SINGAPORE is proposing a set of amendments to designate critical entities in air, sea and land transport in order to “strengthen the resilience of key firms” and safeguard their ability to provide essential transport services.

The Ministry of Transport (MOT) said on Wednesday (Apr 3) that under the proposed Transport Sector (Critical Firms) Bill, designated entities will be subject to controls in the areas of ownership, management appointments, operations and resourcing (see graphic below).

It also said that the Bill “complements” the Significant Investments Review Bill (Sira) that was first tabled in November 2023 and passed in Parliament in January 2024. It scrutinises local or foreign investments into entities that have been deemed critical to Singapore’s national security interests.

“A sectoral approach allows us to tailor our controls to the needs of our transport sectors, and enables us to harmonise controls across key transport firms. Entities designated under our sectoral Acts will not be concurrently designated under Sira,” said an MOT spokesperson.

The spokesperson added that Sira is intended to regulate entities not adequately covered under sectoral legislation, and that entities designated under the Bill will not be concurrently designated under Sira.

The Bill was introduced in Parliament on Wednesday. Its second reading is expected in May, and it could be implemented in the second half of 2024, if passed.

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The Bill will amend four Acts: the Bus Services Industry Act 2015, the Civil Aviation Authority of Singapore Act 2009, the Maritime and Port Authority of Singapore Act 1996, and the Rapid Transit Systems Act 1995.

Controls for designated entities

The relevant statutory boards will designate “key entities involved in the provision of essential transport services in Singapore” under the legislation for their specific transport sector, namely the Civil Aviation Authority of Singapore, the Land Transport Authority of Singapore, or the Maritime Port Authority of Singapore.

Designated entities (DE) will be categorised as a “designated operating entity” if they directly provide essential transport services in Singapore, or a “designated equity interest holder” if they hold equity interest in a designated operating entity.

They will be subject to increased controls in three areas from the relevant industry sector authority: ownership, management appointments, and operations and resourcing controls.

These entities could include companies with services not readily replaceable due to them having a significant market share or specialised expertise, said an MOT spokesperson.

Remedial directions may be issued if a designated entity does not seek required approval, or if approval conditions were not met. This could include the authority directing the transfer or disposal of equity interest in the entity, or the removal of key appointment holders.

Breaches of the controls or remedial actions are offences. Penalties arising from these offences will take reference from the existing penalties under the Bus Services Industry Act 2015, the Civil Aviation Authority of Singapore Act 2009, the Maritime and Port Authority of Singapore Act 1996, and the Rapid Transit Systems Act 1995.

The Bill will also allow parties to appeal to the Minister for Transport regarding decisions by the relevant authority on designation and applications for approval on ownership or management appointments.