AHTC trial: Town councillors say they could have exercised more options on hindsight

(From left) Town councillors Kenneth Foo and Chua Zhi Hon with Workers' Party chairman Sylvia Lim at the Supreme Court on Oct 29, 2018. PHOTO: LIANHE ZAOBAO

SINGAPORE - The question of whether the appointed members of the Aljunied-Hougang Town Council (AHTC) should have done more to secure the best deal for residents in its early days took centre stage early on Monday (Oct 29), on day 16 of the multimillion-dollar lawsuit alleging that its payments, including those to a former managing agent, were improper and void.

Pressed by Senior Counsel Davinder Singh on whether he would have acted differently in 2011 to ensure the council had considered all its available options, town councillor Kenneth Foo said on the stand: "Hindsight is always the master… I believe that I could have exercised more options at that point in time, (but I acted) to the best of my ability and knowledge."

In 2011, the Workers' Party (WP) won Aljunied GRC in a general election, leading to it taking over from the People's Action Party (PAP) the running of the Aljunied Town Council and combining the town council with that of single-seat Hougang, to form the new AHTC.

Without calling a tender, it subsequently replaced incumbent managing agent CPG Facilities Management with newly formed FM Solutions & Services (FMSS), which later was also awarded the Essential Maintenance Services Unit (EMSU) contract. Again, no tender was called.

Mr Singh suggested to Mr Foo that if tenders had been called on both occasions, it would have been clear whether companies were willing to make a bid to run an opposition town council.

Mr Foo conceded that this was the case.

He had raised earlier, when cross-examined by Mr Singh, that he shared others' concerns that companies providing managing agent services to the other town councils in Singapore - which were PAP-run - would not be willing to work with the opposition council.

This, Mr Foo added, could have been because AHTC was an "outlier", and working with it might have affected the companies' relationships with their other clients.

Mr Singh countered later that if there was a competitive tender to be the agent of AHTC, and companies had placed bids, then the AHTC would have had the benefit of at least a three-year managing agent contract "on the best possible prices".

He asked if Mr Foo agreed with this proposition.

Mr Foo replied that this was "possible", to which Mr Singh replied: "The answer must be yes!"

But Mr Foo said that calling a tender could have gotten the town council a cheaper deal, but it could also turn out to be more expensive.

"It could go either way," he explained.

Mr Singh said: "But my point was, you wouldn't know unless you invite bids, right?

"Even if FMSS had been set up to provide managing agent services, as a consumer, it is always better to have FMSS bid with others, correct?"

He added: "Because that way, you have more leverage, or negotiating power, correct?"

Mr Foo agreed.

Mr Singh later asked if the way in which FMSS was first hired by AHTC would have affected the market's confidence in the council's processes, to which Mr Foo said he did not know if it would impact its confidence.

But he conceded that people might wonder why AHTC made the decisions it did, and if this was fair.

Mr Singh then put to him that towards the end of FMSS' managing agent contract a year later, a transitional arrangement between the council and FMSS had not been disclosed to the town council. He asked if this was "improper" and Mr Foo said it was.

He also eventually agreed with three propositions put to him by Mr Singh - with the benefit of hindsight.

One, he would not have left to the elected WP MPs the matter of deciding between engaging a new managing agent and taking on a system of direct management.

Two, he should have asked more questions about the options available to the town council, for the benefit of the residents.

Three, he would have questioned the decision not to call tenders for the managing agent and EMSU contracts.

COUNCILLOR HIGHLIGHTS POLITICAL SITUATION

Mr Chua Zhi Hon, another town councillor, took the stand after Mr Foo's cross-examination.

Mr Singh questioned Mr Chua about what had satisfied him regarding the waiver of the tender for AHTC's managing agent in 2011.

Mr Chua said that based on minutes taken during a town council meeting in August - which he did not attend - it was that FMSS would be taking over the managing agent job at the same rate and with the same scope of work as outgoing firm CPG.

He added that the political situation then was such that the managing agent industry was dominated by companies affiliated with the PAP. In the councillors' minds, it was necessary to get things running so residents will not face a disruption in services.

But Mr Singh said if there was enough time, and a tender had been called, these PAP-affiliated companies may have put in a bid. Mr Chua agreed.

Mr Singh said that CPG had made known its intention on June 9 to withdraw its managing agent services on Aug 1, giving AHTC close to three months, or even more, if CPG's contract was extended.

Mr Singh asked Mr Chua whether he felt the elected MPs should have "honestly" applied their minds to whether a tender has to be called, and that the best way to find out if there would be any bidders was to do a tender. Mr Chua said yes.

Mr Singh later asked Mr Chua whether FMSS had the "upper hand" because it was appointed the managing agent and EMSU provider in 2011, without a tender, and that there were no bidders in 2012, when both contracts were put up for bids.

Mr Chua agreed.

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