The Workers' Party (WP) has charged that the ruling People's Action Party (PAP) is using government departments to attack political opponents, as it tried to dispel concerns over the financial situation at the Aljunied-Hougang-Punggol East Town Council (AHPETC).
Speaking yesterday at the WP's introduction of candidates for the Sept 11 polls, party chairman Sylvia Lim urged voters not to make the ruling PAP stronger as the government machinery could "eat you up".
Citing a government review that found AHPETC's former managing agent FM Solutions and Services (FMSS) was "grossly profiteering" from the town council, she said: "Voters will need to pay attention to this and ask yourself whether it is in your interest and in your children's interest to feed this machinery and let the PAP become stronger.
"If you're not careful, they will eat you up as well."
The huge machinery can do so "as there are so many angles and proxies where they can come in and highlight issues to try and confuse and distract the public", she added.
The Ministry of National Development (MND) issued a statement on Saturday saying FMSS had made a net after-tax profit of $2 million after paying its directors and shareholders fees and salaries amounting to $1.14 million in FY2013-FY2014.
In the same period, the town council suffered an operating deficit of $2 million, said MND, based on an ad-hoc review by the Accounting and Corporate Regulatory Authority (Acra) on FMSS' auditor.
National Development Minister Khaw Boon Wan yesterday also weighed in, calling the FMSS contract a "very rich one". He said the company could still turn a profit after paying its shareholders and directors more than $3 million a year.
Ms Lim responded on Saturday that the MND was making "spurious statements... aimed at politically discrediting AHPETC".
Yesterday, she also said the AHPETC was being targeted for not knowing remuneration levels in the FMSS, citing that the Town Council Act introduced in 1988 was aimed at giving town councils autonomy.
This means the Government should not dictate how much a town council should pay its contractors and also not expect the town council to interfere with how profitable its contractors are or how much the contractors are paying its directors, Ms Lim said. "Looking at the recent events that AHPETC has been targeted for, I think we can see a huge deviation from the original purpose of town councils," she added.
The MND appears to be "in overdrive" to find something wrong with AHPETC before Polling Day, said Ms Lim, revealing that the ministry had informed her on Saturday morning that it was still reviewing the Acra findings.
MND had said it had to make a public statement as public monies were at stake given that FMSS was paid using service and conservancy charges collected from residents and operating grants from MND.
Speaking at the same event yesterday, Hougang MP Png Eng Huat, one of AHPETC's vice-chairmen, said its annual report for FY2014/2015 will be submitted today and will show a surplus after taking into account $7.2 million of government grants being withheld by the MND. The grants were withheld as auditors found financial lapses in the town council's accounts.
He said the surplus came about due to boosted revenue and cost- cutting measures. For example, AHPETC now buys contestable energy - or electricity under a price plan - from Senoko, saving almost $100,000 a month.
The Aljunied Town Council under the PAP had an operating surplus of $3.3 million in the 2010 financial year. The WP won Aljunied GRC and retained Hougang SMC in 2011 and won Punggol East in a 2013 by-election. AHPETC registered an annual operating surplus of $1.1 million in FY2011/2012, followed by deficits of $1.53 million in FY2012/2013, and $2.01 million in FY2013/2014.