News: Government to issue new bonds to fund major infrastructure projects

Feb 17, 2021

These projects include new MRT lines as well as infrastructure that protect against rising sea levels.

Deputy Prime Minister Heng Swee Keat has revealed plans to issue new bonds to help the government finance major infrastructure projects that are crucial to the country’s long-term development and sustainability, reported Channel News Asia (CNA).

These projects include new MRT lines as well as infrastructure that protect against rising sea levels.

Heng, who is also the Finance Minister, said the bonds will come under a law to be tabled in Parliament later this year, which is known as the Significant Infrastructure Government Loan Act (SINGA).

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He noted that the bonds will allow for a fair and efficient way of distributing fiscal responsibility.

“Fair, because these payments are borne by the generations who will directly benefit from the improved infrastructure. Efficient, because they allow us to benefit from the current low interest rate environment,” said Heng in his Budget speech on Tuesday (16 February) and quoted by CNA.

He also assured that the proceeds from the SINGA bonds will be used in a prudent and transparent manner.

As a safeguard, a $90 billion limit will be set for borrowing under SINGA “based on a pipeline of major, long-term infrastructure projects over the next 15 years”.

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“We will also include other safeguards in legislation, which will be open to Parliamentary and public scrutiny. More details will be provided when the Bill is presented in Parliament later this year,” he added.

Heng had shared in his previous Budget statements that the authorities were exploring the use of borrowing to fund major projects in a way that the costs will be spread out more equitably across generations.

The government had been issuing bonds to help develop the domestic debt market and meet the retirement needs of Singaporeans via the Central Provident Fund.

Meanwhile, Heng said President Halimah Yacob has been briefed of the proposal and has given her in-principle support to use borrowing to fund major infrastructure.

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