Preamble: This article aims to provide a True and Fair View of the entire episode of AIM-AHPETC issues. It might take 10 minutes of your valuable time. This article aims to present the facts and figures before you for your analysis and judgement.
AIM and the S$25 million Dollar Question? Why ?
People's Action Party (PAP) town councils had spent over $25 million dollars of residents' money to build a Management System to track payment and maintenance of town councils. The system was build by National Computer System (NCS). In 2010, a strange tender was call to sell the Town Council Management Software and lease it back, there was only 1 bidder, Action Information Management (AIM), a $2 paid up capital shell company whose three directors are former PAP MPs.
Build by NCS, Sold to AIM whom engaged NCS to maintain the System?
Political Round Tripping?
- The PAP Town Council Application Software was built by National Computer Systems (NCS) for a princely sum of over $25 million of residents' money.
- PAP has sold the rights of the entire computer software managing the Town councils to AIM Pte Ltd for a measly S$140,000 despite spending over $25 million dollars of residents' money building the system
- After securing the deal, AIM signed an agreement with PAP town councils whom will pay monthly retainer fees to AIM
- AIM then engaged NCS to maintain the system on a retainer basis
Selling $25 million worth of investment for $140,000 Yet, AIM was deemed qualified to meet the stringent criteria set by the 14 PAP town councils to be worthy of being awarded the contract to purchase the computer system for just $140,000 (where the $140,000 came from was never explained) which cost almost
S$25 million, funded by monthly S&CC collections from residents.So what real value does AIM Bring to the Table ?
AIM Pulling the Plug on WP's Aljunied GRC Town Council
When WP won Aljunied GRC in 2011, AIM terminated their contract with Aljunied GRC and pull the plug on WP's access to vital data from the Town Council software, giving WP only 1 month to migrate the data and built an entire new software concurrently.With the removal of the system, all the data had to be to manually extract, exported and manually key into the newly built software.
WP's Appointment of FMSS as Managing Agent
FM Solutions & Services Pte Ltd (FMSS) was the sole bidder for WP's tender for Adjunied GRC maintenance services. One of the reasons given by WP for engaging its managing agent, FMSS in the first place was that WP had problems finding a managing agent to run AHPETC.
In the words of WP Chief Low Thia Khiang in parliament, “Nobody wants to work for me…That is the problem, Prime Minister!”
Is the reason valid?Of course. There are a total of 16 town councils in Singapore, with 15 run by the People’s Action Party (PAP) and one by the WP. Imagine if you are a managing agent in Singapore – would you want to incur the wrath of a big client by working with its competitor?
WP's Failing - Failure to Disclose FMSS is majority-owned by husband-and-wife team, Mr Danny Loh and Ms How Weng Fan. They were both employed by AHPETC with Mr Loh been secretary and Ms How been deputy secretary and general manager of the town council. The couple are long-time WP supporters, and were assentor and proposer to the WP candidates who contested Ang Mo Kio GRC in the 2006 General Election.
It is not uncommon for party supporters or members to be hired by town councils or to be closely involved with the managing agents appointed by town councils. Mr Ho Thian Poh, who is secretary of the People's Action Party-run Jurong Town Council, is a member of the party. He is also the managing director of the town council's managing agent, Esmaco Township Management.
AGO's Finding But the Auditor-General's Office said AHPETC
did not properly disclose or manage potential conflicts of interest, leading to situations where the same individual issued an invoice for work done by FMSS, and then approved payment from the town council for that work.
Final Outcome: AHPETC in the Pink of Health
AHPETC reports a surplus for FY2014/15, taking into account the govt grant of $7.2m, withheld by the MND (All town councils - including PAP Town councils-
are in the red before receiving govt grants)
Workers' Party MP Png Eng Huat said he would leave it to the residents to decide if there had been an improvement in AHPETC and it's financial position from previous years.WP chairman Sylvia Lim said, 'Looking at the recent events AHPETC has been targeted for, we can see the huge deviation from the original purpose of town councils,' adding that 'one can only assume they (MND) are in overdrive to try to find something before polling day'. She said the report would give everyone 'updated audited information' about the town council.
Despite the release of the report, Lim said she expected the issue to be raised during the upcoming election campaign, and the WP was 'always prepared to discuss and engage it'. Referring to similar lapses in People's Association Town Council which had been flagged by the Auditor-General’s Office, Ms Lim said 'I think there is a desire, certainly in many Singaporeans, that we will have to talk about the broader national issues and where our country is going... that's the purpose of elections'
Comparing AIM to FMSS
FMSS is a registered Government Supplier under the Supply Head of EPU/SER/30 which is for the supply of Management Services such as real estate management, management of car parks, etc. FMSS Financial Category is S8 which requires a
Net Tangible Asset of $250,000 and an annual turnover of $5,000,000. FMSS also claim to have a team of more than 130 staff with individually proven track record bonded together to deliver a comprehensive service covering Property Maintenance and Management, Accounting and Finance, Contracts Administration, Lifts Maintenance, Information Technology, Public Relations and Project Management.
AIM had a paid-up capital of S$2. It didn’t have its own mailing address (its address was the same as the PAP’s headquarters’ in Bedok), it has
No office, No website, No Full time staff (except for 3 directors who are also ex-PAP MPs and 2 Part timer), No hardware, No developers. It didn’t seemed to have engaged in any businesses since its inception, and it also didn’t seem to have any experience in managing town councils or the running of any IT systems.
Prime Minister Office Ordered MND to Review AIM Transaction
In Jan 2013, Prime Minister Lee had tasked Ministry of National Development (MND) to review this transaction fully, and satisfy itself that public funds were safeguarded and NO residents’ interests were not compromised in a deal between People's Action Party (PAP) town councils and the party-owned company, Action Information Management (AIM).
In a strongly-worded response in Parliament, WP's Chairman Ms Sylvia Lim questioned numerous aspects of the AIM deal, including the terms of the tender, the nature of AIM and the one-month termination clause in the event the town council changed hands.On the tender, she stressed that no software company could have fulfilled the tender specification other than AIM, since it required all directors of the company to have town council experience. She also said there was no reason given for the need for the one-month termination clause - and added that the MND report did not address this issue.
First Thing First - Simi is a Town Council?
A Town is an area comprising any constituency. A Town Council’s role is primarily estate management such as cleaning services of the common areas, building maintenance, horticultural landscaping, electrical and mechanical maintenance and estate improvement works including provision of amenities such as covered walkways, playgrounds
The Purported Reason behind Setting up Town Council
Prior to the establishment of Town Councils, the common areas of HDB estates were maintained by HDB, in a
centralized, apolitical (politically neutral) system. The establishment of Town Councils shifted the responsibility for estate management from HDB to the Town Councils. It was deemed that although the HDB was successful in providing public housing to the local population, the standardised rules that the board had set for all housing estates made HDB towns monotonous in appearance and that HDB was slow in making decisions to address problems faced by residents and in responding to their complaints. So the decision to handover the baton of the dreary daily affairs of running to the Town Council, freeing up precious time and resources for HDB to focus on building more public housing.
The First Town Councils - Taking Over from HDB
The 1st town councils were established in September 1986, Ang Mo Kio West, Ang Mo Kio East and Ang Mo Kio South in Ang Mo Kio new town. It was perceived that under this management style, public housing estates would be less monotonous as each estate could develop a distinctive character of its own according to local conditions and the desires of its residents.This concept was put forth and spearhead by Mr Chandra Das former MP and one of the 3 director of AIM Pte Ltd.
Who are the members of the Town Council?
The elected members of parliament of that town will be members of the Town Council. The Chairman will be appointed from those elected members. The Chairman can then appoint other members to the town council, numbering not less than 6 and not more than 30, or up to 10 members per MP, whichever is greater. At least 2/3 of the appointed members must be residents of the Town, to ensure that the interests of residents are represented.
Powers of a Town Council
To fulfill its functions, the Town Council is conferred with certain powers through the Town Councils Act where the Town Council has the powers to:
- with the prior written consent of the Board, maintain facilities on or make improvements to the common property of the residential and commercial property for the benefit of residents of housing estates of the Board within the Town;
- with the approval of the Minister and the consent of the owner of the property on which the facilities are or to be erected, installed or planted, erect, install, plant, repair and maintain facilities within the Town.
- acquire and hold property of any description if, in the opinion of the Town Council, the property is necessary for the accommodation of the Town Council or for the performance of any purpose which the Town Council is permitted by this Act.
- impose charges for such use of any part of the common property as the Minister may prescribe, or for the use of any facility or service provided, or for any improvements to the common property made, by the Town Council as it considers necessary.
- appoint agents to carry out its functions under this Act or any other Act;
- accept gifts and donations whether of property or otherwise and whether subject to any special trust or not; and
FACT 2: How are Town Councils Funded?
Town Councils are primarily funded by:
- Conservancy and Service Charges levied upon every flat in any residential or commercial property, and every stall in any market or food centre of the HDB within the town, at such rates determined by the Town Council.
- Government Grants – grants are disbursed through the Ministry of National Development (MND), to the grassroots organisations. The 12 members committee which oversees the approval of funds is Community Improvement Projects Committee (CIPC) are overwhelming make up by PAP members with no opposition members representation
How are the funds used
- Town Councils are also required to set-up and maintain sinking funds to enable the carrying out of cyclical repair works
- Town Councils may borrow money to carry out its duties, or invest surplus funds in trustee stocks
8 PAP Town Council Lose S$16,000,000 in Risky Financial Products
IN 2008, eight town councils (TC) run by the People's Action Party lose $16 million of sinking funds invested in troubled structured products. The lion's share of $12 million is from Holland-Bukit Panjang ($8 million) and Pasir Ris-Punggol ($4 million). Dr Teo Ho Pin, then chairman of the Holland-Bukit Panjang Town Council as well as coordinating chairman for the 14 PAP town councils, disclosed this in response to Senior Minister of State (National Development) Grace Fu queries if whether a stricter cap on risky investments was needed.
Mr Teo further shared that the Town councils has
accumulated over $2 billion of Sinking funds from the service and conservancy charges we paid monthly ! This amount is then invested within the approved investment set by by Ministry of National Development.
Over S$2 billion of Sinking Funds - Why Collect So Much from Us ?
How are Town Councils Held Accountable?
In the case of non-payment of service and conservancy charges, the Town Councils are also empowered to recover such debts by:
- Recovering the arrears due in a Small Claims Tribunal;
- Applying to Court for a writ of seizure and sale of property belonging to the owner; and
- Imposing a charge and, upon expiry of the notice of intention to sell, dispose of the flat.
Town Councils are also required to keep proper accounts, which must be audited annually. Each year, the Town Council will also display for public inspection estimates of its revenue and expenditure and a list of works proposed to be undertaken for the next financial year. Audited reports must be submitted to the Ministry for National Development for tabling to parliament. The Ministry will then make public its concerns and observations for the benefit of the residents, and publish the Town Council Management Report so residents can keep track of the performance of their Town Council.
FACT 3: REAL PURPOSE OF TOWN COUNCIL SYSTEM
PAP's View:
There are two main reasons for setting up the town council system, as stated by Minister for National Development, Mr Khaw Boon Wan in 2013:
- Town Councils were set up to give authority and responsibility to elected Members of Parliament (MPs) to take charge of their constituents’ estate and to allow each Town to develop its own distinctive character under the MPs’ leadership.
- Town Councils, so set up, made MPs accountable to their voters for the running of the estate, as these voters can take the MPs’ performance into account when they next go to the polls.
WP's View:
Ms Sylvia Lim, Chairman of Workers' Party in response to MND's claim of Gross Profiteering (make or seek to make an excessive or unfair profit, especially illegally) by former AHPETC's agents FMSS profits in 2013. It is unfortunate that the political environment has put non-PAP town councils at a financial disadvantage due to the lack of competitive bidders. Your Ministry ought to recognise the existence of an imbalanced system and take into consideration the political reality of the situation
NMP's View
Town Councils are inherently political was evident from the outset, and it would be naive to think otherwise. While the main intent of the TC framework was to provide for the decentralisation of the control, management, maintenance and improvement of Housing and Development Board (HDB) estates,
the political consequences were even more significant.
SMU Associate Professor of Law and Nominated MP Eugene Tan
MND's ViewLife is More Complicated than Black and White. You learn to live better with ambivalence, stress and the tensions of sometimes morally difficult situations at a personal level, even though at a professional level you are supposed to be firm, decisive and clear in direction. Town Councils, in the words of M
inistry of National Development Permanent Secretary Benny Lim, “
were set up for, and fulfil a political purpose”.Your View ?
This is not a be all and end all article, to reiterate, it aims to present the facts and figures before you for your analysis and judgement. Please feel free to provide your preservative and comments for the learning and education of all electorates. As Voters we have the responsibility to vote wisely and carefully for the future of our nation and for our children. Thank you once again
Whats your view of the town council system .. feel free to comment and share. thank you :)
