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Vivian Balakrishnan Replies Gen Y Hawker: We Have Already Reduced Rental Costs!

redwire-singapore-vivian-balakrishnan-hawker-centre
This is the Ministry of Environment and Water Resources’s reply to a young fishball noodles seller who complained that its impossible to keep food prices low when operating costs continue to rise, first published here:

Gen Y Hawker: How to Make A Living When Ingredients So Expensive but Prices Must Stay Cheap!

VIVIAN BALAKRISHNAN: Dear Douglas, Your fishball noodles are great! I do hope that you will start a stall in Bukit Panjang.

When I came to MEWR, the first policy I changed was to restart the building of new hawker centres. This was a major change made after 26 years.

I believe that hawker centres are a unique feature of life in Singapore – where everyone can eat and socialise in an informal unpretentious place with affordable & delicious local food.

There have always been questions about rental rates. The reality is that rentals constitute a small fraction of the overall cost of running a hawker stall. The major cost drivers are actually ingredients and manpower.

There are 3 things we have done to reduce rental costs for hawkers:

(1) We increased the supply of hawker stalls by building new centres.

(2) Hawker stalls now have to be personally operated. They are not a way for landlords to make money. We did this by removing the practice of assignments and subletting. This removed speculation from hawker rentals.

(3) We abolished the concept of “reserve rent” for hawker stalls. In the past, NEA would reject tender bids which were less than 85% of the assessed market rent. NEA now accepts all valid competitive bids. Some stalls have been rented for as low as $10 a month.

Many more stalls have since been awarded at progressively lower rentals. NEA publishes the results every month and the latest results can be seen here –

http://www.nea.gov.sg/docs/default-source/services-and-forms/tender-notice/list-of-successful-tenderers—june-2015.pdf?sfvrsn=0

NTUC Foodfare is a not-for-profit social enterprise that is managing the first new Hawker Centre in Bukit Panjang. This idea came from a Hawker Centre Panel in 2012. I have made it very clear to Foodfare that they are not to charge high rents. The top priority is to have good affordable food for my residents in Bukit Panjang. That is why every stall must have at least 2 low cost main courses.

http://www.straitstimes.com/singapore/budget-fare-on-the-menu-at-new-bukit-panjang-hawker-centre

I would encourage you and all other potential hawkers to do your calculations carefully. Please do NOT bid high.

We will also be building a second hawker centre in the Senja area in the next few years. So there will certainly be no shortage of food stalls in Bukit Panjang.

Feel free to email me at Vivian.Balakrishnan@mewr.gov.sg if you need more information. Look forward to eating at your stall again!

 

 

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