SINGAPORE: Coordinating chairman of PAP Town Councils Dr Teo Ho Pin, has raised questions about the Workers' Party (WP) and FM Solutions and Services Pte Ltd (FMSS) following Monday's Parliament session.
National Development Minister Khaw Boon Wan who delivered the ministerial statement on town councils had also revealed facts about FMSS.
Describing these facts as "troubling", Dr Teo said in his Facebook post that Workers' Party MPs owe it to the residents of Aljunied and Hougang, as well as Singaporeans in general, to give full answers to them.
Dr Teo said that the Workers' Party chairman Sylvia Lim has not answered Mr Khaw's questions about how she would "characterise FMSS transactions and if public interest has been protected".
Dr Teo said three key questions of public interest arise.
Firstly, did Aljunied-Hougang Town Council (AHTC) secure the best possible deal by awarding a Managing Agent (MA) contract worth over S$5 million to a company formed by close WP supporters just days after the 2011 GE, and without a tender?
Secondly, did AHTC exercise due diligence when they awarded not one but two contracts worth over S$21 million to the same company a year later in 2012?
Lastly, has AHTC protected the interests of Aljunied and Hougang residents?
Dr Teo said Ms Lim, who is also the chairman of the Aljunied-Hougang-Punggol East Town Council (AHPETC), needs to explain clearly why a WP-run town council gave more than S$26 million worth of public funds in contracts to close associates.
He said AHTC, headed by Ms Lim, gave a S$5.2 million contract to FMSS on July 15, 2011 to manage AHTC without calling a tender. A year later in August 2012, AHTC awarded a contract worth S$16.8 million to FMSS to manage AHTC. This time it was noted that AHTC called a tender, and FMSS submitted the only bid.
In 2012, AHTC also gave another contract worth S$3.9 million for the Essential Maintenance Services Unit to FMSS.
Another question that needs to be answered is why it paid management fees significantly higher than normal, and 20 per cent higher than its previous managing agent. It was revealed that FMSS charged AHTC S$7.87 per property unit in July 2011 to be its MA. The previous MA charged S$6.51 per unit per month before the 2011 General Election.
In the August 2012 tender, FMSS increased the unit rate to S$8.04. This is more than 50 per cent higher than the unit rate (S$4.99 in 2012) paid by Tampines TC, a comparable-sized estate, to its MA.
In a statement on Wednesday, Ms Lim had explained the MA rates. She raised her estimate of the MA rate for FY2012, from S$7.01 the previous night to S$7.58.
Dr Teo noted that this is more than 50 per cent higher than the Tampines rate of S$4.99.
As for the MA contract value for the whole estate for three years, the National Development Ministry had pointed out that it would only be S$15.8 million even at the MA rate of S$7.58.
However, Ms Lim had declared to HDB in 2012 that it was S$16.8 million. Dr Teo therefore asked, where is the missing S$1 million.
He noted that Ms Lim and WP MPs have not disputed the following facts: that FMSS was set up four days after WP won in Aljunied GRC on May 11, 2011; that Mr Danny Loh and Ms How Weng Fan who own FMSS were the Assentor and Proposer for the WP team of candidates who contested in Ang Mo Kio GRC in the 2006 General Election; and that Mr Loh was the deputy secretary and general manager of AHTC while his wife Ms How was the secretary, who had also been an employee of Hougang TC.
Dr Teo asked if Mr Loh and Ms How draw salaries as employees of the TC, and if they get paid twice as the couple does business with the TC through FMSS, which they own and profit.
Also questioned was the need to form FMSS just a few days after WP won Aljunied GRC. Dr Teo's assertion is that if the chief consideration was urgency, as claimed by Ms Lim, would it not have been easier for AHTC to have employed Ms How directly and managed the town itself, just as Hougang TC had done, without having to form this for-profit company.
