AHPETC arrears trend ‘will impact services for residents’

SINGAPORE — The service and conservancy charges (S&CC) arrears racked up by Aljunied-Hougang-Punggol East Town Council (AHPETC) has “serious implications” for residents, said Minister of State for National Development Desmond Lee. 

Referring to APHETC’s poor ratings for S&CC arrears in the latest town council management report by his ministry, Mr Lee had noted the sharp increase in arrears, and said that if the trend continued, the town council’s finances “must surely decline” and it would not be able to sustain its operations.  

Mr Lee made these today (Nov 7) comments in response to remarks made by Workers’ Party chief Low Thia Khiang on the APHETC’s poor showing in the areas of S&CC arrears and corporate governance in the annual report. 

Mr Low had told Lianhe Zaobao yesterday that problems in the two areas did not have a direct impact residents’ safety and the living environment. He also said in collecting S&CC, some residents would need more time, and most would pay up eventually.

However, Mr Lee, in a statement last night, said he disagreed with Mr Low’s “sanguine” views.  While some arrears are inevitable as some residents may face temporary financial difficulties, an “abnormally high” S&CC arrears rate means that some residents who can pay are probably not bothering to pay, or to pay on time, he said.

As at April last year, 39,000 households in AHPETC were “effectively subsidising” 16,000 households who did not pay their S&CC, he noted.

According to the report, released on Tuesday, AHPETC’s S&CC arrears rate had increased to 29.4 per cent as at end-April last year. This was up from 2.6 per cent in FY2010 and 8.4 per cent in FY2011 and FY2012, after the town councils in Aljunied GRC and Hougang merged.

“If this trend continues...the delivery of essential services must then be affected, to the detriment of residents,” said Mr Lee. “We should bear in mind that all town councils have to replace at their own cost, critical infrastructure, like lifts and water tanks and carry out all sorts of other building, mechanical and electrical repairs.”

He also pointed out that Hougang Town Council, which had an S&CC arrears rate of 7.8 per cent in FY2010, was in financial deficit — it had a net operating deficit of about S$92,000 and an accumulated deficit of about S$9,000. It only managed to avoid a cash flow problem after it was merged with Aljunied Town Council after the 2011 General Election.

Before the merger, Aljunied Town Council had an operating surplus of S$3.3 million, but within two years, the merged AHPETC’s financial position has “deteriorated rapidly”, Mr Lee said, pointing to an operating deficit of S$734,000 in FY2012.

“AHPETC’s financial position today may in fact be worse. For the town council has not submitted its FY13 financial statements, despite repeated reminders.” said Mr Lee. “And yet Mr Low says AHPETC ‘has no cash flow problems’. I hope he is correct.”