AHTC trial: Town council had reasons for choosing higher-priced contractors, says defence lawyer

Workers' Party chairman Sylvia Lim and secretary-general Pritam Singh outside the Supreme Court building on Oct 12, 2018. ST PHOTO: KHALID BABA
Defence lawyer Chelva Rajah sought to illustrate that the former Aljunied-Hougang-Punggol East Town Council had reasons for choosing higher-priced contractors when running the Punggol East constituency from 2013 to 2015. ST PHOTO: KHALID BABA

SINGAPORE - In 2015, the town council run by the Workers' Party chose to include Punggol East into an existing contract it had with the firm Red-Power, after the single-seat constituency's contract with another vendor expired.

Audit firm PwC later pointed out that the former Aljunied-Hougang-Punggol East Town Council (AHPETC) could have saved nearly $26,000 for a year, if they selected Tong Lee Engineering Works to do booster pump, refuse chute and roller shutter maintenance.

On Friday (Oct 12), defence lawyer Chelva Rajah said Tong Lee verbally told AHPETC that it did not have sufficient resources to take on Punggol East, and this was reflected in a sticky note by an AHPETC staff which was attached to an e-mail.

Additionally, the town council's tenders and contracts committee later decided to terminate Tong Lee because it was not up to standard, the Senior Counsel said on the sixth day of a multimillion-dollar civil lawsuit involving three WP MPs.

In citing this example, Mr Rajah sought to illustrate that the AHPETC had reasons for choosing higher-priced contractors when running the single-seat Punggol East constituency from 2013 to 2015.

But PwC partner Goh Thien Phong, whose firm looked into the financial management of Punggol East by AHPETC, said these justifications were not captured in the tender evaluation reports. His team was also not provided with the relevant supporting documents during their audit.

In 2016, the Pasir Ris-Punggol Town Council (PRPTC) appointed PwC to review past payments made by Aljunied-Hougang Town Council in relation to Punggol East.

PRPTC, which oversees Punggol East, is suing eight defendants - including three WP MPs and two town councillors - over alleged losses suffered when the constituency was run by AHPETC. Punggol East was won back by the People's Action Party in the 2015 General Election.

As to why AHPETC chose Rentokil over Pest-Pro for its pest control services, Mr Rajah said the former was more familiar with the National Environment Agency's "Rat Attack" programme, and had a more qualified team.

PwC in its report had claimed that AHPETC could have saved $2,700 in a year by going with Pest-Pro.

These considerations, among others, were captured in the minutes of a meeting the town council had and were provided to a PwC staff member, said Mr Rajah, who is representing WP chairman Sylvia Lim, secretary-general Pritam Singh and former chief Low Thia Khiang.

Mr Goh said he accepted that there was such an e-mail sent, but the staff in question has left the company.

Separately, Mr Rajah said that then chairman for AHPETC, Ms Lim, and the tender committee had also checked into whether contracts for two incumbent vendors - one for conservancy and cleaning works and another for fire protection systems - could be extended, but was wrongly advised by her contracts manager that they could not be.

They checked not once, but twice, Mr Rajah said.

Mr Goh said an extension clause is common for most service contracts with a town council. "One will exercise more caution to look at the existing contracts," he said.

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