development Board.

It was corporatised in 2003 as a consultancy business offering full-service building consultancy solutions,including architecture, engineering, quantity surveying, project and construction management, coastal

engineering and infrastructure, urban planning, building technology and city management.


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would sell it off again. That was the condition and so we sold it to this

Australian company. And I know this there has been a lot of unhappiness

over that but that was the condition on which we were told to take over

CPG.

In other areas, we need to rethink the legal structure in which we house

these operations. Let me give you an example. A company like PSA

Corporation or SingPower should never have been. Its been corporatized,

its been run as a business. It should never be privatized in a way where

they have to operate like any other commercial operation with growth

potential because that will cause them to do things or invest in areas which

may not be good. But you can privatize in a sense that there is private

ownership but you do not promise that this is a company with growth

potential but say that this is a company which can give a yield that is a very

high bond yield. In other words, a business trust.

You see, the real estate investment trusts (REITS) in Singapore are also

being completely distorted the whole idea of a real estate investment

trust is that you get many people owning a property and they get the

rentals from the property, income from the property. So instead of

owning properties, they have a common share with others and they get the

rental. But somehow, the initial investment trust managed to persuade the

investor that there is growth potential, which is a big mistake. Where does

the growth potential come from? They can raise money to buy new

properties which adds to their income. So people began to buy REITS just

like any other share, which should not be the case at all. So we need to re-educate the investor public. We also need to re-educate the management

and boards of these companies so that they dont promise growth. Now, if

you dont promise the investor growth but that youre going to run it

efficiently at a low-cost and give a good yield, thats a different proposition.

And thats how publicutilities should be like. SMRT, in my view, should

never have been made into a company, into a private-listed company. It

should have been a business trust. But we are learning and thats why

weve held back on PSA and Sing Power.

There is also an obsession with competition. The North-South Line of theMRT competing with the North-East Line thats a big mistake. What

results is that you begin to compete for skills. I think the latest incident

over the last week [with the MRT breakdowns] show how important it is

to have the skills to maintain and operate these properties. And if you

have two or three companies competing, its going to be very difficult to

build up skills at a reasonable cost. So there has got to be a rethink.

Some of the policymakers and ministers get a bit obsessed with

competition. Competition is good up to a point. And then we have got to

ask ourselves: Are private sector operations the best way to run a public

utility and should a public utility be subsidized? These are important

questions that need to be asked. We collect taxes from the motoring public


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and we are using the taxes to build roads, improve roads. In a way, were

subsidizing the motoring public. We dont tell the motoring public that

they must pay in full all the costs. It will probably be more than the costs

because there are many elements in the tax the usage element, wealth

element, income element. But we need to consider transportation as abasic utility which drives the whole economy and then you can make a

very good economic case for a subsidized system. And in fact, there is

already a subsidy in the sense that LTA builds the tunnels, builds the tracks

and then they dont charge it all to the transport company. Why do you do

that? Because you recognize that when you build a MRT connection to an

area somewhere in Woodlands or in Punggol, you not only get people to

live there but you increase the value of the land there and you get more

taxes as a result of that. So it is not really a subsidy in the sense. You are

increasing the land value, youre taxing that value and you are providing

the connectivity. That concept in terms of the infrastructure, capitalinvestment is accepted but its not yet been accepted in terms of operating.

And the danger is of course, once you subsidize transport where do you

stop? But there are ways to control this.

Interviewer 1: So how do you define it, what is considered part of your operating income

that ought to be controlled?

S Dhanabalan: Our companies are operating in, I think, both Melbourne and London,

where the city government calls for bids on the system it wants this kind

of and number of buses, the timing, everything is set out. Bid for it and tell

me what subsidy you require. So the company that offers the lowestsubsidy gets the right to run the system. So there is the pressure to be

efficient, to keep costs down because the bid had been on this basis that

this is the money Im going to get and not anything more, and these are the

fares that I can charge, and not anything more, so I better make sure that I

run it properly. So the fear about subsidies is that you lose control of

efficiency and costs and so on. But there are many ways to address those

things so I think we need to have a lot of rethinking on these areas.

Hindsight and the willingness to make changes

Interviewer 1: What would you see as the major, most significant milestone or choice that

we made that really caused us to have to the kind of urban development

that we have, that we see today?

S Dhanabalan: I mean itd be very nice to think that we had a grand masterplan from the

beginning that we implemented. We had to really make changes as we

went along and the reasons why we did certain things at that time were

not wrong. I mean, looking back from today, we could have done things

better, but we were not entirely wrong.

Little things like, well, I would not say little things, the idea that we musthave proper land use and the usage of any particular piece of land must be


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compatible with the surrounding pieces. This compatible usage depends

on when you look at it. Take the port for example. Today the port should

not be where it is, at Tanjong Pagar. Youve got Sentosain that area, and

its near the downtown area the port should not be there. But 50 years,

100 years ago, it was the obvious location for the port. So it is going to taketime to unravel.

Or take Tanjung Rhu. Tanjung Rhu was a shipbuilding area and we had

many small shipyards including Thorneycroft, a British company which is

very well-known for building very sophisticated patrol craft. An important

employer. Skilled work. So when we built the expressway from Changi to

downtown, that flyover across the mouth of the Kallang Basin, it was built

high because it had to allow ships to go under it. Thorneycroft was one of

the key considerations. They didnt build big naval vessels but really large

patrol craft. Then we said that Tanjong Rhu should not be used for

shipbuilding anymore. The shipyards should all go to Jurong. So I think

sometime in the late 1980s, we decided that we should not renew any of

the leases and change the whole land use of Tanjung Rhu and the whole

Kallang Basin. Okay, so we did that. The current use is more compatible to

the surrounding uses, to the city and so on. But were still stuck with this

very high flyover.

Interviewer 1: It doesnt look that bad.

S Dhanabalan: Well, it is not bad in the sense that it is like when you have a big ballroom

and you can go up the flight of steps and look over the whole ballroom. Itsa vantage point. You see the whole, so thats what its become. From there,

you see the whole city, and then you come down into the city. So in that

sense, its good. But that was not the intention.

So I think the underlying principle is that we have to change and we have

to be bold enough to say that. And this is one of the problems of

conservation, because you want to keep things to remind you of the past

even if it is not compatible with the current usage anymore. So when do

you make the decision that we have to change?

I think in Singapore, we have been flexible enough so far but I think itsbecoming more and more difficult because there are too many interests,

for example, demanding the preservation of Bukit Brown cemetery. Is it

something we can afford today with the kind of population we have? How

many other cemeteries have been cleared, and what are the political

implications? We cleared Muslim cemeteries and acquired Muslim

cemeteries and now suddenly there is a Chinese cemetery and you say you

dont want it cleared because its history. Can you afford that? This point

has not been brought out publicly but obviously it is something that is

going through the minds of the policymakers.


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But if for example, the Nature Society hadnt made such a strong plea to me,

Sungei Buloh will not be where it is today. When they came and made the

presentation, I thought it made a lot of sense, I went there and had a look

because the whole place had been cleared, all the prawn farms and

everything, the farmers had been shifted out. The idea was to fill it up aspart of a HDB new town. Then we asked ourselves, Because of migratory

birds and the kind of environment, is this something worth keeping? Can

we afford to keep it? Well, keeping it meant that we had to intensify land

use elsewhere and we decided that we would keep it. So there are people

with strong views who we have to listen to. And at the end of the day,

somebody will have to make the decision. You cant just let public interest

groups determine the outcome. We had in Marina South land that we

reclaimed and the heavy rains created a huge pond and herons came to

nest there and the Nature Society said, We must conserve this.This was

land that was reclaimed not so long ago. But before there was a bigargument, we just filled up the area.

One of the important things in Singapore is that the politicians and

policymakers are prepared to change. Maybe there should be some

moderation on this, but still, I think we cannot have the same kind of land

use as many other countries have because we are a small place. We not

only need to have land to house our people, provide work for people,

provide land for transportation, but we have to have land for water

catchment areas, for military training. Most countries and cities dont have

to do this. I mean, Hong Kong doesnt they dont require land for

military training, they dont require land for catchment. But we need to

have all that.

Recent issues in transportation and housing

Interviewer 1: What happened in the last two or three years? The well-planned

integration seems to have, somehow, a disconnect between the demand

and supply in so many areas transportation, housing, population. What

do you think?

S Dhanabalan: Well, I think the disconnect between supply and demand has been in

transportation and housing. Probably when they allowed so many

foreigners to come and work here, as well as to live here in terms of being

permanent residents and so on, the impact on the other infrastructure was

not quite understood.

Interviewer 1: Like hospitals are crowded. There are not enough beds.

S Dhanabalan: Thats tough. If the public hospitals say, Were not going to treat anymore

private patients or non-Singaporeans,that will lessen the load. Either

private sector will take the slack or the patients will go elsewhere. They

can go to Kuala Lumpur, Bangkok or whatever. But quite rightly, the


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hospitals dont want to do that because they want, rather to expand their

supply and that will take time. But in the meantime, there is this problem.

Housing and transportation are the same. Housing is in a very strange

situation in Singapore. I bet you that two years from now, we will have an

over-supply. We have had this so many times. In my time in MND, we

brought down the construction of housing to less than 10,000 units

because we had blocks and blocks in Woodlands. Not so long ago, we had

to combine two flats as one in order to persuade people to take it up. But

there are other changes in housing that we need to make. I think that the

policymakers and the politicians have to ask themselves what is more

important to provide a roof over the head or to provide an asset which

will increase in value? These are not necessarily compatible and I would

say that providing a roof over your head is more important than giving the

people an asset. If they come to that conclusion, then there are things they

need to do. They need to lower the price of HDB housing, increase the

period in which people must hold the flat before they can sell, maybe 15

years or 20 years: You want a house? Ill give it to you at a price that you

can afford but you cant sell it. So you know straightaway what the chap is

demanding a house for to have a roof over his head or make some

money. So these are things that they have to, so yes, I think that

unfortunately, these kinds of changes and policies are going to be quite

difficult and quite painful to make. I do not know whether my former

colleagues are prepared to move on this.

Recent political development and effect on decision-making

Interviewer 1: The more recent political developments in Singapore does that change

our whole governance system?

S Dhanabalan: I think so in the sense that decisions are going to be a little bit slower. I

only hope that while they explain and they tweak the policies here and

there, that the basic direction of policy and what needs to be done doesnt

change. Because Singaporeans are not very different from people

anywhere else in the world and I was just reading an article on California

where people want everything at no cost. Which is not possible. But yet

they vote that way. I mean in California, many things are decided on based

on public ballot and this chap, Arnold Schwarzenegger, tried very hard to

get Californians to see that they have to pay more in order to afford what

they have. They voted him down every time. So you find this ridiculous

situation where expenditure on prisons has gone up 30-40 per cent over

the last 10 years and expenditure in education has come down six per cent.

Where is the society heading to? The facts we point out to the public but

would they vote the right way? So at the end of the day, I think the

government cannot go on the basis of what the popular view is. Someone

has got to sit down and ask, What is good?and then take the decision.


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24/24

Teng Cheong wanted, one was going to do what Dr Goh asked for. Both

consultants knew whom they were supposed to please and it was so

ridiculous.

===========

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clc interview with mr s dhanabalan

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