Singapore is positioned among the world’s safest and most investor-friendly countries. It is ranked first in terms of ease of doing business according to the World Bank Group Report “Doing Business 2016”. The World Economic Forum’s Global Competitiveness Report (2015-16) also ranks Singapore second among 140 economies for the overall quality of its infrastructure.

Singapore’s infrastructure is quite well developed and has contributed a lot to the country’s economic wealth and social well-being. The tiny state has made excellent use of its current land mass of only 715 square km. Its coastline of 190 km with natural deep-water ports has added to its growth potential.

However, its economy is slowing down. The gross domestic product (GDP) grew 2 per cent in 2015, compared to 3.3 per cent in 2014. The economy is forecast to grow between 1 and 3 per cent in 2016, due to uncertain global growth amid weak oil prices and sharp swings in global financial markets.

Nevertheless, the country that is credited with the highest GDP per capita in Asia has drawn up massive plans for infrastructure development. Given the outstanding track record of the Singapore government, it is only a matter of time before the plans on paper become a reality.

Singapore has several economic policies and regulations supporting economic development. Transparency International’s Corruption Perceptions Index (CPI) of 2015 estimates that Singapore has a CPI of 85 out of 100, implying that the country does not have a serious corruption problem. One reason corruption in procurement seldom occurs in Singapore is its well-formulated transparency provisions.

Among the Southeast Asian countries, Singapore is a role model when it comes to public procurement. Apart from establishing a well-regulated system of procurement, it has also managed to ensure strict adherence to procurement protocols. The Government Procurement Act of 1997 sets out procurement norms and regulations; any deviations from the rules are highlighted by the Auditor General of the country in a prompt and efficient manner.

Singapore also has a very comprehensive e-procurement system known as GeBiz. This website is used to advertise all procurements, state qualification requirements, procedures, and other information that bidders may require. It is also used to disclose the list of bidders and prices offered, as well as the winning bidder.

Besides, Singapore has a strong Business Trust Act to protect business trust listings. This has been tapped by Singapore companies such as the Keppel Infrastructure Trust and by Hong Kong-based Hutchinson Ports Trust. Most recently, Hainan Airlines from China also raised bonds in Singapore. International Enterprise [IE] Singapore has enhanced partnership with various development banks to gather and develop the relevant expertise. In March 2014, IE Singapore and the Asian Development Bank commenced operations of the Asia Infrastructure Centre of Excellence to structure more bankable projects with governments of various countries.

Singapore is now in advanced discussions to become a founding member of the Global Infrastructure Facility (GIF). The GIF co-ordinates the efforts of multilateral development banks, private sector financiers, and governments interested in infrastructure investment in emerging economies.

Challenges, potential and outlook

“Singapore also appreciates that infrastructure investment needs to continue and evolve to meet the demands of its society and the the changing global environment. The government anticipates that its investment in infrastructure development will grow to SGD 30 billion by the end of this decade to ensure that the country’s infrastructure will continue to meet Singapore’s future economic and social needs,” highlights Lynn Toh, EY’s ASEAN Infrastructure Advisory Leader.

The company’s plans for various infrastructure sectors are discussed below.

Consolidating port operations

Singapore, one of the world’s busiest container ports, plans to consolidate the activities at its current five terminals into a single terminal at Tuas in about 10 years. When the terminal at Tuas is ready, Singapore’s container handling capacity will be almost double the current 35 million twenty-foot equivalent units (TEUs). With the Tuas project still 10 years from completion, PSA is developing the Pasir Panjang Terminal 3 and Pasir Panjang Terminal 4 to add a combined additional capacity of 15 million TEUs of container cargo by the end of 2020. The Tuas port project along with additional capacity at these terminals brightens the prospects for the maritime sector of the country.

Expanding airport capacity

The Changi Airport Group (Singapore) Private Limited (CAG) is undertaking several capital projects to augment the airport’s capacity and enhance passenger experience. A new terminal, Terminal 4, is currently under construction, and is scheduled to open by 2017. The terminal will have a capacity of 16 million passengers per annum (mppa), and will take Changi airport’s total passenger handling capacity to 82 mppa.

Apart from constructing new terminals and adding runways, the ongoing Project Jewel is anticipated to be another feather in the CAG’s cap. The project is expected to cost SGD 1.7 billion. The project will be a mixed-use complex, which will be the central hub connecting the existing terminals, and will feature retail offerings, hotels and other attractions. Construction on the project began in December 2014 and is scheduled to be completed by 2018.

In September 2015, the Singapore government put in place the Civil Aviation Authority of Singapore (Amendment) Act, 2015, establishing the Changi Airport Development Fund (CADF), and with it, took part financing responsibility of the fifth busiest airport in the world. Initially, the purpose of the CADF will be to fund the future Terminal 5 – a project which is crucial to secure Singapore’s economic future. Based on the CAG’s projections, the capacity of Changi airport’s existing terminals and the upcoming Terminal 4 will be fully utilised by the mid-2020s. Hence, Terminal 5 is a major project to ensure that Changi airport can meet Singapore’s future needs.

Expanding MRT network

The transport authority in Singapore is working on a number of mass rapid transit (MRT) projects including two critical new lines and various extensions to the existing track along with upgrading the older parts of its network. The Land Transport Authority (LTA) has announced plans to expand the city’s rail system to a massive 360 km by 2030, almost doubling the existing length, with 8 in 10 households within a 10-minute walk of an MRT station.

Innovative solutions to meet water demand

The PUB plans to meet the country’s entire demand through domestic resources, once the import agreement with Malaysia expires in 2061. It plans to enhance its desalination and NEWater capacity to meet its future water requirements. The upcoming third and fourth desalination plants, targeted to be completed by 2020, will add around 60 million gallons per day of capacity.

Focus on solar and smart grids

Expanding the role of renewable energy in the energy mix is central to Singapore’s electricity sector investment strategy. The government targets to meet 5 per cent of peak electricity demand in the country through renewable energy sources by 2020. At present, innovative financing and business models are being piloted in Singapore to address the challenges of high costs, land constraints, and grid connectivity to encourage greater adoption of solar technologies. In addition, the government is also running various smart grid projects entailing significant investments in smart meters, energy management systems, demand response mechanisms, and electric vehicles. The government targets to reduce the energy intensity by 20 per cent by 2020 and 35 per cent by 2030 compared with 2005 levels.

Other sectors

With regard to telecommunications, the country is looking at fibre optic connectivity to provide data-hungry customers with more data bandwidth. In gas, Singapore has long harboured plans of becoming a regional gas trading hub, given its strategic importance in the gas trading routes in Asia and the number of oil and gas companies currently based in the city-state. With its first liquefied natural gas import terminal coming online in May 2013, Singapore is now on course for achieving its goal.

The final word

“Singapore has a good track record and framework for delivering high quality infrastructure,” says Toh, but adds a word of caution: “The government’s challenge will be in delivering large complex infrastructure, embracing private sector expertise, incorporating technologies, sustainable design and cost, contestability and contracting arrangements and suitable risk frameworks to ensure that a value-for-money outcome is achieved.” Thus, the government’s role will be instrumental in Singapore’s continued infrastructure development. Going by its past record, it is only a matter of time before these plans become a reality.