Separation of powers and roles lead to better governance

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There is a moral outrage over how the AIMS-FMSS deals were concluded. The jury is still out and one should not trivialize what has transpired so far. The larger socio-economic implications of these transactions are basically anti-competitive in nature; it may also be perceived to be politically partial and ultimately, it is the man on the street that loses most.

Town Councils were formed in 1989 to empower local elected representatives and residents to run their own estates. As a result, elected Members of Parliament are permitted to lead Town Councils and decide on local estate management matters. Emphasizing this point, Minister Khaw Boon Wan in his Parliamentary sitting on the 13th of May 2013 said, “As MPs, we are given a lot of latitude to run TCs. “

However, our point of contention is that MPs do not have a carte blanche on this matter. We still have rules, even it is not explicitly spelled out in the Town Council Act there are procedures that the MPs could have referred to under the Singapore Government Procurement Regime  (SGPR) prescribed by the Ministry of Finance when awarding TC contracts.

Shifting political landscape

Our political landscape has changed; there is a greater awareness of politics and scepticism that those in power may not always get their house in order. There is greater awareness of politics, good governance and policies that provide opportunities for upward movement for the individual in the society.

What is troubling though are arguments put forth by the main stream media that politicizing town councils are perfectly fine as long as it is not broke. Proponents of this argument are missing the point altogether.  We elect MPs to represent us in the highest legislative body in Singapore – the Parliament. Town councils are not only an unnecessary distraction and it conflates the role of decision making with managerial authority.

As we have probably come to see, in both cases, mixing the policy making body with the executive body may lead to poor governance. It appears that poor governance is legalized in our political system through legislation, and we see no point in crying foul when parties have been doing what is considered “proper” based on our outmoded laws.

Lapses in Governance

Mr Teo Ho Pin, the Organizing Secretary of the People’s Action Party made serious allegations of lapses in governance in the way AHTC (Aljunied-Hougang Town Council) contracts were awarded. Netizens were quick to point out that he is out to fix the opposition. Is that the case or is there any merit to what he said?

Using the SGPR as a yardstick, the FMSS procurement has failed to meet two basic criteria:

  1. The WP failed to call for an Open, Selective or Limited Tender for the AHTC contracts. The SGPR states that tendering processes are used for any value in excess of $70,000.
  2. The WP failed to pre-qualify FMSS as prescribed in Government Supplier Registration where the supplier’s capability and financial standing are evaluated.

Financial Standing of FMSS

FM Solutions & Services was incorporated four days after WP won the Aljunied constituency in May 2011 by WP supporters Mr Danny Loh and his wife Ms How Weng Fan.

Given that Mr Loh and Ms How are officers of AHTC, the key question is where did they find the money required as capital base i.e Net Tangible Asset of $1.5 in order to qualify for a project of this size?

The image below is a screen grab of the financial requirements for companies bidding for government projects under the guidelines for government supplier relations. Deriving from the chart below, FMSS needs to have a Paid up Capital of at least $1.5M and a revenue base of $10M to execute the projects by AHTC.

SGPR

 

It is obvious that FMSS being a new outfit would not have met the financial criteria of projects tendered in the public or private sector space, let alone meet the minimum requirement of paid up capital.

This beckons the question of why the Workers’ Party selected FMSS and the basis for awarding such a large contract.

As Teo suggested in his Facebook post, this transaction raises “serious questions.” The fact is, in the absence of any selection criteria and a formal tendering process, WP is left exposed to allegations of impropriety and lapses in governance.

However, Ms Sylvia Lim of the Workers’ Party stands firm that the party leaders have done no wrong and has challenged the PAP to report this matter to the Corrupt Practices Investigation Bureau. We’ll leave it to the relevant agencies to determine if there was any wrongdoing.

It is apt, perhaps, to remind one that the Service and Conservancy Fees are a form of taxation and therefore any disbursement of those funds ought to be subjected to the same rigour and scrutiny as we would with any other public sector projects.  The question we’re raising is, and it applies to both AIMS and FMSS, why should there be an exception with town councils?

Maybe it’s time to revert our town councils as public institutions. Separation of powers is the key to good governance. One thing for sure, it will definitely prevent future occurrences of such lapses.

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