Workers' Party (WP) chairman Sylvia Lim has accused the People's Action Party (PAP) of using the Ministry of National Development (MND) to make political attacks against the opposition party.
"To me, this is just an example of how a dominant ruling party, as the Government, can use government departments to make political attacks on their political opponents," a defiant Ms Lim said yesterday during the WP's fourth round of introducing its potential candidates. (See report on page 6)
"It is a huge government machinery that we have right now. If anything, I think this town council episode shows how the huge machinery can try to eat you up."
In a letter to the WP and a statement on Saturday, the MND accused FM Solutions & Services (FMSS) of "grossly profiteering" at the expense of the Aljunied-Hougang-Punggol East Town Council (AHPETC).
It said the former managing agent of AHPETC had made a net after-tax profit of $2 million for the financial year 2013/2014, while AHPETC suffered an operating deficit of $2 million in the same period.
The profit was after FMSS had paid its directors/shareholders fees and salaries amounting to $1.14 million.
For FY 2012/2013, FMSS made an after-tax profit of more than $500,000.
MND said it was "abnormal" for FMSS to make a 300 per cent increase in profits compared with the previous year.
It also said an Accounting and Corporate Regulatory Authority (Acra) audit, that found FMSS had paid itself a handsome profit, supported its concern that the town council had overpaid FMSS excessively. AHPETC was FMSS' only client.
"In addition, MND notes that AHPETC had an operating deficit of $1.5 million in financial year 2012/2013 and a further deficit of $2 million in financial year 2013/2014," MND said.
Hours after receiving MND's letter, Ms Lim replied to the ministry on Saturday: "We are appalled at the series of careless accusations made by your ministry against AHPETC.
"It is shocking that despite our clarifications on your allegations relating to lost monies and overpayment, your Ministry continues to make spurious statements to distract the public and aimed at politically discrediting AHPETC."
At her party's Syed Alwi Road headquarters yesterday, Ms Lim, who is also past chairman of AHPETC, told reporters she had received the letter on Saturday morning and was told that MND was still reviewing the findings.
She said: "So even before they finish their review, they see it fit to release a media statement. I suppose one can only assume that they are in overdrive to find something before Polling Day."
She disagreed with MND's findings, reiterating that town councils should not be held responsible for how profitable their contractors are as it is "not the normal way that people do businesses".
Also present was WP council member and AHPETC vice-chairman Png Eng Huat, who asked voters to pay attention to AHPETC's financial statement for FY 2014/2015 when it is filed today.
The WP was late in handing up its FY 2013/2014 report to MND. It was due on Aug 31 last year but was submitted on June 30 this year. The current Aug 31 deadline was set in February during a parliamentary debate when MND said the state of affairs at AHPETC was "clearly unacceptable".
Mr Png, former MP for Hougang, said the latest statement will show a surplus if it takes into account the $7.2 million service and conservancy charge operating grants owed to AHPETC.
"Residents must take a look into the account to see are there any improvements made. You must see the trending (from 2012 to today)... if there are any improvements. I'll leave it to the residents to judge," he said.
In addition, MND notes that AHPETC had an operating deficit of $1.5 million in financial year 2012/2013 and a further deficit of $2 million in financial year 2013/2014.
This article was first published on August 31, 2015.
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