Town councils will have to submit 10- to 30-year projections of their sinking funds, to ensure that they are setting aside enough for their lift-replacement programmes and other long-term expenses.
Blogging about the new Lift Enhancement Programme yesterday, which will help town councils fund lift modernisation, Minister for National Development Lawrence Wong stressed how town councils must also plan ahead for major expenses such as lift replacements while coping with the increasing costs of managing their estates.
He said the total sinking fund balance across all town councils is about $1 billion. The sinking fund, drawn from service and conservancy charges (S&CC) and government grants, is the part of the town council's finances set aside for long-term replacement works and major repairs.
"This may sound like a healthy amount, but it is still not sufficient to cover the cost of future lift replacements, which is estimated at almost $3 billion from now to 2035 for some 11,500 lifts across all HDB estates," said Mr Wong.
Other expenses such as cyclical repainting of Housing Board blocks and replacement of water pipes and tanks, which also come from the sinking fund, will also go up as estate infrastructure ages, he added.
"All town councils must take a long-term view and start planning now for asset and lift replacements in their estates. This is the basis of Singapore's success. We do not leave things to chance," Mr Wong said.
Dr Teo Ho Pin, coordinating chairman for the People's Action Party's town councils, said they will "cooperate fully with MND (Ministry of National Development) to... ensure that sufficient sums are set aside in the accounts".
When asked if S&CC rates would go up as a result, Dr Teo said they are "looking into" a revision, but did not provide more details. These monthly rates vary according to town council, flat type and whether one is eligible for rebates.
Mr Chong Kee Hiong, chairman of Bishan-Toa Payoh Town Council and deputy chairman of the Government Parliamentary Committee for National Development, said raising S&CC rates would be a "last resort".
Mr Alex Yam, who chairs the same GPC, said such charges are bound to go up over time as costs rise.
But the chairman of Marsiling- Yew Tee Town Council added: "We have got to really build up those reserves and moderate any cost increases (to residents) as much as possible."