[SINGAPORE] Companies in Singapore recognise the need for them to protect their assets from rising seas, but are concerned over how lease renewals and the costs of implementing coastal defences will affect their business viability.
Such costs may involve more than just the actual construction of defences, they say, as it could also include paying for more localised or in-depth studies to better assess their flood risk.
Such studies are on top of the national-level ones that national water agency PUB has commissioned to identify suitable coastal defences for various stretches of Singapore’s coastline.
These further studies are critical because it will help companies understand the specific coastal measures they need to put in place to protect critical infrastructure like oil storage tanks, said Charles Quek, who is chief executive of HSL Group, an engineering and construction company located on coastal land near Jurong Port.
He was among the experts and business owners who spoke to The Straits Times after a proposed law was tabled in Parliament on Feb 3.
The Coastal Protection Bill will require government agencies and private companies that occupy land along Singapore’s shorelines to implement measures to shield their coastal areas from rising seas, or face a fine and jail term.
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Lee Adam Harryman, head of the Climate Resilience Studio at CPG Consultants, said companies will need to look closely at their site’s elevation levels, critical assets, drainage and how different future sea-level scenarios might affect the area.
“It also means physically walking the site and using experienced judgment, not just relying on desktop studies and generic maps,” he added.
Most of Singapore’s coastline comprises land managed by the Government. But some 30 per cent of it is owned or leased by the private sector, and comprises mostly shipyards and ports, as well as businesses in the oil and gas and manufacturing sectors.
Quek, who is also adviser to the Singapore Water Association’s coastal protection chapter, noted that some companies may have low-lying infrastructure that did not factor in rising sea levels when they were first built.
Leaseholders will now have to factor in the length of their tenures in their decision on whether to make coastal protection investments, he said.
“If a company has a few years left on the lease, and is asked to take on such high liability, it may not make economical sense for the company. Whether it is worth it or not to continue with the lease is a business decision the company has to make,” he said.
If a business owner decides that his company is better off not owning waterfront land, he may choose other options such as renting a shared facility for maritime operations, such as the offshore marine centres.
The Government has said that coastal landowners will be given at least 10 years’ notice to fortify their premises, with the first of such notices expected to go out from the early 2030s.
A critical requirement of the proposed law is that landowners must ensure that one plot’s coastal protection measures are tightly connected to another’s.
Such coordination may be tricky to navigate, noted Quek. He said: “If I build a wall, my neighbour’s facility will be flooded if they don’t also have protections in place. If I solve my problem only, I am just passing the (flooding) problem over to them.”
He added: “The industry is nervous and concerned about costs.”
The Government has said it will support private landowners with financial aid and technical advice.
Minister for Sustainability and the Environment Grace Fu said on Feb 7 at a youth event that the exact structure of the grant is being worked out, and will be announced in due course.
For a new landowner, the coastal protection measures will be priced into the land cost, she added. “But if (companies) have already invested in the land and these requirements are imposed on them, that is a good basis for the Government to come in to suspend some of the additional costs,” said Fu, who is also Minister-in-charge of Trade Relations.
Anjali Viswamohanan, director of policy at the Asia Investor Group on Climate Change, said stronger regulatory frameworks like the proposed law outlines clear responsibilities, and would give companies and investors a much clearer basis to attract financing from other sources.
For instance, she cited financial instruments such as sustainability-linked insurance, which will allow the private sector to structure the financing for such infrastructure as an investment rather than a cost.
Quek noted that larger multinational corporations could be eligible for international financing and more specialised options like green bonds – a form of loan given out specifically for environmental projects.
He also suggested other financing modes, such as how companies sharing the same stretch of coastline could consider coming together to get joint funding for a coastal project, with payments made based on the share of land they occupy.
Harryman said such a law will also help to provide landowners clear standards, clear timelines and the ability to plan ahead.
“In many cases, protective measures can be implemented gradually, in phases, rather than as one big, expensive project,” he added. THE STRAITS TIMES
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