Teo Ho Pin: WP's transactions with FMSS raises "serious questions"

Coordinating chairman of the People's Action Party (PAP) town councils Teo Ho Pin on Thursday fired a new salvo in the ongoing town council debate, questioning the financial probity and transparency in the Workers' Party's relationship with its town council managing agent, FM Solutions and Services (FMSS).

In a hard-hitting Facebook post, he brought up the question posed by National Development Minister Khaw Boon Wan on Monday to WP chairman Sylvia Lim.

Mr Khaw had asked how Ms Lim would "characterise the FMSS transactions and if public interest has been protected".

Wrote Dr Teo: "The public deserves to know because the award of contracts worth $26 million by the WP-run Aljunied-Hougang Town Council (AHTC) to long time supporters and close business associates of WP, through FMSS, raises serious questions about public interest and transparency."

FMSS was a company formed days after the WP won Aljunied GRC in the 2011 general election and owned by a couple "who were clearly close and trusted supporters of the WP", said Dr Teo.

Mr Danny Loh and his wife, Ms How Weng Fan, had been assentor and proposer to the WP candidates who contested Ang Mo Kio GRC in the 2006 general election, he said. Ms How was also a former employee of the WP's Hougang Town Council, which was merged with Aljunied GRC after 2011, added Dr Teo.

He then raised three questions of his own:

- Mr Loh and Ms How are Secretary and Deputy Secretary/ General Manager of the AHTC. Do they draw salaries as employees of the Town Council?

- As Mr Loh and Ms How do business with the TC through FMSS which they own and profit- do they get paid twice?

- What was the need to form FMSS just a few days after WP won Aljunied GRC? If urgency was the chief consideration, as Ms Lim claims, would it not have been easier for AHTC to have employed Ms How directly and managed the town itself, just as Hougang TC had done, without having to form this for-profit company?

He also took issue with the WP's calculation of the rates charged by FMSS.

On Tuesday, Ms Lim had disputed the figures given by MND on the rates charged by FMSS and CPG Facilities Management, the former managing agent of the PAP's Aljunied Town Council. But she used only residential units in her calculations instead of MND's method of including both residential and commercial units.

"Her figures were therefore erroneous and misleading," said Dr Teo.

On Wednesday, Ms Lim issued another statement saying that even going by MND's method, FMSS' rates would still be lower than the figure cited by MND.

However, in its response on Wednesday night, MND said the total value of FMSS' three-year contract with AHTC was about $16.8 million. Divided by three years and the 57,899 units managed by AHTC, this gave a monthly rate of $8.04 per unit.

But the rate given by Ms Lim - $7.58 per unit - would result in about $15.8 million if worked backwards, leaving $1 million "missing", said MND.

While Ms Lim had said on Wednesday that the FMSS contract is staggered with yearly increases, Dr Teo said this spelled "bad news for residents".

"It means simply that their current MA rate, which is already high, will rise even higher next year," he said. By his calculations, it would hit $8 this year and $8.50 next year.