01 September 2015

Paying Friends Richly

Minister for National Development Khaw Boon Wan keeps harping on the matter of the fees paid by Aljunied-Hougang-Punggol East Town Council ("AHPETC") to its erstwhile managing agent, FM Solutions and Services Pte Ltd ("FMSS").

AHPETC is managed by The Workers' Party ("WP").

Mr Khaw alleges that the managing agent's fees paid by AHPETC to FMSS are "very rich". He questions the "motive" for such an arrangement and asks, "The point is why are they making such an arrangement to reward their supporters and friends. All I know is the outcome is a very sad one for the Aljunied residents. They end up losing money because the town council was rewarding their friends excessively, from our point of view."[1]
Mr Khaw chooses to ignore the following facts, which are in the public domain[2]:

▪ CPG Facilities Management, which was the managing agent for the PAP-run Aljunied Town Council wanted to prematurely terminate its contract with the newly formed Aljunied-Hougang Town Council ("AHTC", before Punggol East was merged into it to form AHPETC in 2013) shortly after WP won Aljunied GRC in GE 2011.

▪ Due to time constraint, AHTC negotiated with FMSS, which was majority-owned by a married couple who were long-time supporters of WP, to provide managing agent services. FMSS's rates were closer to what PAP-run town councils in Pasir Ris-Punggol and Moulmein-Kallang were paying then.

▪ No one other than FMSS bid in open tenders that were called on two occasions over four years to provide managing agent services to AHTC/AHPETC.

Perhaps, Mr Khaw knows or should find out why the companies that provide managing agent services to the PAP-run town councils did not want to bid to provide managing agent services to AHTC/AHPETC despite possibly knowing that the contracts were "very rich" contracts and the payments were "excessive", in Mr Khaw's words.

As the Minister for National Development whose Housing and Development Board has oversight of all town councils and who has or should have the interest of HDB residents at heart, shouldn't Mr Khaw have encouraged some if not all the companies that were providing managing agent services to PAP-run town councils to bid for AHPETC's business at rates lower than what FMSS was charging AHPETC, instead of sitting back and lamenting that the outcome is a very sad one for AHPETC residents because he views AHPETC as rewarding its friends excessively.

Recall what the Auditor-General wrote about National Parks Board, a statutory board under the Ministry of National Development[3]:

"AGO's test checks revealed … laxity in control over contract variations and payments by … NParks in managing the development of the Gardens by the Bay project (estimated total contract value of $1.06 billion). Consequently, there was no assurance that NParks had not spent more funds than necessary.

AGO's test checks … [revealed that] NParks had breached the Government procurement principle of open and fair competition for consultancy services contracts and there was no assurance that value for money was achieved for the services provided."

In contrast, AHPETC called open tenders but only FMSS bid.

Even if, as Mr Khaw alleges, AHPETC paid more to FMSS than the PAP-run town councils paid to their managing agents, there was nothing much AHPETC could do as no one other than FMSS was prepared to take the job.

If AHPETC offered to pay FMSS a rate similar to rates paid by the PAP-run town councils to their managing agents, would FMSS have agreed?

The only solution to the pricing impasse, if any, was for AHPETC's elected Members of Parliament to take over the managing agent's duties themselves (as they did when FMSS didn't want the job eventually). But, seriously, did the voters elect Members of Parliament or estate managers?

Finally, consider this.

Mr Khaw and his PAP colleagues claim that AHPETC paid WP's friends excessively at the expense of AHPETC residents.

The PAP Government determines how much to pay the prime minister, Cabinet members and other political appointment holders, all of whom are key PAP members. T
he prime minister's salary today continues to be the highest in the world by a wide margin, and much higher than the US president's.


1. HON JING YI and TAN WEIZHEN Khaw Asks Why WP Town Council Rewarded Friends TODAY 31 Aug 2015.

2. RACHEL CHANG The Lose-Lose Political Problem of AHPETC The Straits Times  12 Jul 2015.

3. AUDITOR-GENERAL'S OFFICE Report of the Auditor-General for the Financial Year 2014/15.


  1. I think you passed out some stuff that was reported in the papers (even if the MSM is pro PAP they cannot report lies as the facts could be easily verified.

    It is true that the previous Aljunied town council managers wanted to terminate its contract with WP but it is not clear if they asked for this termination seven days after WP won the constituency. It is however reported that FMSS was formed seven days after WP won the GRC (WP did not deny this). If FMSS was formed before the previous managers gave their notice of termination then there is something fishy.
    I think it is also wrong to insinuate that companies managing PAP town councils were not willing to work with WP due to some unseen hands holding them back even though the contract was "rich". I believe none of these companies nor PAP knew the terms and conditions between FMSS and AHEPTC of the dollars involved until much later. Perhaps some of the companies might have jumped at the chance of earning big bucks had they known that WP was willing to pay top dollars for managing the town council.
    Why should Khaw help AHEPTC find an estate manager? It is wishful thinking. No political party, whether PAP, WP or any other party would do this for an opposition. Here in Singapore or anywhere else in the world. I am also an avid followr of US politics, the greatest democracy in the world and it is a reality that the two political parties will tear each other down at the drop of a coin, even at the detriment of the country. If you yourself are a politician I don't think you would play so fair and high ground either.
    I agree that FMSS could possibly charge more than previously since the company was formed solely for this purpose and it was the only bidder, but surely not so much more? If the owners of this company are great pals of WP and ardent long-time supporters of WP, surely S Lim or LTK could have negotiated for a lower- priced contract, not necessarily as low as PAP’s. LTK is a veteran town councillor so he should know enough of this. In my view, Sylvia Lim is an ineffective town council Chairman. If she had been more diligent, this high-priced contract would not have come about which then allowed PAP to take the opportunity to slam WP. And not forgetting that Lim resigned from her teaching job to become a full-time MP - although I don't know for how long she remained a full MP. So did two of her colleagues: Lee Li Lian and Png Eng Huat who also became full time MPs (I think Chen Show Mao also). What were these full-time MPs doing? Undoubtedly they had no experience of managing a town council and also undoubtedly they didn't have an easy handover but they should have cleaned up the act 1 or 2 years later. It is now more than four years!
    I personally feel that PAP made some serious mistakes which were why I did not vote for it in 2011 but I think opposition supporters have to be fair in their criticism. WP is not faultless too.
    Do not forget also that the AGO said it could not say that there was no fraud because they simply did not have the documents to provide a clearer picture. But WP supporters kept saying there is no fraud lah because even the AGO didn't say so. This is refusing to see the truth.
    If I live in AHEPTC, I would not vote for them this time because I am disconcerted at how WP could have mismanaged the affairs and not once owed up to it. Instead they just kept justifying and blaming PAP for all the wrong and their supporters followed suit. And now they are also having problems with FMSS!

    1. Ask yourself who started all this?
      The 'unseen hand' - you forgotten AIM already?
      How is it considered 'fishy' that FMSS was formed (if indeed it was so) before the previous MA decided not to continue? You have conveniently forgotten that AHPETC has to call tender for a new MA because the existing one HAD REFUSED to carry on. Was that AHPETC's fault? That is to say, had the previous MA not withdraw its services, FMSS wouldn't have taken over. For the sake of argument, even if we assume that AHPETC had decided to start everything afresh by calling for fresh tender what was there to stop the other MA's including the previous MA (who was serving the PAP Aljunied GRC) from bidding? The very fact that NONE did, smacked of a conspiracy to derail the AHPETC. Can you give one reason why, if the previous MA was a professional group and not a partisan, it refused to tender?

      When you put together these THREE occurrences/factors:
      1. LKY threat to make the residents of Aljunied GRC regret
      2. AIM withdrawal of service from AHPETC
      3. CPG's (the previous MA) refusal to carry on under the WP

      It is impossible not to conclude that there is a obvious conspiracy by the PAP to sabotage the WP at AHPETC.

      It is my opinion that had the PAP been as honest and upright as its leaders claimed, they wouldn't have resorted to such a despicable scheme to sabotage the WP. Virtually, all the current AGO issues with AHPETC FLOWED DIRECTLY from this sabotage by the PAP.

    2. I can't recall who the previous MA was but in the corporate world a company will always deliberate if it would adversely affect its relationship with its core business partner and if it also wishes to engage with this company's competitor. A business man will always count if he can pay the costs. And if it does not want to risk its relationship with the core business partner it is its choice, not a conspiracy of PAP. To insist otherwise is make belief. And if the MA is a company owned by PAP what else doesone expect PAP to do – sure it will want out but AHPETC had the contractual legal rights to insist that a long timeframe be granted for the MA’s exit so it was silly to agree to just one month of handover.

      I already said that PAP would naturally watch WP very carefully and be quick to pick out the faults that AHPETC made so in my mind WP was too slow witted to be so careless and slack in its due diligence and that is why I have no sympathy for WP in this case. S Lim was such a let-down - she being a full time MP and chairman of the town council should have kept her eyes wide opened and not cruised along. She was NOT the estate manager, FMSS was, but surely she had to keep a close watch over FMSS to ensure that WP had something to show for in AHPETC. S Lim really tripped up.

      There would no doubt be many WP supporters who cry foul of PAP's every action but there are also people like me who would listen and read both sides and judge for ourselves what the scenario really is. And it matters little if I am called a PAP dog, boot licker or whatever if I take PAP’s side on this - I know myself to not support PAP blindly. As said I did not vote for PAP in 2011 and that was not the first time. I don't only read MSM but read up many blogs including those which curse PAP to death, including wishing LKY would die sooner rather than later. These hold little credibility. What is want is fair critique not stupid cursing and ranting (note: I am not implying you are but what I want to say that is I read both sides of the stories).

      Anyway, no point going on the topic; the phrase agree to disagree has to be applied here. Lots of people, especially core opposition supporters always talk about conspiracy on the part of PAP in every single thing. Sometimes I see conspiracies sometimes I don’t.

      Thank you.

  2. Am sorry for the missing paragraphs. I prepared the text in Word and had the paragraphing but when I cut and pasted to the blog, they disappeared.