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Jewel, a very expensive shopping mall that can restore Changi Airport’s shine or a massive overspend of taxpayers’ money

by Brad Bowyer

Jewel was first mentioned by Prime Minister Lee Hsien Loong in his National Day Rally speech in 2013. He announced the plan to build Jewel as part of Changi Airport’s long-term plans.

Jewel is developed by Jewel Changi Airport Trustee Pte Ltd, a joint venture between Changi Airport Group (CAG), manager of Singapore Changi Airport, and CapitaLand, through its wholly owned shopping mall business, CapitaLand Mall Asia (CMA).

For those of you who are unsure. Civil Aviation Authority of Singapore (CAAS) is the regulatory authority for civil aviation in Singapore but the airport is owned by CAG which was the result of Changi Airport being corporatized in 2009 although its immediate and ultimate holding entity is the Minister for Finance. So it is government pretending to be private.

CapitalLand is a government linked investment holding company 40% owned by Temasek with a slew of other GLC’s among its shareholders. Again, what should be public pretending to be private.

I must add a qualifier for my earlier post about this topic. When CAG was set up, the initial plan was to transfer ownership of the airport and all assets from the Ministry of Finance to Temasek, but the MOF website explicitly says this has not yet happened. Maybe they are waiting till after T5 has been paid for? But this is speculation as there has never been an announcement as to why the delay.

The question of who paid for Jewel though is still open as CMA said it would be a mixture of internal funds and external borrowings but never said where those funds came from or what percentages.

Mr Lawrence Wong, Minister for National Development and Second Minister for Finance, noted recently that “major infrastructure projects that will unfold over the next 10 years will put the national economy on an even stronger footing” acknowledging that although we have set up many “private” entities to manage our infrastructure the bulk of the capital expenditure still comes from the government, i.e. tax payer.

In fact, the Transport Infrastructure Budget, including this years $10B, amounts to approx. $75B since 2011 and Changi Airport development expenses are included there.

The Ministry of Finance own website when talking about Changi airport says “even crown jewels need polishing. Over the years, we have added new terminals to the airport to boost its capacity. In October 2017, Terminal 4 began operations, while retail and lifestyle complex Jewel Changi Airport will open in 2019” and “Changi Airport is just one of the many investments in infrastructure that Singapore has made over the years”

So, it is clear tax payers money went towards building Jewel although it is difficult to say exactly how much.

With a convoluted mix of public, public pretending to be private and fully private fingers in the pot and unclear details on funding and ultimate responsibility for approvals how are we to know exactly what is going and whether public money is being spent wisely?

Maybe the ministers involved, Heng Swee Keat at Finance and Lawrence Wong at MND, can shed better light on this?

Especially as although taxpayer’s money goes to fund these mega projects the profits don’t seem to flow back to the public coffers but stay in other hands.

At Sgd$1.7B for 135,700m2 of what is essentially a very expensive shopping mall the Jewel could be the bling that restores Changi Airport’s Shine or it could be a folly and a monument to poor planning, poor business acumen and a massive overspend of taxpayer’s money?

Where is the fiduciary responsibility and public accountability in all of this?

Can somebody answer these questions please?

This was first published on Mr Bowyer’s Facebook page and reproduced with permission