Debated in Parliament on 13 May 2013.
Mdm Speaker, thank you for allowing me to deliver this Ministerial Statement on Town Councils.
Last December, MND published its fourth Town Council Management Report, what we call TCMR. As we know, this is a regular report which sets out the performance of Town Councils in key areas like the state of cleanliness, maintenance of the estates, management of service and conservancy charges (S&CC) arrears and also the standard of corporate governance.
Among other observations, the fourth TCMR noted that the Aljunied-Hougang Town Council (AHTC) had yet to submit their auditor's Management Letter. This was material to the assessment of the corporate governance indicator. In response, the AH Town Council explained that completion of its audit had been delayed because Action Information Management Pte Ltd (AIM) had terminated the Town Council Management System (TCMS) with effect from 1 August 2011, making it necessary for AH Town Council to develop its own software within only two months.
This led to an exchange of statements between AH Town Council, AIM and Mayor Teo Ho Pin, who is the Chairman of PAP's Town Councils Coordinating Committee. Questions were raised on the circumstances surrounding the termination of the TCMS for AH Town Council in 2011 and the sale of the TCMS software to AIM in 2010. There were questions about possible conflict of interest in AIM, a PAP-owned company, contracting with the Town Councils which were run by PAP Members of Parliament (MPs).
In the interest of transparency and maintaining trust in the system, the Prime Minister ordered MND to review the AIM transaction thoroughly. MND was also to make observations on the nature of the Town Councils and how they had been run, with a view to improving the current framework. MND was given the task as it administers the Town Councils Act and regulates the Town Councils. MND has a duty to ensure that public funds are safeguarded at all times and that residents' interests are not compromised.
Permanent Secretary of MND, Mr Benny Lim, took charge of this task. He set up a seven-person review team, led by Mr Tay Kim Poh. Mr Tay is Deputy Secretary in MND and also formerly CEO of HDB. He has rich experience in public housing and especially Town Council matters. Madam, I notice that Permanent Secretary and Deputy Secretary of MND and one of their Review Team members are in the Visitors' Gallery this afternoon.
The Review Team reported to the Permanent Secretary directly. I gave them a completely free hand in carrying out their task. They interviewed all interested parties, probed their records, sought views from relevant experts and had the full cooperation of all the Town Councils. They did not report back to the Prime Minister or myself until they had completed their work.
On 30 April, Permanent Secretary (MND) submitted the review report to Prime Minister, with a copy to me. On 3 May, the report was released to the public, and has also been circulated to Members as a Miscellaneous Paper. The Prime Minister has accepted the Review Team's findings and recommendations. He asked me to deliver a Statement on this subject to Parliament. I will then move a Motion under Standing Order 44 that the matter be considered by Parliament, so that Members can ask questions and we can have a full debate.
The MND report covers three parts: (a) the 2010 AIM transaction; (b) the party political nature of Town Councils; and (c) the need for a review of the Town Councils.
First, the 2010 AIM transaction. As Members have seen the report, I will not dwell on the details. Basically, the Team reviewed all the facts of the 2010 AIM transaction. Its findings were summarised in paragraph 4 of Permanent Secretary (MND)'s letter to the Prime Minister of 30 April. Let me quote the highlighted sentences in this letter:
(a) "there was no pecuniary or material interest by any Town Council member in AIM or in the contract awarded to AIM in 2010;
(b) the PAP Town Councils complied with the open tender process under the Town Councils Act and Town Councils Financial Rules (TCFR);
(c) the acceptance of a single bid for award is permissible under the TCFR as long as it satisfies the tender requirements and evaluation criteria;
(d) AIM did not make a profit from the TCMS transaction in 2010; its Directors were not paid any fees and it charged only a fee to cover its operational costs;
(e) there was no misuse or loss of public monies in the transaction; and
(f) in the light of the above findings, the team concluded that the AIM transaction in 2010 has complied with the Town Councils Act and the Town Councils Financial Rules."
The Review Team also examined the circumstances surrounding the termination of the TCMS for AH Town Council in 2011. They interviewed both parties and examined the communications between AH Town Council and AIM. They established the chronology of the exchanges. The chronology ends with AIM agreeing with AH Town Council's request to extend the use of the TCMS to 9 September 2011. The Review Team states that AH Town Council sent a letter first, on 10 June 2011, asking for termination of the TCMS, and further states that there appears to be a different understanding of the execution of the termination clause in 2011 by both parties.
Madam, the MND Review Report speaks for itself and I am sure the Review Team will be prepared to defend their findings anytime.
Second, the party political nature of Town Councils. Paragraphs 3 to 7 of the main Review Report provide useful background on why Parliament originally set up Town Councils in 1989, and on the strategic intent behind the Town Councils Act. Then MND Minister, Mr S Dhanabalan took the Bill through the House in June 1988. Then Deputy Prime Minister Goh Chok Tong set out clearly the purpose of forming Town Councils. I advise Members to read the Hansard records for a thorough understanding of this piece of legislation.
Prior to 1989, all the common areas of HDB estates were maintained centrally by HDB, a Government statutory board. However, Parliament decided to give MPs more authority and responsibility over the HDB estates in their constituencies, in order to strengthen the nexus between the residents and their elected MPs. The strategic intent was to bring home to the MPs that how they manage and run their Town Council would affect their electoral fortunes at the next election. This would enhance accountability, push MPs to focus on what mattered to the residents, and in turn, encourage voters to scrutinise more closely the capabilities and the track record of election candidates. This would ultimately benefit both the voters and the residents.
In line with this objective, the MND crafted the legislation to recognise the political nature of Town Councils. As the Review Team noted, and I quote, "The intent is to give the elected MPs as much latitude as possible to run the Town Councils within broad and general rules laid down to ensure proper governance and safeguard public interests."
In the same spirit, when administering the Act, MND has given latitude to MPs to exercise autonomy in judging how best to achieve their agenda and advance their residents' interests. For example, Town Councils may, as they see fit, engage those who share their political cause or are affiliated to their parties. In particular, the Town Councils are able to transact with persons or entities associated with political parties. Over the years, many Town Councils have exercised this flexibility.
For example, some Town Councils have appointed fellow party members and unsuccessful election candidates to various salaried jobs, including as General Manager. One Town Council waived competition – that means did not call tender – to appoint as its Managing Agent, a company owned by party supporters. MND has not interfered with such transactions. However, while MPs have considerable leeway, the substance of each transaction must still be proper and safeguard public interests.
So, to recap, Town Councils are set up for to fulfil a political purpose. Town Councils are not part of the Singapore Public Service, and so they are not governed by Civil Service rules. They are governed by the Town Councils Act. What Town Councils can and cannot do is set out in the Town Councils Act.
In the case of the PAP-run Town Councils, they work closely together to take advantage of economies of scale to benefit their residents. While PAP Town Councils operate in a decentralised manner, in the spirit of the Town Councils Act, they also work together as one team, tap on one another's strength, share best practices, and where relevant, make bulk purchases together so that they can get the best terms for their Town Councils and therefore their residents. That is why they have a Town Councils Coordinating Committee, currently chaired by Mayor Teo Ho Pin. That is also how the IT software got standardised for their Town Councils. In addition, the PAP as a political party stands fully behind the MPs and their Town Councils. And that was why the PAP set up AIM in 1991: to ensure that residents living in PAP-run Town Councils would be well served. I am sure later Mayor Teo Ho Pin can elaborate on how the PAP-run Town Councils work together for the benefit of their residents.
The Review Team made observations on the process of handover of Town Councils from one party to another. After an election, a new team is required to take over almost immediately. And when there is a change in political party, it is not just the MPs who change because the other Town Councillors and even the Town Council employees may change too, as it is common for MPs to tap on the support of those who share their political cause to deliver their electoral promises for the estate. However, at present, the Town Councils Act does not contain adequate provisions to deal with such transitions.
For example, when the Singapore Democratic Party, and subsequently the Singapore People's Party ran Potong Pasir Town Council (PPTC), it self-managed the Town Council, without any Managing Agent. When PAP MP Sitoh Yih Pin was elected in Potong Pasir in 2011, he had to appoint a Managing Agent quickly to ensure continuity of services for residents. He persuaded EM Services to step in to provide the service at short notice and managed to achieve a successful handover. But he told me that it was a trying time for him and his team.
More recently, after the Punggol East by-election, Pasir Ris-Punggol Town Council (PRPTC) had to hand over the management of Punggol East SMC to Aljunied-Hougang-Punggol East Town Council (AHPETC). Both Town Councils agreed to an official hand-over on 30 April 2013 but they needed to share the office space from 1 May as Pasir Ris-Ponggol Town Council needed more time to prepare its alternative office before it could move out. "How to share office space" from 1 May became a point of discussion. There was initial frustration when both parties could not agree to the proposed layout for the shared office. Differences also arose over several other issues. MND officers stepped in to facilitate the handover and broker an arrangement acceptable to both parties. Eventually both sides came to a compromise on the various issues.
There are clearly some lacunae in the rules dealing with handovers of Town Councils. We need to look into this. The Review Team has made some useful recommendations to institutionalise some change-over rules to minimise disruptions to critical services during a change in leadership. One is for Town Councils to have in place contractual provisions for automatic one-off extensions following an election when there is a change of party in charge of the Town Council. Another is to set a minimum notice period for termination initiated by the contractor or key appointment holders such as General Managers. The Town Councils themselves have suggested that MND should consider extending the period of handover and play a greater role in the process. These are all useful suggestions and MND will take them in when it updates the Town Councils' rules.
Another manifestation of the autonomy exercised by MPs is the uneven way MPs manage their respective towns. Some Town Councils are stricter in enforcing and recovering S&CC arrears. But others take a less stringent , shall we say, more populist approach towards such collections but at the expense of the Town Councils' long-term financial health and also, of the interest of the majority of residents who do pay on time.
MND has significant concerns about the Town Councils' long-term financial health. Town Councils are required under the Town Councils Act to build up sinking funds which they will eventually need to replace big ticket items like lifts, mechanical and electrical equipment, major repairs and repainting programmes. Town Councils' sinking funds often run into millions of dollars while they build up but they will all be needed in due course many years later. Most Town Councils find it difficult to explain to their residents why their S&CC has to go up to build up the sinking funds further when the Town Council already has "millions of dollars" in its sinking funds. Some resort to kicking the can down the road, delaying S&CC increases which are necessary, and creating a serious problem that will emerge later when the replacements and maintenance works come due. This is clearly not sustainable.
MND has also observed that Town Councils do not want to take on more responsibilities, especially if these carry a political cost. For example, some Town Councils are reluctant to enforce their own Town Council by-laws strictly, such as on obstruction of common corridors even though this is a fire safety risk. Another example is the disagreement over who should clean the hawker centres. There are currently two cleaning teams: one contractor appointed by the Hawkers' Association − they clean the table tops; another team by the Town Councils who clean the floor and also toilets. We know and we laugh about it. This division is inefficient but to consolidate the cleaning function into one will require the Town Councils to have to charge stallholders a higher S&CC. Most are reluctant to do so.
These examples illustrate how political pressures on Town Councils can lead to Town Councils making sub-optimal decisions resulting in poorer outcomes for the residents. This is not a simple problem to tackle as it is an unintended consequence of the very nature of Town Councils and is deep-seated in the current practice of many Town Councils. The Team has thus recommended a review of the current Town Council framework. This brings me to the third part of the report: the need for a review.
Twenty-four years after the formation of Town Councils, it is timely to assess the achievements of the Town Councils Act. The Review Team found that Town Councils have largely fulfilled the original objectives for which they were set up. Town Councils have delivered key estate services to residents in ways that conferred local flavour and met local needs. Residents enjoy far more customised services and Towns have developed their own identities in ways that HDB as a national agency could not have done.
The Straits Times dated 7 May 2013 published the results of a straw poll on whether town management should return to pre-Town Council days and they found that 41 out of 50 persons agreed. In other words, "Let's walk backwards − go back to the good old days". It titled its article: "Residents prefer apolitical agencies: Poll". It quoted one resident as saying, "Municipal issues must be separated from political considerations so that Town Councils can be administered in a transparent manner, serving public interest and not party interests. After all, Town Councils are funded by public monies." But the same Straits Times article went on to quote several experts and most MPs as wanting to keep Town Councils as political entities.
In a TODAY article published a day earlier, on 6 May 2013, NMP Assoc Prof Eugene Tan argued a view contrary to The Straits Times' poll findings. He aptly summarised it in the title of his article: "Let us not centralise Town Council services". It was a well-argued piece against a return to status quo ante.
We need to consider this long-term issue objectively and carefully. There are at least three areas which need to be looked at: first, Town Councils' duties and responsibilities vis-a-vis HDB; two, adequacy of Town Councils' sinking funds and long-term financial sustainability; and, three, hand-over and transition arrangements when MPs change and, may I add, such change could take place between MPs of the same party or from different parties. I have asked Senior Minister of State Lee Yi Shyan to undertake the review focusing on these areas. And I urge all of you – MPs and NCMPs from all parties, as well as NMPs – to share your views, ideas and insights with him in this review.
Mdm Speaker, 24 years after the formation of Town Councils, town management has been raised to a higher plane. The legislation to empower the elected MP to run the Town Council, so that he can respond more promptly to his residents' needs and work with his voters to shape their town's identity, has generally been a success. The need to create a nexus between an elected MP and his voters, through his work in the Town Council which has a direct bearing on the daily life of the residents, is a strategic imperative which cannot be faulted. We should not return to status quo ante where HDB administers estates all over Singapore, and MPs have no authority or responsibility over what is done or how well things work.
I am hopeful that two decades of actual experience in running Town Councils will enable us to evolve a good practical approach. As pointed out by the Review Team: "How our public housing estates are managed is a very significant subject as it impacts the value of the homes and the experience of day-to-day life for a vast majority of Singaporeans living in the HDB estates." We owe it to them to find a good accommodative solution going forward.
Mdm Speaker, pursuant to Standing Order No 44, I beg to move, "That the Ministerial Statement on Town Councils be considered by Parliament."
Question proposed.
Mdm Speaker, I wish to place on record in this House, and highlight the rationale and facts of the AIM transaction based on the press statement which I issued on 2 January 2013. I have also given the same facts to the MND Review team.
In my press statement, I have clearly and categorically stated the details that led to the AIM transaction. In 2009, the PAP-run Town Councils appointed Deloitte and Touche to advise on the review of the Town Council Management System (TCMS). Deloitte and Touche identified various deficiencies and gaps, and that the current TCMS system was becoming obsolete and unmaintainable.
As recommended by Deloitte and Touche to consider a "Service Model", the PAP-run Town Councils decided to sell the existing TCMS so that the Town Councils can continue to secure extension of the maintenance of the system without extra cost while exploring development options.
AIM submitted the only bid in an open tender, met all tender requirements and was awarded the contract. During the review, AIM had secured two extensions of the existing TCMS at no extra cost to the PAP-run Town Councils. It had actively worked to explore new software options and enhancements for the new TCMS. Thus, the AIM transaction has benefited the PAP-run Town Councils, and paved the way for the new TCMS tender to be called in February 2013.
On 30 April 2013, the MND review committee reported the facts of the AIM transaction, and found that the PAP-run Town Councils complied with the Town Councils Act and Town Council Financial Rules. The findings also show that no PAP-run Town Council Chairman or their Town Councillors had any pecuniary or direct interests in the AIM transaction.
Mdm Speaker, I have been involved in the running of Town Councils for 22 years since 1991. Based on my professional training in Building and Estate Management, I have always exercised my best judgement to serve my residents, and safeguard the interest of residents in the PAP-run Town Councils. I hope the facts of the AIM transaction will help the public to understand that the PAP-run Town Councils had acted in good faith in the interest of and for the benefit of their residents.
As Co-ordinating Chairman of the PAP-run Town Councils, I wish to reiterate that the PAP-run Town Councils have always exercised good governance in the management of the Town Councils. We are guardians of our residents' and public funds, and must always be accountable to our residents. We must ensure that our residents get value for money in Town Council services. The AIM transaction is one of the many joint projects which the PAP-run Town Councils have worked together to benefit our residents.
Mdm Speaker, the AIM transaction has enabled the PAP-run Town Councils to explore various options to develop a new Town Council Management System (TCMS) while paying no extra cost for the maintenance of their existing TCMS. In April 2013, the PAP-run Town Councils have awarded the new TCMS contract to NEC Asia Pacific Pte Ltd for $16.8 million. This is based on a "Service Model" as recommended by our consultant, Deloitte and Touche.
The new TCMS will have enhanced features in estate management solutions, dashboard reporting, more friendly usability, and e-learning tools for staff training. The new TCMS will save all 15 PAP-run Town Councils millions of dollars over the next seven years.
Madam, Town Councils were set up in 1989 to enable elected MPs to run their respective HDB towns, and be accountable to their respective residents. The inherent political nature of Town Councils is to ensure good governance of Town Councils by MPs for the benefit of their residents. It is the duty of all elected MPs, and their appointed Town Councillors, to run the Town Councils in compliance with the Town Councils Act and Town Council Financial Rules.
Over the last 24 years, the PAP-run Town Councils have worked closely with their residents to improve the living environment of their towns. The PAP MPs have engaged their residents actively and improved Town Council services to better serve their residents. The PAP-run Town Councils have also implemented many improvement projects to fulfil the needs of their residents. For example, covered linkways connecting block to block, block to bus-stops, new generation children playground, elderly fitness outdoor gym, and landscape works. All these projects have improved the quality of life of their residents.
Besides serving the residents of their respective towns, the PAP Town Councils also meet regularly to share best practices and implement joint projects for the benefit of their residents. As Co-ordinating Chairman of the PAP-run Town Councils, I chair both the Town Council chairmen and the Town Council GM meetings to facilitate all Town Council matters. The 15 PAP-run Town Councils have always worked together as a team supported by the PAP to continually improve the running of their towns. Over the last 24 years, the PAP-run Town Councils have built capabilities, and accumulated much domain knowledge in the running of Town Councils.
At the same time, the PAP-run Town Councils have also taken advantage of their economies of scale to implement many joint projects to bring cost savings to their residents. Madam, let me provide some examples to illustrate how the 15 PAP-Town Councils have worked together to benefit their residents.
Economies of scale. One, Emergency Maintenance Service Unit (EMSU) Joint Tender. The PAP-run Town Councils jointly called a tender to provide 24 hours emergency maintenance services for their residents. These include lift rescue services, emergency repairs and call centre services. The benefit of this joint tender is to bring down the cost of providing 24-hour emergency maintenance services and ensure that backup emergency maintenance services are available. The EMSU tender for the 15 PAP-run Town Councils is grouped into three zones – East, West and Central – so that two or more service providers can serve and provide backup emergency maintenance services to the residents.
Two, the Town Council Management System (TCMS). Town Councils are established under the Town Councils Act, which stipulates specific functions and duties of the Town Councils. As such, the Town Councils share similar business processes and operations, such as accounting, statutory reporting, income tax, arrears management, by-law enforcement and interface with various Government agencies.
Due to the similarities in business, the PAP-run Town Councils have reaped economies of scale when they jointly developed the TCMS in 1994 instead of each Town Council developing or purchasing computer system separately on their own.
In addition, the Town Councils can leverage on each other's strengths and experiences, thus saving time and cost in the TCMS development. Furthermore, cost savings can be derived with a common IT infrastructure, such as the hosting of software and data in a centralised environment, including backup, as compared to the Town Councils having to purchase individual servers and related equipment.
Thus, with the collective knowledge and experience, the PAP-run Town Councils are able to develop a comprehensive and well-integrated TCMS, thus improving the productivity and efficiency of the Town Councils.
In addition to the operational efficiency, the TCMS has provided much convenience to residents as the PAP-run Town Councils offer different modes for S&CC payment, faster response to accounts queries, and prompt payment to their contractors and suppliers.
Three, town improvement projects. It is a common practice for the PAP-run Town Councils to call joint tenders for improvement projects, such as covered linkways, children's playground or elderly fitness equipment, so as to obtain comparative prices. Due to bulk purchases, the PAP-run Town Councils are able to attract better quality suppliers and contractors for improvement projects. This has enhanced the durability, maintainability and safety of the amenities added to the towns.
Similarly, the PAP-run Town Councils have worked together to negotiate with different lift companies to get better lift maintenance servicing fees, and also spare part prices due to its economies of scale. This has also slowed down escalating costs for lift servicing and maintenance.
As part of the green efforts of the PAP-run Town Councils, the Town Councils jointly called tenders in 2010 and 2013 to replace all common areas and corridor lightings – close to one million tubes – to energy-efficient LED lightings. With bulk purchase and installation, the Town Councils were able to save the capital cost of $24 million for the LED lightings. Instead, the supplier has proposed an energy-saving sharing formula to fund the project. The LED project has also brought immense savings in utilities bills to the Town Councils.
Sharing of Best Practices. Mdm Speaker, over the years, the PAP-run Town Councils have been sharing best practices to provide quality estate management and maintenance services to their residents. In order to better serve their residents, the PAP-run Town Councils have partnered with our service provider to develop the Integrated Estate Management System (IEMS). The IEMS is a management tool that provides recording of feedback and observations which then activates a sequence of follow-up actions.
With IEMS, the Town Councils can respond faster to feedback by residents. The IEMS also collates data for the planning of preventive maintenance works. The PAP-run Town Councils have set high performance standards for their service providers. For example, the lift maintenance team must respond within 25 minutes to rescue passengers trapped in lifts.
As the design of HDB towns and needs of residents are different, the PAP-Town Councils often share their experiences and practices to improve their services. The PAP-run Town Councils also compare notes when formulating their respective by-laws and policies. This sharing provides flexibility for the Town Councils to address local needs while adopting best practices from other PAP-run Town Councils.
One example is the by-law and policy for Outdoor Display Areas (ODA). Different Town Councils have similar ODA policy with regard to fire safety for the display of goods outside shopfronts, but allow flexibility in the display areas due to the different needs and designs of the HDB shops.
Mdm Speaker, since the formation of Town Councils in 1989, the PAP-run Town Councils have been diligent in serving their residents. The PAP-run Town Councils have initiated many projects to get value for money for their residents. In the process, the Town Councils have also established good rapport with their residents. Residents have been responsive in providing useful suggestions to improve Town Council services, and implement improvement projects that meet their needs. The strong partnership between the PAP-run Town Councils and their residents has enhanced the quality of living environment for HDB residents.
Mdm Speaker, I understand that there are concerns raised with regard to the handover of Town Councils when there is a change of political parties or boundary. Elected MPs should not get into a "blame game" and politicise the handover. This is unproductive and do not benefit the residents.
Instead, elected MPs should adopt a professional code of conduct to effect a smooth handing over of Town Councils. This is commonly practised in strata-titled developments whenever there is a change of management or managing agent.
In the case of Town Councils, both incoming and outgoing MPs owe a duty of care to the residents to make sure that Town Council services are not disrupted during the handover. I would propose that the MND review the Town Councils Act to provide a framework to facilitate the handover. In the event of any dispute, the MND shall be the arbitrator to resolve these problems. In this way, we shall be able to safeguard the interests of the HDB residents whenever there is a change of management.
Mdm Speaker, the PAP-run Town Councils have served their residents well over the years. The PAP-run Town Councils have received strong support from the PAP and its leadership in the running of Town Councils. Many HDB residents have witnessed the improvements in their living environment, and expressed appreciation for the range of services provided by their PAP-run Town Councils.
The PAP-run Town Councils will continue to work hard to make every HDB estate the best home for their residents.
Mdm Speaker, this debate has been triggered by the controversies surrounding the sale of Town Council Management System (TCMS) software by 14 Town Councils managed by the PAP through the Action Information Management Pte Ltd (AIM) in 2011 prior to the General Elections.
I would like to thank the Prime Minister for acknowledging the public interest in this matter and for ordering MND to investigate and to do a broader-based review of the nature of TCs. I would also like to record thanks to the Ministry officials for their efforts.
Where do we stand today after the review? MND's findings cleared the AIM transaction but highlighted areas for strategic review of TCs. It seems, however, that members of the public who have been tracking this issue are still asking critical questions and many are not convinced that the 14 PAP TCs acted in the public interest when they sold the TCMS to AIM. It is necessary to debate this matter calmly and clearly to enable the public to understand the issues more fully and realise what is at stake. That was why I re-filed an Adjournment Motion last week. The Government's subsequent decision to enable the matter to be debated under Standing Order 44 is belated but it is the correct thing to do.
Let me first summarise how the Workers' Party and the Aljunied-Hougang-Punggol East Town Council view the MND findings before elaborating. I shall thereafter make recommendations for the review.
First, we do not agree with the findings regarding the AIM transaction that public funds were safeguarded and residents' interests had not been compromised. From our reading of the documents available to us, there were aspects of the tender suggesting it failed to follow the spirit of what an open tender should be.
Further, the terms of the sale of the most critical town management IT system had unnecessarily endangered public welfare, particularly the relinquishing of ownership to AIM with the one-month termination clause. MND fell short in not admonishing the PAP TCs for risking disruption to the public in the name of politics. MND also did not take cognisance of the wastage of public funds incurred when such terminations required replacement systems to be set up. In addition, the one-year sale and leaseback was clearly an underestimate of the time needed to redevelop a new TCMS. The fact that the one year happened to straddle GE 2011 suggests that whatever good faith the TCs had in the sale to AIM, there were political objectives in crippling any new TC leadership of a different political affiliation, hence, endangering the public in the process.
Second, as regards the MND's recommendations for a review of TCs, we find that while they will improve continuity of services during a handover of TC management, their recommendations do not go far enough to prevent wastages of public funds. MND should entrench principles to recognise the public nature of assets being handled by TCs which should be safeguarded for public benefit regardless of politics.
Before I go further, I should, at the onset, state WP's position concerning town management and why we brought the AIM sale to public knowledge in December last year.
Workers' Party MPs are committed to being politically accountable to voters for town management under the current regime. Whatever else is done in other countries, the responsibility for town management has been legislated to the MPs under the Town Councils Act. We accept this responsibility and have pledged during elections to manage towns entrusted to us to the best of our ability. We intend to continue keeping this promise.
We raised the sale to AIM after the MND released its banning of Town Councils under the revised TC Management Review framework in December 2012. Contrary to what some PAP Members have charged, it was not raised as an excuse for non-performance nor are we asking anybody to wait 24 or 30 months or five years for us to perform. AHTC was actually ranked well and comparably by MND in the areas of cleanliness, maintenance and lift breakdowns – the critical functions residents care most about. The main point which required public explanation was that the new indicator of corporate governance was graded as pending, as our auditors took much longer to complete their work.
This was due to the need to reconcile accounts being kept under two different IT systems with differing nomenclature. We do not believe that the AIM sale served the public interest, and the public deserves to know about this and assess it for themselves. We find it unacceptable for any TC to relinquish control over critical TC assets developed with public funds to third parties who can cut the TC off from using the assets to service residents. In our view, the PAP TCs had unjustifiably risked a disruption to public services and that this should not be allowed to recur. I am relieved to read that the MND recognised the need to preserve continuity of public services as a paramount priority. The question is: why did the PAP TCs not recognise the risk of service disruption when selling the TCMS to AIM?
Madam, let me now go into some detail about our misgivings concerning the AIM transaction. The reasons given by the PAP TCs for the sale of software and intellectual property raised more questions than answers. They told MND that having the software reside in a single entity was better than having the vendor deal with 14 TCs which would be cumbersome and inefficient. But surely, this can be easily overcomed since the PAP TCs have a Co-ordinating Chairman who can coordinate to ensure the proper authorisations.
The TCMS was developed with $23.8 million of TCs' operating funds. Surely, there is reason to retain ownership and control over it for the residents in the 82 electoral wards then under their charge. Much ado is being made in the report that the second generation TCMS was almost obsolete and had limited value. But does this mean that it is of limited value to the TCs using it now? If the system ceases to function without replacement, TC operations will grind to a halt.
Another incomprehensible justification is the saving of $8,000 for the 14 TCs that arose from the sale. The $8,000 savings is the difference between $140,000 paid by AIM and the sums paid by the TCs back to AIM during the one-year leaseback. This total savings of $8,000 shared among 14 TCs amounts to about $571 per TC. Is saving $571 significant enough a reason for a TC to sell a system?
Next, Madam, the tender terms. It was emphasised in the MND report that the choice of AIM was made after an open tender. Was it an open tender in substance? The tender was advertised and five companies picked up the documents. However, a closer look at the conditions of contract will reveal that the specifications required each of the Directors of the tendering company to have adequate experience with the operations and functions of a Town Council. I wonder how many companies in the software business in Singapore can say that all their Directors have TC experience – perhaps only AIM.
The tender period was advertised as 14 days, shorter than the minimum period of three weeks for local tenders required under TC Financial Rules 74 sub-rule 6. It was then extended by another week to give three weeks. Why the initial period advertised was one week less than the minimum was not explained at all in the MND report. In addition, one of the companies which picked up the tender forms had told the media that there was insufficient information in the tender documents to make a decision whether to tender. This was in The New Paper.
Next, Madam, risk assessment of AIM. The PAP TCs told MND that one of the key reasons for selling the software to AIM was that AIM agreed to bear the risk of any price increases by NCS in maintaining the software even after the original contract with NCS expired. We have not been able to find this exact clause in our documents. However, even assuming so, on what objective basis did the PAP TCs assess that it was safe to entrust this risk of cost increases to a company with a paid-up capital of $2? Who will pay in the event of a cost increase? What about the risk of AIM being wound up?
The PAP TCs highlighted AIM's track record but based on the tender documents we have seen, AIM listed only one prior project, also a sale and leaseback. When AIM was asked to fill in a table indicating the identities of their key technical and professional staff, a line was drawn across the table with only one word typed in "outsourced".
Next, Madam, duration and timing of the sale and leaseback. MND noted that the TCs underestimated the complexity of the task of developing the new generation TCMS software. We find this quite puzzling since the TCs had experience in developing the first and second generation TCMS and should have known that one year was too short. Now, as MND has noted, two extensions were required after that and a fresh tender was only called this year, in 2013. Was there any re-development work from 2011 to now? The timing of the sale to commence a few months before the General Elections in 2011 also calls for explanation. Was it a pure coincidence or was there simply a need to sell the software quickly so that termination can be effected if political seats were lost?
Madam, let me now turn to the termination clause. The reasons given by the PAP TCs for the one-month termination clause are unconvincing. First, no attempt was made to explain why a material change in the membership of the TC should allow unilateral termination by the contractor with one month's notice. It is unfortunate that MND did not seem to query this as this was the crux of exchange between the PAP and the Workers' Party. Could it be that there is simply no good reason to give?
Some attempt was made to explain why termination may be fair in the case of a change in boundaries. It was said that the contractor might be faced with a much larger town than anticipated but be held to a fixed price to its detriment. I am not sure why there was this worry. At that time, the TCMS was being developed for the whole of Singapore, except two SMCs, namely Potong Pasir and Hougang. In addition, the contract itself already provided for variation in price based on the number of property units.
The real sting of the termination clause lay in its one-month notice period. Is a one-month notice period reasonable for a critical IT system? It is quite clear that time is needed to develop a system of this complexity; in the PAP's own estimation, 18-24 months. Did the PAP TCs not realise that this aspect of the AIM transaction endangered the continuity of public services, or perhaps that was the intention in the case of a change in political leadership? It was fortunate, indeed, that the Workers' Party could use the IT system in place in Hougang Town Council and upscale it within a much abridged time to cater for a town of GRC magnitude. What if the constituency was one by a political party not running any Town Council or by an independent candidate? Or is the continuity of public services not important to the PAP once they lose a constituency?
Next, Madam, no finding has been made about the wastage of public funds caused by the need to replace IT systems due to a change in political leadership. Once the system has been developed with TC funds, the residents have a beneficial interest in it since they contribute to TC funds via service and conservancy charges. Why should they pay again for a replacement system just because the Town Council Management has changed hands? Even those who live in private estates have asked me about wastage since TCs are also funded by Government grants that they, as taxpayers, contribute to. MND has made a finding that there was no loss of public funds caused by the AIM transaction. But what about the wastage of public funds which the transaction brings about? Residents and taxpayers pay twice for political intrigue. How is that justifiable?
Let me now move to the nature of Town Councils and the recommendations for strategic review. Town Councils provide essential public services to HDB dwellers via public funding. As custodians of public funds, all MPs must act in the best interest of residents, regardless of which political party they support. At the same time, TCs unavoidably have some political elements. The manner and quality of town management is one factor in a voter's choice of MP, and MPs wish to do well in town management in order to get re-elected. However, it does not mean that MPs can allow TC assets to be endangered or cut off from TC use for political reasons.
Let me, at this juncture, share some essential facts about AHPE Town Council and correct some misconceptions. The IT system in use in AHPE TC belongs to the TC and will be there for use even if there were to be a change in political leadership. There are no equivalent termination clauses, unlike the AIM transaction. In fact, I understand that Potong Pasir Town Council is still using the IT system developed before the change in political leadership in 2011.
I also take strong issue with the misleading release by MND on our Managing Agent, FM Solutions and Services Pte Ltd. The Straits Times of 7 May reported that MND gave examples of how politics and Town Councils sometimes mixed, which included, in our case, the former General Manager of Hougang Town Council and her husband setting up a company to provide town management services to AHTC. We find this insinuation mischievous as neither she or her husband nor any of the Directors and shareholders of the company are WP members. They were hired based on their experience in property management, professional skills and track record in running Hougang Town Council. What is MND implying? The Minister should explain.
Madam, I now come to the final part of my speech – our key recommendations for the review of Town Councils.
First, restrictions should be in place in the Town Councils Act to prohibit the sale of critical assets or systems still needed for TCs' operations to third parties. On no account should TCs relinquish control over the use of assets which should survive any change in political leadership. The most critical system would be the IT system for town management. Ownership of the town management software system and its intellectual property rights should reside with the Town Council.
Second, Town Council management systems which serve several constituencies should be configured to be easily "segregable" at low cost in the event of boundary change or leadership change. This should be ensured for the 3G TCMS.
Third, another important IT system which should be safeguarded for continuity is the Tele-Monitoring System (TMS) which monitors lift breakdowns and lift rescues. All TCs are currently using the TMS from the same provider and, at the minimum, the existing termination period of three months is too short and should be reviewed.
Fourth, important service contracts, such as those for Managing Agent and Essential Maintenance and Services Unit (EMSU), should provide for a longer termination period to allow for a fresh tender to be called if necessary after a handover.
Finally, unilateral terminations by contractors of essential contracts due to a change in political leadership should be disallowed. Should there be a need to put in place another contractor due to business considerations, a mutual discharge can be agreed between the TC and the contractors.
Madam, we are ready to provide further input on the review if needed.
Let me conclude. We believe that the sale of the TCMS by the PAP TCs, whatever its other ancillary benefits, was to enable AIM to cut off any non-PAP TC from using the TCMS at short notice crippling the TC. By doing so, they acted in a party political interest and jeopardised the public interest using a critical asset developed with public funds.
In this light, I cannot help but recall the parliamentary debate in 1988 when the Town Council Bill was first presented for the Second Reading. At that debate, the then first Deputy Prime Minister Goh Chok Tong justified the introduction of Town Councils as providing political stabilisers to the political system. He said there was a need to protect the public by ensuring that political parties which aspired to be Government should first prove that they could run a Town Council for a constituency.
He said, "If a new party finds itself unexpectedly in Government, it would be like an aspiring pilot taking over a SIA jumbo jet in mid-air before he has flown solo in a Cessna. This cannot be in the interest of passengers in the jumbo. TCs are the Cessnas of our political system."
He also highlighted that some PAP MPs had expressed a fear that Opposition MPs could win some seats, prove themselves able to run the Town Councils and, thereafter, fan out to other constituencies in subsequent elections. Is this what this whole AIM episode is about, ensuring that the passengers in the Cessnas have bumpy rides or even crash land? Does the Government even care about the passengers in the Cessnas or are they simply collateral damage in a bigger political game?
Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.25 pm.
Sitting accordingly suspended
at 4.02 pm until 4.25 pm.
Sitting resumed at 4.25 pm
[Mdm Speaker in the Chair]
(Statement by the Minister for National Development)
Debate resumed.
Mdm Speaker, thank you for allowing me to join this debate. I took great interest in the recommendations made in the report, especially in the section on "How Handovers Can Be Better Managed'.
During the time when Pasir Ris-Punggol Town Council had to hand over Punggol East to Aljunied-Hougang-Punggol East or AHPE Town Council, myself and the other MPs of Pasir Ris-Punggol GRC told our Managing Agent that the handover of systems and assets should be carried out with minimal disruption to TC services to the residents. We were also mindful to minimise any related costs to the handover to both Town Councils as these costs would ultimately be borne by the residents. In areas of potential conflict, Pasir Ris-Punggol Town Council had sought MND's intervention and agreed to abide by their advice and guidelines.
Madam, I agree with the suggestions made in the report that MND should lay clearer rules and guidelines in facilitating the handover process.
Mdm Speaker, Pasir Ris-Punggol Town Council had officially handed over Punggol East to AHPE Town Council on 30 April 2013. Despite encountering some issues, both TCs maintained our lines of communication open and tried to resolve issues professionally and amicably. I would like to share some of these experiences and how we addressed and overcame them in a reasonable and fair manner.
One unique issue in the Pasir Ris-Punggol Town Council handover was that our Town Council office at Rivervale Crescent in Punggol East which was rented from HDB, housed services for five divisions, and not just Punggol East Constituency which was the subject of the transfer. There was a need to apportion an area for AHPE TC to run its services for Punggol East from 1 May 2013. In the early stages, both TCs could not come to an agreement on the area that needed to be apportioned.
Mdm Speaker, the office space was leased from HDB. Hence, MND's intervention was sought to decide on the apportionment, and they recommended several possible options in the meeting held with them on 20 February 2013. Naturally, the area preferred by AHPE Town Council would result in some cost and disruption to Pasir Ris-Punggol Town Council's operation and vice versa.
Eventually, Pasir Ris-Punggol Town Council agreed to allocate AHPE Town Council the area they wanted in view of the fact that they had intention to permanently occupy the space from 1 May 2013.
To ensure they could start operations independently from 1 May 2013, Pasir Ris-Punggol Town Council also agreed to vacate the affected area by 15 April 2013 to enable them to set up the place. Pasir Ris-Punggol TC also apportioned to AHPE Town Council their share of the office assets to minimise the start-up costs. In addition, both Town Councils agreed to share the operating costs, such as utilities, office rental and others, on an 80:20 ratio.
Mdm Speaker, the reality is that there will be costs incurred whenever there is a change of Town Council, which can be significant.
In the case of Punggol East, AHPE Town Council had written officially to Pasir Ris-Punggol Town Council on 31 January 2013 asking for the use of the Town Council Management System (TCMS) used by Pasir Ris-Punggol Town Council to service the Punggol East constituency. Pasir Ris-Punggol TC, along with other Town Councils using the TCMS, were then in the midst of deciding how and when to transit to a new TCMS since the TCMS' leasing agreement with Action Information Management Pte Ltd, or more commonly known as AIM, would expire on 30 April 2013. As such, Pasir Ris-Punggol Town Council was not in a position to commit to their request. Pasir Ris-Punggol Town Council also had to know the cost, technicality, legal and audit implications of AHPE TC's request for the continued use of TCMS, and all these would require time to look into.
Based on the advice given by the service provider and for audit and financial purposes, Pasir Ris-Punggol and AHPE Town Councils must operate as two separate entities by 1 May 2013, and this would include the TCMS as well.
Pasir Ris-Punggol Town Council wrote to AHPE Town Council on 21 February 2013 that we would be able to migrate the Town Council account data for Punggol East from our server to AHPE Town Council's own system by 1 May 2013. This would have been a straightforward data transfer from the Pasir Ris-Punggol Town Council system to the AHPE Town Council's own system.
However, AHPE Town Council replied on 25 February 2013 requesting to know what arrangements were available for the continued use of the TCMS by the incoming management of Punggol East with effect from 1 May 2013, and to advise them on the implications, if any, of the continued use.
As a gesture of goodwill, Pasir Ris-Punggol Town Council also asked AIM whether Punggol East could continue to use the TCMS software after 30 April 2013. Separately, Pasir Ris-Punggol Town Council had also asked the service provider providing TCMS maintenance and support to work out the technical details and cost for the boundary change and other related works to segregate Punggol East from our server and for AHPE Town Council to operate the TCMS as a separate entity.
In Pasir Ris-Punggol Town Council's reply to AHPE Town Council on 8 March 2013, we informed AHPE Town Council that AIM had agreed in principle to allow Punggol East to use the TCMS software after 30 April 2013 "free-of-charge" without any licence fee, but AHPE Town Council must arrange for their own preferred service providers to help them manage and maintain the system on their own computer system since AIM would no longer be providing any services associated with the operations of the TCMS software after 30 April. All the PAP Town Councils were also similarly sourcing for maintenance and management support. Everyone was thus in the same situation.
In the same reply, Pasir Ris-Punggol Town Council also informed AHPE Town Council that there was a significant cost charged by the external vendor to extract the data from our server, and Pasir Ris-Punggol Town Council agreed to bear the cost of extraction, in the interest of a smooth and expeditious transition.
Since AHPE Town Council expressed interest in using the TCMS software, we have shared with them that the TCMS must operate as two separate entities to ensure the integrity of our residents' data and to comply with audit and financial requirements. In an earlier meeting on 25 May 2013, AHPE Town Council requested for Pasir Ris-Punggol Town Council to bear the cost of providing a new server to Punggol East in order to store the migrated data. Pasir Ris-Punggol Town Council explained to AHPE Town Council that we were not able to pay for a new server to be used by AHPE Town Council as we could not make such payments under the Town Councils Act and we could not legitimately impose this cost on the remaining residents of Pasir Ris-Punggol GRC. It would not be equitable to do so. We had sought clarification from MND and they had confirmed that should Punggol East want a new server, it should be funded by Punggol East.
In our reply dated 8 March 2013, Pasir Ris-Punggol Town Council explained that our server was acquired in 2004 with contributions from five constituencies. The Punggol East area was one of these five constituencies. All constituencies shared the same server, and they still do. As such, it was not possible for Pasir Ris-Punggol Town Council to give AHPE Town Council a server. On the advice of auditors and in accordance with accounting principles, the value of the shared server, which was about nine years old, had been depreciated, over time, in the financial statements to zero.
Nevertheless, given that the five divisions had contributed to the original cost of the server, and it is being used currently by the five divisions, we wanted to be fair to AHPE Town Council and took the process of obtaining a fair present value of the server even though the book value is zero. Once we had ascertained the fair value, we would then pay Punggol East a proportionate share of that valuation assessed on a fair and equitable basis.
AHPE Town Council replied on 13 March 2013 stating the position that without any management and maintenance support from AIM, the continued use of the TCMS after 30 April 2013 was not a practical solution. AHPE Town Council also stated it was an "open question" whether a new server was required or whether operations could continue for Punggol East after 1 May 2013 on the existing server, compartmentalised or otherwise.
Mdm Speaker, in the meeting held in the morning of 13 March 2013 – again, to assist AHPE Town Council – we had offered to provide the particulars of the system vendor as a party with whom they could discuss the technical information on the continued usage of the TCMS, maintenance and support and the potential cost implications to AHPE Town Council. The contact particulars were given to AHPE Town Council on the same day.
Madam, we believe it was for AHPE Town Council itself to contact the system maintenance vendor or any other vendor it wanted to, to determine for itself whether AHPE Town Council wanted to continue to use the AIM software which it had been offered use of for free without having to pay any licensing fee.
Subsequently, at a meeting on 15 March 2013 and in an email dated 18 March 2013, AHPE Town Council confirmed that they would deploy and use their own financial system with effect from 1 May 2013. Following the AHPE Town Council's decision to use their own financial management software, Pasir Ris-Punggol Town Council again assisted them to do a transfer of data pertaining to the accounting and estate modules on 4 April 2013 to enable them to test their system for compatibility before the actual transfer on 30 April 2013. Pasir Ris-Punggol Town Council stands ready to assist, where possible, should they encounter problems with the data transfer.
Mdm Speaker, in accordance with the Town Councils Act and following MND's guidelines and advice, Pasir Ris-Punggol Town Council had effected a complete transition of Punggol East to AHPE Town Council by 1 May 2013, smoothly and expeditiously. We had been objective and fair during the handover process.
Mdm Speaker, let me share my key learning points that I hope would be taken into account during MND's review of Town Councils.
There would always be issues arising from the handing and taking over of Town Council matters. These issues could be politicised. What is actually a real constraint could be misconstrued by the other party as an attempt to make things difficult. Thus, it is important that MND must play a bigger role to mediate if there are issues that are dead-locked or involving substantial costs to be apportioned. Leaving it to the Town Councils to resolve the issues would make them more likely to be politicised.
Mdm Speaker, the handing over of the management of a Town Council's operations when there is a changeover of an MP can be a complex task, even with the best of intentions and goodwill. I would like to call on MND, during its review of Town Councils, to lay out rules and guidelines to facilitate the handover process to minimise the risk of disruption of critical services during the change.
Madam, can I ask for two clarifications from the Member?
Yes, please.
I thank him for his narration of the Punggol East handover. He mentioned the discussion about the need to acquire a new server if we were to migrate to the TCMS for Punggol East under our management. I would like him to clarify whether actually there were some figures discussed during the meeting that data migration might cost up to $130,000. That is the first question. The second question is I would like his confirmation on whether he agrees that a handover on a SMC scale is actually a much smaller task compared to a handover on a GRC scale.
Mdm Speaker, during the initial discussion, we did give a rough verbal cost estimate of the cost of handing over the TCMS data as well as the cost of the purchase of a new server. But this was only a verbal cost estimate provided by the vendor. Second, I think I am not in a position to comment on whether the task of handing over an SMC would be more difficult than handing over of a GRC because this is my first experience.
Mr Pritam Singh.
Thank you, Mdm Speaker. The Town Councils Act of 1989 was passed with reference to Singapore politics of the 1980s, when non-People's Action Party (PAP) MPs were elected to check the Government, ending the one-party rule of the PAP in Parliament. Whatever the stated intent and objectives of the Act, Government entities could make life difficult for elected non-PAP MPs from carrying out their duties. For example, by refusing to allow the non-PAP MP to use the existing Town Council (TC) office after securing the people's mandate at the polls because governing legislation like the Town Councils Act provides no safeguards against direct or indirect actions by a PAP government that is intent on obstructing non-PAP TCs.
The MND findings have cleared Action Information Management Pte Ltd (AIM), a fully owned PAP company from any wrongdoing. But, in the minds of many Singaporeans, while the MND Report found nothing legally out of place with the AIM transaction, legal legitimacy under the Town Councils Act does not necessarily represent a commitment to good governance and the continuity of public services in the aftermath of general elections.
During the reading of the TC Bill, then Deputy Prime Minister Goh Chok Tong explained the politicisation of the TCs as giving MPs increased authority and responsibility as a result of which, voters would be more likely to vote "carefully and sincerely" and choose honest and effective MPs. However, the years that followed saw other means used by the Government to lower the standing of a duly elected MP, even if that individual was able to run a TC competently. Denial of upgrading projects -- such as the then Main Upgrading Programme and the Interim Upgrading Programme – was a ruthless psychological PAP tactic at the polls that pandered to the selfishness of the individual, at the expense of other higher order human instincts, such as fair play and equality.
For all practical purposes, the PAP government of the day could jeopardise a candidate's prospects at the ballot box and punish residents without even having to worry about the legal consequences of doing so, as there were none, forget about any protection under the Town Councils Act. So, in spite of the original intent of the Act, even if an MP was honest and effective, the government of the day retained significant powers to cripple him, as it did in Hougang and Potong Pasir. Beyond the determination of the respective MPs in these wards, the thing that held the MPs in esteem was the wisdom, sense of justice and personal sacrifice of the majority of their voters.
It is through these historical lenses that many Singaporeans understood the AIM imbroglio that unfolded at the end of 2012 and the beginning of 2013, after coming to terms with the revelation that the PAP incorporated and owned a private company in 1991 that was operating in the public sector.
While the MND Report saw a "fundamental tension" between the objectives of delivering good public service and the political accountability of MPs – in the specific case of AIM, unfortunately, it fell short in exploring the source of this tension. Quite simply, the source of the tension was the political profile of AIM.
The right of a fully-owned PAP company to terminate a critical piece of the then Aljunied-Hougang Town Council's (AHTC) infrastructure with one month's notice was not in the public interest precisely because even by the PAP's own admission, it would have taken up to two years or even longer to establish a new Town Council Management System (TCMS). The presence of this clause, in the political context of the Town Councils, ought to have raised a conflict of interest red flag because a PAP-owned company and the PAP TCs had defined their rights and obligations by virtue of a contract that ran the real risk of undermining and prejudicing an incoming non-PAP run TC.
Many Singaporeans wonder what would happen to a Town Council in the absence of a working and functional TCMS. Beyond managing maintenance records, feedback management amongst other critical day-to-day operational functions, the Town Council would not be able to efficiently manage the collection of S&CC fees from residents. Collection would have been a cumbersome exercise, part-manual, part-electronic, and the Town Council would have been overwhelmed by S&CC collection, leaving little time for other tasks. Until a new TCMS was established, there would have been numerous disputes pertaining to the accurate collection of S&CC fees and, potentially, a whole list of unfulfilled contractual obligations with the Town Council's contractors.
While the standing of the elected MP would be compromised, the real losers would be the residents who would be faced with delays with rubbish collection, dysfunctional amenities, and a very unpleasant state of affairs immediately outside their own homes, all unconnected to the competence of the incumbent MPs. The prospects of this reality would explain why the AHTC team worked in the months after May 2011 to stabilise Town Council operations and upscale the former Hougang Town Council's IT management system, instead of allowing the residents of Aljunied GRC to be potentially held at ransom by a one-month termination clause in the hands of fully-owned PAP company.
The MND report justified its finding of the absence of any conflict of interest in terms of Town Council members having a pecuniary or direct interest in the AIM transaction, whether the interests of the Town Council's residents were protected or impaired and whether there was any misuse of public funds. However, beyond the contention that the AIM transaction was not in the public interest, if one reflects on the historical context in the aftermath of the passing of the Town Councils Act, a fully-owned PAP company's right to terminate the TCMS was in keeping with the philosophy that has defined the relationship of the PAP Government with Opposition-run Town Councils since 1988, and therein lies the inherent conflict of interest surrounding AIM – a conflict of interest that has been duly recognised by discerning Singaporeans.
In the more recent past, the PAP has moved away from denying upgrading to opposition wards, but the political calculations behind this move do not mean that a u-turn can never take place. The historical record shows that the public interest in the non-PAP Town Council context is usually a victim of PAP pressure on voters during parliamentary elections. There is significant opinion outside this House that this is an ethically unacceptable state of affairs.
It is for this reason that the remarks of the Permanent Secretary of the MND in his letter of 30 April 2013 to the Prime Minister, which called for a strategic and comprehensive review of Town Councils, ought to be welcomed. Of particular significance is the MND report's recognition of public calls to depoliticise Town Councils, a point that was somewhat reinforced by a Straits Times poll of 7 May 2013 where 41 out of 50 residents called for the same, the main concern for some being the lack of a political level-playing field and its impact on residents.
The question of depoliticisation is significant because it raises not just the issue of a review of the Town Councils Act, but the substantive relationship of the Government towards wards which are not run by PAP Town Councils. For the specific purposes of this debate, depoliticisation must mean that companies owned by political parties should not tender for Town Council contracts – a glaring omission from the MND report. In addition to the recommendations called for by the Member of Parliament for Aljunied GRC Ms Sylvia Lim, the report's call for depoliticisation – if executed as imagined by most Singaporeans – would effectively entail inducting a new brand of politics into Singapore insofar as Government-Town Council relations is concerned, representing a hope and desire that goes far beyond the findings of the MND report, but one that is in line with public expectations.
Some members of the public have suggested that certain Town Council functions, like the provision of the TCMS, can be the purview of agencies like HDB and that governance would improve with MND's oversight. However, putting critical infrastructure in MND's hands would be self-defeating if agencies like HDB are open to political influence in matters concerning local Town Council administration.
If such agencies are open to political influence, they would effectively be operating like quasi-Managing Agents, as evidenced by the HDB's decision to lease 26 common properties under the then Aljunied Town Council to the People's Association in the aftermath of the 2011 General Elections, to the exclusion of the incoming Town Council and newly elected MPs. In the AIM context, the larger point is that critical assets, like the Town Council's IT system and its intellectual property, must remain part of the Town Council and cannot be terminated unilaterally. Non-PAP Town Councils must be allowed to effectively manage the town without political interference by HDB or MND, or have its functions compromised by policies that serve a political purpose to the advantage of the ruling party.
Mdm Speaker, the findings of the MND report provides a rare opportunity for the Government to look into substantively depoliticising not just Town Councils, but the relationship between TCs and the Government. The MND report at paragraph 59 states that there were some who opined that depoliticising TCs can improve their governance and that MND can "regulate and oversee Town Councils without perception issues."
Unfortunately, as I have explained earlier, the historical track record of the PAP is not promising in this regard. Depoliticising Town Councils will not mean anything if political calculations continue to determine how MND or other agencies deal with non-PAP Town Councils. It will not guarantee a level playing field as sought by Singaporeans, nor will it be reflective of the "new normal" we operate in today where an expectation of transparency, accountability and equality ought to represent the guiding principles of good governance.
I look forward to the tabling of the Town Council amendment Bill where these matters will inevitably be debated in greater detail. For the immediate term, it would only be appropriate, in light of the findings of the MND report, for the Minister to direct that companies fully-owned by political parties ought to have no business dealings with Town Councils.
Mdm Speaker, I thank you for allowing this report to be discussed in Parliament and for allowing me the opportunity to speak on this subject.
It is heartening to note that the Prime Minister has sought an independent review which MND has conducted briskly in putting together this report. It is great to know that we can always rely on a strong civil service to play an objective and impartial role whenever called upon.
I have read the report and looked at the set of circumstances within which MND has based its findings. Rightly, there is nothing wrong that has been done as the PAP Town Councils did not violate any rules nor was there any misappropriation of funds nor the residents' interests compromised.
So, in that sense, we cannot hold the above-mentioned Town Councils responsible for any misdoings. But there are some important lessons to be learnt from this episode, and since the structure and set-up of the Town Councils also fulfil a political objective, we may come across similar cases again in future involving any of the Town Councils. Therefore, I feel it is important to fix some things at this juncture before we move ahead.
Corporate Governance. The question we have to ask is, even though there may not have been any illegal or unlawful dealings, was there anything about this whole episode that could be improved so that, in principle, even a chance insinuation of any perceived wrongdoing can be avoided in the future?
In terms of governance, I feel that there are things that could be improved on, so that all Town Councils can in the future abide by these guidelines. Firstly, even though there was nothing wrong with the transactions between Action Information Management Pte Ltd (AIM) and the PAP Town Councils, the fact that they had business dealings with a company, which was set up by the PAP in 1991, and its directors who were their very own party members, could raise questions on whether there was any conflict of interest.
MAS has issued clear Code of Corporate Governance recently last year for all the listed companies in Singapore. And Town Councils, being in the business of public service, may follow the same. The key principle being that Town Council Members or the Boards who are either key decision-makers or influencers of decisions must not do so, with an intention to help own or related parties at the cost of the Town Councils and its residents.
Since the nature of the Town Councils is political in nature, I believe there will always be this competitive, and therefore confidential, manner in which the operations of the Town Councils are carried out. In such circumstances, Town Councils and their management may choose to deal with entities and individuals they are more familiar with and who are more trustworthy. I understand that such practices are not limited to just the PAP Town Councils but also others. If such practices are prevalent, and the political nature of the Town Councils gives reason for them to be, then I suggest that more control systems and transparency on such practices must be institutionalised.
Going forward, the legislation should be amended to reflect that any conflict of interest, not just involving a member of the Town Council, but also if dealing with his political party or family, should be declared and this information should be made available also to the public.
At this point, I would also like to raise, for this particular case, to reduce any perception of conflict of interest. It would be better if the PAP Town Councils had set up AIM as a non-profit entity rather than as a corporate for-profit company, especially when its directors were not remunerated, nor does it seek to earn profits and its fees were only to cover operational costs. Would it not be better if the Town Councils set up non-profit bodies to play these roles so that it is clear that the dealings do not come with any profit motive for the organisation or its directors?
Regulating the Town Councils. Ideally, however, the political ambit in which the Town Councils exist should not become an excuse for poor corporate governance. According to the Town Councils Act, it is designed to serve the public, much like other public organisations do, and so why should it not be subjected to the same corporate governance standards that our public and private organisations, including charities and societies, are made to adhere to?
I feel that Town Councils currently operate in this slight ambiguity of roles – whether political or public. If they are public, then they should also be made to adhere to tight corporate governance procedures, including reporting processes and requirements, conflict of interest, and to include these in their annual report card which is being, anyway, done. The ideal scenario for the Town Council should be that their processes and operations are far removed from any traces of conflict of interest and so even when they deal with vendors, these vendors should be as independent as possible with little or no association to the Town Council members or the political party. The annual report card should then also score the Town Councils on its ability to do this so as to encourage them to move towards these better governance practices. We can certainly strive for our Town Councils to reach this goal.
Madam, I also do not believe that our Town Councils should be handed back to the MND or the Government to be centrally regulated. I think some political competition in this regard is healthy and should benefit the residents. But the Town Councils Act should be amended to better safeguard residents' interests in this regard.
I suggest that the Town Council, when planning to engage contractors or vendors to provide any form of maintenance services or purchase of products and services, it, too, should follow set guidelines for tender processes as prescribed by MOF for all Government bodies. This will address any concern of related parties being involved so long as they can qualify the clear criteria for tender processes. This would help create an additional layer of safeguard and help nudge the Town Councils towards greater governance practices. I believe, with these added deterrence mechanisms in place, greater transparency and governance standards can be achieved, enabling the Town Councils to deliver public services efficiently and in a competitive manner.
As such, I would like to propose that the Minister consider an amendment Bill that would aim to entrench some of these measures into the legislation.
Mdm Speaker, MPs and Town Councillors are public servants. In section 21 of the Penal Code, a public servant is defined as an "officer whose duty it is, as such officer, to take, receive, keep or expend any property, on behalf of Government". Their status was the same before and after the Town Councils Act was passed in 1989. Through that Act, HDB merely divested its powers in the management and maintenance of their estates to the individual Town Councils.
The Town Councils Act might have been enacted to give the elected MPs as much latitude as possible to run the Town Councils with broad and general rules. But they are still fully subject to the Penal Code as public servants.
Singaporeans, therefore, find some key points in the AIM transaction puzzling. The Review before us has not satisfied the questions in their minds:
How can a two-dollar company, with no staff, be deemed to have an established track record in providing IT services to Town Councils? The fact that AIM was awarded the tender seems to have hinged solely on their past working experience with the PAP Town Councils.
How can the Review report say that there was no conflict of interest in the AIM transaction, simply because "no one made money"? I am not sure if any lawyer will be satisfied with how "conflict of interest" is defined here.
Even if Town Councils are understood to be political, as provided for by the Town Councils Act, it does not mean that we can just forget about the concerns of residents over governance and due diligence.
Whatever has happened to the mantra that we must strive to observe best practices in public transactions? The Review report does not mention anything about best practices.
If the Review concludes that the AIM transaction is in compliance with the Town Councils Act, then the Act is not well-drafted. The Act must be revised to better address public concern over conflict-of-interest issues, including political interest and criteria for the award of tenders.
When the Town Councils Act was passed in 1988, it was said that the Government wanted to make life harder for the Opposition MPs in running their constituencies. Nevertheless, Potong Pasir Town Council, the only Opposition-held Town Council then, took up the challenge. We worked hard to run the Town Council. I believe we did a good job, and I believe we earned the trust of our residents throughout the 27 years.
But a lot of unfair obstacles were thrown at the Potong Pasir Town Council.
To obtain CIPC funds, we had to seek the endorsement of the Advisor of the Residents' Committees, who had always been the PAP's candidate in all the constituencies. Indeed, no Opposition politician has ever been allowed to become the Advisor of the RCs, even when that politician is the sitting MP for that constituency.
Advisers to the RCs cannot be given the power to endorse community improvement projects or otherwise. Why should the sitting MP, who is democratically elected by the people, be at the mercy of the RC Adviser? MND has got to change this.
When it was under the Opposition, Potong Pasir did not obtain a single cent from the CIPC fund or any HDB-related funding. The sole exception was funding for improving barrier-free accessibility, granted in 2010. That was, after all, a nationwide exercise for wheel-chair bound residents.
Recently, Potong Pasir obtained $5 million fund from MND for the Neighbourhood Renewal Programme, or NRP. I am happy for the residents of Potong Pasir, but I would have hoped that the residents be more informed and involved in the planning of the NRP exercise to decide what they really want for their estate. After all, residents have a stake in their estate. While physical structures and beautifications can be bought with money, the "software" of community ties and interactions can never be bought.
All Town Councils, whether they are held by the PAP or not, should be able to benefit from community improvement grants from the HDB. Residents are all taxpayers and deserve equal treatment.
MND started publishing the Town Council Management Report (TCMR) in 2010 as a form of a report card on their Town Councils' performance in estate management. The evaluators have often found ways to rank Opposition-held constituencies of Potong Pasir and Hougang lowly. The residents of Potong Pasir, however, are happy with our management of the Town Council.
The evaluation process for the purpose of the TCMR must be led by investigators independent of the MND and HDB to avoid biasness in the reporting and branding of the performance of Town Councils.
Town Councils should retain its current powers to manage estates, and MND should not have central control over them – for example, when implementing ad hoc policies at any time, without debate in Parliament.
In conclusion, my question to the Minister is this – is the Government willing to improve the framework for running the Town Councils in the best interests of Singaporeans? Whether they live in a PAP- or an Opposition-held Town Council, they all pay taxes.
Going forward, I urge the MND to review what are the best practices that Town Councils must adopt as public agencies.
The MND Town Council Review has left many questions unanswered despite providing a lot of background information on the AIM transaction. But the Report has concluded that the sale of the Town Council Management System (TCMS) with PAP-owned company was nothing more than a business deal. The intention behind the AIM transaction was not thoroughly scrutinised and explained.
The MND review also did not look into the possibility that some of the decisions made in the AIM transaction could be politically motivated since MND has acknowledged that Town Councils, by virtue of their leadership, are politicised already.
But while the AIM transaction is deemed legal and permissible under the law, the rationale behind the sale of the intellectual property or IP rights to the TCMS to a PAP-owned company and the provision of a termination clause in the contract remains unclear and unconvincing in the review.
Today, I wish to speak on these two issues.
First, the termination clause. The MND review has not fully addressed how public interest is being served when a vital piece of software for town management developed at a combined cost of $23.8 million was offloaded to a PAP-owned company for $140,000 with an unusual termination clause made in favour of the new owner.
The termination clause reads, "The contractor may in his absolute discretion terminate the services during the contract by giving three months' prior notice in writing to the Town Council. However, in the event that there are material changes to the membership of the Town Council or there are material changes in the scope and duties of the Town Council, including but not limited to changes to its present boundaries, the contractor may give a month's notice in writing if he wishes to terminate the services during the contract period."
I find it hard to comprehend that after selling the TCMS to a vendor, the PAP Town Council also found it imperative to give the same vendor absolute discretion to terminate its services which are vital to the operation of their town. How are the interests of the residents protected in such an arrangement? And what are material changes and why is it so important that if such changes were to happen, AIM could just give a month's notice to terminate its services to any Town Council?
In the official explanation of the termination clause, the PAP Town Council has failed to fully address the meaning of material changes. Nonetheless, the PAP Town Council felt that the provision of such a one-sided termination clause was "fair and reasonable as the vendor would have priced its bid on the basis of the existing TC and town boundaries. However, should this change materially, the vendor could end up providing services to a TC comprising a much larger area and a larger population of residents. But it is held to do so at the same fixed pricing since a key feature of the contract was that there should be no price changes to the TC even for extension. The TCs felt that this would be unfair to the prospective vendors. And that a clause explicitly addressing such changes would reduce the business risk to the vendor. This would help fetch a better tender price for the TC's old software".
While the above explanation may sound logical, I would explain to this House point by point why the provision of the termination clause, you can see, makes absolutely no sense at all.
First, there would always be changes made to the size and population of the town because of Build-to-Order flats, Selective En-bloc Redevelopment Scheme, private development and constant redrawing of our Electoral Boundaries. Is it then prudent to allow AIM or any new owner of the TCMS to simply walk away from this critical contract citing material changes and leaving an entire town in the lurch? How is public interest protected with such a one-sided termination clause?
Second, in its original contract, AIM proposed a leaseback payment schedule that did not take into consideration the size and population of a Town Council. All the 14 PAP Town Councils, regardless of their size and population, were required to pay an equal amount of $785 per TC per month as leaseback payment for the use of the TCMS. Thus, it does not matter if you are running a small GRC like Moulmein-Kallang, or a big GRC like Ang Mo Kio. Each town pays AIM the same amount of subscription fee.
So, was AIM concerned about the size and population of a town when pricing the TCMS subscription fee? The answer is obvious. And if AIM is not even worried about such business risks, why would the 14 PAP Town Councils lose sleep over this and want AIM to address such risks? After all, the PAP Town Councils have assessed that AIM is a company with an established track record in TCs and IT services, and they have confidence that the company would deliver on its commitments.
Third, the above explanation of the termination clause sounds even more ludicrous when one finds out that there is a clause in the same contract that allows for variation and AIM will be paid in accordance to a method of calculation based on industry practice. In short, AIM is covered in material changes in size and population of the Town Council if it were to happen for whatever reason. So, why was there a need to give AIM the absolute discretion to cite material changes to terminate its services to a Town Council where material changes were already covered under the variation clause? Can the Minister explain this anomaly?
The provision of this one-sided termination clause in the AIM transaction makes no sense because the interests of the residents were not protected at all. Our towns are always in a constant flux of change due to the dynamics of our public and private housing schemes and the redrawing of our Electoral Boundaries. Residents should not be made to suffer unnecessarily as a result of such material change.
The one-sided termination clause has caused so much confusion that even the Minister was confused as he said earlier that the letter of 10 June 2011 sent by the interim Secretary of the Aljunied-Hougang Town Council was a request to terminate the use of the TCMS. On the contrary, the letter was a request to continue the use of the software till 31 August 2011. The TC has no power to initiate any termination based on material changes. AIM was the one which was given that power to terminate and did exercise it 12 days later, on 22 June 2011, according to its own timeline. They set the termination date as 1 August 2011. The question is: why did PAP TC allow Town Councils to be powerless and at the mercy of AIM?
Next, I want to talk about the sale of the intellectual property rights. The Review Report has also concluded that the AIM transaction complied with the Town Council Act and financial rules. However, there is a misplaced trust that the sale of the IP of the software to a PAP-owned company was done in the best interest of the residents. Would any Member in this House want to spend $23.8 million of your residents' money to develop a vital piece of software and then offload the IP to a third party company knowing very well that future developments and upgrades of their system may depend on the use of the original IP rights?
The risks of system obsolescence are common problems faced by people or companies who depend a lot on the use of IT in their operations. Thus, everything from software to hardware can be rendered obsolete in a short space of time but the IP would not. The knowledge system that went into developing the IP for the $23.8 million TCMS is valuable and critical. The TCMS may have zero book value but its real operational value is immeasurable. Right at this moment as we debate in this Parliament, the TCMS is keeping almost the entire Singapore humming along, processing payments, managing arrears, handling residents' feedback and facilities booking, keeping the financials in check, keeping the communications flowing and more. The rights to use the TCMS must remain open to a Town Council no matter what or when material changes take place.
In the interest of the public, can the Minister state who will own the IP rights to the $17.6 million third-generation TCMS that is currently being developed by NEC Asia Pacific? Will AIM be holding any IP rights direct or derivative to the new system that is being developed and funded with Town Council money?
The official explanation of the sale of the TCMS to AIM was to consolidate the IP rights under a single entity for ease of management, future development and securing extension of the NCS contract at no extra cost to the PAP Town Council until such time when the current system is replaced. As AIM outsourced its IT services to other vendors, it is basically playing the role of a project manager. And project managers do not need to own the IP rights to the project they manage, especially when those projects are vital to the operation of our towns and developed with public money. It also appears incredulous that the 14 PAP Town Councils would need an external company which is technically a competitor of NCS to help them negotiate and secure extension of the NCS contract at no extra cost to the PAP Town Council even though the Town Council has a long standing working relationship with NCS going back to 2003 when it first awarded the multi-million dollar project to the IT company.
How hard is it for the PAP Town Council to secure extension of the NCS contract at no extra cost based on goodwill? Did the PAP Town Council try to approach NCS directly?
The relationship between the PAP Town Council and AIM is an uneasy one. It was reported that AIM was set up by the PAP in 1991 to specifically support PAP MPs in the running of their TCs and estates. The company does not seek to make profit from its work done for the PAP Town Council and only charges management fee based on cost recovery. Thus, any transaction done between the PAP Town Council and AIM has very little business consideration – mostly political, I presume.
The MND Review has stated that given the political character of the Town Council's leadership and the political implication attached to the management of the Town Council, it is inevitable that the Town Council function is carried out in a competitive, politicised context. The AIM transaction has all the trappings of a high stake political game where the interests of the residents are of the least concern. So, how should MND classify the sale of the TCMS to AIM, and the provision of the one-sided termination clause in this Review? Business or political?
Finally, I believe whatever that was written in black and white in the AIM transaction has been reviewed by the committee. But whatever intention that was written in the hearts of the people that were involved in this transaction will remain hidden for their conscience and their makers to judge.
Mdm Speaker, when I took over Potong Pasir Town Council in 2011, it was not an easy handover. I wish to stress, however, that it is not the fault of the previous MP, a man I continue to respect as a politician. But handovers are seldom easy, especially when a handover involves essentially a change of system, culture and leadership. It is also compounded by the fact that the change has to take place immediately after the elections.
This is not just particular to the change in Town Council management. Ask any company that changes vendors and they will tell you it is never easy. From a change in, say, a cleaning and landscape company in a condominium estate to a change in security guard services in a shopping mall, there are always transition and handover problems despite the best intentions. A Town Council change from one political party to another is far more complicated than the ones I have quoted.
Mdm Speaker, when we knew we won the elections that Sunday morning at 3.00 am in May 2011, our minds were not overwhelmed with victory. Instead, during the car journey from the Counting Centre to Toa Payoh stadium, my branch vice chairman, Chua Kian Meng and I were busy discussing the following important priorities:
First, the need to ensure our Town Council services continue to be available to all Potong Pasir residents with minimal disruption.
Second, the recognition that jobs and livelihoods were involved in the changeover, such as Town Council jobs and jobs of companies rendering services to the Council and residents.
Third, the need to improve and change because, ultimately, that is what the voters who voted us in wanted. After all, voters do not vote in a candidate from a different party from the incumbent one if all they wanted was more of the same with no change or improvement.
Change management is never easy. Our strategy to addressing these three challenges was to stabilise, rationalise and to optimise.
Madam, on the first point of ensuring continuity in the immediate period after the General Elections, we appointed an agent with a lot of experience, EM Services, to be the managing agent of the Town Council. Different people may say different things or have different views as to how to approach this issue but, in retrospect, that was a correct decision as having a professional and experienced agent allowed us to stabilise the situation quickly.
Moving to the second point of jobs, my branch vice chairman, Chua Kian Meng, also spoke to all Town Council staff and vendors to allay their concerns but there was some inevitable turnover. Today, which is two years later, three of the original team are still working with us and one is working in another constituency managed by EM Services. We were able to stabilise the situation quite quickly, because, regardless of one's political leanings, we recognise and we respect the original Town Council staff as people out to make an honest day's living even if expectations do not mutually match up. We can agree to disagree.
I must add that some old staff did ask for compensation up to one month for each year's of work. The contractual terms did not provide for this compensation and due to the financial constraints of the Potong Pasir Town Council, we did not give this compensation in the end.
Madam, admittedly, not everyone got what they wanted but I think we gave everyone respect and a chance to try and continue working. I must confess the handover was, personally, an emotionally tiring experience for me but I felt I did what I had to do, always putting the interests of the residents first. I try my best not to hurt anyone but, as the hon Member for Aljunied, Mr Low Thia Khiang once said, "事情岂能尽如人意，但求无愧于心". I believe politics is about convictions and once you have conviction and belief, you just simply cannot please everyone.
After stabilising the place, we then undertook a review of processes and workflow to see where we can rationalise resources within the Town Council. We are now in the optimize phase. The PAP Potong Pasir Town Council is still very much a work-in-progress even though we have come a long way since 2011.
Mdm Speaker, from my experience in taking over the Potong Pasir Town Council, I learned a few important lessons which I would like to share with the House today:
First, change is tough and even sometimes painful, but sometimes change is necessary.
Second, handover, immediately after the elections, is not an easy objective to achieve when the handover happens between two political parties with different cultures and systems.
Third, the Town Council is an instrument, first and foremost, designed to serve residents.
Fourth, the Town Council is also an organisation with a political dimension. The two are not in conflict, that of having a political dimension and also serving our people.
Fifth, the Town Council is designed to give the MP a managerial role in the running of a constituency so that Singaporeans have more at stake when they vote for someone to be their MP. This is an important aspect that must be emphasised. An MP is not just a person elected to speak in Parliament or grace community events. He directs and oversees the Town Council and its services which, in turn, have great impact on the everyday lives of our residents. The policy intent of this is to give greater significance to the vote we cast at the general elections. This policy intent can be seen to be political but at the same time it is party-blind.
This brings me to the last point. Does the current Town Council framework need fixing? The Town Council framework can certainly be tweaked and improved and the Town Councils Act amended to reflect these improvements. But having lived through and survived a handover, my view is that the Town Council framework is very much functioning as it was designed to be.
Madam, what is important is that Town Councils continue to serve residents and that good regulations and governance frameworks are put in place to safeguard Town Councils from abuse and protect residents' interests.
On the issue of good governance, let me quote from the great legalist philosopher Han Fei Zi (韩非子), who said, “法莫如显”“法莫如一而固, 使民知之”. Loosely translated, this means that the law should be made public so that everyone knows that the law is a fixed standard invariably applied to all relevant parties, and the law should be the only yardstick.
Today, Town Councils are governed by the Town Councils Act which is the yardstick that all Town Councils are measured against. The requirements of the Act are applied uniformly to all Town Councils regardless of political affiliation, and these requirements are made plain for all to see. As long as these regulatory requirements are met and residents are served, there is nothing wrong with having Town Councils that have a political dimension because, ultimately, it means empowering voters to choose a Member of Parliament that can have more impact on their everyday lives. Now, is that not what democracy is all about?
Mdm Speaker, I welcome this debate on the Ministerial Statement on the Town Councils. Given that more than 80% of Singaporeans live in public housing, Town Councils are an integral part of the everyday life of Singaporeans.
The MND Town Council Review Report and this debate in Parliament will probably not change the minds of Singaporeans who take the view that there were obvious conflicts of interests in the PAP Town Councils' sale and leaseback of the Town Council Management System software to Action Information Management Pte Ltd (AIM), a PAP-owned company.
Neither will the Review Report and this debate change the minds of Singaporeans who view the termination of the use by the Aljunied-Hougang Town Council of the AIM-owned software as an attempt by the ruling party to undermine the Workers' Party running of the Town Council.
To my mind, the matter has been unnecessarily politicised, and this debate might even be seen in some quarters as further politicisation of the matter. But I hope this House can lead the way, notwithstanding the robust debates and charges between the PAP and WP MPs, in charting new directions for Town Councils.
I must admit to being discomforted by the allegations laid by the Workers' Party against MND and HDB. I hope that they will be able to provide evidence to substantiate their allegations. There are much bigger issues at stake and the political catfights must not compromise the best interests of residents living in our HDB heartlands, as well as the public standing of our public institutions.
Madam, in this regard, a "strategic and comprehensive review of Town Councils" is timely. What may have worked well in the 1990s and 2000s may not necessarily be the case today.
Even if the strategic review reaffirms the key role of Town Councils and its governance and operational frameworks, it is a valuable process of evaluating whether we can reduce the frailties, primarily born out of politics, and make the institution better and less prone to political contestation. In particular, there is a need to ensure that in the running of Town Councils, public funds are adequately safeguarded and that residents' interests are paramount no matter which political party is running a Town Council.
I remain somewhat disturbed and at the same time amused that the dispute between AIM and the Workers' Party stemmed from, in the words of the MND Review Report, a "different understanding of the execution of the termination clause" in the IT contract for the use of the TCMS. To be sure, the Workers' Party disagrees with this finding.
Until the Prime Minister initiated the MND review of the software sale and leaseback, more heat than light was generated. I fear that even with this debate, there will still be more heat than light.
While this misunderstanding between the incoming and outgoing political parties running a Town Council is not the first nor will it be the last, the real damage has been in the dents to the public confidence in Town Councils.
While the strategic review will seek to take the politics out of Town Councils, it will not take the Town Councils out of politics. I hope the framework that will govern Town Councils will make any political party which seeks to politicise the Town Councils pay a high political price for waging partisan political battles at the expense of residents.
Madam, following the release of the MND Review Report, there is a view that doing away with the Town Councils will consign politics in the day-to-day running of Town Councils to the dustbin of history. If only it were that simple.
We must be careful not to throw the baby out with the bath water. By now, it is clear that I am in favour of Town Councils even as we need to improve its governance framework and breathe new life into this institution of local government. Its full potential remains untapped even after more than two decades.
It is time to recognise that Town Councils are inherently political right from the outset. It would be naive to think otherwise. As a form of local government, Town Council has transformed the role of the elected Member of Parliament from being a mere politician to one that includes administrative responsibilities. Besides representing their voters in Parliament, elected MPs are now directly responsible and accountable to their resident-voters for the day-to-day running, upkeep and upgrading of their HDB estates.
While not solely determinative of the MP's political fortunes, there are political implications to the quality of estate management, given the abiding concern of Singaporeans with the value of their residential properties. As the MND Review Report noted, "it is inevitable that the TC [Town Council] function is carried out in a competitive politicised context". As we are moved towards a more competitive and contested political landscape, it is imperative to ensure that the politicised context that Town Councils operate under does not become excessively politicised.
Should we revert to the pre-1989 situation in which the management and maintenance of public housing estates was HDB's sole responsibility? Politics will be par for the course even if we are to centralise the control, management, maintenance and improvement of HDB estates back to the HDB, as it was the case the pre-1989 days.
Any sign that HDB treats one HDB estate differently from another, whether favourably or prejudicially, will be seen through political lenses. If anything, politics will become magnified, and detrimental to HDB heartlanders in such a scenario since the buck will constantly be passed around.
Is this better than the current system in which for estate management and upkeep matters, the buck stops with the Member of Parliament? Certainly not. In addition to blurred lines of responsibility, there are three other major concerns with the re-centralisation of control with HDB. I raised some of these points earlier in my TODAY commentary last week but I think it is good for me to elaborate on them.
First, it is likely to result in our HDB estates not developing their own distinctive identities. HDB would simply adopt a cookie-cutter approach in estate management to avoid any allegations of preferential or prejudicial treatment. Such a one-size-fits-all approach will mean that the particularities of each estate, whether in terms of history, geography, social demographics, cannot be catered to.
Secondly, the nationalisation of estate management back to the HDB will take away a vital platform for an elected MP to administer and run an estate, including making the immediate living environment better. It will also take away a vital opportunity for the MP to work with Town Councillors and residents in a common effort to create the so-called "kampung spirit" in our HDB heartlands. HDB, as a bureaucracy, will be ill-equipped to be the catalyst to strengthen social and community bonds.
Thirdly, the nationalisation of estate management in a more competitive and contested political landscape will mean that an elected MP's accountability and ability will be reduced at a time when it ought to be of growing importance. This is because any MP can simply lay the shortcomings in estate management and upkeep at the feet of HDB. We should continue to protect and enhance local government. Bringing the state back in would spell the end of local government and the idea of greater ownership of residents in their housing estates.
The elected Members of this House will know better than I do that Town Council management will not take away the need for them to be an effective representative of his/her constituents. Town Council management has added to the centrality of elected MPs in our system of government. It will also add another dimension to the relationship between the elected MPs and the electorate.
Mdm Speaker, as the MND Report identified, the challenge going forward is to ensure that the Town Councils' political DNA does not interfere with the Town Councils' fundamental objective of providing estate management services to residents.
In short, how do we professionalise, not politicise, Town Councils? And given that politics is integral to the operating system of Town Councils, what are the appropriate safeguards that can be put in place to ensure that politics of Town Councils are not exercised at the expense of residents?
Madam, as I see it, the risks of politicisation of Town Council administration are magnified during the following occasions:
One, the handover process of a Town Council from one political party to another following a parliamentary election or by-election;
Two, the practice of tapping on people who share the political affiliation, be it party members, party and personal supporters of an MP, and engaging them as a Town Council paid staff or in the award of contracts; and
Three, during the hustings when a party's Town Council management record is scrutinised or challenged.
Madam, the risks of politicisation, while real, should not be exaggerated in the handover process of a Town Council from one political party to another. Political parties have generally conducted themselves well in handovers. Besides the AIM matter, the handover from the PAP to WP of the Aljunied Town Council was relatively smooth. Notwithstanding teething problems and a lack of trust inherent in any transition, I am not aware of any major disruption of services to residents.
Likewise, there was continuity of services to residents in the handover of Potong Pasir Town Council in 2011, as well as in the handover of Town Council jurisdiction for Punggol East recently after the 2012 by-election, save for the use of the Town Council office space there.
In some respects, we are in new territory given that between 1997 and 2011, there was no handover of Town Councils. Since May 2011, however, we have had three handovers, including one involving a GRC. Context, therefore, matters as well, in light of a more competitive political landscape.
The MND Report provides some suggestions for better management of changeovers. They are worth following up on. While MND's light-touch regulatory approach in Town Council matters should be maintained, MND should take a more prominent role in overseeing any changeover. For instance, MND should administer the handover process and/or be the arbiter in the event of any dispute or disagreement.
New subsidiary legislation may need to be drafted to prescribe the protocols in detail on the handing- and taking-over. This relates to political parties as well as MND. This can reduce political opportunism and ensure that accountability and transparency are given due attention even during transitions. Town Council funds have to be safeguarded, and the handover should not result in public funds being misused. In fact, a robust set of protocols and audits can help ensure that any wilful attempt to politicise the handover will have a blowback effect on the political party in question. This is because residents suffer "collateral damage" when the handover is politicised.
Madam, as for the practice of tapping on people who share the political party affiliation, be it party members, party and personal supporters of the MP, and engaging them as a Town Council paid staff or in the award of contracts, here, while politics may well be at play, the larger concern is really about conflicts of interests and related party transactions. Again, the core concern has to be that of the residents' best interests.
While latitude should continue to be extended to Town Councils and MPs in exercising autonomy in engaging those who share their political agenda or are affiliated to their parties, better controls and safeguards ought to be introduced to ensure probity, accountability and transparency in such transactions.
This is notwithstanding that the Town Councils Act does not prohibit such transactions. But the lack of such a prohibition does not and cannot mean that proper controls and appropriate checks and proper disclosures should be dispensed with. In fact, the autonomy must be properly regulated. This is where the Town Councils Act can be improved upon so that the autonomy given in such matters will not be abused and reduce the scope for politics to creep in.
Madam, I note that all political parties that have run Town Councils have entered into contracts, or employed staff with related parties. Indeed, it would appear that this practice is not uncommon. MND should consider introducing measures to promote transparency and accountability in this regard. There should be a process for the proper disclosure of such transactions, and information pertaining to related-party transactions should be publicly available. The AIM matter attracted a lot of negative publicity and was politically costly to the PAP because there was a presumption that the sale and leaseback of the TCMS could not have been in the interests of the residents, given that AIM is a PAP-owned company.
Madam, a current weakness of the system is that a significant amount of local knowledge of the estate officers is lost when there is a change of Managing Agent or a change of staff as well as Town Councillors. Entire teams, especially executives, could conceivably be replaced. Could the Ministry consider professionalising Town Councils such that there would not be this "clearing of the decks" where Town Council staff are concerned? Why should politics matter in the day-to-day running of Town Councils and in the employment of Town Council staff?
Beyond reducing the level of politicisation of Town Councils, a comprehensive review should also consider the "softer" but equally important aspects of Town Councils, such as how the devolution of control and management of public housing estates can imbue in residents a stronger sense of personal and collective responsibility in the well-being of the estate and fellow residents. This potential of Town Councils has not been fully realised even after two decades.
In this regard, all Town Councillors, in my view, should be residing in the areas in which they serve and be elected by residents, rather than being appointed by MPs, as is the current practice today. This can give impetus to grassroots democracy, enabling more people to serve while also nurturing greater ownership among residents. Thick engagement, through involvement in decision-making on matters that affect a resident's sense of well-being vis-a-vis his estate, are necessary if local government is to be authentic, inclusive and consequential. This helps us to get to the substance of what Town Councils are about. Local government or decentralisation has been very much stunted so far. We should unleash the full potential of Town Councils. The overall development of our public housing heartlands has to be a collaborative partnership of the MPs and the residents.
Madam, the "fundamental tension" between the political and administrative functions of Town Councils can be healthy. Maintaining equilibrium between the two can bring out the best in our Town Councils. If there is no incentive for Town Councils to improve their performance, for example, in developing better Town Council Management System, then I think residents will be worse off because no political party would want to invest funds in such an exercise given that the idea is that all these will eventually be shared across the island.
Politics is a reality in a large public undertaking, such as the leadership and management of Town Councils. To pretend that we can divorce politics from it is not realistic. Town Councils form one platform in our system of government in which political parties compete with one another. But it cannot be about political competition merely for competition's sake. Instead, the competition engendered should motivate political parties to raise their game and deliver on their electoral promises at the national and local level.
The proposed comprehensive review of Town Councils should endeavour to reduce the "fundamental tension" between the political and administrative functions of Town Councils. A more robust set of rules and procedures as well as safeguards can remove unnecessary political catfights. But this should not take away from the fundamental character of Town Councils which is, ultimately, about promoting good governance and improvement of people's lives at the local level.
Mdm Speaker, I wish to share my perspectives as a Town Council (TC) Chairperson who runs one of the 14 PAP Town Councils.
First, on AIM. When Deloitte and Touche Enterprise Risk Services Pte Ltd (D&T) first highlighted that the PAP Town Councils' Town Council Management System (TCMS) software was at risk of becoming obsolete in 2009, my fellow TC chairmen and I were naturally alarmed. It was an old Windows-XP-based system. The maintenance contract was due to expire. D&T had advised the choice of either a service or an ownership model for the next generation of TCMS software.
The first thing on our minds was to find a cost-effective way that would meet our need to redevelop the next TCMS software at the best price possible for our residents. Many of my residents in my ward are from the average low-income group. Factors, such as cash flow, affordability and perhaps reaping economies of scale, were some of our top-of-mind considerations.
All of the 14 PAP TCs then agreed on a sale and leaseback arrangement. This would allow the existing software to be centralised in one entity so that this entity could negotiate with potential vendors on our behalf. It did not seem efficient to have each of the 14 PAP TCs deal or negotiate separately with the vendors. At the same time, because the Town Councils still needed to continue to operate, the current software was still needed and maintenance required. The sale of the existing software and the leaseback arrangement was the most practical solution that could meet all of the needs.
Mayor Teo Ho Pin, our Co-ordinating Chairman, a domain expert and the most experienced amongst us, was leading the efforts; but all of us were fully supportive of his leadership. We acted in good faith and none of us wanted our individual TCs and residents we serve to have to bear any operational or financial risk or burden.
A contract was subsequently drafted and an open tender was called. The successful vendor must be willing to buy the existing almost-obsolete software; lease it back to the PAP Town Councils at no increase in maintenance cost to our residents; and be willing to study our future needs and help us negotiate for the development of the next-generation software. This is a tall order. A contract that is guilty of being biased to the needs and interest of our residents. Whilst several vendors collected the tender documents, only AIM, a PAP-affiliated company, agreed to do the job.
To be honest, the last thing on the minds of my fellow TC chairpersons, our TC councillors and the staff, the last thing was to fix or to trip the Opposition. Accusing us of plotting to sell the TCMS software in 2009 prior to the 2011 General Elections is nothing but a figment of imagination of some parties. GE2011 then was the last thing on our mind. Some of us did not even know if we would be fielded. We were more concerned with the mechanics of the old and the new software. Our conscience was and is clear – including in the face of my Maker, to whom Mr Png Eng Huat referred.
Naturally, we had not expected the spat that started in mid-December 2012 when the hon Member Sylvia Lim and Chairman of the then Aljunied-Hougang Town Council (AHTC) blamed AIM for affecting the Town Council's performance in a MND review. This raised nationwide questions of conflicts of interest and why AIM, a PAP-affiliated company, is allowed to do business with PAP Town Councils.
The MND Review Report helped explain the history and political nature of the Town Councils. The Town Councils Act or the TCs Act was set up to legally empower elected MPs representing their respective political parties to run their towns. The Act allowed not only freedom in appointing Town Councillors and staff; it does not prohibit transactions with persons or entities associated with the respective political parties.
This arrangement is hardly new to even hon Members from the Opposition. When Workers' Party took over the running of the Aljunied GRC, it waived competition to appoint FM Solutions and Services or FMSS as its Managing Agent (MA). FMSS was started in May 2011 and owned by the former General Manager of the then-Hougang TC. Later on, when AHTC finally conducted an open tender, not one but two contracts, for both Managing Agent and essential maintenance services, were awarded to FMSS.
Mdm Speaker, I highlighted these transactions not to draw a parallel between AIM and FMSS; but just to point out that both ruling party and Opposition-run Town Councils and MPs are aware of the current operating model, the political nature of Town Councils and the culture. In fact, TCs from all parties had, at various times, working partnerships with vendors who are politically sympathetic and willing to walk the extra mile for the interests of the residents and the respective MPs' political party.
If this arrangement and operating model is deemed to be less than perfect, then let us support the strategic review recommended by the MND Town Council Review Team. It is not helpful to finger-point at any one specific party. Whatever political party colour we don, let us provide inputs on how to plug the gaps in a less than perfect system and make it even more transparent and clear. Better still, let us also take this opportunity to examine the fundamentals of the current TC operating model and legislation. Let us help Town Councils raise the bar to be not just estate maintenance agents but town managers of the 21st century.
Madam, I would like to next share my thoughts on Town Councils of the Future. One of the key decisions I believe we need to make is the choice of the governance model or the operating model of future Town Councils.
On the pre-1989 Model before Town Councils, Madam, there have been calls to revert to the pre-1989 days when the HDB, a Government agency, is responsible for the maintenance of common areas and public housing estates.
The appeal of the model is this. It is potentially able to tap on a bigger pool of public resources. Government does have more resources in the maintenance and further development of towns, such as in IT systems or related environmental control or road facilities.
One of the effects of reverting completely to Government to run Town Councils is the potential of higher costs of managing towns. There is a popular mindset that Government has a deep, deep pocket and if it is cleaning and maintaining towns, Government should be able to afford and accommodate whatever needs and demands residents might have. This view is common not only in housing matters, but also transport, education, and even in social services. But we know that, ultimately, someone has got to foot the bill.
And under this system, the pre-1989 system, elected MPs will play the role of being the mouthpieces to pressure the appointed Government agency for more, potentially without accountability or calibration of what the optimal level of services should be.
Next, the other alternative, the alternative is the post-1989 Town Council Model. Madam, the appeal of the current Town Council operation model, on the other hand, is that it provides a direct link between public housing residents and their elected MPs, what Minister Khaw calls "the nexus between residents and their elected MPs".
Nothing brings an MP more down-to-earth than getting direct feedback on which corridor is not swept, which rubbish is not picked, which chute is not working or how residents disagree with one another on which colour of paint is the best. It is not glamour work. It is different in nature from researching and making public speeches on pet topics in Parliament. It stretches and shows up the bandwidth and responsiveness of the MPs one elects. Resources are put in the hands of the respective MPs. And how they operate the estate will provide one of the data points from which resident-voters evaluate their MPs. It is a double-edged sword that either shows up the quality, or the lack thereof, of the MPs.
The current Town Council model, however, is not without its down side. The challenges of handing over of TC operations in the event of political change is well detailed in the MND report and covered by the hon Members Zainal Sapari, Sylvia Lim and Sitoh Yih Pin.
In addition, MP-led Town Councils are often wrongly perceived as the body to solve the majority of the towns' issues – the drains, the roads, so forth. In reality, the current scope of the Town Councils is primarily in estate management and facility improvement, subject to fairly stringent funding limits. Town Councils are not meant for problems meant to be solved by the Police, LTA, NEA, SLA and so forth, to name a few.
When MPs run Town Councils, they tend to also be reluctant to increase the S&CC charges, even in the face of inflation, even in the face of increasing costs, such as in utility tariffs. With no guidance in the setting of S&C charges, each review of charges is potentially sensitive, emotional and, of course, unpopular.
Under the current TC model, there is also no differentiation in Government grants provided to Town Councils of estates of different profiles and ages. In the housing estates, for instance, located in the city area that I operate, which is frequented by persons all over the island, our Town Council officers and cleaners have to work doubly hard to clean up after the visitors. When I asked for fences to cordon off residential void decks to provide some privacy for my HDB residents, I was advised to use my limited Town Council funding for such purposes.
Clearly, as the MND Review Report rightly advised, the current model is due for a strategic and comprehensive review. Madam, both the pre-1989 and the current TC model have their appeals and their downsides. What is needed is a more updated model that is more inspiring and more visionary that will raise the role of MPs beyond estate managers, but also lead in sculpting the character of their town and residents.
Madam, in this respect, I would like to give eight suggestions to improve the current model just so the Review Team later on can consider these before the next generation of TCs and the Act. Here are the eight:
a) Conduct a study of best practices of how municipalities and towns are run in other parts of the world. A quick research, a desktop research I currently conducted on town council in North Carolina's Town of Cary showed an impressive list of A-Z services that we can learn from. I am sure there are many best practices we can learn.
b) Engage key stakeholders, including resident groups, in developing a realistic vision of what their estates can become; and how they, too, can own part of the process of making their estates cleaner, safer and more gracious. A town, after all, is about both hardware, infrastructure – and also software – its people.
c) Demarcate responsibilities of Government, Town Councils and Residents, taking into account which deliverables are best performed by these key stakeholders. For instance, we should seriously consider having Government lead in the development of nationwide TCMS software to be leased back to individual Town Councils. Since needs and expectations may be different, we can consider a modular approach for the Town Councils to pick and use the modules they need. Choose an open platform so that modules can be customised and added when required.
d) Actively use technology to collect and provide data and information so that Town Councils and their residents can proactively manage their own estate matters.
e) Provide better guidelines in the review of S&CC charges and set more consistent expectations amongst the public so that the revision of such fees is subject to less emotion and less populism.
f) Provide more education and transparency of Sinking Fund top-ups so that residents and Town Councillors are able to understand the need and purpose of such longer-term funds. Consider a tier system so that Town Councils, which have already had adequate sinking fund stashed aside, can be allowed to put aside less and use the money for operating expenses.
g) Allow differentiation in the provision of Government grants to cover operational expenditure, especially for estates which are located in city districts prone to dis-amenities brought about by visitors from the rest of Singapore. I am specifically referring to, of course, my wards, such as Little India – my GRC – my Little India, my Little Thailand and Waterloo Street, and possibly also Dr Lily Neo's Chinatown.
h) Lastly, consider how the same objective of engaging MPs with public housing residents, how this objective can also be furthered and applied in private estates, which are equally important.
In conclusion, Madam, the decision in 1989 by the then-Prime Minister Goh Chok Tong to make elected MPs accountable for maintenance of the housing estates they are voted into, is not unsound. However, it is now 2013. Twenty-four years have passed. The political and social landscapes have shifted and the Town Councils Acts and practices are in need of updates.
It is time to move on to envision the Town Councils of the 21st century. It is time to update our methods of engagement with the use of technology. It is time to further engage and give more power, more support, and ownership to both MPs and their residents to create more distinctive town characters.
I support the Minister's statement. I seek Minister's favourable considerations of the points I have raised and look forward to the implementation of the recommendations of the MND Town Council Review Report.
Ms Sylvia Lim, do you have a clarification?
Thank you, Madam. I have just one clarification for the Member. Earlier, she mentioned that when the 14 PAP Town Council chairmen were discussing this transaction with AIM, they did not know whether they would be fielded in the next General Elections and so on. I would like her to confirm if I am looking at the correct document, because the agreement for sale is actually dated 3 January 2011. So, is that the correct date?
The contract must have been covered later but when the discussions about the status of the software, the TCMS software, about the fact that it was at risk of being obsolete, about needing to think about different models for the next generation – these started from 2009. And the discussion of whether the General Elections, or who to fix or trip, was never in our mindset throughout the discussions.
May I speak in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech on Pg xxxx.] Mdm Speaker, when the Town Councils and AIM incident surfaced, I asked my grassroots leaders, residents and some friends what they were most concerned about in this incident. I have heard from many and I can summarise their worries into two categories: first, was the transaction between AIM and Town Councils legal; was there misuse of public funds? Two, was there any conflict of interest in this transaction?
This country has always prided itself on being free of corruption and able to rule by law. For me, personally, what I am most concerned about is whether or not this cherished reputation and the trust that we have built up over the years would be impacted negatively by unfair and untruthful accusations. Although I firmly believe that PAP Town Councils would not engage in any illegal dealings or hurt the interest of the residents, I still look forward to MND's Review Report so that I can understand their views and conclusions based on fact and evidence. I felt that this was the most sensible and mature way of dealing with this matter and to avoid any biases.
The problem is that when such a controversy occurs, especially when it involves two political parties and the handover process of the Town Councils after the General Elections, it is almost as if a perfect storm is waiting to happen. It is very important that we should view this issue objectively and calmly to understand the truth and fact of the matter.
Town Councils are themselves a very unique organisation. They are a body formed under the Town Councils Act. Town Councils do not belong to any Government organisations. They are not a company under the purview of corporate laws either.
From what I can see, MND's Review Report has reflected some very important points. It has also clarified some doubts and concerns that we had.
First, the residents and Town Councils' interests were not compromised. Second, the company did not receive any unwarranted profit from this transaction. On the contrary, it was stated in the Report that the company even suffered some losses. Third, the Town Councils and AIM transaction was legal as well as reasonable.
In terms of conflict of interests, the Report has also stated that we should consider why Town Councils were formed in the first place and their political nature. This is also why Town Councils have certain latitude to manoeuvre and they can engage the service of party-affiliated persons or companies. The key is whether these transactions were conducted through an open and transparent tender process and whether it was in the interest of the residents as well as the Town Councils. The purpose of the transaction must also be to protect the interests of the residents.
According to this Report, be it the People's Action Party or other parties, they all have similar commercial transactions. Some Town Councils also employed party-affiliated people as the key Town Council personnel.
The Report also pointed out that the purpose of the AIM transaction was to resolve the problem brought forth by the ageing software system which was close to its end of life, therefore, the Town Councils accepted one of the recommendations by Deloitte & Touche Enterprise Risk Services, a risk management company, and called for a tender to sell the IP right of the software and then lease back from the company. D&T is a very well-known, reputable, international company. It is unlikely that D&T would have any political agenda.
Of course, I believe that there is room to improve, especially on the handover process of Town Councils after an election to prevent services of Town Councils being disrupted. From what I can see, this controversy occurred because there was a lack of statutory handover process. Therefore, I welcome what the Minister said in his Ministerial Statement earlier that Senior Minister of State Lee Yi Shyan would lead a deeper review on how to improve the Town Council mechanism, including how to better manage the handover process.
I also agree that we should carry out an overall strategic review of Town Councils and we should be realistic that Town Councils are basically political in nature. Just like the city councils of other countries, they are also political in nature.
Town Councils were established in 1989 with the original intention of allowing the MPs to manage the Town Councils and have a say in how Town Councils are run. They will have a certain degree of autonomy to improve the living environment of the residents.
The Town Council system also allows for political accountability so that the performance of the Town Councils and the ability of the MPs can be linked.
In fact, the creation and implementation of the Town Council system means that our politics have evolved to become more accountable and more in sync with people's lives. Therefore, I agree with what the Minister said earlier that we should learn from the experiences derived from the 20 years of running the Town Councils and try to improve the existing structure and operations. Whether it is the PAP or other political parties, we cannot forget that our mission is to serve the people of Singapore. We must do this with a clear conscience. I can speak without any hesitation that PAP MPs are serving the people exactly with this mission in mind.
Mdm Speaker, I support the suggestions in the Ministerial Statement.
Minister Khaw Boon Wan. I see that Dr Teo has raised his hand. Are you seeking to make a clarification before the Minister makes his reply?
Mdm Speaker, I wish to clarify several points made by the hon Members Ms Sylvia Lim and Mr Png Eng Huat.
First, she asked why risk the sale of an essential service asset for $8,000 savings? I have given the reasons. This is a recommendation by our consultant Deloitte and Touche that by doing that, we are able to have the flexibility to explore the various development options so that the Town Councils can get better value for money for its new TCMS. And also, although the development of a new software may take 12-18 months, but if it is a service model, it will take a much shorter period.
Secondly, the PAP Town Councils had actually taken adequate safeguards to make sure that there is no disruption of services to our residents and that is the reason why the tender specifications are very stringent that all Directors of the firm must have IT and TC experience. And also there are provisions in the TCMS for the extension of contract with NCS. When we opened the tender, we received one bid and we are very confident that AIM, which is fully backed up by the PAP, can deliver.
The second clarification is: why the one-month termination clause? The reasons are: firstly, we want to be fair to the tenderer because it is a balance of risk and pricing; secondly, we want to get a better deal for the Town Councils because of the pricing and the TCMS extension at no extra cost. By the way, the one-month extension or termination clause applies to all TCs irrespective of their political affiliations.
So, it was not mean to undermine any party. As shown in the AHTC's case, they were granted two extensions by AIM to use the IT system and there was no disruption of services to the residents. Anyway, if there were disruptions, I am sure AHTC would have politicised the issue two years ago.
The third point on wastage of public funds. There is no wastage of public funds because the whole AIM transaction has helped the PAP Town Councils, firstly, to recover the residual value of the obsolete TCMS; secondly, to secure extension of the TCMS at no extra cost. And, thirdly, to make a better decision to develop a new TCMS suitable to the TCs.
As regards to Mr Png Eng Huat's speech, he asked why the AIM subscription fee is similar for all 14 TCs. This is because the fee is for the right to use TCMS so it applies equally to all the 14 TCs. Secondly, the $16.8 million NEC contract is based on a service model, so the TCs do not own this software.
Do you wish to make a clarification, Ms Lim?
Yes, Madam. I would like the Member to clarify what he just said. He mentioned that the termination clause in the contract of one month applies equally to Town Councils regardless of which party runs it. But I wonder if he can explain what he understands by material changes to the membership of the Town Council. That is one. And, secondly, did AIM terminate any other Town Council under this clause?
As I mentioned, the termination clause applies to all Town Councils. As to the material change, it all depends on the substance of the change. That is the reason why it is mentioned there to be fair to the bidder, when there is a material change, they have this right to exercise it. But it is up to the bidder to exercise the right. As I mentioned – why is it there – it is because we want to balance the risk and the pricing of the tender.
Mr Png Eng Huat.
I just want to seek a clarification from Mayor Teo. He said that the TC does not own the IP rights to the software. Then who owns it? Also, the other question is: does AIM own any rights to the third generation software, whether it is direct or derivative?
In the new contract, NEC will own the contract because it is a leasing model. It is a service model. The Town Councils do not own the software and also the right. At the same time, as to AIM, AIM does not own the new software at all.
Minister Khaw Boon Wan.
Mdm Speaker, my apologies for my absence just now. I under-estimated the pace of reading of hon Member, Mr Liang Eng Hwa.
Mdm Speaker, I thank all the Members who spoke, sharing their views on the MND Review Report, and also their actual ground experience running their Town Councils. Several MPs, including Ms Denise Phua, Mr Zainal Sapari, Dr Teo Ho Pin and Mr Liang Eng Hwa, offered many suggestions for Senior Minister of State Lee Yi Shyan to consider when he reviews the Town Councils and I am sure he will take them up. Let me respond to the key comments.
The Review Team has established that the AIM transaction has complied with the Town Councils Act and the Town Councils' Financial Rules. Ms Sylvia Lim unfortunately continued to question whether the AIM transaction truly complied with the Town Councils Act since the tender period was only posted for two weeks in the first instance.
Under the Town Councils Financial Rules, the minimum period of tender notice should not be less than three weeks. Nonetheless, latitude is given to the Chairman of the Town Council to approve a shorter period of tender notice. The Review Team has established that the PAP TCs had obtained the necessary approvals for a shorter two-week tender notice as well as a subsequent extension of one week. So, in the end, the tender period was three weeks.
In fact, the Town Councils Financial Rules also provide latitude to Town Councils or their Chairmen to waive requirement to call for tender altogether. Ms Sylvia Lim would be familiar with this because she exercised this latitude when her Town Council waived competition and appointed FM Solutions and Services Pte Ltd (FMSS) as their Managing Agent in 2011. MND left the appointment to her best judgement and did not object. We have to apply the Town Councils Act and the Town Councils Financial Rules fairly, evenly and consistently.
Ms Sylvia Lim said that the tender was only open in substance because "each of the directors of the company had to have adequate experience in the operations and functions of a Town Council".
The tender requirements had been drawn up in the interests of residents. It was important that the vendor should have an established track record in Town Council operations, given the extensive and specialised nature of Town Council administration, involving thousands of HDB blocks and associated common property.
AIM was not the only company that could have qualified. For one thing, Ms How Weng Fan, with her extensive experience in Town Council work, could have formed a company with others like her and submitted a bid for this. After all, this is what she, her husband and her Hougang Town Council colleagues did when they set up FM Solutions and Services several days before the setting up of the AH Town Council. And they went on to win the contract to be the Town Council's Managing Agent, which is worth millions of dollars, without even a tender being called.
In reality, the Town Councils did not receive any feedback from prospective tenderers to change or vary this requirement. In fact, from the informal feedback obtained, the sense is that stringency of requirement was something else. It was that the contract for the transaction ensured against any increase in maintenance costs – this is a maintenance cost by NCS – even as sourcing and development of a new generation TCMS was pursued.
This particular requirement, coupled with the fact that there is no certainty that the vendor would be given the contract to develop the next generation software, explains why the other vendors were not interested.
Ms Sylvia Lim mentioned that a vendor told the media that there was insufficient information in the tender document. There was a three-week tender notice period, during which potential vendors could seek clarifications from the Town Councils or ask for a tender briefing. So, there was sufficient opportunity for potential bidders to obtain the necessary information for their assessment.
Mrs Lina Chiam asked how can there be no conflict of interest even if nobody made money. She said she is not sure if any lawyer would be satisfied with how "conflict of interest" has been defined in the review report. Let me share that the Review Team had consulted the Attorney-General who has confirmed the legal position taken in the report on this.
Some Workers' Party members could not accept the Review Report's conclusion that there was no conflict of interest in the AIM transaction. I had explained earlier the background to the enactment of the Town Councils Act and the political nature of TCs. And this is the context against which the AIM transaction needs to be examined. Let me state the case from MND's perspective as the administrator of the Act. We are the authority, we own this policy. We are the policy formulator and the policy administrator for this Act.
TCs are specifically set up to establish a link between elected MPs and their Town Councils. The Act by design does not prohibit transactions between the Town Council and party-related entities or persons. Latitude has always been given to MPs to manage their Town Councils according to their best judgement and be accountable to their residents politically. Town Councils run by MPs from all political parties have at one time or another appointed party supporters or former candidates to provide services to the Town Councils they run. The Straits Times gave some examples in an article on 7 May; so did Lianhe Zaobao on 11 May.
Mr Pritam Singh suggested that, going forward, to avoid conflict of interest, companies owned by political parties should not be allowed to transact with Town Councils. As I mentioned, the Town Councils Act presently does not prohibit transactions with party affiliates. However, if we choose to do this as what Mr Pritam Singh has proposed, then we must impose it across all Town Councils, and also not just narrowly on party-owned companies but companies owned by people in various forms of party affiliations, like ex-party members and party supporters and even their immediate families.
If we do this, we would of course be prohibiting the appointment of FM Solutions and Services by the AH Town Council as well. Ms Sylvia Lim mentioned about FMSS and made some comments about MND providing this information in response to a media query, and as she asked about this point, let me elaborate on this entity called FMSS.
FMSS was formed by a group of Hougang Town Council employees. It is now principally owned by Ms How Weng Fan and her husband Mr Danny Loh, who although not a staff of Hougang Town Council, was a contractor of services to Hougang Town Council when his wife, Ms How, was the estate manager. Apart from their long association with the Workers' Party's leadership, Mr Danny Loh and Ms How are Workers' Party supporters who acted as assentor and proposer to the Workers' Party team of candidates led by Mr Yaw Shin Leong to contest in Ang Mo Kio GRC in the 2006 General Election.
Thus, if you look at the substance of this contract between AH Town Council and FMSS, the following points are quite striking:
First, FMSS was formed on 15 May 2011, four days after the 2011 GE. The company was principally owned by two very close WP party associates. They were husband and wife and were providing services to Hougang as well. And they were Secretary and Deputy Secretary of AH Town Council.
Second, the Management Contract, which was worth $5.2 million a year, was awarded to FMSS without tender.
Third point: one year later, AH Town Council did go for a tender where FMSS was the only tenderer and a three-year contract worth $16.8 million was given to FMSS.
Fourth point: subsequently, another three-year contract for EMSU (Essential Maintenance Services Unit) was also given to FMSS, which is worth $3.9 million.
Mdm Speaker, when we talk about public interest, how would Ms Sylvia Lim characterise the FMSS transactions? In substance, has public interest been protected? Would she take the position that contracts like these given to close party associates be prohibited?
In the AIM contract, public interest was enhanced. Can the same be said for the FMSS contract? In this respect, let me also remind Members that Mrs Lina Chiam too was appointed Potong Pasir Town Council's Secretary in February 2010 and she was paid a monthly salary. She was then the Singapore People's Party's CEC member and later became its Vice Chairman in August that year, 2010.
MND accepted that, consistent with its approach to allow all Town Councils the same latitude with regard to party affiliation and we did not interfere with any of these transactions. And I think that should be the same, fair, consistent approach that we apply to all parties, whether it is PAP, WP or SPP.
Ms Sylvia Lim and Mr Pritam Singh asserted that the transfer of ownership of the management software from the Town Councils to AIM was improper and against the residents' interests. Ms Sylvia Lim, of course, has been spreading this narrative ever since MND found her Town Council to be lacking in performance. She asked essentially: why should the Town Councils pass the ownership of an essential software to AIM only to lease it back at a fee from AIM? The Review Report has given a detailed explanation for this arrangement. This was a sale and leaseback arrangement which is perfectly normal in the industry. Just because at the end of it, the software has been transferred to AIM does not mean that it is at all improper.
Now, why did the PAP Town Councils do so, just when the software was nearing obsolescence? Precisely because the software would soon be obsolescent, the Town Councils needed to move onto next generation software. Centralising the software ownership in one entity so that the latter could negotiate with potential vendors as one would greatly facilitate the process. But as the Town Councils needed to continue to function, the Town Councils would still need to make use of the software. The sale and leaseback arrangement was a practical solution to this problem.
Moreover, as new generation software would need time to develop, the Town Councils would also need the NCS to continue to maintain the system in the meantime. The tender specifications further required the successful bidder to undertake to secure extensions of NCS' maintenance contract at no extra cost to the Town Councils. Essentially, AIM took on the financial risk of any fee escalation by NCS.
By structuring the tender in this manner, the Town Councils had protected the interests of their residents to the maximum degree. This is the exact opposite of Ms Sylvia Lim's incorrect narrative.
How did the Town Councils benefit? First, they enjoyed a net savings as AIM actually made a loss on the 2010 transaction. Second, the NCS maintenance contract was extended for 18 months at the same cost, without any fee increase. Third, the Town Councils are now on the development path to the next generation software.
Ms Sylvia Lim also argued that AIM, as a $2 company, could not be qualified to deliver on its commitments and, therefore, placing residents' interests under undue risk. I accept the point that, in general, the fact that a company had just $2 of paid-up capital must raise a flag and need to be considered. But in this case, AIM is not an ordinary $2 company. It was set up by the PAP specifically years ago to help its PAP MPs do a better job at running their Town Councils. The party was standing behind it, effectively guaranteeing its performance. Moreover, there was a track record as it was responsible for the earlier version of the Town Councils' management software. That is the difference between AIM and any other "$2 company" that gave the PAP Town Councils confidence to enter into this contract with AIM.
And as it turned out, did AIM perform as required? Yes, AIM performed its duties successfully. First, centralising the software did not cost the Town Councils any extra money. Second, AIM has helped the Town Councils to extend the NCS software maintenance contract at no increased cost in the past 18 months. This has saved money for Town Councils, and hence their residents. Third, AIM has got the Town Councils onto a new generation software to be developed by NEC under a new leasing arrangement. This was a major objective of the Town Councils when they called the 2010 tender to sell-and-lease-back their obsolescent software. This necessary task has now been fully completed. The Town Councils have benefited from the AIM services.
Ms Sylvia Lim further suggested that the timing of the sale of the TCMS to AIM just before the 2011 GE shows that the transaction was politically motivated. This is a rather paranoid view which distorts and ignores the facts. What are the facts?
First, the Town Councils brought in Deloitte & Touche (D&T) to evaluate their software, not in the year just before the 2011 GE, but as early as June 2009.
Second, software becomes obsolescent with time as the hardware and software platforms on which it is written are regularly upgraded. Those of us who have to deal with software installations and software platforms, we know that. The Town Councils knew that their software which had been developed in 2003, and built upon Windows XP and Oracle Financial 11 platforms, would have to be upgraded to the next generation soon. D&T confirmed it after conducting the review. Windows XP had been superseded, in fact, two generations, by Windows Vista and Windows 7. Worse, Oracle would also soon phase out its Financial 11 platform. They therefore recommended a software leasing arrangement for the Town Councils to consider, in line with the general industry practice.
Third, the TCs' software maintenance contract with NCS was expiring in October 2010. That was why the Town Councils invited the open tender in mid-2010. These were compelling considerations which had nothing to do with the timing of the GE.
Ms Sylvia Lim further argued that the residents' interests were placed at risk by AIM's one-sided termination clause. Now, all commercial contracts come with a termination clause. Termination can be initiated by both sides after observing a period of notice. The question is: is it one-sided? The Review Team has studied the specific termination clause in question and noted in its report that the Town Councils had valid reasons to insert it. The AIM contract is a lump-sum contract and a termination clause to address material changes to the scope and duties of the Town Council will help reduce the vendor's business risk and hopefully fetch a better price.
There are now two interpretations of what actually happened. AIM insisted that it did not initiate the termination and that it was the Aljunied-Hougang Town Council which gave notice of its intention to use its own software. Only on receipt of that notice did AIM then terminate the contract. The AH Town Council's version is that they believed that it would be terminated and so decided to start sourcing for their own IT software system. The Review Team has included the full exchange of letters in their report, and we will let the readers draw their own conclusions.
I am, honestly, Mdm Speaker, disappointed that Ms Sylvia Lim has chosen to construe the AIM transaction in such a sinister light and to suggest that the PAP has used the AIM transaction to trip up the incoming MPs. This is like what the Chinese say, “杯弓蛇影”. Seeing a snake in the cup when actually it is nothing more than a reflection of a bow hung on the wall.
In any case, are we so stupid? As the Workers' Party themselves pointed out, the people who will suffer are the residents. Why would we want to deliberately disrupt the lives of residents in Aljunied? Would the WP just keep quiet and not make a political issue out of it? Who then would get the blame? Why would the PAP want to hurt the interests of residents in Aljunied and alienate them? How could we hope to regain Aljunied if we did this?
Ms Sylvia Lim says that the PAP is not concerned about constituents sitting in their Cessna getting hurt should it crash land. This is self righteous, and – pardon me for saying so – arrogant. Many of us in this House have been serving Singaporeans for decades, long before she entered this House. Please do not behave as if you are the only patriot in this House.
Do you honestly believe that the Workers' Party would blame themselves if they crashed, even if there is nothing to do with the plane engine, but because they are bad pilots? No way. I think they will start pointing fingers at everybody else. So, when Ms Sylvia Lim says that the AIM transaction shows that the PAP is hurting the people in Aljunied as just "collateral damage in a bigger political game", I am disappointed at such a comment. What is our bigger political game? It is about winning back Aljunied, not about doing something petty that will just upset everybody and make us lose Aljunied permanently.
Indeed, who has been playing politics with this AIM transaction? If Ms Sylvia Lim was really concerned about the termination of the contract by AIM, why did she not simply write a letter to AIM asking for extension rather than assume that it would not be acceded to? And as events demonstrated, AIM readily acceded to her subsequent requests for extensions, not once but twice. Maybe pride or political motives got in the way and residents' interests became secondary.
Please take a good look at Mr Sitoh who dealt with a similar transitional problem in Potong Pasir. He did not feel anything wrong to ask for an extension of the service of the General Manager who had served for many years under Mr Chiam See Tong. He placed residents' interests first and because he ventured to ask, he ensured a successful transition and handing over at Potong Pasir. The transition there was not without problems; there were many. But instead of bad-mouthing or finding excuses through attributing problems to his predecessor, he and his team worked quietly round-the-clock to minimise any disruption to their residents. That is the professional way of dealing with handing over.
If there is anything suspicious about timing, it is really the timing of Ms Sylvia Lim raising the AIM issue. Why did she not raise the termination of the TCMS back in 2011 when they took over, instead of thanking AIM for agreeing to the extensions that they had requested. Why, after thanking AIM, then wait 18 months till December 2012 when the MND revealed that the Town Council's audit report had been delayed, to raise this complaint against AIM? I presume she will claim that they had been too busy setting up their own system to bother about raising this issue. Anyway, I must say it has been quite effective in distracting the public from the actual situation in the Town Council.
Ms Sylvia Lim has also questioned the prudence in incurring unnecessary expenditure during handovers to replicate systems already developed with public funds, when these systems could simply be handed over to MPs taking over. I agree that Town Councils should not incur unnecessary expenditure, whether during handovers or for day-to-day operations as these are residents' funds. That is why during a handover, contracts, assets and liabilities remain vested with the Town Council. They are accessible to the newly elected MPs when they take over. It is not necessary for the new Town Council management to terminate the existing contracts and incur additional costs to replicate existing systems unless they choose to.
However, software contracts have unique difficulties with such an arrangement. There have to be significant software changes when boundaries are changed. This happens with Town Councils even when the political party remains unchanged. Where political parties change, the operating software inevitably has to evolve to suit the new MP's management style and operational preference. As Mr Zainal Sapari put it just now, the reality is that there will be cost incurred whenever there is a change of Town Council and which can be significant. But I agree that we should try to minimise it, and this requires some give-and-take on the part of the two parties involved in the changeover.
There were some comments about the TCMS software by Mr Png Eng Huat, that this is a software that Town Councils spent almost $24 million to build up, so why hand it over, or tender it out, for $140,000. We all know that software has limited shelf life. IT platforms are so progressive and dynamic that upgrades are inevitable every few years.
When this AIM episode was raised, what struck me was this: I used to run National University Hospital. The then Health Minister Mr Goh appointed me to start up a newly built hospital. The hospital was almost built, and the deadline to open the hospital already announced to the public. My team had to start it up. We were given – relying on my memory – four or five months to start it up.
One of the things that was missing at that time was software. To run a hospital, you need computer software. Yes, if you do not have one software, it is very hard to run a hospital properly, and to do it manually, that is impossible. But we managed it in four, five months. How? Because the software industry is very well developed. There are off-the-shelf software programmes which you can pick and buy, and then you just have to design your operational processes to suit the software, to be in accordance with the software. So, that is one quick and easy option, and that was the option I did in the case of NUH; successfully opened. But if you want bells and whistles, then of course, you have to spend time developing, modifying, changing the software codes; so it cannot be an off-the-shelf solution. In the case of NUH, we started with off-the-shelf solution, settled in, got the priorities right. And then over time, we added in all the bells and whistles, and then we had a very sophisticated software when I left the hospital.
For the Town Councils, it is the same thing. It is not as if it is so crippling without one. There are solutions available. It is up to you. But in any case, the bottom line is this – AIM did not terminate. They were quite willing to extend, if only you asked. But if you do not ask, why should they offer, because you may feel insulted.
Precisely because software goes into obsolescence very quickly, if you examine the Town Councils Financial Rules, hardware is classified as an asset, to be depreciated. Software is not. Software is just treated as an operating expense; expense off straightaway. It does not get depreciated.
Back to the TCMS and when it was first tendered out. Yes, it cost the Town Councils $24 million to develop. But by the time it was hitting obsolescence, how much was it worth? Very little; nothing; probably zero. And the tender bids proved it. Nobody was interested in it. AIM had to step in, because if they did not step in, the Town Councils would be left in the lurch, which was the point that Asst Prof Eugene Tan made in his TODAY article on 6 May.
Anyway, I am glad that several Workers' Party members – Ms Sylvia Lim and so on – made comments expressing great concern about financial prudence and the need to ensure that Town Councils minimise the cost in the interest of their residents. Mdm Speaker, so do we; although, frankly, how the PAP and the Workers' Party do it may be different.
For instance, in Aljunied, we found that the management agency rate which FMSS charged Aljunied-Hougang residents is 20% higher than the rate charged by the former Aljunied Town Council's managing agent, when it was under Mr George Yeo. To be precise, when it was under Mr George Yeo, it was $6.51 per housing unit per month. Now, it is $7.87 in Financial Year 2011, in the first contract. And then up to $8.04 per unit per month now – 20% hike. In fact, FMSS' rate is more than 50% higher than the rate charged in Tampines Town Council, which is of similar size. Tampines' rate is about $5.15 per month per unit. In fact, it came down a little bit to $4.99 last year. I assume the residents living in Aljunied are aware of all these and find them acceptable.
Some Members talked about AIM not making any profit. Actually, there is nothing odd about this. As I said, AIM was set up by PAP to help its MPs run their Town Councils. Because if the Town Councils do not perform, it will reflect on the MPs and affect their future election prospects. PAP has every interest to ensure its MPs succeed, and that is why AIM did not seek to make a profit out of the 2010 transaction.
As I said just now, Members are aware that Workers' Party's supporters set up FMSS after the General Election on 15 May and a legitimate question is: what was the motive behind the formation of FMSS? Surely, it is also to help the Workers' Party's MPs run their Town Council, is it not? The same latitude given to the PAP Town Councils is applied to the Workers' Party's Town Council as well by MND.
Workers' Party's Members raised some examples from the Punggol East handover to illustrate a point that the handover process is highly politicised. However, the version from Mr Zainal Sapari carries a slightly different flavour. More importantly, I must clarify that the Punggol East handover and the Aljunied handover are different, from the point of view of the Town Councils Act.
The Act allows up to 90 days handover for transfer of properties from one Town Council to another. This applies to Punggol East. The two parties have 90 days to complete the handover, but when the MP changes, either from the same or different party, changeover is immediate. This was what happened in Mr Sitoh's case in Potong Pasir. He moved in immediately, took charge, took responsibility, ensured a successful changeover. This was what was supposed to happen in Aljunied. But, sadly, it did not.
After an election, newly-elected MPs assume office as Town Councillors immediately and assume legal responsibility for the town when the relevant orders are gazetted. But we recognise that the new team may need some time to fully take over the day-to-day operations. Hence, all contracts, including the managing agent contract, are transferred and the previous managing agent (MA) can continue to run the Town Council while the new management team eases in. But any future contracts will have to be negotiated under the ambit of the new team. Clearly, it will not be appropriate for the outgoing Town Council to make long-term decisions on behalf of the new team.
Mr Pritam Singh and Mrs Lina Chiam added their flavour of this politicisation of Town Councils and raised old topics like MND's upgrading projects and CIPC. Residents in Opposition wards are not excluded from the selection of upgrading programmes such as Home Improvement Programme (HIP) and Neighbourhood Renewal Programme (NRP). In our selection process —
Order. Leader of the House.
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