By now, everyone knows about the FW dorm overcrowding and poor conditions that has led to the outbreak of almost 20,000 Covid cases. And everyone has blamed the employers, MOM, the dorm operators, etc. However, from what I understand, the root cause is non other then Govt greed.
The govt is the one that delegates parcel of land to be put out to tender for construction of these worker dormitories. Once the govt has identified and put the parcel out for bids, that’s when you have the problems. Do you know for example, the lease given by the govt is only 20 years for these dorms? That’s right, 20 years. That means whoever wins the bid has 20 years to recoup the land cost and construction costs for these dorms. That means that all these dorms are build with modular construction so that they can be dismantled in 20 years at the expiration of the lease and re-assembled for further use elsewhere. The underlying land under the dorms will then be re-sold for more permanent development.
A typical example is in 2014, Tiong Aik Construction Pte Ltd bid and beat out 8 other bidders for a piece of land in Tuas South Street to build a 9200 bed workers dorm. They paid $113.9 million for this privilege. Back in 2014, this was one of the largest dorms, but it’s a medium size dorm by today’s standards. This land was owned by stat board JTC. Imagine thy had to pay $113.9 million for the 20 year lease, and on top of that construct the building, put in all the services, etc. This could end up costing them close to $150 million. You must remember these dorm lands are not even located in prime locations. They are usually in remote areas like industrial estates.
They then have less then 20 years (lease of 20 years less construction time) to earn all their money back, and still make a profit. Is it any wonder that they are squeezing as many workers in there as possible? Is it any wonder that their cleaning and hygiene standard is not there because they have to squeeze every single penny out of the building? Is it any wonder that perhaps they shortcut their maintenance on these dorms to save money?
Now look at it from the PAP’s view point. You have just squeezed $113.9 million from a large company for a short 20 year lease. If you harass them and pressure them to maintain their dorm and to spend money on the facility, they will tell you that reduces their profits. Therefore, other future bids for dorm land will not fetch as high a price if the MOM’s inspectors do their jobs and impose profit reducing regulations. Coupled with the fact that many of these companies have links to the PAP at the grassroot level and you have a very incestuous relationship. Josephstink Teo is not going to kill the goose that lays the golden egg by reading the riot act to the dorm operators. Hence we are in the situation we are in today. This situation will continue in the future, as long as it is so lucrative to the govt.
Now where does all this money from land leases to dorm operators, plus billions $ worker levies go, well your guess is as good as mine. So much collected and the PAP still will not allow us to take $5000 of our own money out of CPF.
