Govt to stick with social enterprise hawker centre model, ‘not enough to keep doing things the same way’

SINGAPORE — Social enterprise-run hawker centres are here to stay, said Environment and Water Resources Minister Masagos Zulkifli on Monday (Nov 19), as Members of Parliament (MPs) raised questions about the new model and why the National Environment Agency (NEA) could not manage the centres directly.

Existing hawker centres under the NEA have done well to meet the needs of communities and hawkers, but it is not enough to keep doing things the same way, said Mr Masagos.

“Despite implementation challenges, the social enterprise hawker centre model is generally sound,” he said, outlining what the social enterprises could do better than the NEA.

“As with any trials and experiment, we cannot always get it right the first time,” he said, appealing for time to let the model evolve.

Ci Yuan Hawker Centre, the first to be run by a social enterprise, has been operating for about three years.

The majority of hawkers in the new centres are doing well and serving a variety of affordable food, said Mr Masagos.

SOCIAL ENTERPRISES A MISNOMER, THE ONLY WAY TO GO?

Social enterprise hawker centres and the terms that their hawkers operate under have been actively debated in recent months.

MPs such as Dr Lee Bee Wah (Nee Soon) and Mr Liang Eng Hwa (Holland-Bukit Timah) questioned if there were alternatives to social enterprises running the centres.

“Residents ask, why can’t we pick away all these layers? Why can’t NEA themselves run the hawker centres, build up your own internal capabilities?” asked Dr Lee.

Many residents would like to see the “old type of hawker centre” with cheap, good food instead of “beautiful” new ones serving more expensive food, she said.

Dr Lee also questioned how a social enterprise is defined and the operators’ motivations, given that many of them were “set up by big companies”.

Mr Liang asked if social enterprises are the only way to go. He suggested having the NEA run the centres, or a “management corporation strata title” model where hawkers manage a centre themselves.

In response, Dr Amy Khor, Senior Minister of State for the Environment and Water Resources, called the term “social enterprise hawker centre” — which she said the media has been using — “a bit of a misnomer”.

The Government had initially used the term “socially conscious operators”, she said. Operators have a social mission but need not be social enterprises, she said.

Government tenders spell out social objectives that operators must meet — such as making sure hawkers make a decent living, and ensuring the vibrancy of hawker centres.

The tender process favours operators that charge lower total rentals and operating costs. The authorities prohibit operators from increasing rentals or operating costs over the tenancy period.

While the Government is open to any model that can meet social objectives, Dr Khor said each will have its challenges and benefits.

“Social enterprise hawker centres, at the present moment, have resulted in many positive outcomes for both patrons and hawkers and we don’t want to undo these achievements,” she said.

All have productivity initiatives such as automated tray return systems and centralised dishwashing, for instance.

MARKET MECHANISM IS WORKING

Currently, 13 out of 114 hawker centres islandwide are managed by five social enterprise entities. Seven of the 13 centres are new, built after the Government announced in 2011 that it would restart the hawker centre building programme.

The new hawker centres — Pasir Ris Central Hawker Centre, Kampung Admiralty Hawker Centre, Bukit Panjang Hawker Centre, Ci Yuan Hawker Centre, Yishun Park Hawker Centre, Jurong West Hawker Centre, and Our Tampines Hub Hawker Centre — are run by five operators. They are Fei Siong Food Management, NTUC Foodfare, Timbre Group, Hawker Management under Koufu, and OTMH under Kopitiam.

Next year, Singapore will nominate hawker culture for inscription on the Unesco Representative List of the Intangible Cultural Heritage of Humanity.

Mr Masagos said food prices at social enterprise hawker centres are not kept artificially low, and operators work with hawkers to offer a range of food at different price points.

“The market mechanism is working, and the Government should not intervene unnecessarily, in mandating low or no rental, which could otherwise affect fair competition,” he said.

“The model must therefore ensure that rentals and costs are transparent and fair to hawkers, but cannot subsidise hawkers to the extent that it distorts the workings of the market.”

The operators also ensure a “good variety” of food options. This is not always a given at existing hawker centres because the NEA is required to award one vacant stall at a time based on tendered rentals to the highest bidder.

“NEA does not have a mechanism to curate an attractive collection of food options at each hawker centre, like in the case of the social enterprise hawker centre model. Such an allocation system run by the NEA would be complex to execute and be subject to potential audit issues,” Mr Masagos said.

Even in popular hawker centres such as Tekka Market, there are rows of stalls offering similar food, he noted.

Social enterprise hawker centres are “establishing themselves within their communities”. He said 97 per cent of hawkers at Ci Yuan Hawker Centre renewed their contracts in July, while 96 per cent of hawkers at Bukit Panjang Hawker Centre did so.

The Kampung Admiralty and Our Tampines Hub hawker centres have “hardly any vacant stalls and a long waiting list of potential hawkers”, similar to NEA-managed hawker centres, he said.

The five operators have also trained 38 aspiring hawkers and 19 of them are still in business. Of these 19, 13 have had their stalls converted to permanent ones, while six are at the incubation stage. This complements the NEA’s incubation stall programme, which has taken in 12 aspiring hawkers, eight of whom have remained in the trade.