In parliament on Thursday (6 Mar), National Development Minister Mr Khaw Boon Wan said the fee that AHPETC paid its managing agent (MA) is estimated to be S$1.6 million more a year than the PAP paid former managing agent, CPG.
AHPETC is run by the Workers’ Party, which has engaged FMSS to manage town council operations.
Mr Khaw added that while all other MA’s charge a clean rate, FMSS has a more complex scheme which appears to contain 3 components.
-a MA rate of $6.37 for residential properties and $12.80 for commercial properties under the former Aljunied Town Council;
-a separate MA fee to cover the annual staff cost of all existing staff of the former Hougang Town Council (HGTC) as per HGTC’s accounts as at 31 Mar 2011, which was $1,114,283.02 subject to adjustments, if any, based on the final audited accounts;
-and an additional MA fee to cover the costs of new staff on a full reimbursement basis.
Mr Khaw was responding to a question from Ms Sylvia Lim, Chairman of the Workers’ Party, in which she asked for the MAs for each town council from 2011 to 2013, as well as the rates charged per residential and commerical unit.
This is Mr Khaw’s full response:
Not all Town Councils (TCs) appoint Managing Agents (MAs). If they do, the Town Councils Act requires the MAs to be selected via an open market tender. Before 2014, my Ministry had not required TCs to submit their MA contracts. As we did not have the pre-2014 MA contracts, MND wrote to all TCs on Feb 27, 2015 to request submission.
Based on the submissions received, we have tabulated the requested information. The information for 2014 is included for completeness. We should highlight that all MA contracts charge a clean MA rate for each property type, with the exception of the FMSS’ 2011 MA contract with AHPETC. Unlike other MA contracts, the FMSS MA fee comprises three separate cost components:
-a MA rate of $6.37 for residential properties and $12.80 for commercial properties under the former Aljunied Town Council;
-a separate MA fee to cover the annual staff cost of all existing staff of the former Hougang Town Council (HGTC) as per HGTC’s accounts as at 31 Mar 2011, which was $1,114,283.02 subject to adjustments, if any, based on the final audited accounts;
-and an additional MA fee to cover the costs of new staff on a full reimbursement basis.
As AHPETC’s submission did not include the quantum of the three MA cost components, it does not allow MND to compute the effective MA rate for the whole TC for 2011 and 2012. However, based on the Auditor-General’s Office (AGO) report on the audit of AHPETC, FMSS’ 2011 MA contract had a contract value of $432,319.91 per month, or $5,187,838.90 for one year. This would give an effective MA rate of $7.87 per unit (without making a distinction between residential and commercial units).
