Preventing Sharp Increase in Hawker Centre Food Prices

Er Dr Lee Bee Wah asked the Minister for the Environment and Water Resources in light of higher prices of food at hawker centres (a) whether the Ministry will introduce rules to curb the sale of hawker stalls at exorbitant prices; (b) what is the percentage increase in rent after a hawker centre is upgraded; and (c) how is this increase in rent determined.

Mdm Speaker, NEA has disallowed subletting and assignment of hawker stalls by all new stallholders since April 2012. Existing stallholders have a three-year grace period that expires in March 2015 to comply with these new conditions.

The Government has upgraded a total of 106 hawker centres at a cost of about $420 million since 2001 under the Hawker Centres Upgrading Programme (HUP). After standard upgrading, subsidised hawkers of cooked food stalls would pay a monthly rent of $192. If the centre underwent rebuilding and/or major reconfiguration works, the subsidised monthly rent for a cooked food stall would be $320. For non-subsidised stallholders, the rents are adjusted based on valuation done by professional valuers to reflect the upgraded facilities. The Government does not recover the full cost of upgrading.

Thank you, Mdm Speaker. I have two supplementary questions. The Minister mentioned just now the deadline of March 2015 – I want to clarify that this means that after this date, they cannot sublet anymore. Is this correct? Secondly, we have heard very often, residents saying that after upgrading or rebuilding, the cost of food in a hawker centre has gone up. Some view that it is not necessary for such improvement works. I would like to ask whether the hawkers or the residents have a say as to whether the hawker centres need upgrading or not.

Mdm Speaker, I would like to confirm the Member's understanding that when we made the changes in 2012 on restricting the subletting of hawker centre stalls, we made two changes. For new stallholders, who successfully tender for stalls from March 2012 onwards, they are not allowed to sublet. For existing stallholders, we have given them a three-year grace period and this is ending in March 2015. So, after March 2015, all stallholders are supposed to be owner-operators. They will have to operate the stalls themselves. We do give some flexibility for an owner to operate up to two stalls. For various reasons, they could have partnerships with another partner; they can then operate in two stalls. That is the flexibility that we have given them.

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On the point about whether all upgrading is necessary, we do take into consideration the views of the stallholders. Let me explain. Under HUP, we have allowed four sold centres to delay the upgrading because of feedback from stallholders. The reason being that these are sold stalls and many of the stallholders require a continuous operation to pay for the cost of their stalls. We do take into consideration the views of the hawkers.

I have also heard the same feedback as the hon Member. I have asked my colleagues in the Ministry and they told me that the newest hawker centre that has gone through an upgrading programme is one that was upgraded 24 years after it was built. I do not think that is an unreasonable length of time to have a major upgrading of a centre – after 24 years in operation. We are very careful. We do not upgrade a centre unnecessarily. We only determine what is required to improve the experience of the patrons. We also do not upgrade a centre more than once. We have not done so. The HUP has been more or less completed. We do not intend to upgrade any more centres in the future. The programme has ended.