WP must investigate lapses and PAP must respect voters' choice

AHPETC was the subject of two days of Parliamentary debate which held it to account for its management lapses as spelt out in the Auditor-General Office’s (AGO) audit report.
AHPETC was the subject of two days of Parliamentary debate which held it to account for its management lapses as spelt out in the Auditor-General Office’s (AGO) audit report. ST PHOTO: KUA CHEE SIONG

AHPETC is an acronym that many Singaporeans would be familiar with after this week.

The Aljunied-Hougang-Punggol East Town Council was the subject of two days of Parliamentary debate which held it to account for its management lapses as spelt out in the Auditor-General Office’s (AGO) audit report. The audit was ordered by the National Development Minister Khaw Boon Wan, after the town council’s own auditors had for two years issued a disclaimer of opinion - that it could not say that financial statements provide a true and fair account of the town council’s financial position. The town council was also late in reporting its accounts and cyclical maintenance.

Three ministers weighed in on the issue during the Parliament sitting on Thursday and Friday.

Mr Khaw called on the Workers’ Party, which runs the town council, and its MPs to manage the town council better. He said the government will tighten laws to give it more oversight and powers over town councils.

Law Minister K Shanmugam, a former top litigator, went for the jugular when he accused the WP of running the town council for the benefit of their friends in FMSS, a company that serves as managing agent and received millions in funds to run the town council. He said the town council’s set-up - lots of self-dealing, with the same people doing work, certifying it, and approving payments to themselves - was unlawful.

Education Minister Heng Swee Keat said the WP had betrayed the trust of Singaporeans with their behaviour. It can’t even check itself, how can it hope to serve as a check on the government, he said.

The general picture painted by the People’s Action Party ministers is that of a group of WP MPs - town councillors in AHPETC - who were not just inexperienced, but also incompetent. Mr Shanmugam said they acted in breach of their fiduciary duties; all three ministers said they overpaid their friends in FMSS for services with monies taken from hardworking Singaporeans; and accused them of hedging and evading when held to account. 

The Workers’ Party of course has its own side of the story.

None of the WP MPs who spoke in Parliament denied or disputed the AGO report. They said they accepted it, had responded to it, and essentially would improve. They also supported the motion which “notes with concern” the AGO report on the town council’s lapses.

Mr Low Thia Khiang, the WP secretary-general, said the difficulty was a political one: The WP had problems getting a managing agent to run AHPETC. Two companies that took tender documents did not tender for the job. Meanwhile, WP supporters who had experience running Hougang Town Council set up a company called FMSS a week after the WP won Aljunied GRC in May 2011. FMSS was appointed managing agent to run the council. The truth was that “nobody wants to work for me, that is the problem, Prime Minister!”, he had exclaimed in Parliament on Friday.

In an earlier speech, he had said: “Under our current system, it seems to me that any opposition party which aspires to be elected in a GRC will have to build a town management team to train hundred staff officers first, then taking the advice of the Minister for National Development start shopping for an off-the-shelf accounting software.
“If an opposition party aspires to be the next government, perhaps it may need to build an army of civil servants first. This is a strange political situation for any functioning democracy to be in.”

Ms Lee Li Lian, WP MP for Punggol East, told a similar story of how companies shunned working for the opposition town council. The WP won the Punggol East by-election in Jan 2013. AHPETC was due to take over the town council from May 2013. It thus asked the handing over council, Pasir Ris Punggol TC, to call for a tender for cleaning services in March. Two established companies tendered - but withdrew when the date of the handover to the WP drew close.

“The tenderers were invited to attend the tender meeting in late April 2013, just before the handover in May. Unfortunately, representatives were sent from both companies to inform that they were no longer able to participate in the tender and would like to withdraw from the tender process. It was also followed up by written notices to the TC Chairman on their decision to withdraw without any valid reasons.

“AHPETC had no choice but to respect the company’s decision to withdraw. As the incumbent conservancy contractor was to cease their services by end June 2013, the town council then needed to quickly make a decision to invite companies to tender; otherwise no one will be clearing rubbish and cleaning lifts! This is just one of the many challenges opposition town council faces.

“On the other hand, I am pleased to note that EMSU (essential maintenance service unit) services provided by the previous contractor continued their services in Punggol East. Regardless of political affiliations, residents’ interests should always be the priority and there should not be elements of political preference or fear. It will be sad if there are elements of fear when bidding for a project in opposition TCs.” 

The PAP said the WP MPs were “playing the victim” with such charges.

They had spoken so confidently of their ability to run a large town council, boasting that they had successfully run Hougang Town Council for over 20 years, noted Mr Heng.
Yet the audit showed the town council was in a sorry state, he said.

Here, Mr Low indicated one reason why: In the past, the Housing Board in charge of public flats, provided computer and EMSU (essential maintenance service unit) services and charged town councils a monthly fee. So when the WP took over Hougang Town Council, it could have seamless maintenance and computer services continue.

This raises the question of whether, in fact, AHPETC was deprived of services critical to the smooth running of a town council after it took over, with the unrealistic expectation that it should devise a computer system, set up a maintenance structure, and get things going in 90 days.

If so, this may be a factor in why the WP did creditably with Hougang in the past, but fell flat on its face with a larger town council.

WP’s Mr Png Eng Huat (Hougang MP) for example, highlighted this issue when he said that AHPETC had to develop its own database and computer system to track payments and service and conservancy charges.

“I wish to touch on safeguarding public funds.

It is a waste of public funds for an incoming administration to develop a new computer system that does essentially the same functions as the previous system, which was also develop with public funds.

“I understand in the old days, HDB used to provide town councils with a centralized computer system. It makes perfect sense since town councils are set up to manage only HDB estates and the common areas. Who else would have the latest data on the number of flats in an estate, the types of flats, the residency status of the tenants, the amount of grant each flat should receive, when to start collecting S&CC (service and conservancy charges) and whether the unit is rented out whole or partial? All these information affects S&CC and grants.

“And such systems are not cheap to develop. The old system at Aljunied Town Council cost over $20 million, hardware and software, split among the other PAP town councils. AHPETC has spent over half a million dollars just to replicate what the old system could do and we still have a way to go. Isn’t that a waste of resources and public funds? Setting up a centralised computer system will certainly safeguard residents’ interest and money, no doubt.”

Ms Sylvia Lim, WP chairman, cited absence of economies of scale as one reason why FMSS charges the town council about 20 per cent more than other managing agents charged other town councils for managing the estate.

What are Singaporeans to make of the whole sad, sorry saga, as the PAP put it?

I think a fair-minded person following the debate cannot help but think that the WP has a lot to answer for, and that it should take the matter more seriously than its MPs appear to do in Parliament - Pritam Singh for example suggested he would answer to residents (and not to Parliament), earning a quick rebuttal from MP Sam Tan that he was an Aljunied resident and could Mr Singh please answer him.

Singaporeans may forgive an opposition party for inexperience, but not if it fails to take action on lapses; or if it comes across as shielding its own supporters. “We must not allow FMSS to profiteer from its incompetence,” said Mr Khaw. He castigated AHPETC for its poor financial accounting: “Opacity creates opportunities for crooks to make money.”

To me, the relevant questions at this point are:

- Was there any criminality in the town council’s actions (or inaction)? If so, rest assured the government will take action. Already Mr Khaw has pledged that “MND is studying what other legal recourse any aggrieved parties may have.”

- Was there a breach of civil law? Both Mr Khaw and Mr Shanmugam suggested that if the town council were a listed company, it would face civil action - and shareholders would sue or demand resignations.

- What next for FMSS? Government ministers have called on Mr Low and the WP to investigate the matter thoroughly by way of a forensic audit, and hold FMSS to account if there was any wrongdoing, and return monies unduly paid to FMSS to residents.

The episode is an opportunity for the WP to raise its game as a political party. If it wants ever to become a credible alternative to the PAP, it has to take the issue seriously and set its own house in order. If it fails to do so, it will remain in the margins as a political party good enough to attract protest votes when Singaporeans are vexed by the PAP, but not become a political party that can lead a nation and govern a country.

But the PAP too should not duck the political issues raised by the WP.

It was not too long ago that the PAP explicitly denied opposition constituencies access to government funds for upgrading or shunted them to the back of the queue. Meanwhile, anecdotal accounts of the career or business setbacks of those who have truck with opposition parties routinely make the rounds in the cocktail and kopitiam circuit.

Many Singaporeans will listen to the WP’s litany of woes with some sympathy, even if they have no patience with their repeated prevarication on their financial statements.
The PAP can dismiss such talk by the WP as politicking or playing the victim.

Or they can take advantage of the review of the Town Councils Act to put in place rules of transition, to make sure that essential services, computer systems, accounts, and all relevant matters are properly handed over when a town council moves from one political party to another, and that an incoming council is given time and every assistance for a smooth transition.

Singaporeans deserve better than a WP that ducks and evades responsibility. They also deserve better than a system that may hobble an opposition party from taking over a town administration smoothly. Voters’ choice is sovereign, and a First World government must respect that choice and accord a legitimately-elected party the respect and assistance to carry out its duties it deserves. Singaporeans deserve no less.

Opinion Editor Chua Mui Hoong blogs weekly on notable issues and commentaries.

muihoong@sph.com.sg