Workers’ Party, FMSS will enter mediation to resolve
dispute over unpaid contract fees
SINGAPORE: The former managing agent of Aljunied-Hougang-Punggol
East Town Council (AHPETC), FM Solutions & Services (FMSS) has
sent a legal letter of demand to the Workers’ Party-run town
council saying that it is owed more than S$3.5 million for services
provided between April and July this year. The story was first
reported by The New Paper on Monday (Aug 31).
When asked about it later on Monday, Workers' Party chairman
Sylvia Lim said "this is quite old news because it has been
overtaken by events".
"This letter was received by the Town Council in late July,
about one month after the managing agent contract had expired,"
said Ms Lim during the WP press conference to introduce its final
three candidates for the General Election. Describing it as a
"normal course of events” Ms Lim explained that “all our
contractors know that the Town Council, when it receives claims, it
will exercise due diligence to check and verify whether those
claims are accurate and valid."
She said that "since that time, we have made some further
payments to FMSS but there are some payments that are not being
made because the town council sees those claims as disputed
claims".
Ms Lim added that FMSS and AHPETC will settle their differences
over the outstanding payments through mediation.
"Right now, the parties - both FMSS and ourselves - we have
agreed to following the Managing Agent (MA) agreement, which
provides for any disputes between the parties to be settled by
mediation," said Ms Lim.
"So this matter is actually set for mediation before the
Singapore Mediation Centre. And the process is supposed to be
amicable, and we will go through that process which is fixed for
October," she said. "And if for some reason that process does not
yield the agreed result, then the MA agreement further provides for
the matter to be solved by arbitration," she added.
"There will not be any litigation concerning this case."
FMSS' contract to manage AHPETC expired on July 15, but it has
been the Town Council's managing agent since 2011.
Ms Lim refused to confirm the amount of money still owed after
the initial payments, and said: "I don't think it's helpful to talk
to us about the details of the numbers. Because for one thing,
mediation, it’s supposed to be a private process. So I don't think
its very helpful for us to go into the details of the amounts."
Ms Lim also explained the Town Council’s position over the
seven-day deadline for payment mentioned in the letter.
"It doesn’t matter what deadline people give us well, because
fundamentally, for the TC, we still have to exercise our due
diligence. If it's to take more than seven days or a week for us to
verify, the TC will do the due diligence accordingly," she said.
"We will not pay out just because people give us deadline to
pay."
The WP chairman added that the money owed will not affect the
FY14/15 annual report.
"It does not impact the figures for FY 14/15, in fact, most of
the claims relate to the current FY, FY 15/16," said Ms Lim. "And a
substantial portion of them are actually related to projects. They
are actually sinking funds payments, so that do not impact on the
routine funds."
Later on Monday, Ms Lim posted an open letter on the WP website
- reiterating her earlier arguments - to "reassure" residents of
Aljunied-Hougang-Punggol East town that there was "never any
conflict of interest whatsoever" between WP and FMSS. She also said
that allegations that AHPETC is bankrupt and running huge deficits
are "misguided".
FMSS was set up seven days after WP won in Aljunied GRC in the
2011 General Election, and it replaced CPG Facilities Management as
AHPETC's managing agent.
The legal letter comes even as the Ministry of National
Development (MND) has said that FMSS has been "grossly
profiteering" off the Town Council. MND said the Accounting and
Corporate Regulatory Authority (ACRA) conducted an ad-hoc review of
FMSS' auditor, Teo Liang Chye and Co. In FY 2013/2014, while AHPETC
suffered an operating deficit of S$2 million, FMSS made a net
after-tax profit of S$2 million, after paying its directors and
shareholders fees and salaries amounting to S$1.14 million, MND
said in a statement on Saturday (Aug 29).
When asked about the MND statement on Monday, Ms Lim said that
it is not for the WP to explain what the Ministry meant by "grossly
profiteering".
"I think the MND is the one that came up with this term 'grossly
profiteering', so I think they should tell us what is an acceptable
level of profit in their view, and perhaps also tell us how much
money has been made by the Managing Agents managing the PAP Town
Councils," said Ms Lim. "This is just a statement from them, and I
don't think it's for us to explain what they mean."
In an earlier response on Saturday, WP said that they were
appalled by MND's "series of careless accusations". National
Development Minister Khaw Boon Wan added that the contract awarded
by WP to FMSS was "an arrangement to reward their supporters and
friends", and was a "very sad" outcome for AHPETC residents.
The Workers' Party is currently managing AHPETC, after no one
came forward to submit a bid, WP chairman Sylvia Lim said in an
open letter to residents in June.
- CNA/av
