Minister for National Development Mah Bow Tan maintains that the reserve bid prices for state lands available for sale will have to remain undisclosed so as to allow the determination of fair market value for the site.
“If we were to reveal the reserve price for sale sites, then it may influence or distort the developers’ independent assessment of land prices and their bids, or deter some developers from bidding,” the Minister added, in a written response to a tabled question by Ho Geok Choo, MP for West Coast GRC.
The government uses the reserve price as a guide in deciding whether a site from the Reserve List will be triggered for sale or awarded when it is tendered out.
Mr Mah explained: “There have been instances in the past when we have both allowed the successful trigger of sites as well as the award of sites at bids below the Reserve Price.”
He said the Reserve List System is working well, with 13 sites successfully triggered for sale during the first half of this year.
That is the highest since the system was introduced in the second half of 2001.
Changes to enhance the reserve list system for land sales were announced in March.
They include the release of sites for sale if more than one bid comes close to the government’s minimum asking price within a reasonable period.
Mr Mah said: “In short, the reserve price is not a strict minimum price for either the trigger or award of sites.”
Deposits to be paid by successful applicants for Reserve List sites would also be reduced to 3 per cent from 5 per cent of the minimum price, capped at S$5 million.
The changes were intended to ensure sufficient land for developers by making the Reserve List System more responsive to market forces.
Source : Channel NewsAsia – 18 May 2010