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Introduction
To meet the challenges arising from Singapore’s rapid economic development, small size and dense urban population, the government has placed high priority on the creation of an advanced infrastructure, and the adoption of appropriate funding arrangements for it. In the past, much of the infrastructure in Singapore was owned and operated by government agencies: either civil service departments, or increasingly over time statutory authorities. It was funded mainly through the government budget. However, over the last 15-20 years, the infrastructure has been developed by harnessing private capital under various privatization schemes. Certain sectors still remain under direct government control and ownership, but even there the entities responsible (statutory authorities) were allowed a degree of autonomy, and to raise some of their funding from the private sector.
The paper will consider the various arrangements whereby the infrastructure has developed in recent years using private capital. Four arrangements are examined:
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full privatization in which the infrastructure providers (entities which build and/or operate the facilities), are now private sector companies;
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partial or limited privatization in which the providers are government-linked companies (GLC’s);
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direct government provision through government-controlled statutory authorities, which in part depend upon borrowing from the private sector; and
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mixed arrangements in which different types of provider mentioned above manage an infrastructure sector.
The paper will consider how these arrangements require infrastructure providers, even statutory authorities, to follow business practices and how far they entail contestability (competition for tenders and for sales). In addition, it will examine how and by what means the government still retains control over infrastructure management. In conclusion, the paper will highlight the twin-pronged approach to infrastructure management. It will indicate the consistency of this approach with the mixed economic philosophy of the Singapore government which balances free enterprise and market competition with state intervention and control.
The infrastructure sectors covered are: the road system, rail transit network, electricity generation and transmission, water supply and drainage, maritime port, airport, ITC facilities, and the industrial infrastructure.
Features of the infrastructure of Singapore
The road system in Singapore is highly developed, with many multi-lane expressways together with numerous flyovers and underpasses and several road tunnels (Land Transport Authority (LTA), 2013a, 2014). Despite the small size of Singapore, a significant amount of land space has...