Debated in Parliament on 5 Mar 2015.
Ms Sylvia Lim asked the Minister for National Development for the years 2011, 2012 and 2013 (a) who were the Managing Agents (MA) for each Town Council; and (b) what were the MA rates per residential unit and per commercial unit respectively for each Town Council.
Ms Sylvia Lim asked the Minister for National Development what were the contracted MA rates of the MA appointed in 2010 for the former Aljunied Town Council for residential units and commercial units respectively for the years 2010, 2011 and 2012.
Not all Town Councils appoint Managing Agents (MAs). If they do, the Town Councils Act requires MAs to be selected via an open market tender. Before 2014, my Ministry had not required Town Councils to submit their MA contracts. As we did not have the pre-2014 MA contracts, the Ministry of National Development (MND) wrote to all Town Councils on 27 February 2015 to request submission.
Based on the submissions received, we have tabulated the requested information in Tables 1 to 3 below). The information for 2014 is included for completeness. We should highlight that all MA contracts charge a clean MA rate for each property type, with the exception of FMSS’ 2011 MA contract with AHPETC. Unlike other MA contracts, the FMSS MA fee comprises three separate cost components:
a) An MA rate of $6.37 for residential properties and $12.80 for commercial properties under the former Aljunied Town Council;
b) A separate MA fee to cover the annual staff cost of all existing staff of the former Hougang Town Council (HGTC) as per HGTC’s accounts as at 31 March 2011, which was $1,114,283.02, subject to adjustments, if any, based on the final audited accounts; and
c) An additional MA fee to cover the costs of new staff on a full reimbursement basis.
As AHPETC’s submission did not include the quantum of the three MA cost components, it does not allow MND to compute the effective MA rate for the whole Town Council for 2011 and 2012. However, based on the Auditor-General's Office (AGO) report on the audit of AHPETC, FMSS' 2011 MA contract had a contract value of $432,319.91 per month, or $5,187,838.90 for one year. This would give an effective MA rate of $7.87 per unit, without making a distinction between residential and commercial units. This rate is reflected in
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Tables 2 and 3 below.
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My Ministry did not have the MA contract that the former Aljunied Town Council signed with its MA, CPG Facilities Management. It is, in fact, in Aljunied-Hougang-Punggol East Town Council’s possession. Based on the Town Council's submission, the MA rates for residential units and commercial units are tabulated at Table 4 below. As explained in para 2, while
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FMSS’ 2011 MA fees appeared to be pegged to CPG’s second year contractual rates, they included separate MA fee components to cover the staff cost of all existing staff of the former Hougang Town Council, as well as the costs of new staff. This had effectively made FMSS’ 2011 MA fees 20% higher than CPG’s 2010 fees. The overpayment to FMSS has further grown, compared to other MAs. By 2014, the overpayment to FMSS was estimated at $1.6 million per year.
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