Hawker stall rents do not rise because of renovation costs: NEA
Repair and redecoration works of hawker centres are typically carried out every five to seven years, with the costs borne fully by the National Environment Agency or the respective town councils.
Stall rentals are not raised because of the costs of repair and redecoration works.
We refer to Mr Kevin Tan’s letter, “Keep hawker food affordable” (Jan 3).
The Government does not regulate the prices of cooked food sold in hawker centres.
While keeping food prices affordable, hawkers need to make a decent living. Hawkers set prices taking into consideration their operating costs, market competition and what patrons are willing to pay. These factors differ from hawker to hawker, depending on the type of food sold.
To understand the possible drivers affecting hawker food prices, the Ministry of the Environment and Water Resources (Mewr) and Ministry of Trade and Industry conducted a study in 2014 on cooked-food stalls in hawker centres managed by the National Environment Agency (NEA).
It found that while there were several cost drivers such as raw materials, manpower and rent, rental costs formed a relatively small proportion of costs for typical hawkers, at 12 per cent. Raw materials were the largest cost component, at 59 per cent. Manpower accounted for 17 per cent of operating costs. Mewr updated the study in 2018, and the findings had not changed — raw materials remained the largest cost component.
Although rent is not the main driver of food prices, we have measures to support hawkers. These include disallowing subletting or assignment of hawker stalls to prevent stallholders from engaging in rent-seeking, which could drive up food prices. NEA has also removed reserve rent since March 2012 to allow stall rentals to fully reflect market conditions.
To help stallholders with increasing concerns about manpower costs, NEA has also introduced productivity measures in hawker centres. These include centralised dishwashing and automated tray return systems, with government subsidies stretching over four years for existing hawker centres, where stallholders pay between 30 and 70 per cent of the cost of centralised dishwashing.
From Jan 1 last year, NEA has also co-funded centralised dishwashing with stallholders at new hawker centres, at 50 per cent for the first year and 30 per cent for the second year. The Hawkers’ Productivity Grant also reimburses 80 per cent of stallholders’ costs for kitchen automation equipment.
In addition, the Government fully funds the building programme of hawker centres as well as the redevelopment of hawker centres when this is due. Repair and redecoration works of hawker centres are typically carried out every five to seven years, with the costs also borne fully by NEA or the respective town councils. Stall rentals are not raised because of the costs of repair and redecoration works. Stallholders who are affected by these works and unable to operate their stalls because of the closure of the centres may be given rental remission for the duration of the works.
Hawkers are central to the hawker trade and our hawker culture. To preserve our hawker culture, a balance needs to be struck between affordable food options and respectable earnings for our hawkers.
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