Minister responds to young hawker's concerns about rising costs

Minister responds to young hawker's concerns about rising costs
PHOTO: The New Paper

SINGAPORE - Minister for the Environment and Water Resources Vivian Balakrishnan has responded to a young hawker's Facebook post on the costs of running a hawker stall in Singapore.

Hawker Douglas Ng, 24, who runs famous fishball noodle stall Fishball Story, wrote an extensive post on Facebook on Sunday about the rising cost of running a hawker stall.

Mr Ng's stall at Golden Mile Hawker Centre was recently featured in Food Wars Asia, a reality TV show that pitted eateries that sold similar food against each other.

His post was shared more than 600 times, and liked by more than 840 people as of Monday.

He said in his post that after attending a briefing for a new hawker centre to be opened in Bukit Panjang, he was not sure about submitting a tender for a stall as the NTUC Foodfare centre will have price caps.

All cooked food stalls at the new hawker centre will have price caps on at least two basic meals, The Straits Times reported on July 14.

The price cap for fishball noodles, for instance, will be set at $2.70.

Mr Ng wrote: "On the papers they talk about attracting quality hawkers. Do you actually think that a quality hawker will come out with quality food when they use quality ingredients and if the cost of food is so high...how much do you think the profit margin will be?"

He added that the model was not sustainable and wrote: "If they want young gen(eration) to come in, give them a better profit."

Mr Balakrishnan, in a response posted on Facebook at around 2am on Monday, said that Mr Ng's post was "thought provoking".

Citing a study from the Ministry of Trade and Industry, the Minister said that rent was not the main cost faced by hawkers.

"The reality is that rentals constitute a small fraction of the overall cost of running a hawker stall. The major cost drivers are actually ingredients and manpower," he wrote.

He also listed what the Ministry of the Environment and Water Resources (MEWR) has done to lower rental costs for hawkers.

The measures have removed speculation from the market, and some stalls have been rented for as low as $10 a month, he said.

"I have made it very clear to Foodfare that they are not to charge high rents. The top priority is to have good affordable food for my residents in Bukit Panjang. That is why every stall must have at least two low cost main courses," he wrote.

 


This article was first published on July 27, 2015.
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Here is Dr Vivian Balakrishnan's Facebook post in full:

Dear Douglas,

Your fishball noodles are great! I do hope that you will start a stall in Bukit Panjang.

When I came to MEWR, the first policy I changed was to restart the building of new hawker centres. This was a major change made after 26 years.

I believe that hawker centres are a unique feature of life in Singapore - where everyone can eat and socialise in an informal unpretentious place with affordable & delicious local food.

There have always been questions about rental rates. The reality is that rentals constitute just a small fraction of the overall cost of running a hawker stall. The major cost drivers are actually ingredients and manpower. https://www.mti.gov.sg/ResearchRoom/SiteAssets/Pages/Economic-Survey-of-Singapore-First-Quarter-2015/FA_1Q15.pdf

There are 3 things we have done to reduce rental costs for hawkers:

(1) We increased the supply of hawker stalls by building new centres.

(2) Hawker stalls now have to be personally operated. They are not a way for landlords to make money. We did this by removing the practice of assignments and subletting. This removed speculation from hawker rentals.

(3) We abolished the concept of "reserve rent" for hawker stalls. In the past, NEA would reject tender bids which were less than 85 per cent of the assessed market rent. NEA now accepts all valid competitive bids. Some stalls have been rented for as low as $10 a month.

Many more stalls have since been awarded at progressively lower rentals. NEA publishes the results every month and the latest results can be seen here - http://www.nea.gov.sg/docs/default-source/services-and-forms/tender-notice/list-of-successful-tenderers---june-2015.pdf?sfvrsn=0

NTUC Foodfare is a not-for-profit social enterprise that is managing the first new Hawker Centre in Bukit Panjang. This idea came from a Hawker Centre Panel in 2012. I have made it very clear to Foodfare that they are not to charge high rents. The top priority is to have good affordable food for my residents in Bukit Panjang. That is why every stall must have at least 2 low cost main courses. http://www.straitstimes.com/singapore/budget-fare-on-the-menu-at-new-bukit-panjang-hawker-centre

I would encourage you and all other potential hawkers to do your calculations carefully. Please do NOT bid high.

We will also be building a second hawker centre in the Senja area in the next few years. So there will certainly be no shortage of food stalls in Bukit Panjang.

Feel free to email me at Vivian.Balakrishnan@mewr.gov.sg if you need more information. Look forward to eating at your stall again.

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