Town Councils

Madam, I have listened to the Minister's roundup speech and I have to take issue with his ascribing to me personal motives of pride and arrogance. Because I think nothing can be further from the truth. The reason why we raised this matter for public discussion and debate is because we want to improve things for the future. So I, definitely, do not accept his ascription of those motives to me, personally. And I would like to make a few clarifications. I have counted them; there are about eight.

The first is that Minister mentioned that I exercised my right as Chairman of the Town Council to waive a tender for the MA contract when it was first awarded after the General Election. And, of course, as he knows, under the rules, there is a provision to do so provided that you satisfy the conditions for the waiver. At that time, the reasons were recorded accordingly as in there was urgency in the public interest and, in large part, due to the termination clause present for the TCMS to be cut off. So, we needed to actually put in place an MA to handle the handover and time was running against us.

Now, the second point he mentioned was about the open tender that was called one year later. That is a fact. It is true, of course, that there were three companies that picked up the documents at that time and only FMSS tendered. Now, we realise our duties when dealing with a sole tenderer that we need to ensure value for money for our residents. So, in actual fact, we went through some due diligence and actually commissioned a special audit of that tender award. So, we have gone through a special audit in the case of awarding the tender to our MA in 2012. The auditors have in the main said that the tender was in compliance and we did take our due diligence to ensure value for money for our residents.

He quoted certain prices on property units. I will have to double-check on that because I think there may be some errors in the prices that he mentioned. But, in any case, the other contracts that he talked about were actually awarded earlier based on earlier pricing. So, inflation and so on would affect EDU pricing. So, we need to compare apples with apples. So, in actual fact, just to reaffirm, we have actually done a special audit for that.

Now, the next point that Minister mentioned was the part of my speech where I asked whether the tender to AIM was really in substance open because one of the conditions of the contract was that all of the directors needed to have Town Council experience and not just IT experience. So, the point being made there was about software companies: how many software companies really have all the directors having Town Council experience. But Minister came back to say that our MA would be such a person. But actually our MA is not a software company. They are actually an estate management company. So, it is in the context of software companies that I was asking that question.

Now, perhaps the most important clarification I should make is, he appears to suggest that the set-up of FMSS and so on was due to some preferential treatment being given by our TC management to our party supporters, as he put it.

Now, I would like to set certain facts straight. Of course, it is true that FMSS was set up after the May 2011 General Election. The landscape of that was this: one is that we all know that there are only certain companies in the market that do town management for HDB estates. I can name them as a fact: Esmaco, EM Services, CPG. We knew at that point in time that all these companies have contracts with PAP Town Councils. In fact, the incumbent MA of Aljunied requested to be released because they thought that it would be detrimental to their business interest because they were doing work for PAP Town Councils and they felt that they could not carry on working for both Town Councils.

So, it is with that landscape that we had to make a certain decision to find an MA willing to work with us in the Town Council. The set-up of FMSS was because of this very real possibility that we will be faced with nobody else to do it for us. And we stand by that to say that we acted in our residents' interest to ensure continuity because of this landscape. I am not sure why the Members in the House are laughing because I think, perhaps, they have not been in this position as we have but these are the facts.

Now, the next clarification which I should repeat is that FMSS shareholders and directors are not WP members at all. So, it is very different from AIM. As Member Denise Phua pointed out, it is not really a parallel to draw that comparison.

The seventh point is, I wonder whether the Minister can confirm his personal view about whether a termination of one month's notice for a critical IT system is reasonable. How does that not jeopardise residents' interest when you have that such clause. I would like his personal view on that.

The last clarification for now is that he mentioned, as some others have mentioned, that we are raising this issue of AIM as an excuse for our poor performance or alleged poor performance under the TCMR. He is asking why we did not raise it earlier when we knew of it earlier. As he well knows, and I have stated this publicly in the past, one reason was that we needed to take over and it is true we were busy with that, but the second thing is also that we needed the public to see the sting of the clause before they can understand how it can jeopardise the handover. So, it is a question of when it is appropriate to raise it. So, these are my clarifications for now, Madam.

Mdm Speaker, I really do not intend to go point by point because they are all related issues. FMSS transaction, I am not saying that it was wrong. The current Town Councils Act allows it. My main point was to point out, that there is no major difference in the nature of these two transactions, FMSS and AIM. Ms Sylvia Lim chose to define "party affiliation" very narrowly to refer to only party members. I am saying "no". Party affiliation is the key point. And the shareholders of FMSS, while they are not party members of WP, they are clearly strong supporters of Workers' Party. When we talk about related parties, they definitely have to come within this ambit. The point about the management agency rate and so on, we can always produce those data for her to compare.

Mdm Speaker, it was helpful to learn of all these revelations about FMSS here in this House. It would actually be quite useful to know revelations about PAP-owned companies, how many PAP-owned companies there are in Singapore, what business do they do? This is a piece of information that a lot of Singaporeans are very curious about. That has not been answered.

I am not sure whether this is the appropriate forum for it but the key instance here is, FMSS is not a WP-owned company and I think that is the point that we are stressing to the public.

The second point I would like to make in regard to this issue is the final point I made before I ended off my speech which is, in so far as the strategic review of TCs is concerned, MND should really look at directing companies fully owned by political parties not having any business dealing with Town Councils. I understand that Minister extended that to say party supporters also but that would make it really hazy because everybody goes to the polls. Somebody votes for PAP; somebody votes for WP. Nobody will be able to bid for a TC contract under that definition. So, what we are saying is political parties should be removed from having business dealings with TCs. And let us be open about it, let us be completely transparent. Both parties, PAP, WP, everybody, any party that contests. That is the first point. And I think we really have not got that assurance yet.

Second point I would like to make is with regards to some of these numbers that were going around. Well, before the WP won, the Aljunied Town Council under the leadership of George Yeo, that Town Council has the highest S&CC rates in addition to one other PAP Town Council, of any Town Council all over Singapore. The numbers ought to be looked at in a different perspective. There are other ways of looking at how much value residents are getting for their dollar. But in so far as we are concerned, Aljunied, Hougang, Punggol East Town Councils with FMSS at the helm, we will make sure that residents actually get full value for their dollar. And that is our assurance to them and we will serve them to the best of our abilities.

Mdm Speaker, the point about S&CC is precisely one of those great concerns of MND because when Town Councils for political reasons wanting to be populist and reduce fees or set low fees when they are not appropriate, they are sacrificing long-term financial viability of the Town Councils. So, that is one point.

The second point is, Mr Pritam Singh, of course, wants to define party affiliation narrowly which I disagree. We are the policy owners and we have good reasons to define party affiliation, why they cannot be so narrow as just "party-owned". And FMSS shareholders are not ordinary Singaporeans. Mr Pritam Singh said by widening this definition now, it covers the whole of Singapore. It does not. They are strong, clearly long-term supporters of the Workers' Party.

To the question about AIM and PAP companies, AIM is the only PAP company.

I had replied very indirectly in the way I handled the NUH project. If you want, there are standard software programmes available in the market. So, indeed, if it is one month, there are available software programmes which you can buy into. But in this case, the key point is not that. The key point is AIM was most willing to extend if only you asked. You did not.

Thank you, Mdm Speaker. Minister, I would just like to request that with regards to the strategic review of Town Councils that is coming up, can we have a regime which is open, transparent where residents can find out completely every single detail they need to know or want to know about the contractors that are tendering for Town Council contracts.

Thank you for the suggestion. I am sure Senior Minister of State Lee Yi Shyan will be talking to you to get more views from you.

Yes, Madam, clarification on the Minister's last but one response. He cited his experience in the hospital to say that you can always buy software off the market. But does he not agree that Town Council management software is actually customised. I do not know what other software he is suggesting can be bought off the market.

Mdm Speaker, I did not want to say this but the Member is really trying to make a mountain out of a molehill. This big name – "TCMS" – when you dive into it, what is it? These are common financial packages. Every organisation has to charge fees, has to collect revenue and there will be bad debts to deal with, account receivable, account payable and then there are purchase orders they have to settle. And, of course, out of this, you need to settle your chart of accounts so that you can put up your monthly statements for balance sheets, for your P&L, for auditing purposes. And, of course, some add in other things like human resource packages because you need to recruit staff, HR management, how many staff do you have, what grade, salaries so that you can pay payroll. All organisations have that kind of requirements and there are standard software programmes available.

I would like to ask the Minister for some clarifications. The Minister mentioned that I was the Vice-Chairman and Town Secretary and I wish to stress that I was the Vice-Chairman and Town Secretary for only a short while and not for 27 years. And also, will the Minister still consider appointing PAP advisers to RCs, even though he is not an MP?

That does not come under my purview.

Yes, Madam, I would like to ask the Minister about what he earlier said about the standard software packages that he thinks could be purchased for town management. This seems to contradict what Mayor Teo has been saying about how there was a need to look at the redevelopment options and how to make sure that things are optimised for the Town Councils. I wonder whether the Minister could explain, in this context, what does he mean? Are the PAP Town Councils wasting too much time?

It is very simple, because I made that point earlier too. If you want sophistication, if you want bells and whistles, of course, not for the fun of doing it, but because it does improve productivity and efficiency, then you have to build it up, which is what we have been doing. Please. We have been running Town Councils for 20-odd years and have so many Town Councils.

I have two questions for the Minister. One, the Minister said that the tender period was opened for three weeks and that the tenderers could seek clarifications. It was reported in The New Paper that one of the tenderers said that, "After paying more than $200, we simply got a thin stack of documents and the Town Councils were unable to provide us with more information." So, did MND interview the other four companies when they were doing the review?

The other clarification I have is that the Minister said that AIM is not an ordinary $2 paid-up capital company and it has helped to develop the TCMS systems previously. Now, this does not gel with my own personal information.

From 2000 to 2003, I happened to work with Horizon and I am pretty aware that they have a town management technology company that claimed that in November 1994, it built the town management systems entirely for the 19 PAP Town Councils.

So, I would like to seek the Minister's clarification on this part of the Report which says that AIM had built the systems. What manpower did AIM have at that point in time? What was AIM's role in the first generation system?

And, finally, just to make a point. As a person who has been in the IT industry for the last 20 years, I find the Minister's suggestions that we can just buy an off-the-shelf solution for the Town Councils' operations to be impossible.

On the point about off-the-shelf software, we have noted his comment. But my key point is that AIM did not ask to terminate, so the one-month clause was built in, it is their legal right to do so; they never intended to do so; they were prepared to extend but they were not asked, no request and, therefore, nothing happened.

On the Horizon history, honestly, I am not familiar. We are just focused on this 2010 transaction and related issues. The past, I was not involved myself, so I cannot add value to this particular comment.

What was the first point? I cannot remember now.

Okay. I thought that was already mentioned in my reply.