Keynote Address By Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and National Development, at The Legal Symposium at The Asia Infrastructure Forum 2021 on 23 June 2021, at Marina Bay Sands Expo & Convention Centre
23 Jun 2021Your Excellencies,
Distinguished Guests,
Ladies and Gentlemen,
1. Good afternoon everyone. It should be “good morning” to some others in the international audience. Welcome to this legal symposium, and for overseas guests who are tuning in virtually, and if this is your first time, a big warm welcome and we hope that you will find this symposium useful. This event brings together governments, industry leaders and a wealth of legal experts from around the world to discuss legal solutions to Asia’s infrastructure challenges.
Projects and infrastructure practice is a growth industry
2. It is estimated that Asia will require US$4.6 trillion worth of financing from 2016 to 2040 to meet its infrastructure financing gap and to maintain economic growth. The fiscal pressures caused by COVID-19 have only widened the infrastructure financing gap, yet infrastructure development and spending is expected to drive the global post-pandemic economic recovery. The growing emphasis on the need for sustainable and resilient infrastructure development to aid recovery and support growing populations has also increased the region’s awareness on environmental challenges arising from climate change.
Standardisation of legal documents can shorten project timelines
3. In tandem with the urgency to support infrastructure growth is the need to build capacity in project financing. One fundamental challenge is the cost of and length of time needed for developing project finance documents. Further, the wide and varied range of documents used in project finance results in the lack of common standards and uncertainty of interpretation in the event of disputes.
4. To address this, Infrastructure Asia, together with Allen & Gledhill and Clifford Chance, and supported by the Asia Pacific Loan Market Association (or APLMA), has developed a core suite of standard project finance loan documents comprising the mandate letter, the term sheet and common terms agreement. 50 per cent of the loan documentation, covering common clauses, have been standardised, with the remainder available for customisation according to individual project needs. The documents will help to reduce the time spent on contract negotiation and consequent costs, and pave the way for a secondary market in infrastructure debt by creating a more homogenous market for project finance loans.
5. To facilitate familiarisation and greater adoption in Asia, I am pleased to announce that we have also translated these documents from the original English into various languages for reference, namely, Mandarin, Vietnamese and coming soon, Bahasa Indonesia. They are available free of charge on InfraAsia’s website, and I encourage you to have a look and consider how they may benefit your projects.
Singapore’s Dispute Resolution Mechanisms and Protocols
6. Infrastructure projects are inherently complex. The high-value, cross-border and long-term nature of infrastructure projects inevitably present political and financing risks, operational challenges, and differences in systems and practices attributed to the multiple stakeholders involved. With delays, variations, defects and/or performance-related issues, it is important to plan for the possibility of disputes. Singapore offers a complete suite of dispute resolution services. This includes arbitration at the Singapore International Arbitration Centre (SIAC), mediation at the Singapore International Mediation Centre (SIMC) and, if litigation is required, at the Singapore International Commercial Court (SICC).
7. Let me elaborate on Singapore’s progress in each field:
Arbitration:
8. According to the 2021 International Arbitration Survey, Singapore is jointly ranked with London as the preferred seat for arbitration globally. The SIAC is the preferred arbitral institution in the Asia Pacific and is among the top four arbitral institutions in all regions. These reflect the global recognition of Singapore as a trusted and world-class centre for arbitration.
Mediation:
9. Let me turn next to mediation. Mediation is an alternative solution which avoids lengthy court proceedings that could delay project completion and increase costs, and could therefore benefit infrastructure projects. To that end, we have developed a dispute management tool known as the Singapore Infrastructure Dispute-Management Protocol in 2018 to help parties proactively manage differences during the lifecycle period of the infrastructure project, and hence, minimise the risks of time and cost overruns. In 2019, the Singapore International Mediation Centre signed a Memorandum of Understanding with the Permanent Forum of China Construction Law (PFCCL) to promote mediation for infrastructure-related disputes. We hope that its use in the region will grow with the Singapore Convention on Mediation.
Litigation:
10. Next, litigation. If litigation is preferred, the Singapore International Commercial Court has a bench of experienced specialist commercial judges, including judges with wealth of experience in infrastructure and construction [such as Justice Sir Vivian Ramsey, who will be on the second panel on dispute resolution later this afternoon].
11. Regardless of the selected mode of dispute resolution, Singapore is globally recognised as a hub to resolve disputes that arise in the course of infrastructure projects. Our offerings in dispute resolution form part of Singapore’s vibrant ecosystem of professional services to “make infrastructure happen.”
Conclusion
12. While these are challenging times, it is also an exciting time to be involved in infrastructure, as together, we can shape infrastructure of the future. Through today’s symposium, I hope that you will gain a deeper understanding of the opportunities that infrastructure development can offer.
13. I look forward to a lively discussion with the panel, and I hope all of you will benefit from this symposium. Thank you very much.
Distinguished Guests,
Ladies and Gentlemen,
1. Good afternoon everyone. It should be “good morning” to some others in the international audience. Welcome to this legal symposium, and for overseas guests who are tuning in virtually, and if this is your first time, a big warm welcome and we hope that you will find this symposium useful. This event brings together governments, industry leaders and a wealth of legal experts from around the world to discuss legal solutions to Asia’s infrastructure challenges.
Projects and infrastructure practice is a growth industry
2. It is estimated that Asia will require US$4.6 trillion worth of financing from 2016 to 2040 to meet its infrastructure financing gap and to maintain economic growth. The fiscal pressures caused by COVID-19 have only widened the infrastructure financing gap, yet infrastructure development and spending is expected to drive the global post-pandemic economic recovery. The growing emphasis on the need for sustainable and resilient infrastructure development to aid recovery and support growing populations has also increased the region’s awareness on environmental challenges arising from climate change.
Standardisation of legal documents can shorten project timelines
3. In tandem with the urgency to support infrastructure growth is the need to build capacity in project financing. One fundamental challenge is the cost of and length of time needed for developing project finance documents. Further, the wide and varied range of documents used in project finance results in the lack of common standards and uncertainty of interpretation in the event of disputes.
4. To address this, Infrastructure Asia, together with Allen & Gledhill and Clifford Chance, and supported by the Asia Pacific Loan Market Association (or APLMA), has developed a core suite of standard project finance loan documents comprising the mandate letter, the term sheet and common terms agreement. 50 per cent of the loan documentation, covering common clauses, have been standardised, with the remainder available for customisation according to individual project needs. The documents will help to reduce the time spent on contract negotiation and consequent costs, and pave the way for a secondary market in infrastructure debt by creating a more homogenous market for project finance loans.
5. To facilitate familiarisation and greater adoption in Asia, I am pleased to announce that we have also translated these documents from the original English into various languages for reference, namely, Mandarin, Vietnamese and coming soon, Bahasa Indonesia. They are available free of charge on InfraAsia’s website, and I encourage you to have a look and consider how they may benefit your projects.
Singapore’s Dispute Resolution Mechanisms and Protocols
6. Infrastructure projects are inherently complex. The high-value, cross-border and long-term nature of infrastructure projects inevitably present political and financing risks, operational challenges, and differences in systems and practices attributed to the multiple stakeholders involved. With delays, variations, defects and/or performance-related issues, it is important to plan for the possibility of disputes. Singapore offers a complete suite of dispute resolution services. This includes arbitration at the Singapore International Arbitration Centre (SIAC), mediation at the Singapore International Mediation Centre (SIMC) and, if litigation is required, at the Singapore International Commercial Court (SICC).
7. Let me elaborate on Singapore’s progress in each field:
Arbitration:
8. According to the 2021 International Arbitration Survey, Singapore is jointly ranked with London as the preferred seat for arbitration globally. The SIAC is the preferred arbitral institution in the Asia Pacific and is among the top four arbitral institutions in all regions. These reflect the global recognition of Singapore as a trusted and world-class centre for arbitration.
Mediation:
9. Let me turn next to mediation. Mediation is an alternative solution which avoids lengthy court proceedings that could delay project completion and increase costs, and could therefore benefit infrastructure projects. To that end, we have developed a dispute management tool known as the Singapore Infrastructure Dispute-Management Protocol in 2018 to help parties proactively manage differences during the lifecycle period of the infrastructure project, and hence, minimise the risks of time and cost overruns. In 2019, the Singapore International Mediation Centre signed a Memorandum of Understanding with the Permanent Forum of China Construction Law (PFCCL) to promote mediation for infrastructure-related disputes. We hope that its use in the region will grow with the Singapore Convention on Mediation.
Litigation:
10. Next, litigation. If litigation is preferred, the Singapore International Commercial Court has a bench of experienced specialist commercial judges, including judges with wealth of experience in infrastructure and construction [such as Justice Sir Vivian Ramsey, who will be on the second panel on dispute resolution later this afternoon].
11. Regardless of the selected mode of dispute resolution, Singapore is globally recognised as a hub to resolve disputes that arise in the course of infrastructure projects. Our offerings in dispute resolution form part of Singapore’s vibrant ecosystem of professional services to “make infrastructure happen.”
Conclusion
12. While these are challenging times, it is also an exciting time to be involved in infrastructure, as together, we can shape infrastructure of the future. Through today’s symposium, I hope that you will gain a deeper understanding of the opportunities that infrastructure development can offer.
13. I look forward to a lively discussion with the panel, and I hope all of you will benefit from this symposium. Thank you very much.