A new law passed by Parliament on May 8, 2024, grants Singapore greater control over designated critical entities across air, land, and sea transport. The Transport Sector (Critical Firms) Act aims to safeguard the country against potential future disruptions to essential transport firms, according to Transport Minister Chee Hong Tat.

This legislation is designed to prepare Singapore for “possible extreme scenarios that may occur in the future,” ensuring readiness against risks such as malicious actors gaining control of key transport entities and jeopardizing essential transport services.

Under this new law, designated entities will be subject to stringent controls concerning ownership, management appointments, operations, and resourcing. This complements the Significant Investments Review Act, passed in January, which examines local or foreign investments in entities deemed critical to Singapore’s national security interests.

The Civil Aviation Authority of Singapore, Land Transport Authority, and Maritime & Port Authority of Singapore will designate affected entities for their respective sectors. These designated entities are required to notify authorities about changes in ownership and control above specific thresholds.

In response to questions from Members of Parliament regarding the criteria for designating entities, Minister Chee explained that several factors will be considered, including whether the firm provides essential transport services and its strategic importance within the sector. Entities with significant market share or specialized expertise are more likely to be designated.

Designated entities may include firms owned by the government, Temasek, or other shareholders. Chee stated that only a “small number of firms for each sector” will be designated. The ministry has already engaged with key transport firms that may be affected, with plans to finalize the list of designated entities by the end of the year.

Chee reassured that this law would not hinder firms’ economic competitiveness or growth, nor would it impose significant compliance costs or regulatory burdens. Most controls are already present under existing licensing schemes, and the new law consolidates these under one framework, extending controls to non-licensees.

In addressing concerns about the law’s step-in powers, which allow the Minister to issue a special administration order for service continuity during extreme scenarios, Chee acknowledged the need for the Land Transport Authority to collaborate with staff and other operators in the event of a crisis.

Currently, there are no plans to designate point-to-point (P2P) transport operators, such as taxi and ride-hailing companies, as the sector is still evolving and serves a complementary role to public transport. A review of the P2P industry structure and regulatory framework is expected to be completed in the second half of 2024.