Significant Infrastructure Government Loan Act 2021

Significant Infrastructure
Government Loan Act 2021

2020 REVISED EDITION

This revised edition incorporates all amendments up to and including 1 December 2021 and comes into operation on 31 December 2021

An Act to authorise loans to be raised by the Government for the purposes of the Development Fund in relation to nationally significant infrastructure.

[3 August 2021]

PART 1

PRELIMINARY

Short title

1. This Act is the Significant Infrastructure Government Loan Act 2021.

Interpretation

2. In this Act, unless the context otherwise requires —

“book‑entry security” means any security issued under this Act in the form of an entry on the records of the MAS and which is transferable by way of book‑entry in the register maintained by the MAS, and not by way of an instrument of transfer;

“depositary institution” means a financial institution approved by the MAS which regularly —

(a)	accepts in the course of its business book‑entry securities by way of a custodial service for its customers; and
(b)	maintains accounts in the names of its customers reflecting ownership or interest in such book‑entry securities;

“depositor” means any person in whose name an account is established and maintained on the records of the MAS;

“Development Fund” means the Development Fund constituted under the Development Fund Act 1959;

“face value”, for any security issued under this Act, means its face value at the time the security was issued;

“MAS” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act 1970;

“maturity date”, for any security issued under this Act, means the date —

(a)	specified, in accordance with the Regulations relating to the issue of that security, as the date on which the security is redeemable at par; or
(b)	specified by the Minister in the terms of the issue as the date on which the security is redeemable at par where the Regulations do not apply to that issue;

“nationally significant infrastructure” means any structure or building in Singapore (whether above or below ground or water) that —

(a)

is or is intended to be controlled and legally owned by the Government;

(b)

is or is intended primarily for any of the following purposes or a combination of any of the following purposes:

(i)

the transport by road or rail, air, sea or inland waterway of passengers or goods or both;

Examples

Roads, paths, railways, tunnels and bridges for roads or railways in Singapore that are used by the public for the movement or transport of people or goods.

A runway or taxiway, or a parking apron for loading and unloading of aircraft passengers or cargo.

A building wholly or principally for use as a passenger terminal or cargo terminal for transport by land or air.

A wharf or dock in Singapore used by the public to facilitate the carriage or transfer of cargo or passengers travelling by sea or river.

(ii)

the collection, treatment and disposal of sewage or the supply or recovery and treatment of water;

(iii)

the alleviation of floods;

(iv)

the protection, conservation, rehabilitation and management of the coastal zone to mitigate current and future risks from coastal hazards, taking into account the effects of climate change;

Example

Seawall, revetment, groyne, weir or dyke, drains or other channels for the interaction of tidal waters with catchment floodwaters, breakwaters, flood gates, barrages and coastal pumping stations.

(v)

the generation, transmission or distribution of electricity, gas or other energy or power;

Examples

Power stations, substations, transmission lines and transformers for electricity generation, transmission or distribution.

Pipelines used to transport gases which liquefy under pressure (such as natural gas, ethane and LPG) from a gas processing plant.

(vi)

the delivery of telecommunications, broadcasting, electronic and other data communications services;

(vii)

any other purpose (which may include a supply chain or an interconnected network) in which initial or further investment is vital to supporting, or is likely to materially improve, national productivity or Singapore’s economic, environmental or social sustainability; and

(c)

is or is intended principally for use by (whether or not free) or for the benefit of the present and future generations of the general public in Singapore;

“nationally significant infrastructure expenditure” has the meaning given by section 11;

“pledge” includes a pledge of, or any interest which secures the payment of a debt or performance of an obligation (but not arising from a trust) in, any book‑entry security —

(a)	as collateral for loans or advances; or
(b)	to secure deposits of public moneys or the performance of an obligation;

“primary dealer” means a person approved under Part 7A of the Government Securities Act 1992 to be a primary dealer;

“public authority” means a body or an office that is established or constituted by or under a public Act to perform or discharge a public function, and includes a Town Council;

“Regulations” means regulations made under this Act;

“related facility”, for any nationally significant infrastructure, means a structure or building, fitting, fixture, plant, computer or other system adjoining to or forming part of another structure or building in Singapore, without which the other structure or building —

(a)

will not have or have left, or cannot reasonably be expected to have or have left, a useful life of at least 50 years;

(b)

cannot reasonably operate for its intended purpose or purposes, being a purpose described in paragraph (b) of the definition of “nationally significant infrastructure”; or

(c)

otherwise ceases to be a nationally significant infrastructure,

regardless of the useful life of the related facility itself, but does not include any train, vehicle or vessel;

Examples

Gratings, float, boom, gauge, tidegate, sump, pumping station, pumps and associated pipe work, maintenance access, and debris interception and removal facility related to the functioning of a storm water drainage system are related facilities for a nationally significant infrastructure for the alleviation of floods.

Aviation fuel pipelines and water and sprinkler facilities relating to normal airport safety requirements, and specific purpose equipment used for unloading cargo or passengers at the airport such as airbridges and mobile air‑stairs are related facilities for a nationally significant infrastructure for air transport.

Rolling stock, locomotives, aircraft and barges are not related facilities for a nationally significant infrastructure for transport.

“security” includes stock, bonds, notes, certificates, bills and similar instruments;

“useful life”, for any thing, means the period that the thing is or is expected to be available and in a condition for use for the purpose which the thing is designed for.

Purpose of Act

3. The purpose of this Act is to enable financing by borrowing to meet the Government’s commitment to Singapore’s future by investing in nationally significant infrastructure and their related facilities in which initial or further investment is vital to supporting or is likely to materially improve national productivity or Singapore’s economic, environmental or social sustainability.

PART 2

AUTHORISATION AND APPLICATION OF LOAN

Power to raise loan

4.—(1) The Minister may raise, in the manner provided in this Act, loans to be applied in the manner provided in this Act and the Development Fund Act 1959.

(2) The power to raise loans under this section does extend to raising money outside of Singapore and in a currency other than the Singapore dollar.

(3) To avoid doubt, this Act does not limit any borrowing by —

(a)	entering into a hire‑purchase agreement or an arrangement that is of the same or a substantially similar nature;
(b)	entering into a lease or an arrangement that is of the same or substantially similar nature;
(c)	accepting debt on assignment; or
(d)	purchasing of goods or services on credit for a period of less than 90 days.

Borrowing limit

5.—(1) Subject to subsection (2), the Minister must not raise a loan under this Act if either condition in paragraph (a) or (b) is satisfied:

(a)

the total at any time of the following exceeds $90,000,000,000:

(i)	the sum of the proposed borrowing;
(ii)	the total amount of sums borrowed under any loan earlier raised under this Act;

(b)

the total effective interest paid or payable within (or both) the relevant period on all outstanding securities issued under this Act is more than the interest threshold amount of $5,000,000,000.

(2) Subsection (1)(a) does not apply to any of the following:

(a)

a borrowing transaction in a year that —

(i)	the Minister (in person) designates to be for the purpose of refinancing a previous borrowing under this Act; and
(ii)	is for a sum less than the total amount of securities issued under this Act and redeemed or with a maturity date within the same year;

(b)

all securities issued under this Act that are loaned by the MAS under any securities lending arrangement under section 18, or held by the MAS on behalf of the Government for the purpose of such an arrangement.

(3) In subsection (1)(b), the effective interest on all outstanding securities issued under this Act is the total of the yield to maturity for every security so issued multiplied by the face value of the security, where “yield” means the rate of return on any such security computed on the basis of the price of the security, the total interest payments and the period commencing from the date of issue of the security under this Act to the maturity date of that security.

(4) The relevant period in subsection (1)(b) means the financial year immediately before the financial year in which the proposed loan to be raised under this Act is raised.

(5) To ascertain on any occasion whether any condition in subsection (1)(a) or (b) is satisfied, any moneys raised in a currency other than Singapore dollars must be converted into Singapore dollars as at the following rate of exchange, being a rate that the MAS certifies to be then appropriate:

(a)

for the purpose of subsection (1)(a)(i), as at the rate of exchange on the last day of the financial year immediately before the date the amount is to be raised;

(b)

for the purpose of subsection (1)(a)(ii) in connection with sums borrowed under any loan earlier raised under this Act, as at the rate of exchange as follows:

(i)	where any security issued under this Act for the sum so borrowed has matured or has been redeemed — on the maturity date of the security or the date of its redemption, if earlier;
(ii)	where any security issued under this Act for the sum so borrowed has not been redeemed — on the day referred to in paragraph (a) for the same occasion;

(c)

for the purpose of subsection (1)(b), as at the rate of exchange on the day when the amount of interest is to be paid or is payable, and that the MAS certifies to be then appropriate.

Issuing securities for borrowing

6. For the purpose of raising any loan under this Act, the Minister may —

(a)	issue securities in such form and manner as the Minister thinks fit; and
(b)	issue such securities at such rates of interest and subject to such conditions as to maturity date, repayment, redemption and other matters as may be prescribed by this Act and the Regulations and, subject to the provisions of the Act and Regulations, by the Minister.

Principal and interest charged on Consolidated Fund

7. The principal payable in respect of moneys borrowed under this Act and represented by securities issued under this Act, and all interest on the principal sums payable on the securities, are charged upon and payable out of the Consolidated Fund without authority other than this section.

Borrowing expenses

8. All expenses incurred in connection with the raising of money under this Act (including expenses in connection with the issue, refinancing, repayment or redemption of securities) are charged upon and payable out of the Consolidated Fund without authority other than this section.

Power to raise loan non‑delegable

9. Despite anything in the Interpretation Act 1965 or any other law, the Minister must not delegate the Minister’s power under this Part.

Borrowing only for nationally significant infrastructure expenditure

10.—(1) The face value of every security issued under this Act, less any sum mentioned in section 5(2) —

(a)	must be paid into the Development Fund; and
(b)	may only be appropriated to meet nationally significant infrastructure expenditure by the Government.

(2) Out of the proceeds of money raised under this Act, only the face value of every security issued under this Act, less any sum mentioned in section 5(2), must be treated as moneys received by way of loan upon the public credit of Singapore for the purposes of section 6 of the Financial Procedure Act 1966.

Meaning of “nationally significant infrastructure expenditure”

11.—(1) In this Act, “nationally significant infrastructure expenditure” means any qualifying capital expenditure incurred, on or after 3 August 2021, in relation to an approved infrastructure project.

(2) In this section, “infrastructure project” means a project involving any one or more of the following matters:

(a)

the construction or acquisition of any nationally significant infrastructure;

(b)

the building, installation or acquisition of any related facility of a nationally significant infrastructure;

(c)

the improvement, extension, enlargement or replacement of any nationally significant infrastructure or related facility of a nationally significant infrastructure where the improvement, extension, enlargement or replacement significantly —

(i)	increases the capacity or reliability of the nationally significant infrastructure;
(ii)	increases the useful life of the nationally significant infrastructure; or
(iii)	reduces previously assessed operating costs of the nationally significant infrastructure,

such that the nationally significant infrastructure has or has left, or is reasonably expected to have or have left, a useful life of at least 50 years upon the completion of the infrastructure project.

(3) In this section, “qualifying capital expenditure”, in relation to an infrastructure project, means capital expenditure incurred by any infrastructure project participant of the project, wholly or substantially for the purpose of carrying on the infrastructure project, and even if incurred before 3 August 2021; and includes capital expenditure incurred in connection with any of the following incidentals to the project:

(a)	the acquisition of any right or interest in respect of the use of any invention, required in respect of or in connection with any matter in subsection (2)(a), (b) or (c);
(b)	any associated design, investigative and engineering studies, survey or research preparatory to the undertaking of any matter in paragraph (a) or subsection (2)(a), (b) or (c);
(c)	any works directly attributable to bringing the nationally significant infrastructure and its related facilities to the location and condition necessary for the nationally significant infrastructure to operate for its intended purpose or purposes.

(4) However, qualifying capital expenditure excludes any capital expenditure incurred in relation to any of the following:

(a)	the repair or maintenance of a nationally significant infrastructure or related facility of a nationally significant infrastructure;
(b)	the acquisition of land and of any right or interest in or over land, even if required in respect of or in connection with any matter in subsection (2)(a), (b) or (c);
(c)	the acquisition, repair or maintenance of any train, vehicle, aircraft, vessel or barge.

(5) The Minister must not approve any infrastructure project for the purposes of this Act unless —

(a)	the total qualifying capital expenditure that has been or is expected to be incurred wholly or substantially by every infrastructure project participant for the purpose of the infrastructure project is estimated to be $4,000,000,000 or more; and
(b)	the infrastructure project is ongoing on, or starts on or after 3 August 2021.

(6) Where a number of distinct contracts or engagements are entered or to be entered into purportedly in connection with any infrastructure project, and the estimated value of some or all of such contracts or engagements taken severally do not exceed the amount specified in subsection (5), then to calculate the estimate of the total qualifying capital expenditure to be incurred by any infrastructure project participant wholly or substantially for the purpose of the project, every distinct contract or engagement for anything that —

(a)	is capable of being completed and to start operations independently of other matters covered by the other contracts or engagements or without materially affecting the effective operation of matters covered by the other contracts or engagements; and
(b)	is situated on lands that are not adjacent or contiguous,

must be disregarded.

(7) In this section —

“approved” means approved in person by the Minister in accordance with this section;

“construction”, in relation to any nationally significant infrastructure, means —

(a)	the erection (but not repair or maintenance) of the nationally significant infrastructure or any of its related facilities;
(b)	the excavation or site formation works connected with or carried out for the purpose of paragraph (a); or
(c)	the demolition and re‑construction of the nationally significant infrastructure or any of its related facilities;

“infrastructure project” includes a phase or stage of an infrastructure project only if expressly planned for at the start of the infrastructure project;

“infrastructure project participant”, for any infrastructure project, means —

(a)	the department, ministry or Organ of State of the Government to which responsibility for carrying out the infrastructure project (or any part of the project) is assigned; or
(b)	a public authority carrying out the infrastructure project as an agent or otherwise on behalf of the department, ministry or Organ of State of the Government mentioned in paragraph (a).

PART 3

TERMS OF SECURITIES

Redemption

12. Subject to sections 13 and 18, a security issued under this Act is redeemable at par on —

(a)

the maturity date of the security; or

(b)

if the security is redeemable at the election of the holder, on the earlier of the following dates:

(i)	the date specified as the redemption date in any notice of intention to redeem that is given by the holder to the MAS in the prescribed manner;
(ii)	the maturity date of the security.

Early redemption

13.—(1) The holder of a security that is issued under this Act and not redeemable at the election of the holder may, upon an invitation of the MAS under this section, apply to redeem the security before the maturity date of the security.

(2) The MAS may by public notice invite the public to apply to redeem any security issued under this Act before the maturity date of the security where that security is —

(a)	not redeemable at the election of the holder; and
(b)	specified or described in the public notice.

(3) The public notice mentioned in subsection (2) may specify —

(a)	the terms and conditions relating to the early redemption of the security specified or described in the public notice, including the manner in which any offer for early redemption has to be made; and
(b)	such other information as the MAS may consider necessary.

(4) However, the MAS may refuse any application to redeem any security before the maturity date of the security without assigning any reason.

Payment of interest

14.—(1) Subject to subsection (2), the interest payable on any security issued under this Act must be paid half‑yearly as specified in the Regulations relating to the issue of the security.

(2) Where any security that is redeemable at the election of the holder thereof at any time is redeemed before its maturity date, a portion of the half‑yearly interest payable on that security (calculated on a pro‑rata basis) is payable on such date as may be specified as the redemption date in the duly served notice of intention under section 12(b)(i) to redeem that security.

(3) The Minister must, in respect of any security issued under this Act —

(a)	in each half‑yearly period ending on the day on which interest on the security falls due; or
(b)	if security is redeemable at the election of the holder thereof at any time, as soon as practicable after due notice of intention under section 12(b)(i) to redeem the security before its maturity date is given,

withdraw from the Consolidated Fund a sum equal to the appropriate interest (or a portion thereof) on the security that is due and payable in order to pay that interest.

Interest stops on redemption

15. Regardless of any demand for payment of the principal sum, all the interest on the principal sum payable on the security stop immediately after —

(a)	the maturity date of a security issued under this Act;
(b)	the redemption date in the duly served notice of intention under section 12(b)(i); or
(c)	the date of early redemption in accordance with section 13,

whichever is the earliest.

Transferability, etc., of securities

16. A holder of a book‑entry security may transfer or pledge the book‑entry security.

PART 4

ADMINISTRATION

MAS is agent

17.—(1) The MAS is by this Act appointed to act on the Government’s behalf as an agent —

(a)	for issuing of securities for moneys borrowed under this Act; and
(b)	for any other purpose that is connected with paragraph (a).

(2) Without limiting subsection (1), the MAS may —

(a)	by public notice invite the public to apply to take up securities issued under this Act; and
(b)	refuse any application to take up securities issued under this Act without assigning any reason.

(3) Subsection (1) does not prevent the exercise by the Minister of any power under this Act.

Securities lending arrangements

18.—(1) The MAS may, from time to time and on the Government’s behalf as an agent, but subject to subsection (2), enter into securities lending arrangements by lending securities issued under this Act to primary dealers, including an arrangement under which such securities are sold and repurchased.

(2) The total outstanding amount of securities issued under this Act and on loan by the MAS at any time by way of any securities lending arrangement on behalf of the Government entered into under subsection (1) must not exceed —

(a)	$6,500,000,000; or
(b)	a higher sum specified by Parliament in a resolution in substitution for the amount in paragraph (a).

(3) Lending security is taken to include an arrangement under which it is sold and repurchased.

(4) In the case of securities issued under this Act that are held by the MAS for the purpose of securities lending to primary dealers under this section, those securities are redeemable on such conditions as are agreed upon between the Government and the MAS.

(5) To avoid doubt, nothing in this section affects the power of the Minister to make investments under section 7 of the Financial Procedure Act 1966.

Issue of book‑entry securities

19.—(1) The MAS may —

(a)

issue book‑entry securities for moneys borrowed under this Act, by means of entries on its records which include the name of the depositor and the amount and description of the securities;

(b)

maintain accounts of book‑entry securities for moneys borrowed under this Act —

(i)	for any depositor on such terms and conditions as may be specified by the MAS for such securities the depositor holds for its own account and, where the depositor is a depositary institution, for the account of its customers;
(ii)	for the Government; and
(iii)	for the MAS; and

(c)

otherwise service and maintain such book‑entry securities.

(2) The MAS is authorised to take all action necessary in respect of book‑entry securities to enable the MAS in its own capacity to perform its obligations as depositary with respect to such securities.

Transfers and pledges of book‑entry securities

20.—(1) A transfer or pledge of a book‑entry security to the MAS or to the Government or to any transferee or pledgee eligible to maintain an appropriate account in its name with the MAS must be effected, despite any law to the contrary, by the MAS making an appropriate entry in its records of the security transferred or pledged.

(2) The making of an entry in the records of the MAS under subsection (1) —

(a)	has the effect of delivery of the book‑entry security as if the security had been issued in the form of an engraved or a printed certificate;
(b)	has the effect of a taking of delivery by the transferee or pledgee;
(c)	constitutes the transferee or pledgee a holder; and
(d)	if a pledge, has the effect of vesting a security interest in favour of the pledgee.

(3) A transfer or pledge of a book‑entry security effected in accordance with this section has priority over any transfer or pledge involving, or any interest in, the security effected or created in any other manner before, on or after the date of the transfer or pledge in accordance with this section.

Transfers and pledges effected by other means

21.—(1) Despite section 20, a transfer or pledge of book‑entry securities, or any interest in such securities, which is maintained by the MAS in an account may be effected by any means that would be effective to effect a transfer or pledge of book‑entry securities, or any interest therein, if the securities were issued by the MAS in the form of engraved or printed certificates.

(2) The MAS must not be treated as —

(a)	a bailee for the purposes of notification of pledges of book‑entry securities not effected in accordance with section 20; or
(b)	a person in possession of book‑entry securities for the purposes of acknowledgment of transfers of such securities not effected in accordance with section 20.

(3) Where a book‑entry security is recorded on the books of a depositary institution for the account of the pledgor or transferor of the security and the security is on deposit with the MAS in an account, that depositary institution must, for the purposes of effecting delivery of the book‑entry security to a purchaser or pledgee, be treated as —

(a)	the bailee to which notification of the pledge of the securities may be given; and
(b)	the person in possession from which acknowledgment of the holding of the securities may be obtained.

(4) The MAS must not accept any notice or advice of a transfer or pledge of any book‑entry security not effected in accordance with section 20, and any such notice or advice is void.

(5) The MAS may continue to deal with its depositor in accordance with this Part despite any transfer or pledge not effected in accordance with section 20.

MAS to be discharged by action on instructions

22.—(1) The MAS is not liable for conversion or for participation in any breach of fiduciary duty where the MAS has, in respect of book‑entry securities maintained in accounts maintained by the MAS —

(a)	effected pledges or made entries regarding the securities; or
(b)	transferred or delivered the securities,

according to the instructions of its depositor even though the depositor had no right to dispose of or take any other action in respect of the securities.

(2) The MAS is fully discharged of its obligations under this Part by the transfer or delivery of book‑entry securities upon the instructions of its depositor.

Confirmation of transactions

23.—(1) The MAS must, following any transaction affecting book‑entry securities maintained for any depositor under this Part, issue to each depositor a confirmation of the transaction in the form of an advice (serially numbered or otherwise).

(2) The advice referred to in subsection (1) must specify the amount and description of the securities and any other pertinent transaction data.

PART 5

REGULATIONS

Regulations

24. The Minister may make regulations necessary or convenient to be prescribed for carrying out or giving effect to this Act, including —

(a)	prescribing the terms of issue of securities issued under this Act;
(b)	prescribing the manner in which applications to take up securities issued under this Act must be made;
(c)	prescribing the manner in which securities are issued under this Act, which may include by syndicated arrangements or like arrangements involving financial institutions which agree to underwrite any issue of securities under this Act, be liable to subscribe for or to procure subscribers for securities issued under this Act, or provide other financial accommodation to the Government with respect to any securities issued under this Act; and
(d)	providing for such saving, transitional, and other consequential, incidental and supplemental provisions as are necessary or expedient for the purposes of this Act.

Presentation to Parliament

25. All Regulations must be presented to Parliament as soon as possible after publication in the Gazette.

LEGISLATIVE HISTORY

Significant Infrastructure Government Loan Act 2021

This Legislative History is a service provided by the Law Revision Commission on a best-efforts basis. It is not part of the Act.

Act 15 of 2021—Significant Infrastructure Government Loan Act 2021

Bill

6/2021

First Reading

5 April 2021

Second and Third Readings

10 May 2021

Commencement

3 August 2021

2020 Revised Edition—Significant Infrastructure
Government Loan Act 2021

Operation

31 December 2021

Abbreviations

(updated on 29 August 2022)

G.N.

Gazette Notification

G.N. Sp.

Gazette Notification (Special Supplement)

L.A.

Legislative Assembly

L.N.

Legal Notification (Federal/Malaysian)

Malaya/Malaysia (including Federated Malay States, Malayan Union, Federation of Malaya and Federation of Malaysia)

Parl.

Parliament

Subsidiary Legislation

S.I.

Statutory Instrument (United Kingdom)

S (N.S.)

Subsidiary Legislation (New Series)

S.S.G.G.

Straits Settlements Government Gazette

S.S.G.G. (E)

Straits Settlements Government Gazette (Extraordinary)

COMPARATIVE TABLE

Significant Infrastructure Government Loan Act 2021

The Act has undergone renumbering in the 2020 Revised Edition. This Comparative Table is provided to help readers locate the corresponding provisions in the last Revised Edition.

2020 Ed.

Act 15 of 2021

2—(1)