Mr Gerald Giam Yean Song (Aljunied): Mr Chairman, the Lift Replacement Fund was introduced during the 2017 amendment to the Town Council’s Act. It addresses the substantial deferred costs associated with lift renewals in our ageing estates. This provision ensures minimum disruption due to lift breakdowns for our residents, notably the elderly, young children and those with mobility challenges. Nevertheless, the current apportionment of service and conservancy charges and Government grants, which is 26% to the Sinking Fund, 14% to the Lift Replacement Fund (LRF), may be precipitating a skewed emphasis towards the LRF.
Looking at the 17 Town Council’s latest annual reports, I noticed that for many of them, their LRF is expanding at a significantly faster pace compared to their Sinking Fund. The stipulated use of the LRF may be unduly restrictive. Currently, expensive lift components like their automatic rescue device, the main controller PCB, the emergency battery-operated power supply and the uninterrupted power supply can only utilise the Routine Fund, despite their considerable capital expense.
Hence, I would like to put forth three proposals to MND: first, rebalance the funding distribution between the Sinking Fund and the LRF, slightly increasing the Sinking Fund’s proportion and reducing the LRF’s proportion; second, broaden the permissible applications of the LRF to encompass all lift components with a lifespan exceeding 10 years; and third, permit Town Councils to transfer funds between the LRF and Sinking Fund to fund necessary cyclical works without compromising the original intent of setting aside adequate reserves for the two funds.
These recommendations seek a more efficient balance between addressing current exigencies and future preparations, assuring all residents benefit from dependable lift and escalator facilities.
The Senior Minister of State for National Development (Ms Sim Ann): Let me turn to Mr Gerald Giam’s suggestions relating to the Lift Replacement Fund, or LRF. The current minimum contribution rates for Town Councils’ LRF and Sinking Funds help Town Councils set aside sufficient funds for various cyclical replacement works. The restricted use of these funds serves as a form of fiscal discipline. In particular, the LRF was introduced in 2017 because Town Councils had been significantly under-saving for lift replacements. Lift replacements are very infrequent but involve heavy draw-down of funds when they are due, as lifts built in the same period will need to be replaced around the same time. Hence, the LRF allows Town Councils to pay for any capital expenditure relating to lift replacements in HDB estates, including those raised by Mr Gerald Giam. We will continue to review the framework periodically to ensure that they keep pace with changes to the operating context.
Mr Gerald Giam Yean Song: To Senior Minister of State Sim Ann, can I confirm that the Senior Minister of State said that the replacement of the lift components I mentioned in my cut, the ARG, the main controller PCB, EBOPs and UPS can be expensed from the Lift Replacement Fund for existing lifts? Can MND publish an exhaustive list of lift components which can be paid for using the Lift Replacement Fund so that it is clear to all Town Councils?
The Chairman: Senior Minister of State Sim Ann.
Ms Sim Ann: Under the Town Council’s Act, section 47(5), Town Councils are already allowed to use LRF for any capital expenditure related to the replacement of lifts in residential or commercial property, including items that are replaced at less than 10 years’ intervals and lift upgrading works under HDB’s LUP in residential property or commercial property.
Examples of uses would include the replacement of lift position display panels, replacement of lift inverters, replacement of hoisting ropes and the sheaves of lifts and so forth. And the LRF can also be used for capital items, such as automatic rescue device and the main controller PCB, which Mr Gerald Giam has mentioned, which are not listed in the cyclical maintenance work schedule. And if the Town Councils would like to clarify or if they are in doubt, they can always check with us.
Ministry of National Development
5 March 2024
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2376
Office of the Leader of the Opposition 