We refer to Mr Patrick Tan Siong Kuan's letter "Won't high bids drive up hawker food prices?" (Jan 19).
In October last year, the National Environment Agency (NEA) received a bid of $10,000 for a cooked food stall at Block 32, New Market Road, but the bidder terminated the tenancy for the stall last month before operations commenced.
NEA lets out vacant stalls in hawker centres under the Hawker Stall Tender Scheme in order to ensure transparency in the allocation of stalls.
Potential tenderers can view the list of successful tender bids for the past 12 months on NEA's website, which may assist them in deciding how much to bid.
We encourage them to consider the overall overhead costs for their business when submitting their bids, and ensure that their business can be sustainable.
In 2014, a study on the possible drivers affecting hawker food prices, conducted by the Ministry of Trade and Industry, and the Ministry of Environment and Water Resources, showed that stall rentals form only about 12 per cent of total costs, while raw materials account for more than half of hawkers' operating costs.
As of Dec 31, about 86 per cent of cooked food stall holders at existing hawker centres are paying monthly rentals below $1,500.
Although rentals are not the main driver of food prices, the Government has also taken various measures to moderate hawker stall rentals.
This includes disallowing the practice of subletting or assignment of hawker stalls to prevent stall holders from engaging in rent-seeking behaviour which could drive up food prices, and removing the reserve rent in the tender of stalls.
As of Dec 31, about 44 per cent of cooked food stalls have been awarded below 85 per cent of the assessed market rent.
This policy change has contributed towards lowering costs for hawkers.
NEA is also open to new ideas to help hawkers further manage their costs, such as those from socially-conscious operators with initiatives to provide affordable meals or discounted bulk purchasing of ingredients.
Ivy Ong (Ms)
Director
Hawker Centres Division
National Environment Agency
