Defence Minister: Tough to clawback rent from firm that paid just $45 per year for land lease

The Minister for Defence has said that it will "be difficult to compute exact savings from the nominal rent" that a privatised company enjoyed due to a "land sublet at below fair market value" to the company.

He was replying to questions in Parliament, from Workers' Party MP Png Eng Huat, about how many years a privatised contractor had enjoyed paying a nominal rental of $45 a year for a land sublet; and whether the Ministry of Defence made any attempt to clawback the rental from the company. The annual rental was reportedly revised to $830,000 a year.

The issue apparently came to light in the Auditor-General's report for Financial Year 2013/2014.

In a written reply on Tuesday, Dr Ng Eng Hen said the company the land was leased to was Government-owned until 2000, and not required to pay rent as the goods and services it provided were solely in support of Mindef and the Singapore Armed Forces (SAF).

He added that the majority of the company's business is still in providing goods and services to Mindef, after it was privatised in 2000.

Dr Ng said that it was difficult to compute the exact savings the company enjoyed as "the land it leased was not solely for commercial use".

He apologised for the lapse and said that Mindef is reviewing other sub-lease contracts to "ensure compliance with good governance".

sinsh@sph.com.sg