WP ‘has not sufficiently addressed’ gravity of AHPETC’s problems

SINGAPORE — The Workers’ Party should give a full explanation on the payments made by Aljunied-Hougang-Punggol East Town Council (AHPETC) to its former managing agent FM Solutions & Services (FMSS), said Prime Minister Lee Hsien Loong, who noted that the opposition party had not sufficiently addressed the authorities’ charge that FMSS had been grossly profiteering from the opposition-held town council.

Speaking at a press conference yesterday evening after nominations closed for the Sept 11 general election, Mr Lee said while the WP would “naturally have to downplay” the problems AHPETC has, they are nevertheless serious ones which involve questions of governance, profitability, viability and propriety.

“It is regrettable that it has not been satisfactorily addressed and explained up till now. But I think these are things which voters will take note of,” said Mr Lee, who is secretary-general of the People’s Action Party (PAP). He also dismissed the WP’s arguments that it is not privy to how much FMSS pays its directors.

In a statement on Saturday which accused FMSS of grossly profiteering at the expense of its sole client, the Ministry of National Development (MND) noted that for the financial year (FY) 2013/2014, AHPETC had suffered an operating deficit of S$2 million. But in the same year, FMSS made a net after-tax profit of S$2 million after paying its directors and shareholders fees and salaries amounting to S$1.14 million.

Noting that it was a “deliberate choice” to design Singapore’s system such that the town council is the responsibility of elected Members of Parliament (MP), Mr Lee explained that this was to test people — who aspire to be the Government of Singapore — on whether they are “capable of administering, managing, leading and producing results to Singaporeans”. This is how some countries do it too, he said, adding that in France, the ministers in Paris have some local responsibilities as well. “They are simultaneously local politicians as well as national politicians, and that’s how our system is designed.”

Joining Mr Lee in the press conference was Deputy Prime Minister Teo Chee Hean, who was asked about his response to the WP’s charge that the PAP is using Government agencies such as MND for politics.

Mr Teo pointed out that this is the duty of the Government agencies to ensure proper governance, regardless of whether it is in a PAP town council, another government agency, private company or a statutory board. “We expect no less from them when it comes to an opposition-run town council.”

Mr Lee added in Mandarin that Government agencies have a responsibility to get to the bottom of things if lapses are found and, if necessary, take corrective or legal actions. “We should deal with this fairly, we can’t say just because it is an opposition-run town council, this problem will be politicised, so we should just give them special treatment and not check out the problems they have internally,” he said.

He highlighted the conflict of interest between two of FMSS’ directors who are also officers of AHPETC. If this were a competitive tender with many bidders and FMSS was picked because it had the lowest bid price, its profitability then would not be an issue as the company could have other ways to up its revenue, Mr Lee explained. But that is not the case in AHPETC, as the tender had only one bidder, and two of FMSS’ directors are also officers of the town council. FMSS’ bid price was also much higher than other town councils and AHPETC had as a result gone from having a surplus to having a deficit, Mr Lee added.

Earlier yesterday, National Development Minister Khaw Boon Wan echoed the same comments to reporters. “Let me simplify the message for Singaporeans: The town council lost money, about S$2million a year. FMSS made profit — more than S$2million a year. After FMSS’ contract has been terminated, the town council is now in the black,” he said. “So I leave it to you to draw your conclusion.”

On whether there will be a backlash from harping on AHPETC’s problems, he said these are “operational and tactical considerations”, adding that they will try to find the best way to “convey the importance and the gravity of the subject to voters in a way which voters can appreciate and understand”.

MND’s statement drew a sharp rebuke from AHPETC immediate past chairman Sylvia Lim, who called the statement a “series of careless accusations”. She also questioned the ministry’s “political motivation” for releasing the report at this time. Mr Khaw had subsequently said the WP should explain why it was “making such an arrangement to reward their supporters and friends”.