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TR EMERITUS
The Voice of Singaporeans for Singapore
PAP Managing Agents mysteriously lower their rates
February 14th, 2015 |
Author:
Editorial
It was reported on ST today (‘PAP MPs seek answers on “missing public funds”‘, 14 Feb) that PAP MPs wanted WP to answer for the “overpayment” of town council management fees to FMSS, the managing agent of AHPETC.
Minister Shanmugam on Thursday (12 Feb) distributed a table showing that the Managing Agent (MA) fees AHPETC paid were nearly double the average fees at PAP town councils:
(ST graphics)
He charged that AHPETC had overpaid FMSS by $1.6 million a year over the past four years. This is calculated based on the what AHPETC would have paid using the average PAP rates from the table above.
Education Minister Heng further pressed WP, “Where did the money go? Why are you so protective of your expensive managing agent that messed up the town council’s work? Because they are the party supporters and friends?”
MP Hri Kumar Nair also said, “And as any person knows, loss does not only occur when money is stolen.” He was referring to “substantial overpayments” to FMSS.
However, do take note that accusations of “substantial overpayments” from AHPETC to FMSS came from after calculating from the numbers stated in the table above.
Problem with Minister Shanmugam’s table
TOC did a very good analysis of the numbers in the table and immediately spotted problems. TOC reported [
Link]:
An apparent anomaly were the residential and commercial unit rates which Mr Shanmugam’s chart indicated were the same.
AHPETC’s chairman, SylviaLim noticed this and highlighted this to Mr Shanmugam.
“From what I know, MA rates are usually different from residential units and commercial units,” Ms Lim said. “But in your chart, they are all the same. So I would like minister to clarify that there has been no mistake in this chart and it is really the fact that all this MA are charging the same rates for commercial and residential units because from the data that I have, even the MA for PAP town councils, such as CPG, from the Aljunied town council records that we have, the MA rate for commercial units was 12 dollars and something. So I think minister may want to check his chart.”
Mr Shanmugam got up and replied to Ms Lim immediately, “I can answer your answer straight away. You should look at annex 3 and you will see in the first page that the MA rates once they are done on a weighted average basis, these figures are accurate, [I’m] told by MND.”
However Ms Lim was unconvinced.
She said, “Minister, I would still request it to be checked because I don’t think it is correct.”
WP’s secretary-general Low Thia Khiang also told Mr Shanmugam that the rates cannot be the same.
Mr Shanmugam replied that he would check the rates for accuracy.
Indeed, looking at the figures, one would come to wonder if the figures are correct.
A TRE reader, Melvin Tan, who was at the gallery observing the parliamentary proceeding also reported (‘
Report from gallery: TC saga designed to damage WP‘):
Ms Lim added that of the three pages of appendices distributed by Mr Shanmugam, the one detailing various charges by town councils was wrong. The rates for all PAP town councils were residential rates except AHPETC had different rates for residential and commercial properties.
To me, the error was so obvious but Mr Shanmugam was adamant on his accuracy. Only later did he admit he was only told that the figures were correct and did not check them himself. On the second day of the debate, he did not address or correct this issue and no longer did.
The above incident brought a few points to my mind. Firstly, if I were shown a table where two columns were the same figures except for the one for AHPETC, I would instinctively check if the figures were correct before presenting them in Parliament.
Secondly, Mr Shanmugam had only to produce three appendices on a town council matter and one was already wrong. How would he expect AHPETC with several fronts to take care of to avoid even one mistake?
Thirdly, I noticed the MSM had downplayed or blotted out this incident.
PAP MA rates were suddenly lowered last year
In fact, evidence has shown that the MAs of PAP TCs suddenly and mysteriously, lowered their MA rates only last year. That means to say, prior to last year, PAP MA rates were much higher than those shown in the table above.
A reader forwarded the following information to TRE today (14 Feb). It showed that for Pasir Ris-Punggol Town Council, their residential MA rates (per unit per month) were:
- FY2011 (ending Jan 2012) – $6.11
- FY2012 (ending Jan 2013) – $6.20
- FY2013 (ending Jan 2014) – $6.25
For commercial property (FY2011 to FY2013), it was higher at $11.50. The MA for Pasir Ris-Punggol Town Council is EM Services, a joint venture between HDB and Keppel Land [
Link]. HDB, of course, comes under Mr Khaw’s Ministry and Keppel Land is under Keppel Corporation, controlled by Temasek Holdings.
Following is the letter confirming the rates from FY2011 to FY2013:
Now, from the table above, the residential and commercial MA rates for Pasir Ris-Punggol have both dropped to $5.50 starting from last year (i.e, 12% drop for residential and 52% for commercial).
That is to say, for the residential MA rates for Pasir Ris-Punggol, we have:
Presumably, one would expect that the MA rates would have dropped accordingly among all the PAP TCs last year, since they are all coordinated by PAP TC Chairman Teo Ho Pin.
So, what happened? With inflation going up every year, how is that the PAP MAs can suddenly cut their rates for PAP TCs? Perhaps the PAP MAs felt remorseful for the “substantial” profits they had made over the years and decided to make less last year?
Or could it be with the cut in MA rates, certain services will also be correspondingly removed and if the TCs want those services, they will have to pay extra to their MAs? For example, like the sales tactic used by Joven Chew to sell cheap mobile phones to tourists but make them pay dearly for other accessories?
Indeed, if we were to assume that the residential MA rate for Tanjong Pagar may have also dropped 12%, that means before 2014, its rate could be as high as $7.56, higher than AHPETC’s $7.43.
WP MP Sylvia Lim also said in Parliament, “It is possible that the (other) managing agents have reduced their rates since then. The information that we had in 2012, the rates were at a higher level than what was circulated in the table (on Thursday).”
In a statement yesterday (13 Feb), a MND spokesman confirmed that the rates were based on the latest contracts the town councils had signed, and were submitted to MND only last year.
What do you think is going on here?
Why did the PAP MAs suddenly decide to charge less?
