Khaw Boon Wan
Singapore
“Motor vehicle dealerships and showrooms have been closed since the start of the circuit breaker. As COE bidding is done mostly by the motor vehicle dealers on behalf of prospective owners, the Land Transport Authority (LTA) suspended COE bidding for the months of April and May.”
“Though stressed by the financial pain, they press on with the immediate priority of fighting the virus and supporting essential services. Post-pandemic, we will see how public transport evolves. Will demand for public transport services simply return to the pre-pandemic level?”
“Under our rail financing framework, the Government fully pays for the cost of building new rail lines. In other words, we do not recover the cost of building the Cross Island Line (CRL) from commuters through fares. The CRL project is being implemented and the final costs will depend on tender bids.”
“There are around 5,000 private bus operators with a combined fleet of 13,500 private buses. As we do not track the number of private bus trips and passengers, we do not have data on their carbon emissions.”
“There are nursing rooms at 50% of our bus interchanges. We will provide nursing rooms at all new bus interchanges and integrated transport hubs. For the MRT network, we will provide nursing rooms at all new interchange stations. We will also explore providing such facilities when MRT stations undergo upgrading.”
“Over the last three years, Singapore carriers have reported a total of 20 incidents of food allergies on board their flights. None required the use of epinephrine or emergency flight diversions.”
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“They have statutory duties but they are also subject to national laws. Running a Town Council requires elected Members of Parliaments to govern, not just politick. Compared to the sound and fury of politicking, governing is long, tedious and unglamorous work. But good government is what secures a good life for Singaporeans, on a Page: 62 long-term, sustainable basis. Conversely, neglect of Government ultimately compromises residents' well-being. It may not show up immediately, but it will, eventually. Meanwhile, where serious problems have been identified, MND has to intervene to require the Town Council to remedy them. Mdm Speaker, beyond ensuring that our HDB estates are well run, the Town Councils Act has a wider strategic objective: to ensure that any party aspiring to form the national government of Singapore first shows that it can run a Town Council competently. This aim remains sound. That is why, despite the problems that AHPETC has run into, we do not propose taking back the Town Council's powers and having HDB run everything again, like before. Instead, we will strengthen the Town Council framework to remedy the weaknesses in it, so that elected Members of Parliament have to perform and be held more tightly to account in running their Town Councils and towns. Madam, I do not relish making this statement. Parliament should be about accountability and responsibility. Sadly, the AG's report has found the lack of accountability and failure to take responsibility on the part of AHPETC Chairman and her Councillors. I hope they will act speedily to remedy the problems. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 4.05 pm”
“This will take reference from best practices in companies and other organisations, and include spelling out the duties and responsibilities of the Town Councillors and elected Members of Parliament and the penalties if they fail to perform those duties. Third, we will strengthen MND's regulatory oversight with powers to collect information and conduct investigations and a stronger penalty framework. Currently, the Town Councils Act does not provide MND with any levers to cause Town Councils to comply, except for offence provisions in three narrow areas. MND also lacks the power to investigate irregularities or non-compliance with the Town Councils Act, as it does not have the express authority to require Town Councils to submit any information beyond the annual financial statements. So far, MND has been relying on moral suasion and Town Councils' self-declarations. For effective governance and regulatory oversight, MND requires powers to collect information and conduct investigations. This also has to be coupled with a stronger penalty framework, to enable the Government to take errant Town Councils to task for non-compliance. Mdm Speaker, how Town Councils perform matters. How our public housing estates are managed impacts public health, public safety and the quality of life for millions of Singaporeans and the value of their flats. Town Councils need competent, honest people and proper systems to serve their residents well. Good intentions and bland assurances alone are not sufficient. Elected Members of Parliament need to supervise the work of their Town Councils and their Managing Agents. While they enjoy wide autonomy, they also have huge responsibility and they are accountable to their residents.”
“After the Committee of Supply this year, MND will table a Bill to amend the Town Councils Act to tighten the current legislative framework, so as to better protect the public interest. Senior Minister of State Lee Yi Shyan has been working on this and will take the Bill through Parliament. But let me set out briefly three key areas which the amended Act will address. First, at the fundamental level, we will make clear that Town Councils are subordinate to and must comply with the authority of public law and of Government agencies charged with enforcing the law. While Town Councils are statutorily vested with the function and duty to manage and maintain common property, they do not own the common property and their powers are not unfettered. We have assumed that all Town Councils will follow this fundamental principle without needing to spell it out explicitly. But, sadly, AHPETC has proven us wrong. For example, we require all Town Councils to focus on their primary mission which is to maintain the common areas under their care. Town Councils are not set up like for-profit companies to make money. Town Councils should break-even with revenue from the S&CC collections and Government grants. Page: 61 For example, it is not their business to organise and operate trade fairs which compete with existing HDB shops as that would be unfair to the shops. That is why there are clear rules against such a practice. However, AHPETC has refused to comply with such rules, despite repeated reminders from MND and other Government agencies. Second, we will strengthen Town Councils' corporate governance and financial accountability, to ensure that Town Councils plan and use their finances in a sustainable way.”
“In fact, we are prepared to consider paying out the S&CC grants in full or, at least in half, if AHPETC could assure MND that the grants will be properly channelled to the purpose for which they are given. Page: 60 MND has asked AHPETC what measures they could institute to ensure this. AHPETC has not yet taken up MND's offer. On 12 November 2014, Ms Sylvia Lim replied MND to say that they are assessing the situation and will reply should they wish to take up the option of the half-grant. We are concerned, but we have not heard from her since then. Anyway, the earlier the AHPETC clean up the mess, the earlier we could resume payment of the S&CC grants. So, the ball is in the Town Council's court. Third, MND will address the weaknesses in the current Town Councils regulatory framework. We can no longer take the light touch and assume that all Members of Parliament running Town Councils will be responsible. We will amend the Town Councils Act to ensure that the Town Councillors, including the elected Members of Parliament, carry out their duties and, if they do not, to institute a proper system of enforcement and penalties. Regardless of which party is running the Town Council, there is a need to ensure proper systems, accountability and governance, to safeguard residents' interests. The Companies Act regulates companies closely. Boards of Directors are held to a high standard of fiduciary duties. The Town Councils Act has not and may not need to follow the Companies Act in full. But the basic need for accountability and good corporate governance must be followed and the legislative provisions strengthened as in the Companies Act.”
“Instead, what we have consistently gotten from the Members of Parliament of AHPETC is side-stepping and avoiding responsibility – first "no response", then "in due course" and then followed by a series of excuses, blaming everybody else for their failure to perform. Finally, last month, AHPETC declared that they had "embarked on a roadmap to enhance its aggregated arrears reporting module sometime in November 2014". This is their response to a problem in June 2013, 17 months earlier! Simply astounding. Clearly, this state of affairs is unacceptable. MND will follow up in three ways. First, MND expects AHPETC to follow up and remedy the problems and weaknesses listed in the AGO Report. It is already too late for AHPETC to submit their FY2013 financial reports on time. But MND expects them to submit an unqualified set of their FY2013 financial reports to MND by 30 June 2015, and FY2014 financial reports by 31 Aug 2015. These must be tabled to Parliament, just like the financial reports from all the other Town Councils. MND further expects AHPETC to deal decisively with the gross incompetence of its Managing Agent. Please do something for the sake of your residents. There has been overpayment and public funds have been affected. Will the Town Council be suing the FMSS for return of money lost? Meanwhile, MND is studying what other legal recourse any aggrieved party may have. Second, because of these serious problems, MND has withheld this year's FY2014 S&CC grant from AHPETC. The money has been put aside in a separate deposit account and will be paid out after the problems are fixed. MND is mindful that the suspension does not unwittingly result in the Town Council not being able to pay its essential services, leading to hardship for the local residents.”
“Why did AHPETC not disclose these related-party transactions and take steps to prevent the risk of abuse when the companies it gave contracts to were owned by its key officers? Third, FMSS was paid abnormally high fees. It was paid 20% more than the previous Managing Agent that ran Aljunied, 50% more than a comparable Town Council and more than any other Town Council. Why? When asked, the Town Council explained publicly that the higher rates included services which used to be contracted out, such as IT administration and maintenance, resulting in savings for the Town Council. Sounds like fair enough. But is it true? In December 2012, in response to MND, the Town Council said, "It had moved on to upscale and develop the Financial System which was in use at the former Hougang SMC". So, it is not true. And what exactly is the capability of this "up-scaled and developed Financial System"? Apparently, it could not even track and make simple monthly arrears reports. To produce the reports, the Town Council told MND that they would require "manual counting and sorting". Page: 59 Fourth, their failure to deal expeditiously with problems – S&CC arrears being a prime example. Throughout this sad saga, what are the Members of Parliament of AHPETC doing? I do not expect them to take over the job of their Managing Agent, but I do expect them to exercise close supervision and, when problems arise or issues are highlighted, to step up, take responsibility, look into them quickly and address them squarely. This is the accountability that we expect of all elected Members of Parliament or, for that matter, any company director or any member of the governing board of a charity.”
“AHPETC's Service and Conservancy Charges (S&CC) arrears reports have Page: 58 been outstanding for nearly two years. Financial incompetence aside, failure to carry out critical cyclical maintenance work is an even graver safety concern. For instance, even AHPETC's FY2013 cyclical maintenance works report which informs MND of any delays in replacing major infrastructure, was late for more than six months, incomplete and inaccurate. This is serious as it potentially impacts on public health and safety. For instance, we expect lifts to be replaced after 28 years. If the Town Council prolongs the replacement of a lift beyond the recommended operating-life, we require them to disclose it and declare that it remains in serviceable condition and has been duly certified by qualified personnel. But AHPETC does not seem to be exercised over such reporting. Each time MND officers update me on their Town Councils' submissions, it reads, "AHPETC still outstanding". Why this lack of transparency? Why are reports from AHPETC always outstanding? Second, the Town Council appointed a related party, FMSS, as its Managing Agent. As I explained earlier, the owners of FMSS are Mr Danny Loh, who became the Town Council's Secretary, and Ms How Weng Fan, Mr Loh's wife, who became the Town Council's General Manager. There were occasions where Ms How certified work done, approved the payment voucher and approved the cheque from the Town Council to her own company. The AG has found insufficient disclosure of the related-party transactions in AHPETC's financial statements and lack of evidence of safeguards to manage the conflicts of interests of related parties arising from the ownership interests of its key officers.”
“The strategic intent was to bring home to the Members that how they manage and run their Town Council will affect their electoral fortunes at the next election and, to voters, that the Members of Parliament they elect will be responsible for looking after their housing estates. This would enhance accountability, push Members to focus on what mattered to the residents and, in turn, encourage voters to scrutinise more closely the capabilities and track record of election candidates. That is why the Town Councils Act deliberately takes a light-touch approach to regulation and enforcement. However, light touch does not mean that the Members and the Councillors running the Town Council bear no responsibility and need not be held to account if the Town Council fails to perform. By law, the Members and Councillors are, ultimately, responsible for everything in the Town Council. They cannot simply delegate their responsibility away to their Managing Agent or any others. Unfortunately, throughout this saga, we have found the Members of Parliament running the AHPETC to be evasive, unresponsive and misleading. In response to legitimate queries from auditors, my MND officials, their own residents and the media, they stone-walled, deflected the queries, made false or dishonest claims, raised irrelevant excuses and sought to confuse the public with a flurry of red herrings. Let me give four illustrations. First, their lack of transparency – they failed to disclose things on time; they failed to submit reports they should be submitting. Every time we reminded them, again and again, they came up with yet another excuse. AHPETC's FY2011 and FY2012 financial statements were late and its FY2013 statements are still outstanding.”
“It was also partly due to the abnormally large fees it paid to its Managing Agent, FMSS, which was fully owned by the key officers of AHPETC. Mdm Speaker, the AG's findings confirm that something is seriously wrong at the AHPETC. They paint a picture of financial mismanagement, incompetence and negligence in corporate governance. If an auditor makes such a finding on a listed company, it will immediately cause consternation among the shareholders, and a call for the removal of the CEO and the Board Page: 57 of Directors. In Japan, the Chairman and CEO would hold a press conference and take a deep bow. And in the good old days, they may even commit harakiri. Where there are breaches of the Companies Act, both the company as well as the individuals responsible could be charged and, if found guilty, punished with fines and/or jail terms for the individuals. Even for charities, if their auditor makes such a damning finding, the Commissioner of Charities will haul up the Governing Board and key officers for a full inquiry. They will be suspended and eventually removed from their duties if the findings are borne out. They can also be charged and punished for any breaches of the Charities Act. Town Councils are not regulated under the Companies Act or the Charities Act. As I explained in this House in May 2013, Parliament decided in 1989 to give elected Members of Parliament more authority and responsibility over the HDB estates in their constituencies in order to strengthen the nexus between the residents and their elected Members.”
“While the Town Council framework is designed to give Town Councils maximum autonomy in their operations, it demands, in turn, that Town Councils account for their actions through proper accounting, governance and disclosure. AHPETC's repeated failure to do so shows a disregard for its obligation to account to its residents; and also disregard for this Parliament which the AHPETC's Chairman, Vice-Chairmen and their fellow Members of Parliament have solemnly sworn to serve in. As the accounts are unreliable, we do not know the exact state of AHPETC's financial position. Based on their published reports, AHPETC's financial position has deteriorated sharply since Aljunied Town Council was merged with Hougang Town Council in 2011. The audited Financial Year 2010, financial stake accounts at Aljunied Town Councils, had reported an operating surplus of $3.3 million. By Financial Year 2012, the merged Town Council had incurred a $734,000 operating deficit. Now, a Town Council runs a surplus if its income exceeds expenditure for that year; conversely, it runs a deficit if its expenditure exceeds income. In Financial Year 2010, the Aljunied Town Council's expenditure was less than its income and, hence, the Town Council had a surplus. But in Financial Year 2012, AHPETC's expenditure had exceeded its income, resulting in a deficit. In two years, AHPETC's income rose 14% as its population base had increased, but its expenditure had shot up disproportionately by 30%. The deterioration of AHPETC's financial position was in part due to Aljunied absorbing Hougang and its bad finances. In Financial Year 2010, before merging with Aljunied, Hougang Town Council had an operating deficit of $92,000.”
“Each year, AHPETC collects about $37 million in S&CC from residents and tenants and receives another $7 million in grants from the Government. The Town Council also manages a reserve of about $90 million, accumulated from residents' monies and Government grants over the last 25 years. Without a proper accounting system, the Town Council cannot accurately ascertain how much of the arrears is recoverable. This means that the Town Council's financial position, as reported in its annual financial statement may, in fact, be overstated. If so, the Town Council may actually get into financial difficulties without realising it. There is also no assurance that Government grants, which are taxpayers' monies disbursed to the Town Council, are being safeguarded and channelled to the purpose for which they are given. And most fundamental of all, there is no safeguard against potential mischief and loss of public monies. Fourth, the AG reported that AHPETC had no proper system to safeguard important documents and had weak accounting procedures. It did not provide key information required by its auditor and the AG. Without access to proper records, the AG, like the Town Council's own auditors, was unable to make a proper assessment of the Town Council's Page: 56 financial situation. As a result, the AG concluded that, "There can be no assurance that AHPETC's accounts are accurate and reliable". Now, Madam, a key plank of Town Councils' accountability towards their residents is via their financial accounts, which have to be audited annually by an independent auditor and tabled to Parliament. AHPETC's failure to provide information to its auditor and the AG has completely undermined the system of accountability.”
“Compounding this risk, the AG found "lapses in internal controls, which exposed AHPETC to the risk of loss of monies, or valuables, commitment to expenditure without requisite approval as well as wrong payments for goods and services". The AGO report contained many examples of such lapses, including instances of a lack of segregation of duties within the payment process for many invoices to third-party vendors. For example, "the General Manager of AHPETC certified work done as well as approved the payment vouchers and cheques", to external vendors. This was in addition to the lapses in payment to the related parties owned by the key officers that I mentioned earlier. Now, Town Councils award millions of dollars of contracts each year. Residents and taxpayers need to know that their monies are properly spent and they are getting best value for money. When these contracts are awarded to parties related to the Town Council, the Town Council needs to be upfront with its residents as well as with taxpayers at large, so that there is transparency and proper scrutiny. In total, AHPETC has close to $27 million worth of contracts with its two related parties, FMSS and FMSI. Of these, close to $6 million was given without tender. Third, the AG observed that AHPETC did not have a system to monitor the scale of its S&CC arrears accurately. "The statistics on arrears that AHPETC submitted to MND as well as AHPETC's Finance and Investment Committee were unreliable". As a result, the AG concluded that, "There is no assurance that AHPETC is able to monitor and manage its S&CC arrears properly or present an accurate picture of arrears in its financial statements".”
“Hence, it was important for AHPETC to have put in place adequate mitigating controls to manage the conflicts of interests". However, AHPETC did not properly oversee transactions with these companies owned by its key officers. The AG found that before AHPETC entered into contracts with these companies, "There was no documentary evidence that the AHPETC Town Councillors had specifically considered the ownership interests of AHPETC's Secretary, General Manager and a Deputy General Manager. These contracts amounted to about $25.9 million in total". The AG also found that, "There were control weaknesses, and lack of documentary evidence that payments to the related parties were independently verified so as to ensure that work has been satisfactorily performed and payments were fully justified and correctly computed". The report cites "instances where the Secretary and General Manager issued payment claims as owner of FMSI and director of FMSS respectively, and subsequently, the same General Manager certified these payment claims and approved the payment vouchers in her capacity as an officer of AHPETC". In other words, it is very convenient – the husband issued the payment voucher and the wife approved the payment and the wife also signed the cheque. It is all in the family. The AG concluded that, "Taken in totality, AHPETC did not adequately manage the conflicts of interest involved in related party transactions". This means that AHPETC may not have obtained the best value for the monies paid to these related parties. Or worse, there could be opportunities of wrong-doing or unethical practices which AHPETC may not be able Page: 55 to detect or prevent.”
“If it continues to miss contributions to its Sinking Fund, the residents will eventually be living in blocks where lifts are unsafe or unreliable and other infrastructures often break down. There is always the temptation, when a Town Council is financially strapped, to postpone saving, and say it will make up the shortfall later or, worse, to put its hand into the cookie jar, to draw from the savings to satisfy immediate needs. Just spend, use the savings first. Sounds appealing. But the Town Council will then be simply running down its reserves and mortgaging away the future of its residents. And that is why the Town Councils Act and Financial Rules enforce saving to pay for replacements and major repairs which have to be Page: 54 carried out in future. Second, the AG found that, "AHPETC did not disclose fully the related-party transactions in its financial statements. It also did not adequately manage the conflicts of interests of related parties arising from ownership interests of its key officers". The related parties were two companies, FMSS and FMSI, engaged by AHPETC to carry out managing agent services and essential maintenance and lift rescue services. FMSI was a sole proprietorship owned by the Secretary of AHPETC. The directors and shareholders of the other company, FMSS, were the Secretary, General Manager and Deputy General Manager of AHPETC. The Secretary and General Manager of AHPETC are, by the way, husband and wife. The AG found that, "The key officers of AHPETC, that is, Secretary, General Manager and Deputy General Manager, who had ownership interests in FMSS and, at the same time, performed a role for AHPETC in approving payments to FMSS were in clear conflicts of interests.”
“As a result of these major lapses, the AG concluded that there was no assurance that public funds are properly spent, accounted for and managed by AHPETC. Let me quote relevant sections from the AGO report to elaborate on these findings. First, the AG found that, "AHPETC had not complied with the Town Councils Financial Rules. It failed to make the required transfers to sinking fund bank accounts". All Town Councils are required by law to transfer 30% to 35% of their S&CC collections and grants received to their own Sinking Funds. These monies are the Town Councils' own savings, for the Town Councils to replace major infrastructures like lifts and to do major repairs and repainting. The transfers have to be made promptly, to ensure that the monies are safeguarded. The AG found that more than a year after the end of each financial year, AHPETC still had not transferred the full sums required for their Sinking Fund. It owed $7.9 million for the Financial Year 2011 Sinking Fund and $3.9 million for Financial Year 2012. In Financial Year 2012, AHPETC had $86 million in its Sinking Fund. Eighty-six million might seem like a lot of money. However, AHPETC has about 1,870 lifts which the Town Council needs to replace when their operating-life expires. In fact, over the next 10 years alone, it will need to replace 10% of the entire stock of lifts. This will cost $54 million, or 60% of the current Sinking Fund. So, that will leave only 40% of the current Sinking Fund for other major repairs and repainting works that also need to be done. Things can only get worse beyond that, because the bulk of the lift replacements – about 90% of the 1,870 lifts – are due after 2025. AHPETC needs to build up its Sinking Fund.”
“AG was to investigate the causes of Foo Kon Tan's Disclaimer of Opinion and ascertain the reliability and accuracy of AHPETC's financial management and accounting processes and systems. The AGO report has set out clearly its approach and its findings. It is a sad commentary on the state of affairs at the AHPETC. In summary, the AG's investigation has uncovered major lapses. It found that AHPETC had failed to take all reasonable steps to safeguard the collection and custody of AHPETC's monies, ensure adequate controls over payments and fully comply with all legal provisions relating to AHPETC's monies. It concluded that the AHPETC had no proper accounting system, resulting in the Town Council's financial statements failing to "accurately reflect the state of affairs and transactions of AHPETC". It added that "there can be no assurance that AHPETC's accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed". In other words, AHPETC's financial and accounting processes and systems are unreliable and their accounts, inaccurate. Members can read the details in the AG's report. But let me just highlight four of AGO's key findings. The AG has found that: (a) AHPETC did not transfer monies to its Sinking Fund as required by law; (b) AHPETC had inadequate oversight of related-party transactions involving ownership interests of key officers; (c) AHPETC had weak internal controls and systems to monitor payments received and made; and Page: 53 (d) AHPETC had no system to safeguard important documents or keep proper accounts as required under the law and failed to provide key information required by its auditor and the AG.”
“The Town Council's financial accounting had further deteriorated. This is a cause for serious concern. Town Councils collect substantial monthly Service & Conservancy Charges (S&CC) from their residents and their commercial tenants. Town Councils also receive large S&CC grants from MND. These are all public monies. As stewards of public funds, all Town Councils must keep proper accounts and records and maintain adequate control over their assets. Who has paid and who has not? How is the money spent? Is it properly used? Is anybody doing anything wrong? Is the Town Council solvent, being able to pay its bills on time? Does the Town Council have enough reserves in its Sinking Fund to replace major infrastructure when it is needed? For example, can the Town Council afford to replace the lifts when it is time to do so? Page: 52 These and many other questions directly affect the interests and safety of the residents. They are not trivial technical issues raised merely to satisfy the accountants or the auditors, or to meet financial regulations. Unfortunately, the observations in AHPETC's auditor's reports have raised serious questions about the reliability and accuracy of its financial and accounting systems. That is why on 19 February 2014, at my request, the Minister for Finance exercised his power under the Audit Act to direct the AG to conduct a special audit of AHPETC's accounts. This was not a routine audit. AG was to ascertain whether AHPETC had taken all reasonable steps to safeguard the collection and custody of AHPETC's monies, ensure adequate controls over payments, and ensure that all legal provisions relating to AHPETC's monies were fully complied with.”
“Their first set of reports for Financial Year 2011 was only submitted to MND on 11 January 2013, a delay of more than four months, after repeated reminders. Even then, their auditor's report was a qualified one, with the auditor making a Disclaimer of Opinion on the financial statements. The auditor listed four areas as the basis for their disclaimer. In audit terms, a Disclaimer of Opinion is a serious matter. It means that the auditors are unable to state that the financial statements provide a true and fair account of the Town Council's financial position. In response, AHPETC assured MND that they had rectified most of the observations raised by their auditor and were in the midst of rectifying the others. That was in August 2013. MND decided to give the Town Council time to resolve their issues. Unfortunately, the following year saw no improvement. Their second set of reports for Financial Year 2012 was submitted to MND on 10 February 2014, after another long delay of six months. And once again, their independent auditor, Foo Kon Tan Grant Thornton, submitted a Disclaimer of Opinion on AHPETC's Financial Year 2012 financial statements. Not only was this the second consecutive year that the Town Council's independent auditor had submitted a Disclaimer of Opinion on AHPETC's Financial Statements, but they now raised 13 areas as the basis for their disclaimer. There were nine new issues of pressing concern, in addition to four areas identified by the auditor in the previous year, which remained unresolved contrary to AHPETC's assurance to MND. The auditor also issued a qualified opinion on AHPETC's other legal and regulatory requirements, stating that AHPETC had not complied with the provisions of the Town Councils Act and Financial Rules in various respects.”
“Mdm Speaker, I beg to move, "That this Parliament: (i) notes with concern the Auditor-General's Report on the Audit of Aljunied-Hougang-Punggol East Town Council (AHPETC) (Paper Misc 1 of 2015), specifically its findings on: (a) the deficiencies in AHPETC's financial and accounting systems, record-keeping and safeguards; (b) the uncertain accuracy and reliability of AHPETC's accounts; (c) the lack of proper disclosure and oversight by AHPETC's Town Councillors, especially over related-party transactions and conflicts of interest; and (d) the risk that AHPETC has not properly managed and spent public funds; (ii) calls on all Town Councils to uphold high standards of accounting, reporting and corporate governance so as to safeguard residents' interests; and (iii) supports strengthening the legislative framework for Town Councils, in order to hold those responsible for their good management to proper account." A copy of the audit report has been circulated to Members as Paper Misc 1 of 2015. It was also released to the public on Monday, 9 February 2015. This is the first time in the history of Town Councils (TCs) that the Auditor-General (AG) has undertaken a special audit on a Town Council to look into concerns about its financial circumstances, under section 4(4) of the Audit Act. Let me explain how this came about. Each year, Town Councils are required to submit their audited financial statements, auditor's report, and annual reports to my Ministry by 31 August, within five months of their financial year closure. MND will then table the reports to Parliament. All Town Councils have Page: 51 been able to meet the submission deadline, except AHPETC. AHPETC have not submitted their reports on time ever since their formation in 2011.”
“Madam, in this instance, there was no question of a lack of transparency. The site was clearly marked out as a temple. In fact, for completeness, the HDB put in a footnote to indicate that there may be a columbarium. We cannot assume that the temple will build a columbarium. I am closely associated with three temples which I visit quite regularly. Out of the three, two have a columbarium service. It is not all three; and not all zero. Some do and some do not. Even for this new temple that will eventually crop up when we re-tender, we will not know yet if they want to put up a columbarium service or not. We cannot make that assumption. But I think the unhappiness of the residents over the last few weeks was that they thought we were going to allow a commercial columbarium to be built there. And this is quite a different entity from an incidental columbarium service.”
“Madam, as I said earlier, the review was meant to look at larger issues and various aspects have cropped up. Shortage of land for PWs is indeed a real issue, because Singapore, unfortunately, is very handicapped as far as land is concerned. That is why in recent years, we have allowed existing PWs to intensify their land use so as to be able to meet the greater demand that they are now facing. We have reserved enough sites, but there is a need to intensify land use. We will bear the Member's points in mind.”
“Certainly, out of this incident, we have learnt some lessons, which Mr Seng also asked about just now. But as I have said, for a quarter of a century, we never had a for-profit company taking part in such temple tenders. Therefore, it never crossed the minds of the officials evaluating the tender. But it is not too late to unwind the situation. Assoc Prof Fatimah Lateef (Marine Parade): Mdm Speaker, I would just like to ask about the issue of temples and religious organisations. Some of the temples and religious organisations in my constituency have bidded for a long time and have waited many years, but they have no choice and their hands are tied. Since there is a review ongoing, can the Minister ensure they also look at the extension of lease for some of these religious organisations as well, and perhaps update us at the relevant time?”
“Yes, that is the intent. We are in discussion with the company to see how we can restore this site to its original purpose. Their plan and our plan do not coincide. We are in discussion; I do not want to go into too much detail here. But we will find a way to restore this site to its original intent.”
“Er Dr Lee Bee Wah: Mdm Speaker, my first question earlier was since the company that tendered for this site is not a temple or a company set up by the temple, will the Ministry disqualify this tenderer and recall the tender, so that the temples, especially the smaller temples can take part in the tender and make it more affordable? Many say that if you allow the commercial company to tender such land, it would drive up the bid price and the smaller Page: 15 temples have difficulty in getting land.”
“Mdm Speaker, as I have said, this is a case where, for many years, the tenders are open to commercial companies without problem. The assumption is that the companies are affiliated to some religious organisations and are a convenient vehicle for the religious organisations to take part in a tender and to execute a project. In fact, some of us recall that the request to include commercial companies came from the religious organisations because some of them found it more convenient to do so. Because temples and churches are non-profit making, we just assume that profit-making companies would not be taking part in a non-profit making venture. That is how it came about. Mr Seng Han Thong would know a very popular Chinese opera – Butterfly Lovers. It was in an era of old China when girls, unfortunately, were not allowed to join schools. But there was this young and beautiful talented lady, 祝英台, who wanted to study. So, she disguised herself as a boy and succeeded in attending the school for three years. The classmates just assumed that girls would not turn up. In hindsight, they asked why they did not suspect. They had noticed that the student looked a little girlish, but just brushed the thought aside as it would be too incredible. And "he" turned out to be a girl. It is a similar situation here. The officials assessing the tender assumed that it must be a company affiliated to some religious organisation. Because they made the highest bid, it was awarded to them. But as I have said, we will find a way to forge a middle path forward. The key point is we will restore the planning objective.”
“Mdm Speaker, as I have indicated, a review is on-going. In fact, the review has been going on for several months. There are different kinds of religious organisations – a church's needs and a temple's needs can be quite different. We have done many rounds of consultation and the consultation will continue to see how best to tighten some of these tender rules to achieve our planning objectives. If we want a temple, we really get a temple, and not a commercial columbarium cropping up out of the blue. The review is ongoing. The reason that triggers the review was not this incident in Sengkang. It was that we have got quite a bit of feedback from some of our temples and churches. When they take part in a tender, they often lose out to some other bidders whose congregation is much smaller and who already own an existing place of worship. So, they asked if the Government could build in additional criteria to ascertain needs rather than to simply award the tender to whoever has the deepest pocket. Often, the latter also has external links, being foreigners. Page: 14 And with deep pockets, they were more able to win the tender. That was what triggered the review. As Members know, it is not easy to assess needs, especially when different kinds of religious organisations are involved, but we will find a way. We will seek religious wisdom. We will meditate on it.”
“It is not necessary. We already do it as our Standard Operating Procedure (SOP).”
“As Mr Seng Han Thong pointed out, temples like Kong Meng San Phor Kark See Monastery and Fo Guang Shan also provide a columbarium service. I visit Fo Guang Shan occasionally and I am impressed with their careful planning of the columbarium. Most temples hide them in the basement, so, it is dark and gloomy. But in this instance, they put it on Level 3 or 4. With sunlight coming in, it is bright and when you walk in, you do not feel uneasy about the Page: 13 columbarium. In other words, there are ways to provide a good columbarium service without causing any kind of disamenity. I hope that answers the Member's queries.”
“Mdm Speaker, I thank the Member for the questions. One take-away for me from this episode is that times have changed and some of our tender procedures have not caught up with time. For example, for over 20 years, we would never have thought that a for-profit company would participate in a non-profit making venture like building and owning a Chinese temple. In this instance, the motivations of the successful bidder are very different. But having reached such a situation, I will find a way to try and unwind this. The key point is, for that Sengkang site, we want a Chinese temple; and we will deliver that. For that Sengkang site, we do not want a commercial columbarium; and we would not have one. Members can be assured about this point. As for reservation of PW sites, they are clearly marked in our Master Plan. Every five years, we review the Master Plan and when adjustments are needed, we publish those proposals and seek public consultation before we confirm them. So, there is full transparency. Likewise, HDB's BTO brochures are very clear. In this instance, for example, that the site would be reserved for a Chinese temple was clearly marked. There was no ambiguity about that. But I can understand some of the residents' unhappiness because of the possibility that there will be a commercial columbarium cropping up in their neighbourhood. I think those concerns are legitimate and reasonable. We make a strong distinction between a commercial columbarium and an incidental columbarium service which is provided by temple or church. I remember that in Er Dr Lee Bee Wah's constituency, there is a church which has an incidental columbarium service.”
“HDB awarded the site to EPL, under the impression that the company is a vehicle for a religious organisation to build and own a Chinese temple. We will ensure that the land is restored to the original plan of a Chinese temple. We are in discussion with EPL on how this can be achieved. The intent of a Chinese temple was clearly stated in the Master Plan and the HDB's marketing brochures for their BTO flats there. Many temples provide an incidental columbarium service for their members and devotees. Whether the eventual temple in Sengkang will also provide such a service is a decision for the temple trustees to make. But to minimise disamenity to residents, there are clear URA planning guidelines for such ancillary facilities. Late last year, we launched a review to improve our land tender process for places of worship, for example by tightening eligibility requirements for tenderers. We have been engaging religious groups on the review. The Sengkang temple case has highlighted the necessity for such a review. I will provide more information when the review is completed.”
“Places of Worship, or PWs, serve the spiritual needs of our people and are essential community facilities. That is why the Master Plan has reserved and zoned specific land sites for PWs to be built. We tender out such sites to meet new demand and invite religious organisations to bid in such tenders. We have also opened such tenders to participation by companies. This is because some religious organisations form companies to enable and facilitate their ownership and development of such PW sites. This has been the practice since 1991 – that is some 24 years ago -- when state lands were put up for tenders for PW use. The assumption is that only companies affiliated to religious organisations would participate in such tenders. Page: 11 For each tender, the highest bid among eligible bidders will win, as this is a fair way to allocate the site. Since 1991, seven sites have been won by companies, all affiliated to religious organisations. Until the recent case of the Chinese temple site in Sengkang, the Government has never awarded a PW site to a company that is not affiliated to a religious organisation. We now understand that the winning tenderer for this site, Eternal Pure Land Pte Ltd (EPL), is actually a private company without any religious affiliation. From what we know, the plan of the company is to run a commercial columbarium on the site. This is not in line with our plan for the PW site at Sengkang. The Master Plan sets aside and provides sites for private columbaria. We have occasionally tendered such sites as "columbarium", but not as "place of worship". The tender documents are differently worded. The Sengkang site is not intended for a commercial columbarium.”
“Mdm Speaker, may I have your permission to take Question Nos 1 to 3 together?”
“The rates are based on the unladen weight of the van. Those below 1,800 kilogrammes in unladen weight can be parked in normal car lots at the season parking rates for cars. Heavier vans are not allowed to be parked there for safety and environmental reasons. However, HDB exercises some flexibility and has allowed some drivers to use the residential car parks if the van can fit within a standard car lot and does not obstruct or endanger other car park users. They will be charged the heavy vehicle season parking rate. Page: 105 For passenger vans that are unable to fit within a standard car lot or are unable to park within multi-storey car parks due to height or weight limits, their drivers will have to park them in heavy vehicle parking lots. There is a range of heavy vehicle season parking rates depending on the location of the parks. For a similar type of locations, the rates levied by HDB and URA are largely similar.”
“The National Parks Board (NParks) has built about 240 kilometres of park connectors, which will continue to grow. Due to their extensive nature, amenities, such as benches, shelters, fitness equipment and toilets, are provided at selective sites where they can better serve park users. For existing park connectors, NParks is currently working to improve the signages that direct visitors to the nearest toilet facilities, such as those located at nearby shopping malls, food centres and petrol kiosks. These signages are currently placed at strategic spots, such Page: 102 as the junctions of the cycle tracks and gathering points. Where toilet facilities are not available within close proximity to the park connector, NParks will study the feasibility of putting in such facilities, such as where pockets of spaces are available. Going forward, the new Round Island Route development, which is an expansion of the Park Connector Network, will also incorporate toilet facilities at appropriate locations. Page: 103”
“The Building and Construction Authority’s Building Control Regulations stipulate that in buildings with lifts, at least one lift has to be designed to allow the access of wheelchair users with a minimum internal lift car dimension of 1.2 metres by 1.4 metres. In practice, the lifts in newer Housing and Development Board residential blocks are larger than 1.2 metres by 1.4 metres, and can accommodate a wheelchair or an ambulance stretcher in an inclined position. The Building Control Regulations do not require the lifts to fit stretchers in a flat-lying position. Currently, about 15% of lifts in HDB residential blocks can accommodate a wheelchair, but not an ambulance stretcher in an inclined position. But in most of these blocks, there will be some lifts which are big enough to do so. Enlarging the lifts beyond what is stipulated in the Building Control Regulations is constrained by the size of the existing lift wells.”
“The Housing and Development Board (HDB) provides up to two concessionary rate loans to eligible flat buyers, with interest rate at below market rates over the long term. Under exceptional circumstances, HDB may grant a third housing loan, but it will then be at the market rate. Typically, this is for those who are in urgent need of housing but, due to poor credit records, are unable to secure a bank loan even though they have a steady income. Providing a third housing loan at a higher rate is to discourage churning of resale flats. However, for genuine hardship cases, HDB may help with a concessionary rate loan, if the case merits such consideration. Page: 101”
“In addition, the Environmental Public Health Act requires construction sites of contract sums exceeding $10 million to employ an Environmental Control Officer to anticipate and eliminate situations which could result in environmental health problems, for example, mosquito breeding. The Building and Construction Authority (BCA) and NEA regularly share good practices with the industry through seminars. BCA has also put in place the Green and Gracious Builders Scheme to promote environment protection during construction and to recognise contractors who do so. Residents can provide feedback on building safety to BCA and on environmental health issues to NEA through their hotline numbers which are displayed on signboards at the construction sites. And if the contractor flouts the rule, the contractor could be fined or prosecuted in Court under the specific laws.”
“It is the duty of the contractor overseeing the construction site to ensure the construction has minimal impact on the residents. There are regulations in place to minimise the health and environmental impact of construction. Under the Building Control Regulations, prior to project commencement, the contractor has to carry out a pre-construction survey to assess the existing conditions of the buildings and structures which are in close proximity to the building works. This survey would be used to determine whether the construction works have affected the surrounding properties. During project implementation, the Building Control Act requires contractors to erect protective hoarding around the site boundary to prevent construction debris from posing a hazard to the public and the environment. Measures must also be in place to minimise any soil movement which could affect the environment. For construction works that cause vibrations, the contractors have to ensure the vibration level is within the recommended limits based on international standards and practices. These are specified in the Code of Practice. Contractors must comply with the maximum permissible noise levels regulated by the National Environment Agency (NEA). To meet these noise standards, contractors could put in place measures, such as setting up noise barriers. In addition, NEA imposes the no-work Page: 99 rule on Sundays and public holidays on construction sites that are located near residential and noise-sensitive premises, such as hospitals.”
“Last year, there were 136 registrations of events in the Speakers' Corner. The corresponding figure for 2013 was 169. Page: 20 The National Parks Board (NParks) took over the administration of the Speakers' Corner from September 2008. For the whole of 2009, the corresponding figure was 129. The regulations governing the use of Hong Lim Park have worked well over the years, with no untoward cases until the incident of 27 September last year. As legal proceedings against certain persons related to the incident are still ongoing, it is not appropriate to comment on whether there is a need to review the regulations over the use of Hong Lim Park.”
“Madam, indeed, other HDB initiatives, like HIP, will contribute to the deficit of HDB. But the single biggest ticket item in our deficit is the subsidy and housing grants under the Home Ownership Programme. For upgrading, as we ramp up some programmes, there are other upgrading programmes which we are ramping down, for example, LUP, which is a big $5 billion project. How do we finance it? HDB operates under what we call the deficit financing model. So, whatever the deficit is for the year, we receive a grant from the Ministry of Finance (MOF), so that, in the end, we will balance our account. That grant is reflected in the overall Government Budget for the year, which we debate during COS. Was the almost $2 billion deficit expected? Yes, it was expected because as we ramp up the numbers – 25,000 homes – you should expect that the deficit will grow accordingly. But going forward, I do not see us building 25,000 units per year for a long time. In fact, this is already Year Four, and we have started the process of tapering it down for the simple reason that the number of family formation is not of that order. While I hope even more Singaporeans will get married and have larger numbers of babies, I do not see that happening in the near future or the medium term.”
“Madam, the Housing and Development Board (HDB)'s deficit is the outcome of Government policies to provide Singaporeans with good, affordable public housing and quality living environments in HDB towns. HDB's deficit is largely due to the subsidy extended to buyers of new flats and the disbursement of Central Provident Fund (CPF) housing grants to eligible buyers of resale flats. The spike in HDB's deficit in Financial Year 2013 (FY2013) was due to HDB's ramp-up in its flat-building and upgrading programmes. The deficit will remain high in the next few years, as flats launched in the ramp-up phase are progressively completed and handed over. For future years, the deficit level will depend on several factors, such as housing demand, policy changes, HDB's building and upgrading programmes, as well as development costs. HDB will continue to use its allocated resources judiciously to provide affordable and quality homes for Singaporeans.”
“The six-month period is generally sufficient for flat owners to arrange for the sale of their existing flat, as they renovate their new flats and move in. This is especially if they start planning once they book a new flat. For those who need more time to sell their flats due to special circumstances, HDB will assess each request based on the merits of the case. Page: 144”
“Owners of new Build-to-Order (BTO) flats will begin paying the service & conservancy charges (S&CC) to their Town Councils from the day they complete their flat purchase and collect the keys to their new flat. This is because this is the date that they assume complete ownership of the flat. Prior to key collection, HDB pays for the S&CC for the vacant completed units. Under the Town Councils Act, Town Councils are empowered to vary the S&CC from time to time or remit or refund the charges in whole or in part. Town Councils can decide if the S&CC can be waived or reduced during the period when the flat remains unoccupied. However, if the Town Council does so, residents of occupied flats would effectively be subsidising the unoccupied flats.”
“The stretch of green space between the Bukit Timah Railway Station and the foothills of Bukit Timah is part of the Rail Corridor, which once held the Malayan Railway track. We are actively engaging Singaporeans on how the Rail Corridor can be developed as a unique public space that connects people and communities, including nature lovers and exercise enthusiasts. In other stretches of the Rail Corridor, where large areas of adjoining land are suitable for development, we will, nevertheless, preserve a continuous green corridor from the Woodlands Railway Station to the former Tanjong Pagar Railway Station. As for the stretch along Old Holland Road where the deepening of the tributary canal is taking place, it is not part of the Rail Corridor. It abuts mainly residential land. We have plans to replant trees along the northern bank of the canal after the canal has been widened. We are also studying how a park connector along the southern banks of the canal can be provided. Page: 143 While both these areas are still subject to detailed study and planning, the agencies will work together to ensure that any future developments will be integrated with green spaces.”
“Plans are ongoing to establish Coney Island as a rustic regional park with recreational facilities amidst rehabilitated coastal beach vegetation. Under "The Ubin Project", various agencies are working closely with and consulting the public extensively on ways to enhance Pulau Ubin’s natural and rustic charm for future generations. Several initiatives, such as shoreline restoration, habitat enhancement, species recovery and a new centre for education and research, will be progressively implemented over the next few years.”
“Greening has always been a key strategy in our planning and development of Singapore. This is because we see the value of greenery in improving the quality of life for our people. It also beautifies our city. Implementing it requires a whole-of-Government approach. Planning for greenery is, therefore, a closely coordinated effort involving multiple agencies. Today, we have set aside close to a tenth of our land for Nature Reserves and parks. For a small nation, this is a significant commitment. Given our land constraints, we have sought practical and innovative solutions to safeguard sufficient green spaces and integrate greenery and biodiversity into our urban environment. These comprise our Nature Reserves, Nature Areas, parks, Park Connectors, street-side planting, greenery along our waterways and skyrise greenery. Green spaces are safeguarded in the Parks and Waterbodies Plan under URA's Master Plan. In the 2014 Master Plan, a key focus is to provide more green spaces and to improve accessibility to them. To enhance liveability, we aim to have 90% of our residents living within 400 metres of a park by 2030. To enable our residents to enjoy the benefits of nature, Page: 142 we will be developing 180 kilometres of Nature Ways and 400 kilometres of Park Connectors, including 150 kilometres of the Round Island Route, by 2030. The Rail Corridor will be retained as a continuous green corridor and public space that connect people and places. We will also be adding new nature parks with lush vegetation and these include Chestnut Nature Park, Windsor Nature Park and Thomson Nature Park. We also value the natural heritage of our coastal and marine areas. We have set up the Sisters’ Islands Marine Park for the public to enjoy the rich marine life there.”
“There are 304 veterinarians licensed by the Agri-Food & Veterinary Authority. Among them, 219 are in small animal practices, looking after pet animals, such as dogs and cats. The rest are in other establishments, such as research institutes, wildlife attractions and equine establishments. One common indicator to assess the sufficiency of veterinary services is the veterinarian-pet ratio. A study by the World Society for the Protection of Animals showed that Singapore’s ratio was comparable to that of the United Kingdom and the United States of America. Page: 141 The vast majority of our veterinarians offer general veterinary services. Only four have obtained specialist recognition in the fields of small animal surgery, canine medicine and ophthalmology. Some vet centres in Singapore may, on occasion, invite visiting consultants to offer other specialised services, such as cardiac surgeries.”
“There are trade-offs between the interests of residents and those of visiting motorists. HDB car parks are provided primarily to cater to the parking needs of residents. The current Free Parking Scheme (FPS) covers Sundays and Public Holidays. Extending the FPS to Saturdays will result in residents having to also compete with visitors for parking lots on Saturdays, too. On balance, HDB prefers to maintain the status quo and has no plans to extend free parking to Saturdays.”
“We can consider their application, but they will have to compete with other needy applicants. We will give priority to those who have no other housing option and no family support. One option is for them to rent a flat under the Parenthood Provisional Housing Scheme, especially if they do so jointly with another family, so as to further reduce their rental expenses. Page: 135”
“From time to time, we review the income ceiling and other eligibility criteria for HDB rental flats. This is to ensure that our stock of some 50,000 rental flats benefit the targeted population segment. These are essentially the low-income households who have no family support and no other housing options. As $1,500 per month corresponds to the 20th percentile of household income, the current income ceiling remains appropriate. However, income ceiling is just a guide. In practice, HDB has exercised flexibility to enable some families with higher income get a public rental flat, if their circumstances are deserving of such assistance.”