Among all the town councils, the Aljunied-Hougang-Punggol East Town Council (AHPETC) paid the highest rates to its managing agent (MA) — for both residential and commercial units — for three out of the past four years, figures from the Ministry of National Development (MND) showed.
Ms Sylvia Lim, Workers’ Party (WP) chairman and Aljunied GRC Member of Parliament, had filed questions for written answers, asking the MND for the MA rates of each of the town council for residential and commercial units in 2011, 2012 and 2013. She also asked for the names of the firms that were appointed as the MA of each town council for those years.
In response, the MND released figures for the rates between 2011 and last year. For residential units, AHPETC paid the highest rates to its MA, FM Solutions and Services (FMSS), for the four years, except in 2013 when its rates was behind what Potong Pasir Town Council paid its MA, EM Services.
For commercial units, AHPETC’s MA rates were the highest in 2011, 2013 and last year, but its rates were topped by those paid by the East Coast and Pasir Ris-Punggol town councils in 2012.
The ministry also highlighted that all MA contracts charge a “clean MA rate” for each property type, with the exception of the FMSS’ 2011 MA contract with the town council. Unlike other MA contracts, FMSS’ MA fee comprises three separate cost components: The MA rate, a fee to cover the costs of existing staff of the former Hougang Town Council, and a fee to cover the costs of new staff.
During last month’s parliamentary debate on the Auditor-General’s audit report on AHPETC, which found several accounting and corporate governance lapses, Law and Foreign Affairs Minister K Shanmugam cited the MA rates of each town council last year to show that the fees paid by AHPETC to FMSS were significantly higher. Among other things, Mr Shanmugan charged that the town council made inflated payments to FMSS — whose directors were also key office holders in the town council — without transparency and accountability.
Ms Lim questioned the figures cited by Mr Shanmugam, asserting that MA rates for commercial and residential units are usually different. In response, Mr Shanmugam said the figures were accurate.
The ministry has since clarified that the MAs of all town councils, with the exception of FMSS, have done away with the practice of charging differentiated rates for residential and commercial units. The ministry also said Pasir Ris-Punggol Town Council had called for a fresh tender last year, which adjusted its rates for commercial units from S$11.50 to S$5.50.
Ms Lim also tabled a question asking the ministry what were the rates charged by the MA for the former Aljunied Town Council — which was then run by People’s Action Party — for 2010, 2011 and 2012. The ministry noted that the contract which the former Aljunied Town Council signed with its MA, CPG Facilities Management, is in fact in AHPETC’s possession. CPG’s rate per commercial unit was S$12.80 in those three years. Its rate per residential unit during the period was between S$6.03 and S$6.73.
Taking into account various components in FMSS’ MA fee, the town council’s payments to FMSS in 2011 were effectively 20 per cent higher than the amount paid to CPG Facilities Management in 2010. By last year, AHPETC was paying about S$1.6 million more to its MA than other town councils, the ministry reiterated.
Bishan-Toa Payoh GRC MP Hri Kumar Nair questioned the additional fees that the town council paid to FMSS in 2011. “Since the work of running the enlarged Aljunied-Hougang Town Council fell on former Hougang staff — some of whom became owners of FMSS — as well as the new staff whose salaries were provided for, why were additional MA fees payable for that year to FMSS?”