Study on financing underground space development in Singapore
Date of Issue2016-05-16
School of Civil and Environmental Engineering
Land scarcity is a perpetual constraint in Singapore and one solution is to develop underground space. Deep underground space, the layer 60m ~ 150m underground, is less developed as compared to the shallower spaces. The high costs and uncertainty in return renders the private sector less active in pursuing deep underground development. This report thus investigates the potential of deep underground development in Singapore and proposes a financial framework for private investors. Previous establishments in underground development are studied. Such investments are to be encouraged in the form of public-private-partnership. The Singapore public-private-partnership model is studied, alongside with worldwide infrastructure public-private-partnerships. A categorisation of development type by depth is proposed, due to the different financing options and technical requirements. The benefits and drawbacks of typical facilities in shallow layer and semi-deep layer are carefully compared. Four potential development, storage, deep tunnel, nuclear bunker shelter and mining, are evaluated and storage is most suitable for Singapore. Its costs and benefits are studied and the financial returns of a new deep underground storage space is analysed using the proposed framework. The financial framework consists of three steps and incorporated the uncertainty in costs and returns by risk analysis. Result of the framework presents a probabilistic distribution of net-present-value of potential project for investors. The major advantage of the proposed framework is the flexibility for investors to model their risks, the augmented analytical capability over several independent uncertainties and the user-friendly process. Investors can easily adjust the uncertainty according to their own expectation and gain a holistic understanding of potential consequences.
Final Year Project (FYP)
Nanyang Technological University