WP continues to mislead, says Khaw

Mr Khaw Boon Wan speaking to diners at an eatery during his walkabout in Woodlands yesterday.
Mr Khaw Boon Wan speaking to diners at an eatery during his walkabout in Woodlands yesterday.PHOTO: LIANHE ZAOBAO

National Development Minister Khaw Boon Wan yesterday rebutted remarks made by Workers' Party (WP) chairman Sylvia Lim at a rally on Wednesday on the Aljunied- Hougang-Punggol East Town Council's (AHPETC) accounts, saying of the WP: "They continue to mislead".

"I do not like to harp on AHPETC but, when facts are distorted, I think it is my duty to point out what are the facts, what are the half-truths, and what are the semi-truths," he told reporters at the People's Action Party's (PAP) Sembawang branch office.

Mr Khaw said WP has argued that there was no overpayment as it was paying AHPETC's then managing agent FM Solutions and Services (FMSS) according to the contract.

But recently, it was revealed that the town council has "been quietly trying to claw back $450,000 from FMSS" over the past few months. AHPETC has also withheld payment of some $3.5 million it owes FMSS, whose services have ended.

Mr Khaw asked: "If they have been paying in accordance to the contract, why are they suspending payment and why are they trying to claw back the money?"

He also asked why this fact was not explained at the WP rally, as the millions of dollars paid to FMSS is money from residents.

The AHPETC saga hit the headlines early this year when the Auditor-General's Office (AGO) highlighted lapses in AHPETC's governance and compliance with the law since 2011. In a parliamentary debate in February, Law and Foreign Minister K. Shanmugam accused the WP of taking "money from the man in the street to give to their friends in FMSS".

Yesterday, Mr Khaw said: "Their town council paid more than everyone else. Their managing agent made more than everyone else. Their town council lost money more than everyone else. And they say everything is OK 'because none of us are in jail'."

At the WP rally, Ms Lim had accused the PAP of spreading "four myths" about AHPETC. The Ministry of National Development (MND) yesterday issued what it said are the facts.

WP reserved contracts for friends: Ms Lim said the managing agent contract was given to FMSS because the previous agent had wanted to terminate its contract.

MND: The agent could not have terminated its agreement without the agreement of the town council.

AHPETC overpaid FMSS: Ms Lim said managing agent rates varied across town councils. The rates for FMSS took into account rates charged by the previous agent and "other additional costs".

MND: FMSS was paid 20 per cent more in 2011 than the previous agent in 2010. "Now we also know FMSS' profit margin was over 30 per cent."

FMSS issued invoices and checked its own work: WP said cheques were countersigned by Ms Sylvia Lim, Mr Png Eng Huat and Mr Pritam Singh.

MND: The AGO found lack of controls over related-party transactions with its managing agent.

AHPETC is in financial difficulties: WP said it incurred significant, but necessary, costs at the initial stages but has managed to turn things around.

MND: There have been problems with the town council's accounts for the last four years, including the most recent, which is "still qualified".

Mr Khaw also drew attention to comments made by the High Court earlier this year describing AHPETC's conduct as "the height of financial irresponsibility".

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A version of this article appeared in the print edition of The Straits Times on September 04, 2015, with the headline 'WP continues to mislead, says Khaw'. Print Edition | Subscribe