Saturday 14 February 2015

Parliament Highlights - 13 Feb 2015

MPs unanimously endorse motion on audit finding lapses at Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC)

Unanimous support in House for tougher standards on TCs
But calls from ministers for WP to take action against managing agent go unanswered
By Ng Jing Yng, TODAY, 14 Feb 2015

The two-day debate in Parliament on the accounting lapses by the Aljunied-Hougang-Punggol East Town Council (AHPETC) ended yesterday the same way as it began, with fireworks and trading of barbs.

But calls by Cabinet ministers and a People’s Action Party Member of Parliament (MP) for the Workers’ Party (WP) to take concrete steps to resolve the matter, such as mounting a forensic investigation and pursuing legal action against the town council’s managing agent, FM Solutions and Services (FMSS), went unanswered by the opposition party.

Nevertheless, there was unanimous support from all the 85 MPs present — including all the WP MPs in attendance — for the motion tabled by National Development Minister Khaw Boon Wan which, among other things, called on town councils to uphold higher standards of accounting, reporting and corporate governance to safeguard residents’ interests. It also sought MPs’ support to strengthen laws governing town councils in order to “hold those responsible for their good management to proper account”.

The division bell — called by Holland-Bukit Timah GRC MP Liang Eng Hwa — was rung at the end of yesterday’s debate, which lasted about thee-and-a-half hours. In a division, the vote of each MP is collected and tabulated through an electronic voting system to ascertain whether the motion has the support of two-thirds of the total number of elected MPs. “This is a matter on which it is important for each (MP) to take a stand explicitly,” Mr Khaw said.

Wrapping up the debate, Mr Khaw expressed his disappointment with the response of the WP MPs over the two days. “I was initially cheered by (WP chief) Mr Low Thia Khiang’s declaration that WP would support the motion. I thought, finally, they have acknowledged the mess they are in and their residents can look forward to being out of the hole,” said Mr Khaw.

“But my optimism was short-lived. He went straight into a political speech, playing the victim of an unfair political world created by the Government and calling for the depoliticisation of the transition process.”

He added: “Soon after, (WP chairman) Sylvia Lim and its other MPs spoke, repeating their objections to the Auditor-General’s Office’s (AGO) findings, objections, which were rebutted explicitly by AGO and documented in the AGO report.”

The AGO audit report on AHPETC, which was made public on Monday, had found major lapses including a failure to transfer monies into the sinking-fund bank accounts as required by the Town Councils Financial Rules, inadequate oversight of related party transactions, not having a system to monitor arrears of service and conservancy charges accurately, poor internal controls and no suitable system to safeguard documents and keep proper accounts and records as required by the Town Councils Act.

Reiterating that the motion was not about “PAP versus WP”, but about the residents of the opposition wards, Mr Khaw said the WP MPs had “made light” of the AGO findings when they asserted that there was no evidence of loss of money or fraudulent activity.

This was a misrepresentation of the AGO’s conclusions, he said. “In fact, with so many documents missing and the accounts unreliable, who can be sure that there was no wrongdoing?” Mr Khaw said.

Instead of making such an assertion, Mr Low and Ms Lim should “just roll up their sleeves and do real work”, he added. Among other things, the WP leaders should start a serious forensic probe and pursue all the AGO findings, clean up the accounts and put right the flawed structure. They should also institute a robust system, discipline errant officers, get FMSS to return the money and explain the matter to residents, Mr Khaw said.

He also called on AHPETC to submit a clean set of accounts for FY2013 and FY2014 to Parliament by June 30 and Aug 31, respectively. “It can’t be just lip service, a convenient way of sliding past this debacle, to live and fight another day. Demonstrate your sincerity through real actions,” said Mr Khaw. “These are not high hurdles … Every town council has been able to do this, including those run by opposition MPs in the past. This is what supporting the motion means.”

Mr Khaw made reference to the National Kidney Foundation (NKF) saga in 2005, where monies were found to be misused by its then-CEO T T Durai. “The new NKF Board was able to sue the old board and T T Durai in the civil court. I am not sure if this may happen in the case of the town council,” he said.

Apart from Mr Khaw, Education Minister Heng Swee Keat and Bishan-Toa Payoh GRC MP Hri Kumar also urged WP to take concrete steps to get its house in order. “You can outsource work, you cannot outsource responsibility,” said Mr Heng. “The responsibility (to supervise the managing agent) lies squarely with the MPs.”

Apart from a forensic investigation, Mr Hri Kumar said WP should procure an undertaking from FMSS to make available all documents for investigations and conduct a legal suit to recover damages. “It is not enough for the WP to simply say it supports the motion. If it means what it says, it must folllow through by doing everything it can to ensure that all the questions raised in this House are answered and this mess is cleared up once and for all,” he said.

WP arrogant over lapses instead of being remorseful, says Khaw
Minister urges Workers' Party to recognise gravity of town council's situation
By Kelly Ng, TODAY, 13 Feb 2015

Throughout the two-day debate on the audit findings on Aljunied-Hougang-Punggol East Town Council (AHPETC), the Workers’ Party (WP) has been in denial and has shown no remorse for the lapses that were uncovered, charged National Development Minister Khaw Boon Wan.

Instead of acknowledging the mess they are in, he said they chose to play the victim and recycle their objections to the troubling audit findings in the House, even though these had been rebutted explicitly by the Auditor-General’s Office (AGO) report, which was at the centre of the parliamentary debate over the past two days.

“This consistent pattern of evasive behaviour gives us cause to doubt the sincerity of the AHPETC Members of Parliament (MPs) when they come to this House to declare their support for the motion and assure that they will make necessary changes,” said Mr Khaw. “I am a forgiving man and I listened very carefully to their speeches, hoping to find some dose of sincerity and genuine remorse. Sadly, I found none.”

On the contrary, the WP town councillors took a defensive stance, even showing “a certain arrogance (and) disdain” for having to address the House and answer to the AGO’s adverse findings, he added.

The report, made public on Monday (Feb 9), flagged major lapses in the WP-run town council pertaining to standards of accountability and governance, such as non-disclosure of related party transactions and failure to transfer required monies to its Sinking Fund.

Citing AHPETC vice-chair Pritam Singh’s refusal to answer specific questions directed at him by Law and Foreign Minister K Shanmugam yesterday, Mr Khaw said: “If there is no remorse, there can be no genuine acceptance that one is at fault and that one is morally if not duty-bound to make things right.”

Urging AHPETC to “come out of denial” and recognise the situation’s gravity, Mr Khaw argued that the lapses the AGO found in the town council are symptomatic of a systemic failure. How can a town council safeguard public monies, he questioned, if it does not have proper controls and a reliable record and accounting system.

All political parties aspire to run the Singapore Government. If they cannot even run a town council well, how can they be entrusted with the even more critical responsibility of running the country?“ he asked.

Given that elected MPs, as town councillors, have significant authority to set and enforce by-laws and a platform to demonstrate to the residents their ability to govern, a dysfunctional town council can have “grave consequences” for the lives of residents, said Mr Khaw.

At the core of AHPETC’s “tragic saga” is the incompetence and “murky” operations of its managing agent FM Solutions and Services (FMSS), he added. A married couple, Mr Danny Loh Chong Meng and his wife, How Weng Fan, who are AHPETC office-bearers, set up FMSS seven days after the 2011 General Election and the company was appointed without a tender to undertake estate maintenance services at precincts managed by the then Aljunied-Hougang Town Council.

Despite being paid a handsome sum — up to three times more than managing agents of other town councils, based on figures from the Ministry of National Development — it could not even administer accounts in a reliable way, said Mr Khaw. The lack of such a system creates opportunities “for crooks to make money” at the expense of residents, he added.

But beyond FMSS’ incompetence, Mr Khaw pointed to the AHPETC leaders’ dereliction of duty as the root cause of the town council’s state of affairs. “(The town councillors had) condoned this, allowed it to happen and made excuses for it when uncovered, instead of putting things right,” he charged. “Only they can unwind this mess.”

But rather than make amends, the WP MPs made light of and misrepresented the AGO’s findings by asserting that it did not find evidence of monies lost, Mr Khaw said.

“AGO pointed this out in (its report) when WP tried to put such words in the AGO’s mouth ... In fact, with so many documents missing and the accounts unreliable, who can be sure that there was no wrongdoing?”

WP’s pattern of deflection, denial betrays public trust, says Heng
Minister accuses WP MPs of lack of transparency, avoiding residents’ queries, making empty promises to gain votes
By Ng Jing Yng, TODAY, 13 Feb 2015

The Workers’ Party (WP) has betrayed the people’s trust by failing to act in the best interest of residents, by not living up to its promise and for displaying a “consistent pattern” of denial, deflection and protection of the managing agent owned by its supporters.

Education Minister Heng Swee Keat today (Feb 13) levelled these charges at the opposition party as he weighed in on the debate about the Auditor-General’s Office’s (AGO) report on the WP-run Aljunied-Hougang-Punggol East Town Council (AHPETC) — the third Cabinet minister to do so.

Mr Heng pointed out that compared to anywhere else in the country, the residents in the estates managed by AHPETC were charged the highest fees by its managing agent, FM Solutions and Services (FMSS).

He added that S$12 million were also missing from the town council’s sinking funds, which are meant for long-term maintenance work, before a partial sum was belatedly recovered. Mr Heng said residents’ well-being would be compromised further when there are insufficient funds for infrastructure repair work.

He said the WP corrected the shortfall only because it was caught.

“If not for the Auditor-General, the town councillors would have kept the residents of Aljunied, Hougang and Punggol East in the dark. Nothing is transparent,” he added.

The WP and AHPETC chairman Sylvia Lim, however, rejected the accusation. She said parts of the sum had been put back into the sinking funds before the audit began, and the calculations had taken them “quite some time”.

Mr Heng charged that the shortfall happened because the town council was “running into cash-flow problems from their profligate management, and they put off paying into the sinking fund so that they would have money to pay the MA (managing agent)”. “That is compromising the long-term interests of residents to enrich their friends,” he said.

On how the WP kept defending FMSS, Mr Heng said: “They have a consistent pattern of denial, deflection and protection of their managing agent, which suggests a serious rot is happening.”

He also cited several examples where WP MPs went back on their words. For instance, they had said they would address Parliament on the audit report, but yesterday, Aljunied GRC MP and AHPETC vice-chairman Pritam Singh said he would only answer residents on the matter, Mr Heng noted.

He also revealed that WP Non-Constituency MP Yee Jenn Jong and a group of party supporters were asked by a resident last evening about the report.

“But he didn’t answer and walked away quickly. So is this the answer Mr Singh (and) the WP promised to residents? A WP CEC (central executive council) member and his activists meet residents, and they evade the question?” Mr Heng said.

He added that the WP MPs have shown a “pattern of behaviour of saying whatever suits them for the moment”. But what was more disturbing was how the WP had made empty promises to win votes, Mr Heng said.

For instance, at the rallies during the 2013 Punggol East by-election, WP members including Mr Gerald Giam and Ms Lee Li Lian, who was eventually elected as Punggol East MP, spoke of their confidence in managing a town council. Ms Lim had also said in May 2013 in Parliament that WP MPs are “committed to being politically accountable to voters for town management under the current regime”.

Referring to WP chief Low Thia Khiang’s comments in Parliament on Thursday, in which he said the Opposition should not be expected to run town councils, Mr Heng said: “Or were Mr Gerald Giam, Ms Lee Li Lian and Ms Sylvia Lim all misleading residents when they made these speeches, that WP had no intention whatsoever of fulfilling your election promises?”

WP criticised for making ‘flimsy’ excuses for AHPETC’s lapses
Party carefully avoided assuring the House that no public funds under its care have been lost: Hri Kumar
By Ng Siqi Kelly, TODAY, 13 Feb 2015

People’s Action Party parliamentarians came out strongly against the Workers’ Party (WP) today (Feb 13) over its running of the Aljunied-Hougang-Punggol East Town Council (AHPETC) and accused it of trying to dodge blame for the lapses uncovered by the Auditor-General’s Office (AGO).

Describing AHPETC as a “house in disarray”, Mr Liang Eng Hwa, Member of Parliament (MP) for Holland-Bukit Timah GRC, took aim at the WP’s “lax attitude” in managing the town council’s sinking fund, as he echoed his party colleagues’ warning that its residents will suffer in the long run as a result.

The opposition party has also thrown up excuses instead of accounting for the deficiencies flagged in the audit, said Bishan-Toa Payoh GRC MP Hri Kumar Nair, adding that it had even tried to paint a misleading picture that no wrongdoing was found.

On the second day of debates on the AGO’s findings on AHPETC, Mr Hri Kumar slammed the WP for giving a “flimsy excuse” in saying its struggles to find a managing agent was why it appointed a company owned by the town council’s staff. Some of the other town councils have managed to run their towns themselves without a managing agent, he said.

Mr Hri Kumar also took issue with AHPETC’s responses to the AGO’s observations, namely that the mistakes and omissions detected were due to inadvertence, human error, IT system constraints and a lack of experience in dealing with certain scenarios.

“The AGO report does not by any stretch confirm ... that there has been no criminal or dishonest activity. Rather, it says that it does not know, because of the way AHPETC has mismanaged its operations,” he said, adding that the town council had failed to submit the documents required for a thorough audit.

Mr Hri Kumar also said that while WP parliamentarians have reiterated during the debate that they are for transparency and accountability, they have “carefully avoided” assuring the House that no public funds under their care had been lost, misappropriated or unaccounted for.

“I do not know if there is a statute of limitations for excuses, but they must have long exceeded it,” he chided.

The AGO’s finding that AHPETC was, on several occasions, late or short in transferring money into its sinking fund warranted concern, said Mr Liang, who also called for a division bell during voting on the motion, “given the seriousness of the issue”.

The consequences of a mismanaged sinking fund may not be seen in the short term, he added, but in time, residents will suffer as they are getting the short end of the stick.

Calling on the town councillors to carry out their fiduciary duties, Mr Liang also noted that AHPETC had “flip-flopped and reported wide swings in services and conservancy charges arrears numbers”, rendering its data unreliable.

He added that the processes in AHPETC were far from the practices expected from organisations such as town councils, which are funded by public monies and run by elected members.

“These are practices that would not even find their place in a Third-World Parliament,” said Mr Liang, in reference to the WP’s election slogan in 2011 of building a First-World Parliament.

Mr Liang and Mr Hri Kumar said members of the public had told them not to “attack” and “bully” the opposition party, but they said the debate was necessary because public monies were at stake.

“How can anyone in good conscience ignore or downplay (AHPETC’s lapses)? ... Why should the WP be let off easy just because they are the Opposition?” asked Mr Hri Kumar.

Mr Liang added: “What we are concerned about is public money and that the WP is bullying its own residents.”

Balancing financial viability with affordable fares
This is key as, if the industry is not sustainable, commuters may bear the brunt of higher fares
By Adrian Lim, The Straits Times 14 Feb 2015

WHILE fares must be kept affordable for commuters, the public transport business must remain financially viable so operators have the incentive to be efficient and productive, Transport Minister Lui Tuck Yew said in Parliament yesterday.

This is because if the industry is not sustainable in the long run, commuters may have to bear the brunt of much higher fares or it will leave the Government and taxpayers to subsidise the operations. This happened in other cities with a nationalised transport system which is not run efficiently, Mr Lui added.

She had asked why public transport operators SBS Transit and SMRT could not absorb the increase since they are profitable.

To this, Mr Lui said: "The fact is that operating buses and trains is not a highly profitable business, far from it. In fact, of all the profits that are generated, roughly about 95 per cent comes from the non-fare business and, at most, 5 per cent comes from operating trains and buses."

Non-fare business includes rental of retail space, advertising sales and taxi rental.

Mr Lui said that fare revenue and income have crept marginally above costs only in recent quarters.

Although SBS Transit's profit rose from more than $11 million to over $14 million last year - a huge gain in percentage terms - Mr Lui noted that this profit margin is about 1.5 per cent when compared against the total revenue of about $1 billion.

For SMRT, the profit margin in its last financial year was 5 per cent, he added.

Mr Lui said that besides making profit to pay a reasonable return to shareholders, operators also have to pay for future capital expenditure.

SMRT, for example, has financial obligations of about $2 billion from now to 2019, which include buying over operating assets and additional trains. This figure, Mr Lui said, is more than three times the cumulative profits the company has made in the last five financial years.

Mr Lui said there was a downside to stifling every possibility for the operators to make a profit.

"Because if they run a shoddy operation, it's very expensive... and ultimately we all bear the costs," he added.

In reply to Workers' Party chief Low Thia Khiang's point that fares would not have to go up if public transport operators were productive, Mr Lui said this was possible in theory.

But the fact is that the public transport operators, like other public and private entities, also face cost pressures, such as expectations from their employees for wage increases, he said.

Overhead pedestrian bridges to be upgraded
By Adrian Lim, The Straits Times, 14 Feb 2015

THE Land Transport Authority (LTA) plans to upgrade all overhead pedestrian bridges and cover them, including those which span expressways.

Currently, about 84 per cent of these bridges are sheltered.

Pedestrian overhead bridges that have a higher usage and those that are connected to transport nodes, such as MRT stations and bus interchanges, or linked to key amenities will be upgraded first.

He was responding to questions by Mr David Ong (Jurong GRC) on the guidelines for erecting covered overhead pedestrian bridges. Mr Ong also asked about plans to make such bridges accessible to the elderly and those using wheelchairs.

Dr Faishal gave the assurance that providing for an ageing community has always been a priority for the Government. There are currently more than 510 pedestrian overhead bridges in Singapore.

In recent years, the LTA has been working towards improving the commuting experience for pedestrians, particularly for those heading to transport nodes.

In 2013, it announced that more than 200km of sheltered walkways would be built in the next five years.

The $330 million project will significantly increase the size of the existing 46km linkway network and is designed to make sure travellers can access public transport in all weather. The new walkways are to be built within 400m of MRT stations.

Some will also be within 200m of LRT stations, bus interchanges and major bus stops.

Appeals by private property owners to buy HDB flats
By Amir Hussain, The Straits Times, 14 Feb 2015

NEARLY 40 per cent of appeals by Singapore citizens and permanent residents to buy a Housing Board flat while holding on to private property have been approved in the past two years.

Of the 1,587 appeals received, 486 came from those who owned private property in Singapore, and 1,101 from those who had property overseas.

Minister of State for National Development Desmond Lee said this in Parliament yesterday in response to questions by Mr Ang Wei Neng (Jurong GRC).

Mr Ang also asked what criteria are used in deciding an appeal.

Mr Lee replied that HDB assesses each appeal on a case-by-case basis.

"For example, if a resident has extenuating circumstances such as financial hardship and needs to buy an HDB flat while the private property is undergoing a mortgage sale - this could be a circumstance that would be looked into," he said.

Specific resources focused on cybercrimes
Police also constantly upgrading capabilities to prevent them: Iswaran
By Amir Hussain, The Straits Times, 14 Feb 2015

WHILE there is no dedicated cybercrime unit here, the police do have specific resources focused on tackling cybercrimes.

Second Minister for Home Affairs S. Iswaran said this yesterday when asked what the police are doing to prevent a further escalation of e-commerce crimes.

"Police are also constantly upgrading their cyber capabilities and they work closely with international partners and experts in order to track down persons who use the Internet to commit crimes," he said.

He added that the new Interpol Global Complex for Innovation in Singapore will also have a digital crime centre that will develop new solutions to tackle cybercrime.

Crimes involving e-commerce have risen sharply over the last three years - from 238 reported cases in 2012 to 510 cases in 2013, and 1,659 cases last year.

The increase, Mr Iswaran said, reflects the growth of online shopping transactions and greater awareness and reporting of such crimes.

While the number of reported cases has escalated in recent years, the number of arrests in relation to these cases has been relatively low.

There were 132 arrests related to e-commerce crimes from 2012 to last year.

Mr Iswaran said that this was because many of these perpetrators are based overseas and, therefore, harder for the police to track down.

"Investigations also take more time given the trans-boundary nature of such crimes, and the police need to work closely with their international counterparts," said Mr Iswaran.

The police also carry out public education campaigns to make consumers aware of the danger of scams when they shop online.

They work with the Media Development Authority, Monetary Authority of Singapore, major financial institutions and online shopping sites, among other partners, he said.

Projections not made for utility tariffs
By Jacqueline Woo, The Straits Times, 14 Feb 2015

THE Ministry of Trade and Industry (MTI) and the Energy Market Authority (EMA) do not make projections for electricity and town gas tariffs, said Second Minister for Trade and Industry S. Iswaran in Parliament yesterday.

But he said the EMA reviews both electricity and town gas tariffs on a quarterly basis to ensure that they "reflect the underlying costs of production, including fuel costs".

He was responding to a query by Mr Gan Thiam Poh (Pasir Ris-Punggol GRC), who asked how much of a reduction in electricity and gas tariffs could be expected in the next six to 12 months, given lower oil prices.

Crude prices have reached almost six-year lows in recent months as demand lagged behind rising supplies, and the impact might be reflected in the latest tariff revisions.

Mr Iswaran said the electricity tariff for January to March this year had fallen 7.9 per cent to 23.29 cents per kilowatt hour, while the town gas tariff for February to April had dropped 8.7 per cent to 19.02 cents per kWh.

He explained that the fuel cost component of electricity tariffs is based on average forward fuel oil and dated Brent prices for the first 21/2 months of the preceding quarter. It makes up about half the tariff.

The fuel cost component for town gas is based on average forward fuel oil and naphtha prices for the quarter. It accounts for about 40 per cent of the tariff.

A leg up for firms heading abroad
By Jacqueline Woo, The Straits Times, 14 Feb 2015

MORE companies are getting help in venturing overseas, said Minister of State for Trade and Industry Teo Ser Luck in Parliament yesterday.

He noted that trade agency International Enterprise (IE) Singapore has helped more than 27,000 firms expand overseas under its Global Company Partnership scheme - sharply up from 16,000 firms in 2013. About 80 per cent of the firms are small and medium-sized enterprises (SMEs).

The scheme, introduced in 2012, offers support for companies keen to build internal capabilities and gain access to overseas markets and financing.

"More companies are going overseas and, hopefully, we can reach our target of (having) 1,000 companies (with revenues above $100 million) by 2020," said Mr Teo, in response to a question by Non-Constituency MP Gerald Giam.

Mr Giam had asked about the schemes in place to help companies achieve this target.

Mr Teo noted that the goal reflects the objective of "developing a strong base of globally competitive companies to create a vibrant corporate ecosystem in Singapore, and grow the external wing of our economy".

He also pointed to other schemes such as Spring Singapore's Capability Development Grant, a financial assistance programme for SMEs in areas such as technology adoption and staff training. It is being used by more than 1,000 companies.

More flat applicants delay collecting keys
By Amir Hussain, The Straits Times, 14 Feb 2015

THERE were about 113,000 new flat bookings from 2010 to Jan 31 this year.

During this period, there were 460 requests by applicants to delay collecting their keys. The figure has been on the rise since 2010, increasing from 30 to 50 in 2011, 90 in 2012 and 2013, and 200 last year.

Minister of State for National Development Desmond Lee said this in Parliament yesterday, but he added that the increase in the number of appeals corresponds with the increase in the number of flats that were completed over this five-year period.

Appeals from first-timer applicants, he said, were mostly about four- and five-room flat types. In contrast, smaller flat types had more appeals from second-time applicants.

About three in four of the applicants who appealed have since collected their keys.

Mr Lee also said that, of the total number of bookings, about 9 per cent of the applicants, or 10,000 bookings, eventually did not complete their purchase.

Mr Ang also asked whether there was a growing number of people unable to collect their keys because of financial problems.

Mr Lee said he did not have figures for this, but added: "HDB will look at the individual circumstances of the applicant. And if they, for example, face financial hardship, we will see how best we can assist."

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