23 May 2013

Civil Servants Should Be Politically Neutral

Sometimes, civil servants don't know how to remain politically neutral, or at least to be seen to be politically neutral.

In the 13 May 2013 Parliamentary debate on the sale and leaseback of the town council management system owned by 14 People's Action Party-managed town councils ("TCs") to PAP-owned Action Information Management Pte Ltd, Minister for National Development Khaw Boon Wan said:
"I am glad that several WP [The Workers' Party] members like Sylvia Lim, made comments expressing concerns about financial prudence and the need to ensure that TCs minimise costs in the interests of their residents.  Well... so do we, although frankly how the PAP and the WP does (sic) it may be different.  For instance, in Aljunied, the management agency rate which FMSS [FM Solutions and Services Pte Ltd] charged Aljunied-Hougang residents, we found, is 20 per cent higher than the rate charged by the former Aljunied TC’s managing agent when he was under [PAP's] Mr George Yeo.  To be precise, when it was under George Yeo, the rate was $6.51 per unit per month.  Now, it is $7.87 in FY2011 — the first contract — and then it went up to $8.04 per unit per month in FY2012.  In fact, the FMSS rate is more than 50 per cent higher than the rate for Tampines TC, which is of similar size.  Tampines TC’s rate was about $5.15 per month per unit.  In fact, it came down a little bit to $4.99 last year.  I assume the residents living in Aljunied are aware of these and find them acceptable."

The fees that TCs paid their managing agents are disclosed in the respective TCs' audited financial statements.  But the public is not in a position to compute the managing agent rate (in dollars per unit per month) because the number of residential and commercial units in each TC is not available, or not easily available.  Even if the number of residential and commercial units in each TC is known, such number changes from year to year because of new HDB flats being occupied and old HDB flats being demolished.  Furthermore, electoral boundaries — and hence TC boundaries — are redrawn at every general election.  Finally, electoral constituencies may be added to or removed from existing TCs.

But, Housing and Development Board has the information for all TCs.

However, instead of providing the public with comparative information of all rates (in dollars per unit per month) charged by the managing agents of each town council, MND bureaucrats joined the very public post-Parliament debate with The Workers' Party and Aljunied-Hougang TC with insinuations and innuendos.
For example:

Ministry of National Development[3][4] Aljunied-Hougang-Punggol East TC (AHPETC)[2][5]
EM Services was the Managing Agent for Tampines TC in FY2010 and FY2011.  In FY2010, it charged a monthly rate of $5.14 per property unit.  In FY2011, it charged a monthly rate of $5.15 per property unit.  In August 2012, an open tender was called, and CPG Facilities Management won the bid to provide MA services to Tampines TC, at a monthly rate of $4.99 per property unit.
Tampines TC’s MA rate for 2012 is $4.99 per property unit.  We understand that... 2012 was the first year in Tampines for the... MA, CPG.  Coincidentally, CPG was incumbent in Aljunied TC until 2011, and its unit rate tendered in FY2010 for Aljunied had been $6.51 (according to the government’s tables).  We do not wish to speculate why a MA would tender in 2012 at a lower rate for MA services than in 2010, given the rising costs.  However... as early as at 2007,... EM Services, had tendered at $5.75 per residential unit for Pasir Ris-Punggol Town.
We can only surmise that the Tampines TC’s MA rate of $4.99 in 2012, which was chosen for comparison, was an outlier.
Last night, AHPETC had stated that their FY2012 MA per unit rate is $7.01.  Tonight, it has amended it to $7.58.
There is no contradiction in MA rates... as MND suggests.

When we first gave our MA rate for FY2012 based on residential units, MND said our computation should be based on residential and commercial units, so we then re-computed the MA rates based on MND’s methodology, which continued to show at [worst] a 4.5 per cent increase over the PAP MA’s rate for Aljunied for 2012, not 20 per cent as claimed.
Even at the amended rate of $7.58, the MA contract value for 3 years would only be $15,799,479.  This is nearly $1 million less than the $16,752,314 declared to HDB. Where is the missing $1 million?
There is no... missing money as MND suggests.

MND unjustifiably suggested that $1 million was missing.  MND simply took FMSS’s MA rate for FY2012 for the first year and multiplied it by 3 to arrive at $15.8 million, when we had clearly stated earlier that the MA contract for the 3 years (i.e. 2012, 2013 and 2014) provided for staggered pricing, with increases in costs factored in each year.  The total contract price declared is correct at $16.75 million.  If MND is still unclear about the matter, clarification can always be sought before erroneous assertions are made.

Strangely, MND did little to refute AHPETC's statement that its MA rates for FY2012 were at worst 4.5 per cent higher than the MA’s rate for Aljunied TC when it was PAP-managed, not 20 per cent as claimed by Mr Khaw.

Civil servants are employed to serve the State and its people.  They are not political appointment holders even though they report to their political appointment holders.  They should (must) be politically neutral, or at least seen to be politically neutral.

Perhaps, they will be, if they weren't so certain who their political bosses will be after the next general election.


1. In cases in which an organisation's financial year does not coincide with the calendar year, the common practice is to refer to a financial year ending or ended on, for example, 31 March 2011 as FY2011.  The town councils, however, follow the Government's practice of referring to such financial year as FY2010.

2. ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL AHPETC/WP’s Response to Comparisons on Managing Agent Rates 14 May 2013.

3. MINISTRY OF NATIONAL DEVELOPMENT MND Press Statement on MA Rate Computation 14 May 2013.

4. MINISTRY OF NATIONAL DEVELOPMENT MND Press Statement on AHTC's Discrepancies in MA Rate Calculations 15 May 2013.

5. ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL Media Response to MND’s Comparison of MA Rates (No. 3) 16 May 2013.

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