We thank Mr Tan Kin Lian (Share more information on financial aspects of giant tunnels; Dec 23, 2017) for his feedback on the electricity cable tunnels project.

The tunnels are necessary for renewing ageing assets in the national electricity grid infrastructure to ensure reliability of supply. We must also plan long term to cater for future needs.

Built to last 120 years, the tunnels will also allow easier, faster and more efficient maintenance and upgrading of the cables, minimising traffic disruption and inconvenience to the public.

Mr Tan also inquired about the impact on tariff.

First, the electricity tariff must be approved by the regulator. SP Group cannot change the tariff it charges consumers.

Of the 21.56 cents of electricity tariff currently paid by domestic consumers, 15.84 cents is for electricity generation, and 5.30 cents is for maintaining network infrastructure.

The cost to build and maintain the cable tunnel is included in the latter. This component has been between 4.78 cents and 5.84 cents in the last 15 years. Spread over its economic lifespan, the tunnels' costs have marginal impact on the regulated electricity tariff.

Information on capital expenditure funding has been published in SP Group's annual reports.

The use of the tunnels will be prioritised for electricity supply.

We welcome other services such as telecommunication services to use the unutilised space in the tunnels, so long as the security and safety of this critical electricity infrastructure are not compromised.

Michael Chin

Managing Director Infrastructure and Projects

SP Group