Hansard, Monday, 13 May 2013

1 Ms Foo Mee Har asked the Minister for Health (a) what possible impact will the H7N9 strain of bird flu outbreak in China have on Singapore; and (b) what precautions do we have in place to counter and contain any spread of the disease.

2 Er Dr Lee Bee Wah asked the Minister for Health with the outbreak of the new strain of bird flu and the imminent school holidays in June (a) what is the Ministry's advice for those who are planning trips to China; and (b) how prepared are our hospitals to meet any epidemic outbreak of bird flu.

3 Mr Zainal Sapari asked the Minister for Health (a) what is the risk assessment of the H7N9 strain of bird flu spreading to Singapore; (b) what are the measures taken to minimise the potential threat posed by the spread of this strain of bird flu; and (c) what is the worst-case scenario that Singapore has to be prepared for.

4 Dr Lam Pin Min asked the Minister for Health (a) if he will provide an update on the novel coronavirus and H7N9 influenza outbreak; and (b) what are the surveillance measures and management strategies in place to handle any index case in Singapore.

Mdm Speaker, may I have your permission to take Question Nos 1 to 4 together?

Yes, please.

Madam, since the first reports from China on 31 March this year, there have been a total of 132 confirmed cases of avian influenza A (H7N9) infection, including 33 deaths. Affected areas in China include eight provinces and two municipalities: Zhejiang, Shanghai, Jiangsu, Anhui, Henan, Beijing, Shandong, Jiangxu, Fuijian and Hunan. Taiwan also reported one confirmed case who was likely to have been infected in Jiangsu, China.

Infected poultry and contaminated live poultry markets are the most likely source of infection. Many of the cases had such exposure, and the virus has been isolated in chickens, ducks, pigeons and environmental samples from live poultry markets. Closure of the poultry markets in Shanghai has significantly reduced the number of cases there.

There is no evidence of sustained person-to-person transmission so far. Despite close monitoring of more than 2,000 contacts, only three small family clusters have been identified so far, but these could be due to either common exposure to an animal source or limited person-to-person transmission.

Besides the threat of H7N9, MOH is also closely monitoring another emerging infectious disease – the novel coronavirus infection first reported by the World Health Organization (WHO) in September last year. To date, there are a total of 34 confirmed cases of novel coronavirus worldwide, with 18 deaths. Countries which have reported cases include Jordan, Qatar, Saudi Arabia, the United Arab Emirates, the United Kingdom (UK) and France. The source of the novel coronavirus remains unclear. There have been several clusters suggestive of limited human-to-human transmission between close contacts, but there is no evidence of sustained human-to-human transmission of the infection so far. However, we are monitoring the progress of investigations into the latest Saudi Arabian cluster closely.

Madam, so long as there is no sustained human-to-human transmission for H7N9 or novel coronavirus, the risk of an outbreak in Singapore will remain low.

Singapore does not import live poultry, birds or fresh frozen poultry meat from China. AVA has a comprehensive inspection and testing programme for imported poultry and birds to ensure that they are free from H7N9. The local chicken farms are under strict biosecurity and AVA conducts regular inspections at all pet shops that sell birds. AVA has a surveillance programme in place for chickens and birds in Singapore, including birds in the wetlands reserves and public parks, such as the Singapore Botanic Gardens. The H7 avian influenza virus has not been detected in tests on local and imported birds.

A potential concern is transmission of H7N9 to Singapore via migratory birds carrying the virus. However, as the current H7N9 virus has not been detected in migratory birds in China, the risk of such transmission is currently low. AVA is vigilant against this possibility, and has stepped up surveillance testing on birds in Singapore, including migratory birds.

Nevertheless, we need to be vigilant against the possibility of cases in travellers coming to Singapore. MOH has alerted all hospitals and doctors to look out for suspect cases with symptoms such as fever, cough and signs of pneumonia, and a travel history to affected areas for H7N9 and novel coronavirus. Suspect cases will be isolated and tested for H7N9 or novel coronavirus infection. To date, MOH has been notified of 11 cases who have been investigated for H7N9, and 24 who were investigated for novel coronavirus. None have been positive.

Our hospitals have put in place procedures to manage suspected cases of H7N9 and novel coronavirus. These include infection control measures for management of respiratory infections, and triaging and separating of suspect cases at emergency departments from non-suspect cases to minimise risk of transmission.

When a confirmed index case is detected in Singapore, we stand ready to undertake contact tracing and phone surveillance of close contacts as an added precautionary measure, even in the absence of sustained human-to-human transmission. ICU isolation beds are available to manage severely ill patients.

WHO, currently, does not advise special screening at points of entry, nor does it recommend any travel or trade restrictions for both H7N9 and novel coronavirus.

MOH has advised travellers to affected areas on general precautions, such as practising frequent hand washing with soap and water, avoiding crowded areas and maintaining a high level of personal hygiene. In addition, H7N9-specific precautionary measures include avoiding direct contact with poultry, birds and their droppings, and consuming poultry and eggs that are thoroughly cooked.

We have put up health advisory posters and issued health advisory notices to travellers at our airports to remind inbound travellers who have been in the affected areas to seek medical attention if they become unwell with fever and cough, and to inform their doctors of their travel history. As the June school holidays are approaching, we expect that Singaporeans will be making plans for overseas travel. We would like to remind them to be alert to the latest global disease situations for H7N9 and novel coronavirus, as well as updates to MOH's travel advisory.

We continue to monitor the situation for evidence of community transmission of H7N9 or novel coronavirus.

MOH has actively engaged other Government agencies to coordinate whole-of-Government measures to be ready for such a scenario. We have worked with hospitals and clinics to ensure that there is adequate surge capacity in healthcare infrastructure and beds. At the national level, we have sufficient personal protective equipment and antiviral stockpiles, which can be deployed, should the need arises. Possible control measures include isolation of cases, quarantine of close contacts, and social distancing measures to reduce community transmission, if necessary.

We will continue to engage the WHO and our overseas counterparts to keep abreast of the most updated information. We are monitoring the situation closely as it evolves to ensure that public health is safeguarded. As of now, there is no indication that more drastic measures are required.

Mdm Speaker, I would like to thank the Minister for the comprehensive answer. A lot of the residents are concerned about this mainly because they think that there may not be sufficient hospital beds, should the need arises. Based on their experience currently, they say that when they go to hospitals, sometimes they have to wait for the hospital beds. They are thinking, in case we need more hospital beds, how prepared are we and how fast can we react?

Madam, I thank the Member for the question; it is a very important one. Our hospitals have been working together with MOH to look at how we can expand hospital capacity at short notice if there is a surge in demand. Some of this capacity could be temporary in nature in response to emergency cases due to, for example, the coronavirus or H7N9 should they land in Singapore.

The hospitals are ready. One of the possible measures, for example, is to defer some of the elective surgery so that we can free up beds for emergency cases that come in. Another possible measure that we are looking at is to facilitate discharge of the medically stable patients, either to stepdown care or help them to be discharged home. We can provide home support for these patients so that additional beds can be freed up when necessary.

Mdm Speaker, according to the latest WHO report, the novel coronavirus that has killed at least 18 people in Europe and the Middle East could be transmitted from human to human, albeit after prolonged contact. With this latest information, would the Minister agree that air passengers travelling and confined in an aircraft cabin with an infected person for flight duration of about seven to eight hours typically from the Middle East countries, can pose a significant risk of transmission of the disease? Can the Minister comment on the surveillance measures that are currently available at points of entry and whether these are sufficient to identify these high-risk groups? I would also appreciate it if Minister could explain to the House what sustained human-to-human infection means.

Madam, up to today, the knowledge of the actual transmission mechanism of novel coronavirus is still very limited. We are watching and monitoring very closely. Reports are coming out from WHO on the knowledge that they have gained in the investigation into the various cases. So far, WHO has not recommended any travel restrictions because from their investigations, transmission is limited to very close and prolonged contact, primarily, within the same family or where they are housed together within the same hospital ward. We would follow the advice from WHO in terms of travel advisory.

For us in Singapore, we have introduced several measures including notices to our travellers who are arriving in Singapore, that should they develop symptoms or fall ill and if they have the travel history to affected areas, we encourage them to see our doctors immediately so that we can provide the necessary treatment as well as, if necessary, to isolate them. For the outbound travellers, we have given general travel advice to encourage them to stay away from crowded areas, and to exercise and maintain a high level of personal hygiene. These measures will help to mitigate the potential risks.

Finally, on sustained transmission: when we look at the current cases of transmission, transmission tends to be between one or two persons when they are in close contact. Transmission after the second person tends to be attenuated. Sustained transmission means there is a sustained transmission beyond the immediate contact. From WHO's contact tracing, out of the 2,000 that they have followed up on, very few of them have developed these symptoms, other than the clusters I mentioned in my reply.

Mdm Speaker, I would like to ask the Minister a supplementary question. Given the threat of H7N9 and novel coronavirus, how much more is Singapore prepared today, as compared to the SARS outbreak in 2003 to deal with the pandemic in Singapore?

Madam, I want to thank the Member for another very important question. In fact, with our experience in SARS, we are now much better prepared than 10 years ago. However, with each new infectious disease, it will bring in new experiences, new challenges, new threats. It is a continuing journey of learning so our healthcare professionals and institutions are working together, preparing ourselves for the possibility of the arrival of H7N9 or novel coronavirus patients in Singapore. Our institutions are ready and we will be able to manage them.

Mdm Speaker, I thank the Minister for the information and the explanations. Given that there is no real need to press the panic button for either H7N9 or novel coronavirus right now, is it a good time now for us to look at how we can create greater civic-minded or community-driven measures to deal with such diseases? This aspect of the way we deal with endemic diseases like dengue most recently, can the Ministry do more now that there is no need to panic, to start this going?

Mdm Speaker, in fact. MOH has been working with the various Government agencies, including our own Health Promotion Board (HPB), National Environment Agency (NEA), as well as AVA, on outreach and public education. We want to raise the awareness of the threat of infectious diseases. During peace time, or without the immediate threat of infectious diseases, our focus has been on non-communicable diseases associated mainly with ageing and so on. But we are very much aware that infectious diseases continue to be a threat, given today's globalised world.

There is now a much higher volume of international travellers and infectious diseases will continue to be a threat to many countries in the world. This is an area that MOH will continue to work on with our various organisations and agencies to reach out to not just our residents at the community level but also the professionals, such as doctors and the healthcare institutions, so as to raise their awareness and to enhance their preparedness should a crisis arise.

5 Mrs Lina Chiam asked the Deputy Prime Minister and Minister for Finance (a) why did the Tote Board donate $400 million towards building Gardens by the Bay, which charges admission fees for its conservatories, instead of donating the sum to the needy or funding social services; and (b) whether the Tote Board publishes an annual report detailing its donations made and, if not, why.

Mdm Speaker, under its Act, the Tote Board's funds can be donated in support of public, social or charitable purposes and the promotion of culture, art and sport in Singapore. Hence, while supporting the needy and social services is at the core of its funding activities, the Tote Board also supports projects that bring vibrancy into our community spaces to benefit all Singaporeans. These include Gardens by the Bay, as well as other community and arts-related projects.

In 2008, the Board made a donation to support the development cost of Gardens by the Bay. The donation does not cover the costs of operating the conservatories. The conservatories make full recovery of operating costs through the collection of admission fees.

A large proportion of the Tote Board's donations goes towards social support. Over the last five years, the Board has donated $1.2 billion or almost half of all its donations to the social sector. In FY2012 alone, donations to the social sector were about $500 million, or 46% of donations for that year.

This includes the Tote Board Social Service Fund, through which programmes for the needy and disadvantaged are supported. Another example is the Tote Board Community Healthcare Fund (TBCHF) which supports community-based preventive healthcare programmes and builds capabilities in the Intermediate and Long-Term Care sector to enable providers to offer better and more affordable care.

I should add that the Tote Board positions itself as complementing Government programmes, not substituting for Government. In fact, the Board does not fund projects which it deems to be basic Government programmes. Instead, it seeks, for example, to uplift capabilities, and work with its community partners to pilot new or innovative programmes to help the needy and disadvantaged.

The Government plays the major role in supporting social services and programmes to help the needy. For FY2012 alone, the Government spent about $1.25 billion on targeted benefits for the bottom 20% of Singaporean households, or about $6,000 per household. It includes the Workfare Income Supplement, childcare subsidies, educational bursaries and means-tested healthcare subsidies.

Tote Board's annual report, which contains a summary of donations made, is tabled in Parliament. Members were notified of this when the last annual report was tabled in September last year. Besides being available at the National Library, the annual report can now also be viewed on Tote Board's website.

Mdm Speaker, I thank the Minister of State for answering my question. I would like to ask a supplementary question. If the two conservatories charge about $20 per entry or less for senior citizens, is it enough to cover the maintenance and, if not, who covers the other side of the maintenance to run these two domes?

Mdm Speaker, I thank the Member Mrs Chiam for her question. The conservatories are supposed to make full recovery on the operating costs, so they will have to assess the level of attendance at the conservatories and also adjust their admission fees accordingly. I should just add for interest that since the Gardens have opened, about 4.1 million visitors have been to the Gardens, and just over one-third visit the conservatories. This is still very early days yet. The conservatories will have to make an assessment and plan accordingly once the attendance numbers are more stabilised over time.

6 Mrs Lina Chiam asked the Minister for Education (a) whether only those serving in People's Association and its affiliated committees and organisations are considered as active community leaders for the purpose of prioritising their children for Primary 1 Registration and, if so, why; and (b) whether he will consider expanding the definition of active community leadership.

7 Dr Intan Azura Mokhtar asked the Minister for Education whether the Ministry can consider creating a new Primary 1 registration priority phase for couples with two or more children who may not qualify for Phase 1 and who may live within two kilometres of a Primary school.

Mdm Speaker, with your permission, may I take Question Nos 6 and 7 together, please?

Yes, please.

The current Primary 1 (P1) Registration Framework reflects a careful balance of considerations, such as convenience for the family, the school's ties with community stakeholders and school proximity.

Mrs Lina Chiam has asked about the priority of registration. Phase 2B of the P1 Registration Framework is open to children of active community leaders, that is, serving committee members of the Residents' Committee, Neighbourhood Committee, Citizen's Consultative Committee, Community Club Management Committee and the Community Development Council. In addition, Phase 2B is also open to the children of parent volunteers and endorsed members of the churches or clans that are directly connected with the school. The commitment and support from these various stakeholders help to build stronger bonds between the school and the community.

We also note Dr Intan's concern about providing support for large families in Primary school admissions. While P1 admissions were used to support population policies up to the late 1980s, the Government decided to de-link P1 registration from population policies in 1992.

As we had just reviewed the P1 Registration Framework last year to give priority to Singapore Citizens during balloting, we will monitor the effects of these changes before deciding if further refinements should be made.

In addition, the Ministry will continue to ensure sufficient school places on a regional basis so that our children will not have to travel long distances to their Primary school. In fact, for the last three P1 Registration Exercises, about 98% of the registrants were able to obtain a place in a Primary school of their choice, or a Primary school within 2 km of their residence.

We will also continue to ensure that every school is a good school, so that every pupil can receive a good quality and holistic education, regardless of the school which he or she attends.

Mdm Speaker, I thank the Senior Minister of State for answering the question. I have two questions to ask. First, who defines the criteria for the term "leadership" here, and if leadership can also be identified outside Government and politically-linked entities? Second, would the Minister for Education consider scrapping the scheme as community leadership in Government-linked entities should not be rewarded through priority over public goods and services?

Mdm Speaker, one part of the question is related to whether the priority was Government-linked. As mentioned in my answer earlier, quite apart from the grassroots organisations under the People's Association (PA), there are the Parent Volunteers and there are also those who are members endorsed by the clans or churches. Of course, there are the alumni as well, but that is a different priority phase. So, the short answer to that particular question, is it only Government-linked? The answer is "no" because there are those which parent volunteers as well as those endorsed by churches and, of course, by clan associations as well.

With respect to the specific question about those who are given priority under the grassroots organisations, perhaps I should clarify before I go on to deal with specific Government-linked aspects. Under PA, it is not all of the grassroots committees that get priority. For example, as I mentioned earlier, it is only those in the Residents' Committee, Neighbourhood Committee, Citizens' Consultative Committee and the Community Club Management Committee. There is a great number that do not get priority, such as the Youth Executive Committee (YEC), Women's Executive Committee (WEC), Community Sports Committee (CSC), Inter-Racial and Religious Confidence Circle (IRCC) and a large number of others under that umbrella. So, it is the ones that are residentially-linked as well as those in the community. We recognise that there are many different social groups which serve the community. But when we look at priority, we look at priority for active community leaders. And in defining active community leaders, we define eligibility based on an objective view of community service.

PA and its grassroots organisations are non-partisan organisations set up with the specific mission of connecting people to people, people to the Government, and Government to the people. Grassroots leaders (GRLs) support PA in its mission of community building in support of the government of the day and that is why, at the current time, only active GRLs from the four grassroots organisations and District Councillors from the Community Development Councils are eligible for consideration under Phase 2B. And eligibility is based on contribution and not along party lines.

I thank the Senior Minister of State for her reply. I understand that Primary 1 registration has been delinked from population policies in the past. In the light of our current population challenges, would the Ministry consider relooking the Primary 1 registration priority phase, especially for families with two or more young children, in particular, for those who would like to enrol their children in the nearest Primary school, and where this Primary school is popular and usually over-subscribed? It is really a matter of convenience and accessibility for these families.

Mdm Speaker, I thank the Member for her question. I note her concern for families who have more than one child and the desire to get into a school of their choice that is near to their place of residence. Currently, they would be able to get priority under Phase 1, if there is a sibling who is already studying at the Primary school. If the sibling has left that Primary school but was previously from that school, they would be able to get priority under Phase 2A.

With respect to whether we should increase or have more schemes with respect to priority registration, as I mentioned earlier, because we have just recently tweaked the system, we would like to study this before we take any other measures or make further changes to the system. We want to see how the current system works.

Thank you, Mdm Speaker. Earlier in her reply, the Senior Minister of State mentioned that the community leaders are important to build the bond between the schools and the community. I would like to ask if the Ministry has done any survey to see how many community leaders have actively contributed to the schools that their children are enrolled in, and if it can be a criterion for community leaders to have first made specific contributions to the schools before they are being considered for priority.

I am not aware of any survey. I do not have that information at the current time. If the Member would like to file a specific question on that, I can check. But currently, the criterion is based on contribution to the community, as opposed to contributions specifically to the school. Contributions specifically to the school would be under the parent volunteers scheme or on the Advisory Council of the school. But with respect to the community leaders' contribution, it is contribution to the community.

8 Mr Zaqy Mohamad asked the Minister for Communications and Information whether the Government will review the earlier recommendations by the Advisory Council on the Impact of New Media on Society (AIMS) to gradually liberalise the restrictions on party political films.

Madam, the Advisory Council on the Impact of New Media on Society (AIMS), chaired by Mr Cheong Yip Seng, submitted its report in December 2008. One of its recommendations was to gradually liberalise the restrictions on party political films (PPFs).

The Government has accepted the recommendation and amended the Films Act in 2009 to allow political films that do not depict events, persons or situations in a dramatic way. This was done to allow greater space for political discourse, while ensuring that political debate in Singapore remains serious and robust.

Both objectives remain relevant. However, we recognise that it is useful to periodically review and assess if existing rules governing PPFs continue to be the best way to achieve these objectives as our society changes and our polity matures.

I announced during the recent Committee of Supply debate that my Ministry is reviewing the Films Act and intends to introduce amendments to the Act to, amongst other things, allow the industry to self-classify videos. As part of the review, we are also reviewing the existing PPF restrictions.

I thank the Minister for the reply. First question: the changes that were made recently concerned films in general but, given that the topic at hand is about party political films, does the Ministry intend to seek feedback since the political landscape has evolved in 2009? Perhaps there may be new considerations at this point.

We can allow greater space for civic discourse while keeping political debates serious and robust. And in that process, we will do the necessary due diligence to ensure whether or not the changes will be in line with what is happening within the society.

9 Dr Lam Pin Min asked the Acting Minister for Social and Family Development whether he can provide timelines for the plans that the Ministry has to address the shortage of childcare facilities in Sengkang and Punggol.

10 Ms Lee Li Lian asked the Acting Minister for Social and Family Development in view of the completed BTO project "Rivervale Arc", whether there are plans to cater to the projected increase in demand for childcare centres in Punggol East.

11 Ms Tin Pei Ling asked the Acting Minister for Social and Family Development how does the Ministry determine where to site new infant care, childcare and student care centres and whether mature estates, such as MacPherson, will be considered.

12 Ms Lee Li Lian asked the Acting Minister for Social and Family Development (a) whether the Ministry will allow childcare centres to be set up at school premises; and (b) for Punggol East where there is a lack of suitable premises at HDB estates for childcare centres, whether part of school premises or building extensions of existing school premises can be allocated for the setting up of childcare centres.

Mdm Speaker, may I have your permission to take the four questions together?

Yes, please.

Mdm Speaker, Ms Tin Pei Ling asked about the siting of infant care, childcare and student care services. The Early Childhood Development Agency (ECDA) monitors the demand for childcare services across various estates, including MacPherson, and initiates development of new centres or expand existing ones in high demand areas.

Dr Lam Pin Min asked about the development plans for childcare centres in Punggol and Sengkang. Ms Lee Li Lian asked about the development of childcare centres in Punggol East. These are estates with a higher proportion of families with young children.

Since 2008, 37 additional centres have been set up in Punggol and Sengkang. For Sengkang, 14 more centres will be developed within the next two years, and another nine centres are slated for development by 2018. For Punggol, 14 more centres will be developed within the next two years and another 12 by 2018. ECDA is working with HDB to pre-build childcare facilities alongside upcoming BTO projects. As part of this effort, there will be a childcare centre within Rivervale Arc which will be completed in the first quarter of 2015.

Ms Lee asked about the setting up of childcare centres at school premises. In general, ECDA is open to exploring alternative premises beyond HDB sites for the development of childcare centres. For instance, to raise capacity, ECDA is looking into the use of other premises such as workplaces, disused facilities and integrated developments. Each specific site will have to be assessed according to feasibility, while ensuring that the development does not adversely affect existing needs. In the case of schools, the physical capacity of the school and educational experience of the school-going children would have to be part of the considerations.

For student care centres, MSF will continue to work with MOE to support schools in their collaboration with student care providers to provide additional support for students.

I thank the Acting Minister for the reply. I would like to ask, firstly, how demand is determined. I am asking this because even for mature estates, there are BTO projects coming up and I anticipate that young families would be moving in. So, I think that there would be an increase in demand for childcare, student care and even infant care services.

The second reason is that there are also low-income families, for example, in MacPherson, and sometimes these young families with children may not surface in a conventional way and they go to a childcare centre to demand for childcare. But from observation, it is with the availability of childcare that young mothers especially can be freed up, comforted in the knowledge that their children can be taken care of, and that they can go out to find a job to supplement their household income. I would like to ask the Acting Minister if the Ministry would also provide funding to help build or retrofit some of the existing buildings to allow for the provision of additional childcare services in mature estates such as MacPherson.

Mdm Speaker, let me thank Ms Tin Pei Ling for the questions. The answer to the first question is that demand is determined by a few factors. We know that, generally, childcare places are sited either near their own homes, the parents' workplace or the grandparents' place. So, how we determine demand is based on the cohort size in the respective estates. We also take in feedback from the respective community leaders, if they see a demand for such a service. We also look at the queue at the existing childcare places in the vicinity so that we have a sense of what is the demand.

As to Ms Tin's question that there will be some parents who might need childcare but may not have approached their community leaders, this is where we appeal to the various community leaders to work with us. If they know of such cases, do bring such needy families' children to the childcare centre and we will find some ways to support them.

So, this is, in general, how we determine where to set up childcare centres. It is based on the numbers that we have on hand and it is also based on the feedback from the community leaders. For example, we also understand that in Sengkang and Punggol, generally the younger families there have less grandparents' support, so they will need a bit more childcare places. And we have catered for it accordingly.

On the last issue, yes, we do provide grants to help childcare operators to retrofit some of the existing places and our aim is to make sure that we continue to expand the mass market options to provide affordable childcare services to those who need it.

I would like to thank the Acting Minister for the reply and also the Ministry for working with my grassroots organisations to help identify potential void deck sites for conversion to childcare centres. Since the past few years, we have converted almost all available spaces but, unfortunately, due to the extremely high demand for childcare facilities, the waiting list still runs into the hundreds. I would like to urge the Ministry to place Sengkang and Punggol in their priority list.

I would also ask the Acting Minister what quick short-term measures can MSF provide to address this shortage in the coming months and up to the next one or two years.

Mdm Speaker, in response to Dr Lam Pin Min's question, yes, Sengkang and Punggol are on our radar screen. We know, as I have mentioned, that there is a high proportion of young families and many of these young families do not have grandparents' support. In catering to the needs of Sengkang and Punggol, we have catered for above what we provide for nationally, which is about one in three, or one in two.

We also understand that some of the flats in Sengkang and Punggol do not have the necessary void deck spaces, which is why we are working with the community leaders to convert other places in an innovative manner. Some of the feedback and ideas that we have heard from community leaders include using temporary sites at empty plots of land by using temporary containers. We have also heard other ideas where community leaders have offered places in their community centres; other community leaders have suggested the use of under-utilised car parks. So, these are all places that we will look into and will work together with the community leaders to bring them about, if they are feasible.

I thank the Acting Minister for his reply. Like Sengkang and Punggol, Punggol East has an acute shortage as well. Are there any possibilities to see any new childcare centres up by 2014? The stated timeline was by the first quarter of 2015 – some of them just cannot wait that long.

Mdm Speaker, I thank Ms Lee for the question. When we address the issues, we address them holistically as a town, not just Punggol East but the whole Sengkang town. While there might not be immediate sites available in Punggol East, we will try to look for other places within the Sengkang town so that the whole place can share the facilities together, in particular in Rivervale Arc where there will be a place that will be pre-built into the estate and that will be coming up quite soon.

Mdm Speaker, I would like to ask the Acting Minister not to forget about the other estates like Sembawang as well, where there is a huge proportion of young families. I would also like to ask the Acting Minister whether there is any possibility, in the short term, to relax the criteria of manpower restrictions on the quota of childcare centres. It is not only just physical environment, the problem is that there are not enough teachers.

Mdm Speaker, let me thank Dr Lim for his questions and comments. Yes, we have Sembawang as we have everybody on our radar screen. In fact, I think some of you may have received letters from my Ministry. We are going through town by town to meet the respective community leaders to discuss with them on the local solutions. So, it is not macro planning. We are actually meeting all the community leaders, estate by estate, to address their needs. There will be need even in the older towns because some of the parents will leave their children with the grandparents. So, we fully understand that.

On the issue about relaxing the manpower criteria, I just like to provide the other perspective, which is that the numbers are there for a purpose because we want to give the parents an assurance on the quality. So, if the childcare providers are able to give us the assurance, and also give the parents the assurance, that the quality is not compromised, we can look at it to see how we can adjust some of these issues. But many of the childcare operators have also come back and share with us that they do not want to have too high a ratio, meaning that one teacher taking too many students, because it affects the quality of care. So, this is where we have to strike a balance.

On the manpower side, we are continuing to increase the supply of manpower through two tracks. One is direct recruitment from the Polytechnics and the institutes responsible for training of childcare teachers. On this aspect, we do train many people. Our challenge is not so much of training them. Our challenge is to make sure that those who are trained come in and join the sector and also stay in the sector.

The other prong of the manpower approach has to do with increasing the number that we can recruit from the mid-stream recruitment. This could be part-timers who want to return to work. This is how we try to increase the overall manpower. I will be making more comprehensive announcements in a few months' time on the various tracks that we are tapping on to increase the manpower. But we are certainly aware that manpower is a critical issue.

Miss Penny Low, last question.

Thank you, Mdm Speaker. I want to thank the Acting Minister for his considerate approach in addressing the critical childcare issues all across Singapore. In the case of Sengkang and Punggol, I want to also echo Dr Lam Pin Min and Dr Lim Wee Kiak's sentiments on convertible void deck space. In cases where there is limit in how many void decks can be converted, can the Minister seriously consider and expedite building of childcare centres on state land and open plots of land, even if they might cost a little bit more? It might address the issue much more efficiently than trying to convert unconvertible void deck spaces.

In the case of shortage of teachers, that is also a very real issue. While we are awaiting more teachers to be trained, which will take two to three years, is it possible to consider having teaching aides, for example, maybe two attached to a class so that the class size can also be enlarged without compromising the care given to some of these students?

Mdm Speaker, let me thank Miss Penny Low for her suggestions. Yes, indeed, we are actively working with the land agencies and HDB to see where we can expedite the building of some childcare centres at vacant plots in Punggol and Sengkang particularly. On the second issue about teacher ratio, let me explain that we have started to work on the pipeline about two years back, ever since I joined the Ministry. So, the pipeline will be coming onstream soon. The other matter that I must also share with Members of this House is that we have already reviewed that particular suggestion and, indeed, we have implemented that.

For example, some of the classes used to be one is to eight, that is, one teacher to eight students. We have since reviewed that last year where we gave the option of one-plus-one is to 12, that is, one qualified teacher plus one para edu-carer, so that the para edu-carer can perform some of the care functions that are not directly related to teaching. With that, we have also increased the capacity for many of the childcare centres that have the available space. Through this approach, whereby we give 50% extra by employing the para-personnel, we increase the capacity and, at the same, we also provide more employment opportunities for part-timers who may not be fully trained in the profession. But over time, some of these para-personnel, once they are in the industry, can also be attracted to upgrade themselves and become a full-time teacher. We have tried these methods since last year.

13 Mr Teo Siong Seng asked the Minister for Trade and Industry whether the Ministry has any plans to establish better channels of communication with SMEs, in particular the micro-enterprises, with the objective of simplifying the various Government incentives and assistance schemes and encouraging a greater take-up rate amongst SMEs and micro-enterprises.

Madam, MTI has regular channels of communications with our SMEs. For example, we work closely with the trade associations and chambers through SPRING and IE Singapore to understand the needs and concerns of their members and the business community as a whole.

In 2011, I accepted the Singapore Business Federation (SBF)'s invitation to be the Advisor to the SME Committee (SMEC). One of the missions of the SMEC is to garner all the feedback from the trade associations and members of these associations to know the issues and the problems that these SMEs are facing today.

It is a key platform because it forms a bridge between the SME community and policymakers or the Government, and it surfaces the issues for us to analyse and understand what the SMEs and businesses are facing today, and how these affect the policies and the policy reviews. We conduct reviews every single time during the Budget session.

This SMEC has submitted its Budget recommendations every single year since its inception. Many of these recommendations have been accepted, especially this year, when more than half of the recommendations were accepted.

In this year's Budget, we announced new measures to help all SMEs, including micro-enterprises. Some of these are focused on making our schemes more accessible to the SMEs. For example, we have expanded the Enterprise Development Centres (EDCs) into integrated one-stop SME Centres. These SME Centres are not limited to the five that exist today. We intend to have a hub and spoke system where there will be satellite centres that cater to the needs of micro-enterprises. These satellite centres can be set up by merchant federations or smaller federations that exist within the heartlands.

SMEs can access information and obtain advice on a wide range of assistance schemes. We know that the Government has rolled out several schemes and there needs to be some hand-holding. Officers will be on the ground to help these SMEs, especially the micro-enterprises.

SPRING Singapore, with its SME Centres, will also streamline its various schemes. In fact, we have already done so. One of those schemes was called the Capability Development Grant (CDG) which is several different schemes combined into one. A change that was made, for example, is the streamlining of the pages in the application process. There used to be 10 pages in the application form. Today, it has been reduced to two pages. This helps SMEs in their application for the productivity scheme and in capability development.

We will continue to work closely with our SMEs and business associations and chambers to help them transform. This is a difficult period for our SMEs, especially the micro-enterprises. We want to make sure that the schemes are better utilised and can effectively help all the businesses.

Last year, when we were reviewing all the schemes for the SMEs, we formed a Committee called the SME Review Committee. This year, we have converted that Committee to be the SME Implementation Committee. Instead of coming up with new programmes and schemes, it is important for us to focus on implementation for the entire year to make sure that all the programmes and schemes work.

With the new measures in place, we hope to encourage more SMEs to embark on the transformation journey. It is important that we have the schemes. The SMEs must also step forward to tap on those schemes.

Mdm Speaker, I would like to ask the Minister of State, from the ground, does he get the feedback that there are higher take-up rates from the SMEs for these schemes?

What I understand is that because of the various schemes that are in place, some are "macro" – that is, they are focused on the industry. Some schemes are "micro" and these are for the individual firms. It takes awhile for the SMEs to understand the schemes. We need to create greater awareness. That is why SME Centres are very important today to play that part. Trade associations and chambers of commerce are also very important to help educate the SMEs.

The take-up rate is slowly increasing, but if you ask me, we have some way to go to reach the benchmarks that we have set and the milestones that we need to reach.

Madam, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech on Pg xxxx.] I am glad there are already a number of schemes to help SMEs now. However, many SMEs are still not following up as they have had unpleasant experiences in the past. I would like the Minister of State to tell us if there are better ways to reach out to and help those SMEs who have suffered unpleasant experiences in the past as well as those who cannot understand the schemes due to language problems, so that more can better utilise the schemes. Can we do better to help them succeed in the next three transitional years?

I will make my reply in English. The Member has highlighted a very important issue. We have been trying to have a better understanding of the issues that are facing the SMEs and the micro-enterprises, in order to come up with schemes and make sure that the utilisation rate of these schemes is up to a satisfactory level. It is not easy. The SME Centres will be staffed by officers with bilingual abilities, and even with dialect abilities. Some of the micro-enterprises, for example, the stalls and small businesses in the heartlands, do not even speak Mandarin and converse in dialects instead. We want to help all of them and reach out to them.

There are some schemes – for example, those involving vouchers like the Productivity and Innovation Credit (PIC) vouchers – that help to defray some of the costs of process re-designing in the micro-enterprises. We want to make sure that these small micro-enterprises would be able to understand some of the schemes and the rationale behind how to apply for them. The officers need to be able to handhold them and help them. Some of these satellite centres will be on the ground, either within the CDC, CC, or in the heartland areas. The officers would be able to be on the ground to handhold them and guide them.

It is not just for the three years of transformation. Some of the schemes take longer than three years. For example, some of the schemes are focused on the industry as a whole, like the Collaborative Industry Programme. This programme needs substantive effort over a longer period of time – definitely more than three years – because you need an entire industry to be able to tap on the process redesign or IT or automation in order to get its effects. Implementation can take more than three years. That, we understand. We will implement the scheme and make sure that it achieves its effects even though it may take more than three years.

Madam, I thank the Minister of State for his reply. The question also relates to communication. The point raised by Member Teo Siong Seng is right – that it is also about feedback. The Ministry is getting a lot of feedback but the feedback back to the SMEs themselves, like the recommendations that have been accepted, is also important to say that they are being heard too.

The other challenge is this: what else is the Ministry doing in order to improve the level of communications. The schemes are there; the centres are there. Many of them are still not coming forward perhaps due to prior bad experiences, but perhaps something new needs to happen. Perhaps the Ministry could look into this.

Definitely, we will look into it and look at different ways of communicating. What is the most important is that it is not just going to be a national level push on promotion, and creating awareness through advertisements and promoting it generally or in the mainstream media, but we are going to be walking the ground, and going on the ground to engage the different businesses and organising dialogues, and so on. I also urge Members and advisors to assist in this process. It is important that we touch the ground in every area, every constituency, where possible.

14 Dr Lim Wee Kiak asked the Minister for the Environment and Water Resources what is the number of offenders apprehended and prosecuted since the use of close circuit cameras to monitor high-rise littering was piloted in 2011.

High-rise littering is a dangerous anti-social act. Since 2011, we have installed surveillance cameras in certain hot spots and we have identified 12 suspects who were caught in the act of high-rise littering. So far, five of them have been prosecuted in court, and the courts have imposed fines ranging from $800 to $1,500.

I want to emphasise, however, that surveillance cameras should only be used as a last resort. Our primary line of defence must remain the adoption of personal responsibility and the cultivation of appropriate social norms within our neighbourhoods. NEA will continue to work closely with residents and the Town Councils to deal with this scourge of high-rise littering.

Mdm Speaker, I would like to ask the Minister, given the very small numbers that are prosecuted and then given the high numbers of complaints that we are facing, whether the Minister is happy with the performance of the CCTVs currently? Since the Minister mentioned that the use of CCTV alone should not be the main measure to control high-rise littering, what other measures is his Ministry considering to help to curb this high-rise littering issue?

Mdm Speaker, I thank the Member for that question. The answer is, "No, I am not satisfied with the situation". Just to give Members an idea of scale – we received more than 8,000 complaints of high-rise littering a year. Over the years, the number of cases that have been brought to the Courts would only be single-digit numbers. Ten to 12 a year, maximum. We introduced high-rise surveillance in fact recently, just a year and a half ago, in order to try to improve the probability of being caught. To be honest, I do not think it is high enough. On the other hand, I cannot imagine us having cameras trained on every single HDB block in the island. I do not think that is something that we want.

What else can we do? I think, given the fact that most recent cases were only fined between $800 and $1,500, Members of the House would agree with me that we probably need to review the penalties. The penalties need to be significantly raised.

The other aspect – which is something I am sure Members of the House can identify with – is when we do our block visits, many of us will receive complaints. Most times, people roughly know who the culprits are. But in our traditional Asian way, we do not want to be the finger-pointer. We will have to find a more effective and local way of identifying the culprits and of resolving it at source. I do not think installing cameras is going to be the final solution, or indeed, should it be the primary solution for this problem.

Madam, I thank the Minister for mentioning that the use of CCTVs to monitor littering is to be used only as a last resort. I would like to ask Minister to define what "last resort" is. And what if the littering really amounts to "killer litter" – for example, in some of my blocks at Beach Road where there was real danger and it was a concern for many of the residents?

Usually, the local Member of Parliament is the person who is first aware or is kept informed of the situation. Members of the House would also agree with me, that we usually try at the Town Council level, at the Member of Parliament level, to visit the blocks. We know which column it originates from, and we would knock on every door. If that does not work, they get NEA involved, then NEA would do at least two rounds of knocking on doors and trying to persuade and educate people on the need to be responsible. Only after that is done and if the problem continues, do we then resort to high-rise surveillance cameras.

Even then, our current SOP is that we will send a letter to all the households to say we are putting up a camera; so we are not trying to invade your privacy. We even go so far as to tell people exactly when we are doing that. In quite a significant number of cases, once the cameras are up, everything is fine. Then when the cameras are down, some cases resume − the bad habits − and in which case, NEA would have to go back and put it on again. We are reviewing the SOP. For second and third deployments, we will probably not have to reveal exactly when it is up, in order to have a greater deterrent effect. Right now, we see irate emails from complainants. They say, "This is ridiculous! You put up the cameras and you tell everybody exactly where and when you are putting it up. The person will naturally make sure he does not litter at that point, and then he resumes after that."

So, yes, we will make some changes, but I still want to emphasise that this cat-and-mouse game cannot be the real solution. We need more effective assumption of personal responsibilities and we need local action, on the ground by people who are living there and who know who the culprits are.

Having said that, there is also a very small minority who, frankly, have mental problems. Even their family members are aware of it, and have sometimes reached the end of their limits. In those cases, what they really need is psychiatric help and treatment, and it is not a matter of penalties and photographing them on camera.

Mdm Speaker, I would like to ask the Minister, out of the 12 suspects and the five charged, how many of them are from owner-occupied flats, how many are tenants, and are they foreigners or Singaporeans? The other question is: apart from a fine, are those who are charged made to do compulsory community service through Corrective Work Orders (CWOs)?

I am sorry I do not have the breakdown of the 12 cases on nationality and whether they are rental or owner-occupied. If the Member wants to, I can check on that. But I do not have the data here. The larger question the Member has raised is the range of penalties available. Just now, Ms Phua asked what happens if it is killer-litter? In fact, if you go through our regulatory regime, in extremis, HDB can even acquire your flat so that you are not ever in a position to be able to throw any killer-litter. But this is a very extreme position. Sometimes, we, in fact, need a spectrum of penalties which makes it easier or less restrictive when the agencies need to take action against them. So, this all-or-nothing approach is not ideal as far as enforcement is concerned.

Mdm Speaker, I would like to ask the Minister, besides using CCTV, is there any other technology that can be used? Very often, we see very unsightly sanitary pads being thrown down, diapers being thrown down; if other technologies like DNA testing and so on can be utilised. The next question is: I also understand that catching the culprit is not easy because you need to identify him and a witness must be sure of the face or the hand which threw the litter. Can we change the regulation in such a way that so long as the litter comes from that unit, you can take action; similar to how we penalise speeding traffic offenders?

I thank Er Lee for her suggestions. I think we will have to look at this carefully. It would involve legislative changes. As far as DNA testing is concerned, the answer is, technically, it is possible. But even if I do DNA analysis on the sanitary napkin, in order to pin it to the culprit, it means I have got to have a DNA database on everyone living in the block. So, technically possible, but I think this really takes – how shall I put it – intrusive surveillance to new heights.

Ms Phua, last question.

Minister, I would like to ask if you could re-install the CCTV for the land between Blocks 4 and 5 Beach Road. It is not soiled diapers or sanitary pads; it is beer bottles, so it is really killer-litter. So, I would appreciate some action on that.

We will look into it.

15 Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Home Affairs whether the new Community Policing System (COPS) has seen positive results in deterring loan shark harassment within the neighbourhood and communities in which COPS operates.

Mdm Speaker, we launched the new Community Policing System (COPS) in May last year. The objective of COPS is to improve the way the Police works in, with and through the community, and it has two key aspects. First, the Neighbourhood Police Centres (NPCs) will be strengthened and given additional resources to fight crime and to engage the community. Second, technology, such as Police Cameras, will be deployed as a force multiplier. The first two NPCs to adopt the new COPS model were Bukit Merah East and Tampines. At the start of this year, we rolled out COPS to another six NPCs. Three hundred and fifty HDB blocks across various NPCs have also been fitted with Police Cameras thus far.

There have been some early positive signs since we launched COPS. Police has seen an improvement in the loan shark harassment situation at the blocks where Police Cameras were deployed. This is in the context of an overall decrease in cases of unlicensed money-ending and harassment. The footages received and retrieved from the Police Cameras have also helped solve nine crime cases and provided further leads for investigations in another 61 cases.

Our Police officers have also received positive feedback on COPS at the two pilot NPCs. Residents appreciate the more-visible Police presence, and the officers are now familiar faces on bicycle and foot patrols in their neighbourhoods. The community has also come forward to work more closely with the Police in keeping their neighbourhoods safe, with a 29% increase in the number of Citizens-on-Patrol members at the pilot areas at the end of last year.

Madam, the new COPS model has just been launched for about a year. While it is still too early to draw definitive conclusions about the efficacy of the COPS model, I am pleased with its good start in addressing the safety and security concerns of the community, including loan shark harassment. Police will push on to introduce the new COPS model to another 12 NPCs by the end of this year. Police Cameras will also be installed in another 650 HDB blocks across the various Town Councils by the end of the year.

While I have focused on COPS thus far, I want to emphasise that Police has implemented a nationwide strategy of various measures, comprising enforcement, education and community partnerships, in order to help bring down the overall loan shark harassment numbers. Police will continue with its holistic approach to deal with loan shark harassment, including leveraging on COPS as part of this effort.

I thank the Minister for the reply. It is heartening to note that there is an increase of 29% of residents who assist COPS on the bicycles and on the beat. My supplementary question is: while it is good to deter harassment, that is at the end of the game. Would COPS and Police on bicycles work with the community on the ground to deter borrowing, especially if the borrowing happens within the community, within the borders of the area that COPS patrols? So, a deterrence upstream rather than a deterrence downstream.

Madam, I thank the Member for his suggestion. I want to emphasise that we fully agree with his idea and proposal. Indeed, when we look at the efforts that have been taken and the measures overall, there are three limbs present. Enforcement, as the Member has rightly pointed out, is a downstream deterrence and is an after-the-fact activity.

At the same time, we want to work with the community. Community partnership and education efforts are key in limiting the problem upstream. This is where we can work very closely with the Police and the community groups to heighten the awareness of the dangers of this scourge and what can be done to lessen one's vulnerability to it. So, I would encourage the Member − in fact, all Members – where they have ideas and their community leaders want to engage the Police in this, to take it up with the Police. Indeed, this is why we have established the community policing arm, to deepen that partnership.

Madam, a number of the victims of these harassments are actually not the borrower. So, I would like to ask the Minister what steps would the Police take to help those who suffer because the ones who borrowed had failed to change the address in their identity cards.

Madam, I understand the Member's point and I thank him for bringing this up. Fundamentally, in order to bring peace of mind to a particular neighbourhood or group of residents, the key source of the problem is the actual harassment. That is where our Police resources are targeted − to detect and deter this kind of activity. Having said that, we have already introduced measures and legislation to render the failure to update the address on the identity card a punishable offence. If Members are aware of such cases, the cases should be reported to Police so that follow-up action can be taken.

16 Ms Janice Koh asked the Acting Minister for Culture, Community and Youth (a) what are the implementation plans for the recommendations made by the Arts Festival Review Committee; (b) what is the status of the search for the arts festival's key personnel, including the appointment of its Artistic Director and the setup of its independent board of directors; (c) what steps will be taken to ensure the artistic independence and autonomy of the Festival; and (d) what can the public expect from the Singapore Arts Festival in 2014.

Mdm Speaker, the key recommendation of the Singapore Arts Festival Review Committee was for the National Arts Council (NAC) to set up an independent company to allow the artistic community to take the lead in organising the Singapore Arts Festival. Members would have read recently that the NAC had announced, in line with the recommendation, the formation of a new company, the Arts Festival Limited, to organise the Singapore Arts Festival. The company will be led by Ms Lee Chor Lin as Chief Executive Officer (CEO), and Mr Ong Keng Sen as the Festival Director. Mr Ong will be responsible for the artistic direction of the first four editions of the Singapore Arts Festival.

We are still in the process of appointing the full Board of Directors of this new company. The Board will have responsibility and oversight of the company. This will give the company and its Festival Director the autonomy to determine the artistic vision, identity and programming of the Festival.

With regard to what we can expect from the first Arts Festival in 2014, I think we have to be realistic because arts festivals of this scale typically require two to three years to develop, commission and prepare. But I am confident that, with time, the Singapore Arts Festival will achieve the vision set out by the Review Committee, which is to inspire diverse audiences through great artistic experiences.

Mdm Speaker, I thank the Acting Minister. Arts festivals are often in a unique position to offer opportunities to artists whose passion is to inspire and stimulate us and to commission and support work that is genuinely creative. In a Festival context, we should not just be thinking about the market and what audiences want. To stimulate the creative muscle in our society, we should also need to expose audiences to the new, and we can do this by supporting artists in the creative process and then support the results of that creative process by getting it to the public.

In this respect, giving the Festival its independence and artistic autonomy in terms of programming and commissioning is a critical step towards its success. The Government should therefore support those things which have, as yet, no market but show excellent potential. In this respect, my question is: how is the Government going to ensure that the Festival will be given its artistic autonomy while at the same time funding it sufficiently so that it does not become completely subject to the demands of the market?

Well, I do not think the two are in contradiction. The funding will be provided and the company will then have to decide how best to use the funding to achieve the objectives it sets out to achieve, both to attract audiences for the Festival as well as to achieve the objectives that the Member has highlighted, which is to commission new works, inspire and support artists, get creative pieces put out, and then raise the artistic standards and quality of the performances.

That is what we expect from the company, both from the Board as well as from the Management and the Artistic Director. So, the way we expect the company to operate, including the Festival Director, is to take the funds that are provided by the Government but not just rely solely on Government funding. We would like them to also raise funds from other sponsors and then, with that funding, do the best possible Arts Festival that they can to raise artistic standards and inspire new audiences.

I would to ask the Acting Minister: in the past, when NAC was organising the Arts Festival, it also had to raise sponsorship to cover the costs. Now that it will be operated by an independent company, what is the difference between the Government's commitment in terms of financial contribution and liability of the NAC vs now, the independent company?

The financial commitment would largely remain the same. In terms of funding, the Government remains committed to funding the Arts Festival as it had done in the past. Of course, in the past, NAC would also raise funds from sponsors. Similarly, in the new arrangement, we would expect the company to raise funds from sponsors as well. In terms of the Government's commitment of funding, in the past, it was to NAC; now, it is to the new company. But that funding level will remain unchanged. And we would hope that besides Government funding, the new company would also be able to do more to raise funds from other sources, which NAC had done as well. Hopefully, with the new company, with new management, they can also do more to raise funds from other sources.

The following question stood in the name of Assoc Prof Fatimah Lateef –

17 To ask the Acting Minister for Manpower whether the Ministry will consider allowing CPF monies of parents to be utilised for their children's education in institutions like SHATEC, Nanyang Academy of Fine Arts and LASALLE College of the Arts.

Question No 17, Madam.

Mdm Speaker, the CPF Education Scheme was introduced in 1989 to enable members to tap on a portion of their CPF savings for tertiary education. However, the primary purpose of the CPF remains to help members save for retirement, housing and healthcare needs. Therefore, we have limited the usage of CPF funds for education to only full-time subsidised local tertiary education courses at approved publicly-funded tertiary institutions. This is so that we have assurance on the affordability and also, quality of these courses.

All full-time subsidised courses offered by the Nanyang Academy of Fine Arts (NAFA) and LASALLE are covered under the CPF Education Scheme. This comprises all full-time diploma courses offered by NAFA and LASALLE and degree courses offered by LASALLE in partnership with Goldsmiths' College, as well as the Music degree course offered by NAFA in partnership with the Royal College of Music. This means that parents can already use their CPF monies for their children's education in the above-mentioned courses.

Tertiary education courses that are not publicly subsidised, such as SHATEC's full-time diplomas, are not covered under the CPF Education Scheme.

MOM has no plans to expand the CPF Education Scheme beyond what is currently allowed, as it is important to preserve members' CPF savings for their retirement, especially in view of improving life expectancies. For students who may require financial assistance for their courses, we do encourage them to explore other avenues, including study awards and bursaries offered by the institutions, where available.

Mdm Speaker, I thank the Acting Minister for the answer. I would like to ask the Acting Minister two questions. First, should we not support young Singaporeans in pursuing their aspirations, even though some of the further education that they are trying to pursue here are not in full-time or subsidised public Universities, such as NUS and NTU?

Secondly, what might the other concerns be if the children promised and eventually do pay back into their parents' CPF? I understand the concern is about preserving enough money in their CPF for retirement. But should we not give them the flexibility while they are able to at this time, to help them pursue their dreams and aspirations and later on when they put the monies back to their parents' CPF, the monies of their parents are still pretty much intact for their retirement?

Mdm Speaker, I would like to thank the Member for the supplementary questions. All full-time subsidised undergraduate courses leading to a degree at our key educational establishments are covered under the CPF Education Scheme. The intent is, indeed, to support our young people as far as we can. However, we do need to remember the core purpose of CPF which is why we have decided to open up the space slightly but I think we do to manage that space.

Notwithstanding the assurance from children that they are able to repay their parents and so on, we do also have instances where there are issues arising from that. So, what I would say is that we do have many schemes available to support students who will need to pursue their various dreams and aspirations at the various institutions. For those that are not publicly funded, there are also various bursaries available as well.

18 Dr Intan Azura Mokhtar asked the Minister for Communications and Information and Minister-in-charge of Muslim Affairs if he can provide an update on the schemes administered by MUIS and MENDAKI to assist low-income Malay/Muslim families in Singapore.

Madam, the Islamic Religious Council of Singapore (MUIS) and Yayasan MENDAKI administer a range of programmes and work closely with national agencies and voluntary welfare organisations (VWOs), to help needy Malay/Muslim families achieve self-reliance and uplift their lives.

Through the zakat fund, MUIS provides financial assistance to needy Malay/Muslim families. In 2012, about $10.3 million was disbursed to more than 5,500 Malay/Muslim families, an increase of about $0.9 million compared to 2011.

Beyond financial assistance, MUIS' Empowerment Partnership Scheme (EPS) guides zakat recipients towards self-reliance. Out of the 237 families under the EPS in 2012, 192, or 81%, now no longer depend on MUIS' financial assistance as they have learned to better manage their household finances and minimise monthly income deficits. Starting June 2013, MUIS will expand its financial coaching programme to 40 more families under the EPS. MUIS will also be collaborating with MENDAKI SENSE to assist EPS clients on employability matters.

A total of 743 zakat recipient families who are not on the EPS also successfully underwent a three-month programme in 2012 to acquire useful knowledge such as financial planning and Islamic learning.

MENDAKI also provides social assistance to ensure that disadvantaged Malay/Muslim families with children who are schooling get help from a comprehensive range of social services. Currently, MENDAKI's Wrap Around Care (WAC) and Enhanced WAC (eWAC) provide social assistance to about 200 families, to help them achieve a certain level of healthy functioning. In 2013, two satellite centres were launched in Pasir Ris and Woodlands to bring such services even closer to families.

MENDAKI's primary focus continues to be on education, which is a key social leveller. MENDAKI's Education Trust Fund (ETF) provides subsidies from pre-school to post-secondary education for Malay/Muslim students from low-income households. In 2012, over 6,300 students benefitted from more than $1.2 million ETF subsidies. The subsidies now also extend to needy students who are re-sitting for academic qualifications such as the "N", "O" and "A" levels at SENSE College, a skills centre that MENDAKI recently launched in March this year.

Through its signature MENDAKI Tuition Scheme (MTS), MENDAKI has provided accessible and affordable tuition classes to almost 45,000 Malay/Muslim students in the last five years – that is, 2009 to 2013 – particularly in English, Mathematics and Science. The MTS enrolment for 2013 is about 9,800 students. More than 70% of these students receive fee waivers because of their family income. To bring MTS to more students, MENDAKI is collaborating with Malay/Muslim Organisations (MMOs), such as Darul Ihsan and Muhammadiyah Welfare Home, to host tuition classes. MENDAKI also partners Residents' Committees to run the Homework Cafe in areas with a high concentration of low-income families, to supervise and guide students with their homework.

Zakat funds are also used for educational purposes. MUIS implemented the $2.5 million Progress Fund in April 2010 to subsidise the school fees and enrichment programmes of children from zakat-receiving families. The fund was further topped up with $2 million in 2012. More than 5,800 children have benefitted from the $3.2 million disbursed to date.

Madam, in terms of employment, MENDAKI SENSE continues to assist low-income workers through training, skills upgrading and job matching. In April 2013, SENSE successfully conducted a two-day fair targeted at assisting some 2,000 low-skilled workers, aspiring PMETs and women who are keen to return to the workforce.

Mdm Speaker, I thank the Minister for the comprehensive reply. It is clear that low-income families will benefit from the Government assistance and programmes such as access to affordable childcare or student care, for example. However, may I know how our other community organisations and Malay/Muslim organisations (MMOs) are streamlining their assistance schemes to complement and enhance Government's support for low-income families?

Madam, families who are in need, first of all, should not hesitate or be embarrassed to seek help from a wide range of assistance schemes at the national and community levels. We want to avoid duplication and enable low-income families to achieve self reliance in a holistic manner beyond just mere monetary help. So, the Member is right that we want MMOs to better dovetail their assistance schemes with national schemes. The general approach that we would like to take is to first explore the client's eligibility for national schemes and then with community and local schemes coming in to supplement or complement the client's needs.

I cannot speak for other MMOs but, for both MUIS and MENDAKI, that is the protocol that we adopt. So, for example, we first refer zakat recipients to national schemes conducted by the CDCs and also by WDA. In the case of MENDAKI, all the programmes that we do on the ground, we work closely with Family Service Centres which are national institutions to ensure that we tap on the programmes which are available by various Government agencies with MOE and MSF.

At the national level, we understand that MSF would continue to work as an active and caring partner in helping the needy but working in partnership with families and the community to strengthen our social safety net. So, the idea of dovetailing and streamlining is an important part of the work that has been done in Singapore and we would like all MMOs to consider that as a protocol.

To the best of my knowledge, many MMOs would first tap on national resources before they deploy their own resources to assist low-income Malay/Muslim families.

Supplementary question, Mdm Speaker. I would like to ask the Minister if such a partnership between Government and community is viable, and if it is the way forward for uplifting our low-income families.

Madam, we think that the partnership between Government and community-based organisations has enabled a lot of low-income families, not just Malay/Muslim families, to benefit from assistance that is more tailored and customised to meet their complex needs. So, if you look across the landscape, we have the CDCs, grassroots organisations, VWOs as well as community-based organisations and they play a key role in rendering the services.

I think the best way to see whether the partnership has worked is really to look at examples. I have a couple of examples that I have asked my staff to compile but I will give just one example. This is the case of Mr Mohamad Rafi, aged 37, and his wife, Mdm Rokiah, aged 28. They successfully graduated from the MUIS' Empowerment Scheme in December 2012 and they approached MUIS in 2011 when they were grappling with their inadequate income, arrears and even depression suffered by the wife and childcare arrangement for the children. But because of the EPS and because we worked with WDA, today Mdm Rokiah has just completed a full-time diploma in design. So, the family no longer has arrears and is working towards the dream of home ownership. And what is more important now, Madam, is that Mdm Rokiah is now a volunteer at one of our mosques in Ang Mo Kio. When she was asked as to why she is doing that, and I would like to quote her, she said, "There are many more out there, worse off than us. We have been very lucky. I know how they feel and I hope we can help in whatever small way."

So, the partnership is effective. The example clearly shows how both the Government and VWOs are complementing each other in helping low-income families to uplift and there are many, many other examples to show that this is really a viable alternative to go forward.

I thank the Minister for sharing the case studies and also the progress made by MENDAKI and MUIS. I would like to ask the Minister if MENDAKI and MUIS had done a scan in terms of the demand for such help in Singapore, and whether MUIS and MENDAKI are adequately staffed and resourced to meet the demand?

We did a scan first in 2002 when I took over and we have just finished another scan. Clearly, there are gaps and the gaps can be filled by having more partners come onboard. So, a good example is the CLF that we created in 2003. And it has created an opportunity for more organisations to come onboard so that we can have more hands on board to deal with the problem. As I mentioned in my figures, we are only helping 200 families. Clearly, there are more families out there and we need more partners to come onboard.

Having said that, the response from the MMOs has been very heartening – they also faced constraints such as manpower and resources and, certainly, we can always raise the money but we also need warm bodies on the ground to be able to do the hard work. So, this will be an ongoing challenge and we will continue to engage the organisation as best as we can to ensure that they are scaled up as quickly as possible to deal with the problems.

The following question stood in the name of Ms Mary Liew –

19 To ask the Acting Minister for Culture, Community and Youth what are the existing enforcement measures against bogus fund-raising activities and bogus fund-raisers.

Question No 19, please.

Acting Minister, you have two minutes.

Mdm Speaker, all fund-raising appeals conducted in publicly accessible areas or from house to house require a licence from the Police.

If in doubt, members of the public can check if a fund-raising appeal has a valid licence from the Police. They can do so using the SMS verification service. With this service, anyone who sends an SMS can receive details such as whether a valid licence has been issued and if so, the name of the fund-raising organisation and the approved fund-raising period.

Furthermore, through the Charity Portal's fund-raising permit search facility, members of the public can obtain additional information such as the approved locations for the conduct of the fund-raising activity as well as the purposes for which the funds will be raised.

If members of the public suspect that any fund-raising activity is fraudulent, they should report the matter to the Police immediately. The conduct of bogus fund-raising activities is tantamount to cheating and is a crime that will be dealt with by the Police.

I thank the Acting Minister. Just two supplementary questions. The first is —

Keep your questions short, Ms Koh. We do not have much time.

Firstly, what are the penalties for these bogus fund-raisers and how are these penalties communicated so that it is a preventive measure? And secondly, how are we educating the public so that they are able to discriminate between the bogus fund-raisers and the genuine ones?

I thank the Member for the questions. I do have not the details on the penalties now but I think we can provide the information and I agree with her that we should certainly raise awareness that there are penalties. There is a system in place that people can check on the licences. It is very convenient – send an SMS, the number is 74688 and you can check whether the licence is valid. We will put up more information on how people can do that. There is a charity portal. Check the charity portal. You can get information on the permits and where the fund-raising activities are being held.

This is the information we can put out more to raise public awareness to do their own checks and then as a deterrent measure, as the Member had said, we can highlight what the punishments are. There are penalties in place. I do not have the details but I would be happy to share them separately.

Order. End of Question Time. Ministerial Statement. Minister Khaw Boon Wan.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 20-21, 23-25, 28-29, 31-47, 49-54, 56-59, 61-66, 68-69, 71-76, 78-84 and 87-90 on the Order Paper are reproduced in the Appendix (Pg xxx-xxx). Question Nos 22, 26-27, 30, 48, 55, 60, 67, 70, 77 and 85-86 have been postponed to the next available sitting of Parliament.]

Mdm Speaker, thank you for allowing me to deliver this Ministerial Statement on Town Councils.

Last December, MND published its fourth Town Council Management Report, what we call TCMR. As we know, this is a regular report which sets out the performance of Town Councils in key areas like the state of cleanliness, maintenance of the estates, management of service and conservancy charges (S&CC) arrears and also the standard of corporate governance.

Among other observations, the fourth TCMR noted that the Aljunied-Hougang Town Council (AHTC) had yet to submit their auditor's Management Letter. This was material to the assessment of the corporate governance indicator. In response, the AH Town Council explained that completion of its audit had been delayed because Action Information Management Pte Ltd (AIM) had terminated the Town Council Management System (TCMS) with effect from 1 August 2011, making it necessary for AH Town Council to develop its own software within only two months.

This led to an exchange of statements between AH Town Council, AIM and Mayor Teo Ho Pin, who is the Chairman of PAP's Town Councils Coordinating Committee. Questions were raised on the circumstances surrounding the termination of the TCMS for AH Town Council in 2011 and the sale of the TCMS software to AIM in 2010. There were questions about possible conflict of interest in AIM, a PAP-owned company, contracting with the Town Councils which were run by PAP Members of Parliament (MPs).

In the interest of transparency and maintaining trust in the system, the Prime Minister ordered MND to review the AIM transaction thoroughly. MND was also to make observations on the nature of the Town Councils and how they had been run, with a view to improving the current framework. MND was given the task as it administers the Town Councils Act and regulates the Town Councils. MND has a duty to ensure that public funds are safeguarded at all times and that residents' interests are not compromised.

Permanent Secretary of MND, Mr Benny Lim, took charge of this task. He set up a seven-person review team, led by Mr Tay Kim Poh. Mr Tay is Deputy Secretary in MND and also formerly CEO of HDB. He has rich experience in public housing and especially Town Council matters. Madam, I notice that Permanent Secretary and Deputy Secretary of MND and one of their Review Team members are in the Visitors' Gallery this afternoon.

The Review Team reported to the Permanent Secretary directly. I gave them a completely free hand in carrying out their task. They interviewed all interested parties, probed their records, sought views from relevant experts and had the full cooperation of all the Town Councils. They did not report back to the Prime Minister or myself until they had completed their work.

On 30 April, Permanent Secretary (MND) submitted the review report to Prime Minister, with a copy to me. On 3 May, the report was released to the public, and has also been circulated to Members as a Miscellaneous Paper. The Prime Minister has accepted the Review Team's findings and recommendations. He asked me to deliver a Statement on this subject to Parliament. I will then move a Motion under Standing Order 44 that the matter be considered by Parliament, so that Members can ask questions and we can have a full debate.

The MND report covers three parts: (a) the 2010 AIM transaction; (b) the party political nature of Town Councils; and (c) the need for a review of the Town Councils.

First, the 2010 AIM transaction. As Members have seen the report, I will not dwell on the details. Basically, the Team reviewed all the facts of the 2010 AIM transaction. Its findings were summarised in paragraph 4 of Permanent Secretary (MND)'s letter to the Prime Minister of 30 April. Let me quote the highlighted sentences in this letter:

"there was no pecuniary or material interest by any Town Council member in AIM or in the contract awarded to AIM in 2010;

the PAP Town Councils complied with the open tender process under the Town Councils Act and Town Councils Financial Rules (TCFR);

the acceptance of a single bid for award is permissible under the TCFR as long as it satisfies the tender requirements and evaluation criteria;

AIM did not make a profit from the TCMS transaction in 2010; its Directors were not paid any fees and it charged only a fee to cover its operational costs;

there was no misuse or loss of public monies in the transaction; and

in the light of the above findings, the team concluded that the AIM transaction in 2010 has complied with the Town Councils Act and the Town Councils Financial Rules."

The Review Team also examined the circumstances surrounding the termination of the TCMS for AH Town Council in 2011. They interviewed both parties and examined the communications between AH Town Council and AIM. They established the chronology of the exchanges. The chronology ends with AIM agreeing with AH Town Council's request to extend the use of the TCMS to 9 September 2011. The Review Team states that AH Town Council sent a letter first, on 10 June 2011, asking for termination of the TCMS, and further states that there appears to be a different understanding of the execution of the termination clause in 2011 by both parties.

Madam, the MND Review Report speaks for itself and I am sure the Review Team will be prepared to defend their findings anytime.

Second, the party political nature of Town Councils. Paragraphs 3 to 7 of the main Review Report provide useful background on why Parliament originally set up Town Councils in 1989, and on the strategic intent behind the Town Councils Act. Then MND Minister, Mr S Dhanabalan took the Bill through the House in June 1988. Then Deputy Prime Minister Goh Chok Tong set out clearly the purpose of forming Town Councils. I advise Members to read the Hansard records for a thorough understanding of this piece of legislation.

Prior to 1989, all the common areas of HDB estates were maintained centrally by HDB, a Government statutory board. However, Parliament decided to give MPs more authority and responsibility over the HDB estates in their constituencies, in order to strengthen the nexus between the residents and their elected MPs. The strategic intent was to bring home to the MPs that how they manage and run their Town Council would affect their electoral fortunes at the next election. This would enhance accountability, push MPs to focus on what mattered to the residents, and in turn, encourage voters to scrutinise more closely the capabilities and the track record of election candidates. This would ultimately benefit both the voters and the residents.

In line with this objective, the MND crafted the legislation to recognise the political nature of Town Councils. As the Review Team noted, and I quote, "The intent is to give the elected MPs as much latitude as possible to run the Town Councils within broad and general rules laid down to ensure proper governance and safeguard public interests."

In the same spirit, when administering the Act, MND has given latitude to MPs to exercise autonomy in judging how best to achieve their agenda and advance their residents' interests. For example, Town Councils may, as they see fit, engage those who share their political cause or are affiliated to their parties. In particular, the Town Councils are able to transact with persons or entities associated with political parties. Over the years, many Town Councils have exercised this flexibility.

For example, some Town Councils have appointed fellow party members and unsuccessful election candidates to various salaried jobs, including as General Manager. One Town Council waived competition – that means did not call tender – to appoint as its Managing Agent, a company owned by party supporters. MND has not interfered with such transactions. However, while MPs have considerable leeway, the substance of each transaction must still be proper and safeguard public interests.

So, to recap, Town Councils are set up for to fulfil a political purpose. Town Councils are not part of the Singapore Public Service, and so they are not governed by Civil Service rules. They are governed by the Town Councils Act. What Town Councils can and cannot do is set out in the Town Councils Act.

In the case of the PAP-run Town Councils, they work closely together to take advantage of economies of scale to benefit their residents. While PAP Town Councils operate in a decentralised manner, in the spirit of the Town Councils Act, they also work together as one team, tap on one another's strength, share best practices, and where relevant, make bulk purchases together so that they can get the best terms for their Town Councils and therefore their residents. That is why they have a Town Councils Coordinating Committee, currently chaired by Mayor Teo Ho Pin. That is also how the IT software got standardised for their Town Councils. In addition, the PAP as a political party stands fully behind the MPs and their Town Councils. And that was why the PAP set up AIM in 1991: to ensure that residents living in PAP-run Town Councils would be well served. I am sure later Mayor Teo Ho Pin can elaborate on how the PAP-run Town Councils work together for the benefit of their residents.

The Review Team made observations on the process of handover of Town Councils from one party to another. After an election, a new team is required to take over almost immediately. And when there is a change in political party, it is not just the MPs who change because the other Town Councillors and even the Town Council employees may change too, as it is common for MPs to tap on the support of those who share their political cause to deliver their electoral promises for the estate. However, at present, the Town Councils Act does not contain adequate provisions to deal with such transitions.

For example, when the Singapore Democratic Party, and subsequently the Singapore People's Party ran Potong Pasir Town Council (PPTC), it self-managed the Town Council, without any Managing Agent. When PAP MP Sitoh Yih Pin was elected in Potong Pasir in 2011, he had to appoint a Managing Agent quickly to ensure continuity of services for residents. He persuaded EM Services to step in to provide the service at short notice and managed to achieve a successful handover. But he told me that it was a trying time for him and his team.

More recently, after the Punggol East by-election, Pasir Ris-Punggol Town Council (PRPTC) had to hand over the management of Punggol East SMC to Aljunied-Hougang-Punggol East Town Council (AHPETC). Both Town Councils agreed to an official hand-over on 30 April 2013 but they needed to share the office space from 1 May as Pasir Ris-Ponggol Town Council needed more time to prepare its alternative office before it could move out. "How to share office space" from 1 May became a point of discussion. There was initial frustration when both parties could not agree to the proposed layout for the shared office. Differences also arose over several other issues. MND officers stepped in to facilitate the handover and broker an arrangement acceptable to both parties. Eventually both sides came to a compromise on the various issues.

There are clearly some lacunae in the rules dealing with handovers of Town Councils. We need to look into this. The Review Team has made some useful recommendations to institutionalise some change-over rules to minimise disruptions to critical services during a change in leadership. One is for Town Councils to have in place contractual provisions for automatic one-off extensions following an election when there is a change of party in charge of the Town Council. Another is to set a minimum notice period for termination initiated by the contractor or key appointment holders such as General Managers. The Town Councils themselves have suggested that MND should consider extending the period of handover and play a greater role in the process. These are all useful suggestions and MND will take them in when it updates the Town Councils' rules.

Another manifestation of the autonomy exercised by MPs is the uneven way MPs manage their respective towns. Some Town Councils are stricter in enforcing and recovering S&CC arrears. But others take a less stringent , shall we say, more populist approach towards such collections but at the expense of the Town Councils' long-term financial health and also, of the interest of the majority of residents who do pay on time.

MND has significant concerns about the Town Councils' long-term financial health. Town Councils are required under the Town Councils Act to build up sinking funds which they will eventually need to replace big ticket items like lifts, mechanical and electrical equipment, major repairs and repainting programmes. Town Councils' sinking funds often run into millions of dollars while they build up but they will all be needed in due course many years later. Most Town Councils find it difficult to explain to their residents why their S&CC has to go up to build up the sinking funds further when the Town Council already has "millions of dollars" in its sinking funds. Some resort to kicking the can down the road, delaying S&CC increases which are necessary, and creating a serious problem that will emerge later when the replacements and maintenance works come due. This is clearly not sustainable.

MND has also observed that Town Councils do not want to take on more responsibilities, especially if these carry a political cost. For example, some Town Councils are reluctant to enforce their own Town Council by-laws strictly, such as on obstruction of common corridors even though this is a fire safety risk. Another example is the disagreement over who should clean the hawker centres. There are currently two cleaning teams: one contractor appointed by the Hawkers' Association − they clean the table tops; another team by the Town Councils who clean the floor and also toilets. We know and we laugh about it. This division is inefficient but to consolidate the cleaning function into one will require the Town Councils to have to charge stallholders a higher S&CC. Most are reluctant to do so.

These examples illustrate how political pressures on Town Councils can lead to Town Councils making sub-optimal decisions resulting in poorer outcomes for the residents. This is not a simple problem to tackle as it is an unintended consequence of the very nature of Town Councils and is deep-seated in the current practice of many Town Councils. The Team has thus recommended a review of the current Town Council framework. This brings me to the third part of the report: the need for a review.

Twenty-four years after the formation of Town Councils, it is timely to assess the achievements of the Town Councils Act. The Review Team found that Town Councils have largely fulfilled the original objectives for which they were set up. Town Councils have delivered key estate services to residents in ways that conferred local flavour and met local needs. Residents enjoy far more customised services and Towns have developed their own identities in ways that HDB as a national agency could not have done.

The Straits Times dated 7 May 2013 published the results of a straw poll on whether town management should return to pre-Town Council days and they found that 41 out of 50 persons agreed. In other words, "Let's walk backwards − go back to the good old days". It titled its article: "Residents prefer apolitical agencies: Poll". It quoted one resident as saying, "Municipal issues must be separated from political considerations so that Town Councils can be administered in a transparent manner, serving public interest and not party interests. After all, Town Councils are funded by public monies." But the same Straits Times article went on to quote several experts and most MPs as wanting to keep Town Councils as political entities.

In a TODAY article published a day earlier, on 6 May 2013, NMP Assoc Prof Eugene Tan argued a view contrary to The Straits Times' poll findings. He aptly summarised it in the title of his article: "Let us not centralise Town Council services". It was a well-argued piece against a return to status quo ante.

We need to consider this long-term issue objectively and carefully. There are at least three areas which need to be looked at: first, Town Councils' duties and responsibilities vis-a-vis HDB; two, adequacy of Town Councils' sinking funds and long-term financial sustainability; and, three, hand-over and transition arrangements when MPs change and, may I add, such change could take place between MPs of the same party or from different parties. I have asked Senior Minister of State Lee Yi Shyan to undertake the review focusing on these areas. And I urge all of you – MPs and NCMPs from all parties, as well as NMPs – to share your views, ideas and insights with him in this review.

Mdm Speaker, 24 years after the formation of Town Councils, town management has been raised to a higher plane. The legislation to empower the elected MP to run the Town Council, so that he can respond more promptly to his residents' needs and work with his voters to shape their town's identity, has generally been a success. The need to create a nexus between an elected MP and his voters, through his work in the Town Council which has a direct bearing on the daily life of the residents, is a strategic imperative which cannot be faulted. We should not return to status quo ante where HDB administers estates all over Singapore, and MPs have no authority or responsibility over what is done or how well things work.

I am hopeful that two decades of actual experience in running Town Councils will enable us to evolve a good practical approach. As pointed out by the Review Team: "How our public housing estates are managed is a very significant subject as it impacts the value of the homes and the experience of day-to-day life for a vast majority of Singaporeans living in the HDB estates." We owe it to them to find a good accommodative solution going forward.

Mdm Speaker, pursuant to Standing Order No 44, I beg to move, "That the Ministerial Statement on Town Councils be considered by Parliament."

[(proc text) Question proposed. (proc text)]

Mdm Speaker, I wish to place on record in this House, and highlight the rationale and facts of the AIM transaction based on the press statement which I issued on 2 January 2013. I have also given the same facts to the MND Review team.

In my press statement, I have clearly and categorically stated the details that led to the AIM transaction. In 2009, the PAP-run Town Councils appointed Deloitte and Touche to advise on the review of the Town Council Management System (TCMS). Deloitte and Touche identified various deficiencies and gaps, and that the current TCMS system was becoming obsolete and unmaintainable.

As recommended by Deloitte and Touche to consider a "Service Model", the PAP-run Town Councils decided to sell the existing TCMS so that the Town Councils can continue to secure extension of the maintenance of the system without extra cost while exploring development options.

AIM submitted the only bid in an open tender, met all tender requirements and was awarded the contract. During the review, AIM had secured two extensions of the existing TCMS at no extra cost to the PAP-run Town Councils. It had actively worked to explore new software options and enhancements for the new TCMS. Thus, the AIM transaction has benefited the PAP-run Town Councils, and paved the way for the new TCMS tender to be called in February 2013.

On 30 April 2013, the MND review committee reported the facts of the AIM transaction, and found that the PAP-run Town Councils complied with the Town Councils Act and Town Council Financial Rules. The findings also show that no PAP-run Town Council Chairman or their Town Councillors had any pecuniary or direct interests in the AIM transaction.

Mdm Speaker, I have been involved in the running of Town Councils for 22 years since 1991. Based on my professional training in Building and Estate Management, I have always exercised my best judgement to serve my residents, and safeguard the interest of residents in the PAP-run Town Councils. I hope the facts of the AIM transaction will help the public to understand that the PAP-run Town Councils had acted in good faith in the interest of and for the benefit of their residents.

As Co-ordinating Chairman of the PAP-run Town Councils, I wish to reiterate that the PAP-run Town Councils have always exercised good governance in the management of the Town Councils. We are guardians of our residents' and public funds, and must always be accountable to our residents. We must ensure that our residents get value for money in Town Council services. The AIM transaction is one of the many joint projects which the PAP-run Town Councils have worked together to benefit our residents.

Mdm Speaker, the AIM transaction has enabled the PAP-run Town Councils to explore various options to develop a new Town Council Management System (TCMS) while paying no extra cost for the maintenance of their existing TCMS. In April 2013, the PAP-run Town Councils have awarded the new TCMS contract to NEC Asia Pacific Pte Ltd for $16.8 million. This is based on a "Service Model" as recommended by our consultant, Deloitte and Touche.

The new TCMS will have enhanced features in estate management solutions, dashboard reporting, more friendly usability, and e-learning tools for staff training. The new TCMS will save all 15 PAP-run Town Councils millions of dollars over the next seven years.

Madam, Town Councils were set up in 1989 to enable elected MPs to run their respective HDB towns, and be accountable to their respective residents. The inherent political nature of Town Councils is to ensure good governance of Town Councils by MPs for the benefit of their residents. It is the duty of all elected MPs, and their appointed Town Councillors, to run the Town Councils in compliance with the Town Councils Act and Town Council Financial Rules.

Over the last 24 years, the PAP-run Town Councils have worked closely with their residents to improve the living environment of their towns. The PAP MPs have engaged their residents actively and improved Town Council services to better serve their residents. The PAP-run Town Councils have also implemented many improvement projects to fulfil the needs of their residents. For example, covered linkways connecting block to block, block to bus-stops, new generation children playground, elderly fitness outdoor gym, and landscape works. All these projects have improved the quality of life of their residents.

Besides serving the residents of their respective towns, the PAP Town Councils also meet regularly to share best practices and implement joint projects for the benefit of their residents. As Co-ordinating Chairman of the PAP-run Town Councils, I chair both the Town Council chairmen and the Town Council GM meetings to facilitate all Town Council matters. The 15 PAP-run Town Councils have always worked together as a team supported by the PAP to continually improve the running of their towns. Over the last 24 years, the PAP-run Town Councils have built capabilities, and accumulated much domain knowledge in the running of Town Councils.

At the same time, the PAP-run Town Councils have also taken advantage of their economies of scale to implement many joint projects to bring cost savings to their residents. Madam, let me provide some examples to illustrate how the 15 PAP-Town Councils have worked together to benefit their residents.

Economies of scale. One, Emergency Maintenance Service Unit (EMSU) Joint Tender. The PAP-run Town Councils jointly called a tender to provide 24 hours emergency maintenance services for their residents. These include lift rescue services, emergency repairs and call centre services. The benefit of this joint tender is to bring down the cost of providing 24-hour emergency maintenance services and ensure that backup emergency maintenance services are available. The EMSU tender for the 15 PAP-run Town Councils is grouped into three zones – East, West and Central – so that two or more service providers can serve and provide backup emergency maintenance services to the residents.

Two, the Town Council Management System (TCMS). Town Councils are established under the Town Councils Act, which stipulates specific functions and duties of the Town Councils. As such, the Town Councils share similar business processes and operations, such as accounting, statutory reporting, income tax, arrears management, by-law enforcement and interface with various Government agencies.

Due to the similarities in business, the PAP-run Town Councils have reaped economies of scale when they jointly developed the TCMS in 1994 instead of each Town Council developing or purchasing computer system separately on their own.

In addition, the Town Councils can leverage on each other's strengths and experiences, thus saving time and cost in the TCMS development. Furthermore, cost savings can be derived with a common IT infrastructure, such as the hosting of software and data in a centralised environment, including backup, as compared to the Town Councils having to purchase individual servers and related equipment.

Thus, with the collective knowledge and experience, the PAP-run Town Councils are able to develop a comprehensive and well-integrated TCMS, thus improving the productivity and efficiency of the Town Councils.

In addition to the operational efficiency, the TCMS has provided much convenience to residents as the PAP-run Town Councils offer different modes for S&CC payment, faster response to accounts queries, and prompt payment to their contractors and suppliers.

Three, town improvement projects. It is a common practice for the PAP-run Town Councils to call joint tenders for improvement projects, such as covered linkways, children's playground or elderly fitness equipment, so as to obtain comparative prices. Due to bulk purchases, the PAP-run Town Councils are able to attract better quality suppliers and contractors for improvement projects. This has enhanced the durability, maintainability and safety of the amenities added to the towns.

Similarly, the PAP-run Town Councils have worked together to negotiate with different lift companies to get better lift maintenance servicing fees, and also spare part prices due to its economies of scale. This has also slowed down escalating costs for lift servicing and maintenance.

As part of the green efforts of the PAP-run Town Councils, the Town Councils jointly called tenders in 2010 and 2013 to replace all common areas and corridor lightings – close to one million tubes – to energy-efficient LED lightings. With bulk purchase and installation, the Town Councils were able to save the capital cost of $24 million for the LED lightings. Instead, the supplier has proposed an energy-saving sharing formula to fund the project. The LED project has also brought immense savings in utilities bills to the Town Councils.

Sharing of Best Practices. Mdm Speaker, over the years, the PAP-run Town Councils have been sharing best practices to provide quality estate management and maintenance services to their residents. In order to better serve their residents, the PAP-run Town Councils have partnered with our service provider to develop the Integrated Estate Management System (IEMS). The IEMS is a management tool that provides recording of feedback and observations which then activates a sequence of follow-up actions.

With IEMS, the Town Councils can respond faster to feedback by residents. The IEMS also collates data for the planning of preventive maintenance works. The PAP-run Town Councils have set high performance standards for their service providers. For example, the lift maintenance team must respond within 25 minutes to rescue passengers trapped in lifts.

As the design of HDB towns and needs of residents are different, the PAP-Town Councils often share their experiences and practices to improve their services. The PAP-run Town Councils also compare notes when formulating their respective by-laws and policies. This sharing provides flexibility for the Town Councils to address local needs while adopting best practices from other PAP-run Town Councils.

One example is the by-law and policy for Outdoor Display Areas (ODA). Different Town Councils have similar ODA policy with regard to fire safety for the display of goods outside shopfronts, but allow flexibility in the display areas due to the different needs and designs of the HDB shops.

Mdm Speaker, since the formation of Town Councils in 1989, the PAP-run Town Councils have been diligent in serving their residents. The PAP-run Town Councils have initiated many projects to get value for money for their residents. In the process, the Town Councils have also established good rapport with their residents. Residents have been responsive in providing useful suggestions to improve Town Council services, and implement improvement projects that meet their needs. The strong partnership between the PAP-run Town Councils and their residents has enhanced the quality of living environment for HDB residents.

Mdm Speaker, I understand that there are concerns raised with regard to the handover of Town Councils when there is a change of political parties or boundary. Elected MPs should not get into a "blame game" and politicise the handover. This is unproductive and do not benefit the residents.

Instead, elected MPs should adopt a professional code of conduct to effect a smooth handing over of Town Councils. This is commonly practised in strata-titled developments whenever there is a change of management or managing agent.

In the case of Town Councils, both incoming and outgoing MPs owe a duty of care to the residents to make sure that Town Council services are not disrupted during the handover. I would propose that the MND review the Town Councils Act to provide a framework to facilitate the handover. In the event of any dispute, the MND shall be the arbitrator to resolve these problems. In this way, we shall be able to safeguard the interests of the HDB residents whenever there is a change of management.

Mdm Speaker, the PAP-run Town Councils have served their residents well over the years. The PAP-run Town Councils have received strong support from the PAP and its leadership in the running of Town Councils. Many HDB residents have witnessed the improvements in their living environment, and expressed appreciation for the range of services provided by their PAP-run Town Councils.

The PAP-run Town Councils will continue to work hard to make every HDB estate the best home for their residents.

Mdm Speaker, this debate has been triggered by the controversies surrounding the sale of Town Council Management System (TCMS) software by 14 Town Councils managed by the PAP through the Action Information Management Pte Ltd (AIM) in 2011 prior to the General Elections.

I would like to thank the Prime Minister for acknowledging the public interest in this matter and for ordering MND to investigate and to do a broader-based review of the nature of TCs. I would also like to record thanks to the Ministry officials for their efforts.

Where do we stand today after the review? MND's findings cleared the AIM transaction but highlighted areas for strategic review of TCs. It seems, however, that members of the public who have been tracking this issue are still asking critical questions and many are not convinced that the 14 PAP TCs acted in the public interest when they sold the TCMS to AIM. It is necessary to debate this matter calmly and clearly to enable the public to understand the issues more fully and realise what is at stake. That was why I re-filed an Adjournment Motion last week. The Government's subsequent decision to enable the matter to be debated under Standing Order 44 is belated but it is the correct thing to do.

Let me first summarise how the Workers' Party and the Aljunied-Hougang-Punggol East Town Council view the MND findings before elaborating. I shall thereafter make recommendations for the review.

First, we do not agree with the findings regarding the AIM transaction that public funds were safeguarded and residents' interests had not been compromised. From our reading of the documents available to us, there were aspects of the tender suggesting it failed to follow the spirit of what an open tender should be.

Further, the terms of the sale of the most critical town management IT system had unnecessarily endangered public welfare, particularly the relinquishing of ownership to AIM with the one-month termination clause. MND fell short in not admonishing the PAP TCs for risking disruption to the public in the name of politics. MND also did not take cognisance of the wastage of public funds incurred when such terminations required replacement systems to be set up. In addition, the one-year sale and leaseback was clearly an underestimate of the time needed to redevelop a new TCMS. The fact that the one year happened to straddle GE 2011 suggests that whatever good faith the TCs had in the sale to AIM, there were political objectives in crippling any new TC leadership of a different political affiliation, hence, endangering the public in the process.

Second, as regards the MND's recommendations for a review of TCs, we find that while they will improve continuity of services during a handover of TC management, their recommendations do not go far enough to prevent wastages of public funds. MND should entrench principles to recognise the public nature of assets being handled by TCs which should be safeguarded for public benefit regardless of politics.

Before I go further, I should, at the onset, state WP's position concerning town management and why we brought the AIM sale to public knowledge in December last year.

Workers' Party MPs are committed to being politically accountable to voters for town management under the current regime. Whatever else is done in other countries, the responsibility for town management has been legislated to the MPs under the Town Councils Act. We accept this responsibility and have pledged during elections to manage towns entrusted to us to the best of our ability. We intend to continue keeping this promise.

We raised the sale to AIM after the MND released its banning of Town Councils under the revised TC Management Review framework in December 2012. Contrary to what some PAP Members have charged, it was not raised as an excuse for non-performance nor are we asking anybody to wait 24 or 30 months or five years for us to perform. AHTC was actually ranked well and comparably by MND in the areas of cleanliness, maintenance and lift breakdowns – the critical functions residents care most about. The main point which required public explanation was that the new indicator of corporate governance was graded as pending, as our auditors took much longer to complete their work.

This was due to the need to reconcile accounts being kept under two different IT systems with differing nomenclature. We do not believe that the AIM sale served the public interest, and the public deserves to know about this and assess it for themselves. We find it unacceptable for any TC to relinquish control over critical TC assets developed with public funds to third parties who can cut the TC off from using the assets to service residents. In our view, the PAP TCs had unjustifiably risked a disruption to public services and that this should not be allowed to recur. I am relieved to read that the MND recognised the need to preserve continuity of public services as a paramount priority. The question is: why did the PAP TCs not recognise the risk of service disruption when selling the TCMS to AIM?

Madam, let me now go into some detail about our misgivings concerning the AIM transaction. The reasons given by the PAP TCs for the sale of software and intellectual property raised more questions than answers. They told MND that having the software reside in a single entity was better than having the vendor deal with 14 TCs which would be cumbersome and inefficient. But surely, this can be easily overcomed since the PAP TCs have a Co-ordinating Chairman who can coordinate to ensure the proper authorisations.

The TCMS was developed with $23.8 million of TCs' operating funds. Surely, there is reason to retain ownership and control over it for the residents in the 82 electoral wards then under their charge. Much ado is being made in the report that the second generation TCMS was almost obsolete and had limited value. But does this mean that it is of limited value to the TCs using it now? If the system ceases to function without replacement, TC operations will grind to a halt.

Another incomprehensible justification is the saving of $8,000 for the 14 TCs that arose from the sale. The $8,000 savings is the difference between $140,000 paid by AIM and the sums paid by the TCs back to AIM during the one-year leaseback. This total savings of $8,000 shared among 14 TCs amounts to about $571 per TC. Is saving $571 significant enough a reason for a TC to sell a system?

Next, Madam, the tender terms. It was emphasised in the MND report that the choice of AIM was made after an open tender. Was it an open tender in substance? The tender was advertised and five companies picked up the documents. However, a closer look at the conditions of contract will reveal that the specifications required each of the Directors of the tendering company to have adequate experience with the operations and functions of a Town Council. I wonder how many companies in the software business in Singapore can say that all their Directors have TC experience – perhaps only AIM.

The tender period was advertised as 14 days, shorter than the minimum period of three weeks for local tenders required under TC Financial Rules 74 sub-rule 6. It was then extended by another week to give three weeks. Why the initial period advertised was one week less than the minimum was not explained at all in the MND report. In addition, one of the companies which picked up the tender forms had told the media that there was insufficient information in the tender documents to make a decision whether to tender. This was in The New Paper.

Next, Madam, risk assessment of AIM. The PAP TCs told MND that one of the key reasons for selling the software to AIM was that AIM agreed to bear the risk of any price increases by NCS in maintaining the software even after the original contract with NCS expired. We have not been able to find this exact clause in our documents. However, even assuming so, on what objective basis did the PAP TCs assess that it was safe to entrust this risk of cost increases to a company with a paid-up capital of $2? Who will pay in the event of a cost increase? What about the risk of AIM being wound up?

The PAP TCs highlighted AIM's track record but based on the tender documents we have seen, AIM listed only one prior project, also a sale and leaseback. When AIM was asked to fill in a table indicating the identities of their key technical and professional staff, a line was drawn across the table with only one word typed in "outsourced".

Next, Madam, duration and timing of the sale and leaseback. MND noted that the TCs underestimated the complexity of the task of developing the new generation TCMS software. We find this quite puzzling since the TCs had experience in developing the first and second generation TCMS and should have known that one year was too short. Now, as MND has noted, two extensions were required after that and a fresh tender was only called this year, in 2013. Was there any re-development work from 2011 to now? The timing of the sale to commence a few months before the General Elections in 2011 also calls for explanation. Was it a pure coincidence or was there simply a need to sell the software quickly so that termination can be effected if political seats were lost?

Madam, let me now turn to the termination clause. The reasons given by the PAP TCs for the one-month termination clause are unconvincing. First, no attempt was made to explain why a material change in the membership of the TC should allow unilateral termination by the contractor with one month's notice. It is unfortunate that MND did not seem to query this as this was the crux of exchange between the PAP and the Workers' Party. Could it be that there is simply no good reason to give?

Some attempt was made to explain why termination may be fair in the case of a change in boundaries. It was said that the contractor might be faced with a much larger town than anticipated but be held to a fixed price to its detriment. I am not sure why there was this worry. At that time, the TCMS was being developed for the whole of Singapore, except two SMCs, namely Potong Pasir and Hougang. In addition, the contract itself already provided for variation in price based on the number of property units.

The real sting of the termination clause lay in its one-month notice period. Is a one-month notice period reasonable for a critical IT system? It is quite clear that time is needed to develop a system of this complexity; in the PAP's own estimation, 18-24 months. Did the PAP TCs not realise that this aspect of the AIM transaction endangered the continuity of public services, or perhaps that was the intention in the case of a change in political leadership? It was fortunate, indeed, that the Workers' Party could use the IT system in place in Hougang Town Council and upscale it within a much abridged time to cater for a town of GRC magnitude. What if the constituency was one by a political party not running any Town Council or by an independent candidate? Or is the continuity of public services not important to the PAP once they lose a constituency?

Next, Madam, no finding has been made about the wastage of public funds caused by the need to replace IT systems due to a change in political leadership. Once the system has been developed with TC funds, the residents have a beneficial interest in it since they contribute to TC funds via service and conservancy charges. Why should they pay again for a replacement system just because the Town Council Management has changed hands? Even those who live in private estates have asked me about wastage since TCs are also funded by Government grants that they, as taxpayers, contribute to. MND has made a finding that there was no loss of public funds caused by the AIM transaction. But what about the wastage of public funds which the transaction brings about? Residents and taxpayers pay twice for political intrigue. How is that justifiable?

Let me now move to the nature of Town Councils and the recommendations for strategic review. Town Councils provide essential public services to HDB dwellers via public funding. As custodians of public funds, all MPs must act in the best interest of residents, regardless of which political party they support. At the same time, TCs unavoidably have some political elements. The manner and quality of town management is one factor in a voter's choice of MP, and MPs wish to do well in town management in order to get re-elected. However, it does not mean that MPs can allow TC assets to be endangered or cut off from TC use for political reasons.

Let me, at this juncture, share some essential facts about AHPE Town Council and correct some misconceptions. The IT system in use in AHPE TC belongs to the TC and will be there for use even if there were to be a change in political leadership. There are no equivalent termination clauses, unlike the AIM transaction. In fact, I understand that Potong Pasir Town Council is still using the IT system developed before the change in political leadership in 2011.

I also take strong issue with the misleading release by MND on our Managing Agent, FM Solutions and Services Pte Ltd. The Straits Times of 7 May reported that MND gave examples of how politics and Town Councils sometimes mixed, which included, in our case, the former General Manager of Hougang Town Council and her husband setting up a company to provide town management services to AHTC. We find this insinuation mischievous as neither she or her husband nor any of the Directors and shareholders of the company are WP members. They were hired based on their experience in property management, professional skills and track record in running Hougang Town Council. What is MND implying? The Minister should explain.

Madam, I now come to the final part of my speech – our key recommendations for the review of Town Councils.

First, restrictions should be in place in the Town Councils Act to prohibit the sale of critical assets or systems still needed for TCs' operations to third parties. On no account should TCs relinquish control over the use of assets which should survive any change in political leadership. The most critical system would be the IT system for town management. Ownership of the town management software system and its intellectual property rights should reside with the Town Council.

Second, Town Council management systems which serve several constituencies should be configured to be easily "segregable" at low cost in the event of boundary change or leadership change. This should be ensured for the 3G TCMS.

Third, another important IT system which should be safeguarded for continuity is the Tele-Monitoring System (TMS) which monitors lift breakdowns and lift rescues. All TCs are currently using the TMS from the same provider and, at the minimum, the existing termination period of three months is too short and should be reviewed.

Fourth, important service contracts, such as those for Managing Agent and Essential Maintenance and Services Unit (EMSU), should provide for a longer termination period to allow for a fresh tender to be called if necessary after a handover.

Finally, unilateral terminations by contractors of essential contracts due to a change in political leadership should be disallowed. Should there be a need to put in place another contractor due to business considerations, a mutual discharge can be agreed between the TC and the contractors.

Madam, we are ready to provide further input on the review if needed.

Let me conclude. We believe that the sale of the TCMS by the PAP TCs, whatever its other ancillary benefits, was to enable AIM to cut off any non-PAP TC from using the TCMS at short notice crippling the TC. By doing so, they acted in a party political interest and jeopardised the public interest using a critical asset developed with public funds.

In this light, I cannot help but recall the parliamentary debate in 1988 when the Town Council Bill was first presented for the Second Reading. At that debate, the then first Deputy Prime Minister Goh Chok Tong justified the introduction of Town Councils as providing political stabilisers to the political system. He said there was a need to protect the public by ensuring that political parties which aspired to be Government should first prove that they could run a Town Council for a constituency.

He said, "If a new party finds itself unexpectedly in Government, it would be like an aspiring pilot taking over a SIA jumbo jet in mid-air before he has flown solo in a Cessna. This cannot be in the interest of passengers in the jumbo. TCs are the Cessnas of our political system."

He also highlighted that some PAP MPs had expressed a fear that Opposition MPs could win some seats, prove themselves able to run the Town Councils and, thereafter, fan out to other constituencies in subsequent elections. Is this what this whole AIM episode is about, ensuring that the passengers in the Cessnas have bumpy rides or even crash land? Does the Government even care about the passengers in the Cessnas or are they simply collateral damage in a bigger political game?

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.25 pm.

Sitting accordingly suspended

at 4.02 pm until 4.25 pm.

Sitting resumed at 4.25 pm

[Mdm Speaker in the Chair]

(Statement by the Minister for National Development)

[(proc text) Debate resumed. (proc text)]

Mdm Speaker, thank you for allowing me to join this debate. I took great interest in the recommendations made in the report, especially in the section on "How Handovers Can Be Better Managed'.

During the time when Pasir Ris-Punggol Town Council had to hand over Punggol East to Aljunied-Hougang-Punggol East or AHPE Town Council, myself and the other MPs of Pasir Ris-Punggol GRC told our Managing Agent that the handover of systems and assets should be carried out with minimal disruption to TC services to the residents. We were also mindful to minimise any related costs to the handover to both Town Councils as these costs would ultimately be borne by the residents. In areas of potential conflict, Pasir Ris-Punggol Town Council had sought MND's intervention and agreed to abide by their advice and guidelines.

Madam, I agree with the suggestions made in the report that MND should lay clearer rules and guidelines in facilitating the handover process.

Mdm Speaker, Pasir Ris-Punggol Town Council had officially handed over Punggol East to AHPE Town Council on 30 April 2013. Despite encountering some issues, both TCs maintained our lines of communication open and tried to resolve issues professionally and amicably. I would like to share some of these experiences and how we addressed and overcame them in a reasonable and fair manner.

One unique issue in the Pasir Ris-Punggol Town Council handover was that our Town Council office at Rivervale Crescent in Punggol East which was rented from HDB, housed services for five divisions, and not just Punggol East Constituency which was the subject of the transfer. There was a need to apportion an area for AHPE TC to run its services for Punggol East from 1 May 2013. In the early stages, both TCs could not come to an agreement on the area that needed to be apportioned.

Mdm Speaker, the office space was leased from HDB. Hence, MND's intervention was sought to decide on the apportionment, and they recommended several possible options in the meeting held with them on 20 February 2013. Naturally, the area preferred by AHPE Town Council would result in some cost and disruption to Pasir Ris-Punggol Town Council's operation and vice versa.

Eventually, Pasir Ris-Punggol Town Council agreed to allocate AHPE Town Council the area they wanted in view of the fact that they had intention to permanently occupy the space from 1 May 2013.

To ensure they could start operations independently from 1 May 2013, Pasir Ris-Punggol Town Council also agreed to vacate the affected area by 15 April 2013 to enable them to set up the place. Pasir Ris-Punggol TC also apportioned to AHPE Town Council their share of the office assets to minimise the start-up costs. In addition, both Town Councils agreed to share the operating costs, such as utilities, office rental and others, on an 80:20 ratio.

Mdm Speaker, the reality is that there will be costs incurred whenever there is a change of Town Council, which can be significant.

In the case of Punggol East, AHPE Town Council had written officially to Pasir Ris-Punggol Town Council on 31 January 2013 asking for the use of the Town Council Management System (TCMS) used by Pasir Ris-Punggol Town Council to service the Punggol East constituency. Pasir Ris-Punggol TC, along with other Town Councils using the TCMS, were then in the midst of deciding how and when to transit to a new TCMS since the TCMS' leasing agreement with Action Information Management Pte Ltd, or more commonly known as AIM, would expire on 30 April 2013. As such, Pasir Ris-Punggol Town Council was not in a position to commit to their request. Pasir Ris-Punggol Town Council also had to know the cost, technicality, legal and audit implications of AHPE TC's request for the continued use of TCMS, and all these would require time to look into.

Based on the advice given by the service provider and for audit and financial purposes, Pasir Ris-Punggol and AHPE Town Councils must operate as two separate entities by 1 May 2013, and this would include the TCMS as well.

Pasir Ris-Punggol Town Council wrote to AHPE Town Council on 21 February 2013 that we would be able to migrate the Town Council account data for Punggol East from our server to AHPE Town Council's own system by 1 May 2013. This would have been a straightforward data transfer from the Pasir Ris-Punggol Town Council system to the AHPE Town Council's own system.

However, AHPE Town Council replied on 25 February 2013 requesting to know what arrangements were available for the continued use of the TCMS by the incoming management of Punggol East with effect from 1 May 2013, and to advise them on the implications, if any, of the continued use.

As a gesture of goodwill, Pasir Ris-Punggol Town Council also asked AIM whether Punggol East could continue to use the TCMS software after 30 April 2013. Separately, Pasir Ris-Punggol Town Council had also asked the service provider providing TCMS maintenance and support to work out the technical details and cost for the boundary change and other related works to segregate Punggol East from our server and for AHPE Town Council to operate the TCMS as a separate entity.

In Pasir Ris-Punggol Town Council's reply to AHPE Town Council on 8 March 2013, we informed AHPE Town Council that AIM had agreed in principle to allow Punggol East to use the TCMS software after 30 April 2013 "free-of-charge" without any licence fee, but AHPE Town Council must arrange for their own preferred service providers to help them manage and maintain the system on their own computer system since AIM would no longer be providing any services associated with the operations of the TCMS software after 30 April. All the PAP Town Councils were also similarly sourcing for maintenance and management support. Everyone was thus in the same situation.

In the same reply, Pasir Ris-Punggol Town Council also informed AHPE Town Council that there was a significant cost charged by the external vendor to extract the data from our server, and Pasir Ris-Punggol Town Council agreed to bear the cost of extraction, in the interest of a smooth and expeditious transition.

Since AHPE Town Council expressed interest in using the TCMS software, we have shared with them that the TCMS must operate as two separate entities to ensure the integrity of our residents' data and to comply with audit and financial requirements. In an earlier meeting on 25 May 2013, AHPE Town Council requested for Pasir Ris-Punggol Town Council to bear the cost of providing a new server to Punggol East in order to store the migrated data. Pasir Ris-Punggol Town Council explained to AHPE Town Council that we were not able to pay for a new server to be used by AHPE Town Council as we could not make such payments under the Town Councils Act and we could not legitimately impose this cost on the remaining residents of Pasir Ris-Punggol GRC. It would not be equitable to do so. We had sought clarification from MND and they had confirmed that should Punggol East want a new server, it should be funded by Punggol East.

In our reply dated 8 March 2013, Pasir Ris-Punggol Town Council explained that our server was acquired in 2004 with contributions from five constituencies. The Punggol East area was one of these five constituencies. All constituencies shared the same server, and they still do. As such, it was not possible for Pasir Ris-Punggol Town Council to give AHPE Town Council a server. On the advice of auditors and in accordance with accounting principles, the value of the shared server, which was about nine years old, had been depreciated, over time, in the financial statements to zero.

Nevertheless, given that the five divisions had contributed to the original cost of the server, and it is being used currently by the five divisions, we wanted to be fair to AHPE Town Council and took the process of obtaining a fair present value of the server even though the book value is zero. Once we had ascertained the fair value, we would then pay Punggol East a proportionate share of that valuation assessed on a fair and equitable basis.

AHPE Town Council replied on 13 March 2013 stating the position that without any management and maintenance support from AIM, the continued use of the TCMS after 30 April 2013 was not a practical solution. AHPE Town Council also stated it was an "open question" whether a new server was required or whether operations could continue for Punggol East after 1 May 2013 on the existing server, compartmentalised or otherwise.

Mdm Speaker, in the meeting held in the morning of 13 March 2013 – again, to assist AHPE Town Council – we had offered to provide the particulars of the system vendor as a party with whom they could discuss the technical information on the continued usage of the TCMS, maintenance and support and the potential cost implications to AHPE Town Council. The contact particulars were given to AHPE Town Council on the same day.

Madam, we believe it was for AHPE Town Council itself to contact the system maintenance vendor or any other vendor it wanted to, to determine for itself whether AHPE Town Council wanted to continue to use the AIM software which it had been offered use of for free without having to pay any licensing fee.

Subsequently, at a meeting on 15 March 2013 and in an email dated 18 March 2013, AHPE Town Council confirmed that they would deploy and use their own financial system with effect from 1 May 2013. Following the AHPE Town Council's decision to use their own financial management software, Pasir Ris-Punggol Town Council again assisted them to do a transfer of data pertaining to the accounting and estate modules on 4 April 2013 to enable them to test their system for compatibility before the actual transfer on 30 April 2013. Pasir Ris-Punggol Town Council stands ready to assist, where possible, should they encounter problems with the data transfer.

Mdm Speaker, in accordance with the Town Councils Act and following MND's guidelines and advice, Pasir Ris-Punggol Town Council had effected a complete transition of Punggol East to AHPE Town Council by 1 May 2013, smoothly and expeditiously. We had been objective and fair during the handover process.

Mdm Speaker, let me share my key learning points that I hope would be taken into account during MND's review of Town Councils.

There would always be issues arising from the handing and taking over of Town Council matters. These issues could be politicised. What is actually a real constraint could be misconstrued by the other party as an attempt to make things difficult. Thus, it is important that MND must play a bigger role to mediate if there are issues that are dead-locked or involving substantial costs to be apportioned. Leaving it to the Town Councils to resolve the issues would make them more likely to be politicised.

Mdm Speaker, the handing over of the management of a Town Council's operations when there is a changeover of an MP can be a complex task, even with the best of intentions and goodwill. I would like to call on MND, during its review of Town Councils, to lay out rules and guidelines to facilitate the handover process to minimise the risk of disruption of critical services during the change.

Madam, can I ask for two clarifications from the Member?

Yes, please.

I thank him for his narration of the Punggol East handover. He mentioned the discussion about the need to acquire a new server if we were to migrate to the TCMS for Punggol East under our management. I would like him to clarify whether actually there were some figures discussed during the meeting that data migration might cost up to $130,000. That is the first question. The second question is I would like his confirmation on whether he agrees that a handover on a SMC scale is actually a much smaller task compared to a handover on a GRC scale.

Mdm Speaker, during the initial discussion, we did give a rough verbal cost estimate of the cost of handing over the TCMS data as well as the cost of the purchase of a new server. But this was only a verbal cost estimate provided by the vendor. Second, I think I am not in a position to comment on whether the task of handing over an SMC would be more difficult than handing over of a GRC because this is my first experience.

Mr Pritam Singh.

Thank you, Mdm Speaker. The Town Councils Act of 1989 was passed with reference to Singapore politics of the 1980s, when non-People's Action Party (PAP) MPs were elected to check the Government, ending the one-party rule of the PAP in Parliament. Whatever the stated intent and objectives of the Act, Government entities could make life difficult for elected non-PAP MPs from carrying out their duties. For example, by refusing to allow the non-PAP MP to use the existing Town Council (TC) office after securing the people's mandate at the polls because governing legislation like the Town Councils Act provides no safeguards against direct or indirect actions by a PAP government that is intent on obstructing non-PAP TCs.

The MND findings have cleared Action Information Management Pte Ltd (AIM), a fully owned PAP company from any wrongdoing. But, in the minds of many Singaporeans, while the MND Report found nothing legally out of place with the AIM transaction, legal legitimacy under the Town Councils Act does not necessarily represent a commitment to good governance and the continuity of public services in the aftermath of general elections.

During the reading of the TC Bill, then Deputy Prime Minister Goh Chok Tong explained the politicisation of the TCs as giving MPs increased authority and responsibility as a result of which, voters would be more likely to vote "carefully and sincerely" and choose honest and effective MPs. However, the years that followed saw other means used by the Government to lower the standing of a duly elected MP, even if that individual was able to run a TC competently. Denial of upgrading projects -- such as the then Main Upgrading Programme and the Interim Upgrading Programme – was a ruthless psychological PAP tactic at the polls that pandered to the selfishness of the individual, at the expense of other higher order human instincts, such as fair play and equality.

For all practical purposes, the PAP government of the day could jeopardise a candidate's prospects at the ballot box and punish residents without even having to worry about the legal consequences of doing so, as there were none, forget about any protection under the Town Councils Act. So, in spite of the original intent of the Act, even if an MP was honest and effective, the government of the day retained significant powers to cripple him, as it did in Hougang and Potong Pasir. Beyond the determination of the respective MPs in these wards, the thing that held the MPs in esteem was the wisdom, sense of justice and personal sacrifice of the majority of their voters.

It is through these historical lenses that many Singaporeans understood the AIM imbroglio that unfolded at the end of 2012 and the beginning of 2013, after coming to terms with the revelation that the PAP incorporated and owned a private company in 1991 that was operating in the public sector.

While the MND Report saw a "fundamental tension" between the objectives of delivering good public service and the political accountability of MPs – in the specific case of AIM, unfortunately, it fell short in exploring the source of this tension. Quite simply, the source of the tension was the political profile of AIM.

The right of a fully-owned PAP company to terminate a critical piece of the then Aljunied-Hougang Town Council's (AHTC) infrastructure with one month's notice was not in the public interest precisely because even by the PAP's own admission, it would have taken up to two years or even longer to establish a new Town Council Management System (TCMS). The presence of this clause, in the political context of the Town Councils, ought to have raised a conflict of interest red flag because a PAP-owned company and the PAP TCs had defined their rights and obligations by virtue of a contract that ran the real risk of undermining and prejudicing an incoming non-PAP run TC.

Many Singaporeans wonder what would happen to a Town Council in the absence of a working and functional TCMS. Beyond managing maintenance records, feedback management amongst other critical day-to-day operational functions, the Town Council would not be able to efficiently manage the collection of S&CC fees from residents. Collection would have been a cumbersome exercise, part-manual, part-electronic, and the Town Council would have been overwhelmed by S&CC collection, leaving little time for other tasks. Until a new TCMS was established, there would have been numerous disputes pertaining to the accurate collection of S&CC fees and, potentially, a whole list of unfulfilled contractual obligations with the Town Council's contractors.

While the standing of the elected MP would be compromised, the real losers would be the residents who would be faced with delays with rubbish collection, dysfunctional amenities, and a very unpleasant state of affairs immediately outside their own homes, all unconnected to the competence of the incumbent MPs. The prospects of this reality would explain why the AHTC team worked in the months after May 2011 to stabilise Town Council operations and upscale the former Hougang Town Council's IT management system, instead of allowing the residents of Aljunied GRC to be potentially held at ransom by a one-month termination clause in the hands of fully-owned PAP company.

The MND report justified its finding of the absence of any conflict of interest in terms of Town Council members having a pecuniary or direct interest in the AIM transaction, whether the interests of the Town Council's residents were protected or impaired and whether there was any misuse of public funds. However, beyond the contention that the AIM transaction was not in the public interest, if one reflects on the historical context in the aftermath of the passing of the Town Councils Act, a fully-owned PAP company's right to terminate the TCMS was in keeping with the philosophy that has defined the relationship of the PAP Government with Opposition-run Town Councils since 1988, and therein lies the inherent conflict of interest surrounding AIM – a conflict of interest that has been duly recognised by discerning Singaporeans.

In the more recent past, the PAP has moved away from denying upgrading to opposition wards, but the political calculations behind this move do not mean that a u-turn can never take place. The historical record shows that the public interest in the non-PAP Town Council context is usually a victim of PAP pressure on voters during parliamentary elections. There is significant opinion outside this House that this is an ethically unacceptable state of affairs.

It is for this reason that the remarks of the Permanent Secretary of the MND in his letter of 30 April 2013 to the Prime Minister, which called for a strategic and comprehensive review of Town Councils, ought to be welcomed. Of particular significance is the MND report's recognition of public calls to depoliticise Town Councils, a point that was somewhat reinforced by a Straits Times poll of 7 May 2013 where 41 out of 50 residents called for the same, the main concern for some being the lack of a political level-playing field and its impact on residents.

The question of depoliticisation is significant because it raises not just the issue of a review of the Town Councils Act, but the substantive relationship of the Government towards wards which are not run by PAP Town Councils. For the specific purposes of this debate, depoliticisation must mean that companies owned by political parties should not tender for Town Council contracts – a glaring omission from the MND report. In addition to the recommendations called for by the Member of Parliament for Aljunied GRC Ms Sylvia Lim, the report's call for depoliticisation – if executed as imagined by most Singaporeans – would effectively entail inducting a new brand of politics into Singapore insofar as Government-Town Council relations is concerned, representing a hope and desire that goes far beyond the findings of the MND report, but one that is in line with public expectations.

Some members of the public have suggested that certain Town Council functions, like the provision of the TCMS, can be the purview of agencies like HDB and that governance would improve with MND's oversight. However, putting critical infrastructure in MND's hands would be self-defeating if agencies like HDB are open to political influence in matters concerning local Town Council administration.

If such agencies are open to political influence, they would effectively be operating like quasi-Managing Agents, as evidenced by the HDB's decision to lease 26 common properties under the then Aljunied Town Council to the People's Association in the aftermath of the 2011 General Elections, to the exclusion of the incoming Town Council and newly elected MPs. In the AIM context, the larger point is that critical assets, like the Town Council's IT system and its intellectual property, must remain part of the Town Council and cannot be terminated unilaterally. Non-PAP Town Councils must be allowed to effectively manage the town without political interference by HDB or MND, or have its functions compromised by policies that serve a political purpose to the advantage of the ruling party.

Mdm Speaker, the findings of the MND report provides a rare opportunity for the Government to look into substantively depoliticising not just Town Councils, but the relationship between TCs and the Government. The MND report at paragraph 59 states that there were some who opined that depoliticising TCs can improve their governance and that MND can "regulate and oversee Town Councils without perception issues."

Unfortunately, as I have explained earlier, the historical track record of the PAP is not promising in this regard. Depoliticising Town Councils will not mean anything if political calculations continue to determine how MND or other agencies deal with non-PAP Town Councils. It will not guarantee a level playing field as sought by Singaporeans, nor will it be reflective of the "new normal" we operate in today where an expectation of transparency, accountability and equality ought to represent the guiding principles of good governance.

I look forward to the tabling of the Town Council amendment Bill where these matters will inevitably be debated in greater detail. For the immediate term, it would only be appropriate, in light of the findings of the MND report, for the Minister to direct that companies fully-owned by political parties ought to have no business dealings with Town Councils.

Mdm Speaker, I thank you for allowing this report to be discussed in Parliament and for allowing me the opportunity to speak on this subject.

It is heartening to note that the Prime Minister has sought an independent review which MND has conducted briskly in putting together this report. It is great to know that we can always rely on a strong civil service to play an objective and impartial role whenever called upon.

I have read the report and looked at the set of circumstances within which MND has based its findings. Rightly, there is nothing wrong that has been done as the PAP Town Councils did not violate any rules nor was there any misappropriation of funds nor the residents' interests compromised.

So, in that sense, we cannot hold the above-mentioned Town Councils responsible for any misdoings. But there are some important lessons to be learnt from this episode, and since the structure and set-up of the Town Councils also fulfil a political objective, we may come across similar cases again in future involving any of the Town Councils. Therefore, I feel it is important to fix some things at this juncture before we move ahead.

Corporate Governance. The question we have to ask is, even though there may not have been any illegal or unlawful dealings, was there anything about this whole episode that could be improved so that, in principle, even a chance insinuation of any perceived wrongdoing can be avoided in the future?

In terms of governance, I feel that there are things that could be improved on, so that all Town Councils can in the future abide by these guidelines. Firstly, even though there was nothing wrong with the transactions between Action Information Management Pte Ltd (AIM) and the PAP Town Councils, the fact that they had business dealings with a company, which was set up by the PAP in 1991, and its directors who were their very own party members, could raise questions on whether there was any conflict of interest.

MAS has issued clear Code of Corporate Governance recently last year for all the listed companies in Singapore. And Town Councils, being in the business of public service, may follow the same. The key principle being that Town Council Members or the Boards who are either key decision-makers or influencers of decisions must not do so, with an intention to help own or related parties at the cost of the Town Councils and its residents.

Since the nature of the Town Councils is political in nature, I believe there will always be this competitive, and therefore confidential, manner in which the operations of the Town Councils are carried out. In such circumstances, Town Councils and their management may choose to deal with entities and individuals they are more familiar with and who are more trustworthy. I understand that such practices are not limited to just the PAP Town Councils but also others. If such practices are prevalent, and the political nature of the Town Councils gives reason for them to be, then I suggest that more control systems and transparency on such practices must be institutionalised.

Going forward, the legislation should be amended to reflect that any conflict of interest, not just involving a member of the Town Council, but also if dealing with his political party or family, should be declared and this information should be made available also to the public.

At this point, I would also like to raise, for this particular case, to reduce any perception of conflict of interest. It would be better if the PAP Town Councils had set up AIM as a non-profit entity rather than as a corporate for-profit company, especially when its directors were not remunerated, nor does it seek to earn profits and its fees were only to cover operational costs. Would it not be better if the Town Councils set up non-profit bodies to play these roles so that it is clear that the dealings do not come with any profit motive for the organisation or its directors?

Regulating the Town Councils. Ideally, however, the political ambit in which the Town Councils exist should not become an excuse for poor corporate governance. According to the Town Councils Act, it is designed to serve the public, much like other public organisations do, and so why should it not be subjected to the same corporate governance standards that our public and private organisations, including charities and societies, are made to adhere to?

I feel that Town Councils currently operate in this slight ambiguity of roles – whether political or public. If they are public, then they should also be made to adhere to tight corporate governance procedures, including reporting processes and requirements, conflict of interest, and to include these in their annual report card which is being, anyway, done. The ideal scenario for the Town Council should be that their processes and operations are far removed from any traces of conflict of interest and so even when they deal with vendors, these vendors should be as independent as possible with little or no association to the Town Council members or the political party. The annual report card should then also score the Town Councils on its ability to do this so as to encourage them to move towards these better governance practices. We can certainly strive for our Town Councils to reach this goal.

Madam, I also do not believe that our Town Councils should be handed back to the MND or the Government to be centrally regulated. I think some political competition in this regard is healthy and should benefit the residents. But the Town Councils Act should be amended to better safeguard residents' interests in this regard.

I suggest that the Town Council, when planning to engage contractors or vendors to provide any form of maintenance services or purchase of products and services, it, too, should follow set guidelines for tender processes as prescribed by MOF for all Government bodies. This will address any concern of related parties being involved so long as they can qualify the clear criteria for tender processes. This would help create an additional layer of safeguard and help nudge the Town Councils towards greater governance practices. I believe, with these added deterrence mechanisms in place, greater transparency and governance standards can be achieved, enabling the Town Councils to deliver public services efficiently and in a competitive manner.

As such, I would like to propose that the Minister consider an amendment Bill that would aim to entrench some of these measures into the legislation.

Mdm Speaker, MPs and Town Councillors are public servants. In section 21 of the Penal Code, a public servant is defined as an "officer whose duty it is, as such officer, to take, receive, keep or expend any property, on behalf of Government". Their status was the same before and after the Town Councils Act was passed in 1989. Through that Act, HDB merely divested its powers in the management and maintenance of their estates to the individual Town Councils.

The Town Councils Act might have been enacted to give the elected MPs as much latitude as possible to run the Town Councils with broad and general rules. But they are still fully subject to the Penal Code as public servants.

Singaporeans, therefore, find some key points in the AIM transaction puzzling. The Review before us has not satisfied the questions in their minds:

How can a two-dollar company, with no staff, be deemed to have an established track record in providing IT services to Town Councils? The fact that AIM was awarded the tender seems to have hinged solely on their past working experience with the PAP Town Councils.

How can the Review report say that there was no conflict of interest in the AIM transaction, simply because "no one made money"? I am not sure if any lawyer will be satisfied with how "conflict of interest" is defined here.

Even if Town Councils are understood to be political, as provided for by the Town Councils Act, it does not mean that we can just forget about the concerns of residents over governance and due diligence.

Whatever has happened to the mantra that we must strive to observe best practices in public transactions? The Review report does not mention anything about best practices.

If the Review concludes that the AIM transaction is in compliance with the Town Councils Act, then the Act is not well-drafted. The Act must be revised to better address public concern over conflict-of-interest issues, including political interest and criteria for the award of tenders.

When the Town Councils Act was passed in 1988, it was said that the Government wanted to make life harder for the Opposition MPs in running their constituencies. Nevertheless, Potong Pasir Town Council, the only Opposition-held Town Council then, took up the challenge. We worked hard to run the Town Council. I believe we did a good job, and I believe we earned the trust of our residents throughout the 27 years.

But a lot of unfair obstacles were thrown at the Potong Pasir Town Council.

To obtain CIPC funds, we had to seek the endorsement of the Advisor of the Residents' Committees, who had always been the PAP's candidate in all the constituencies. Indeed, no Opposition politician has ever been allowed to become the Advisor of the RCs, even when that politician is the sitting MP for that constituency.

Advisers to the RCs cannot be given the power to endorse community improvement projects or otherwise. Why should the sitting MP, who is democratically elected by the people, be at the mercy of the RC Adviser? MND has got to change this.

When it was under the Opposition, Potong Pasir did not obtain a single cent from the CIPC fund or any HDB-related funding. The sole exception was funding for improving barrier-free accessibility, granted in 2010. That was, after all, a nationwide exercise for wheel-chair bound residents.

Recently, Potong Pasir obtained $5 million fund from MND for the Neighbourhood Renewal Programme, or NRP. I am happy for the residents of Potong Pasir, but I would have hoped that the residents be more informed and involved in the planning of the NRP exercise to decide what they really want for their estate. After all, residents have a stake in their estate. While physical structures and beautifications can be bought with money, the "software" of community ties and interactions can never be bought.

All Town Councils, whether they are held by the PAP or not, should be able to benefit from community improvement grants from the HDB. Residents are all taxpayers and deserve equal treatment.

MND started publishing the Town Council Management Report (TCMR) in 2010 as a form of a report card on their Town Councils' performance in estate management. The evaluators have often found ways to rank Opposition-held constituencies of Potong Pasir and Hougang lowly. The residents of Potong Pasir, however, are happy with our management of the Town Council.

The evaluation process for the purpose of the TCMR must be led by investigators independent of the MND and HDB to avoid biasness in the reporting and branding of the performance of Town Councils.

Town Councils should retain its current powers to manage estates, and MND should not have central control over them – for example, when implementing ad hoc policies at any time, without debate in Parliament.

In conclusion, my question to the Minister is this – is the Government willing to improve the framework for running the Town Councils in the best interests of Singaporeans? Whether they live in a PAP- or an Opposition-held Town Council, they all pay taxes.

Going forward, I urge the MND to review what are the best practices that Town Councils must adopt as public agencies.

The MND Town Council Review has left many questions unanswered despite providing a lot of background information on the AIM transaction. But the Report has concluded that the sale of the Town Council Management System (TCMS) with PAP-owned company was nothing more than a business deal. The intention behind the AIM transaction was not thoroughly scrutinised and explained.

The MND review also did not look into the possibility that some of the decisions made in the AIM transaction could be politically motivated since MND has acknowledged that Town Councils, by virtue of their leadership, are politicised already.

But while the AIM transaction is deemed legal and permissible under the law, the rationale behind the sale of the intellectual property or IP rights to the TCMS to a PAP-owned company and the provision of a termination clause in the contract remains unclear and unconvincing in the review.

Today, I wish to speak on these two issues.

First, the termination clause. The MND review has not fully addressed how public interest is being served when a vital piece of software for town management developed at a combined cost of $23.8 million was offloaded to a PAP-owned company for $140,000 with an unusual termination clause made in favour of the new owner.

The termination clause reads, "The contractor may in his absolute discretion terminate the services during the contract by giving three months' prior notice in writing to the Town Council. However, in the event that there are material changes to the membership of the Town Council or there are material changes in the scope and duties of the Town Council, including but not limited to changes to its present boundaries, the contractor may give a month's notice in writing if he wishes to terminate the services during the contract period."

I find it hard to comprehend that after selling the TCMS to a vendor, the PAP Town Council also found it imperative to give the same vendor absolute discretion to terminate its services which are vital to the operation of their town. How are the interests of the residents protected in such an arrangement? And what are material changes and why is it so important that if such changes were to happen, AIM could just give a month's notice to terminate its services to any Town Council?

In the official explanation of the termination clause, the PAP Town Council has failed to fully address the meaning of material changes. Nonetheless, the PAP Town Council felt that the provision of such a one-sided termination clause was "fair and reasonable as the vendor would have priced its bid on the basis of the existing TC and town boundaries. However, should this change materially, the vendor could end up providing services to a TC comprising a much larger area and a larger population of residents. But it is held to do so at the same fixed pricing since a key feature of the contract was that there should be no price changes to the TC even for extension. The TCs felt that this would be unfair to the prospective vendors. And that a clause explicitly addressing such changes would reduce the business risk to the vendor. This would help fetch a better tender price for the TC's old software".

While the above explanation may sound logical, I would explain to this House point by point why the provision of the termination clause, you can see, makes absolutely no sense at all.

First, there would always be changes made to the size and population of the town because of Build-to-Order flats, Selective En-bloc Redevelopment Scheme, private development and constant redrawing of our Electoral Boundaries. Is it then prudent to allow AIM or any new owner of the TCMS to simply walk away from this critical contract citing material changes and leaving an entire town in the lurch? How is public interest protected with such a one-sided termination clause?

Second, in its original contract, AIM proposed a leaseback payment schedule that did not take into consideration the size and population of a Town Council. All the 14 PAP Town Councils, regardless of their size and population, were required to pay an equal amount of $785 per TC per month as leaseback payment for the use of the TCMS. Thus, it does not matter if you are running a small GRC like Moulmein-Kallang, or a big GRC like Ang Mo Kio. Each town pays AIM the same amount of subscription fee.

So, was AIM concerned about the size and population of a town when pricing the TCMS subscription fee? The answer is obvious. And if AIM is not even worried about such business risks, why would the 14 PAP Town Councils lose sleep over this and want AIM to address such risks? After all, the PAP Town Councils have assessed that AIM is a company with an established track record in TCs and IT services, and they have confidence that the company would deliver on its commitments.

Third, the above explanation of the termination clause sounds even more ludicrous when one finds out that there is a clause in the same contract that allows for variation and AIM will be paid in accordance to a method of calculation based on industry practice. In short, AIM is covered in material changes in size and population of the Town Council if it were to happen for whatever reason. So, why was there a need to give AIM the absolute discretion to cite material changes to terminate its services to a Town Council where material changes were already covered under the variation clause? Can the Minister explain this anomaly?

The provision of this one-sided termination clause in the AIM transaction makes no sense because the interests of the residents were not protected at all. Our towns are always in a constant flux of change due to the dynamics of our public and private housing schemes and the redrawing of our Electoral Boundaries. Residents should not be made to suffer unnecessarily as a result of such material change.

The one-sided termination clause has caused so much confusion that even the Minister was confused as he said earlier that the letter of 10 June 2011 sent by the interim Secretary of the Aljunied-Hougang Town Council was a request to terminate the use of the TCMS. On the contrary, the letter was a request to continue the use of the software till 31 August 2011. The TC has no power to initiate any termination based on material changes. AIM was the one which was given that power to terminate and did exercise it 12 days later, on 22 June 2011, according to its own timeline. They set the termination date as 1 August 2011. The question is: why did PAP TC allow Town Councils to be powerless and at the mercy of AIM?

Next, I want to talk about the sale of the intellectual property rights. The Review Report has also concluded that the AIM transaction complied with the Town Council Act and financial rules. However, there is a misplaced trust that the sale of the IP of the software to a PAP-owned company was done in the best interest of the residents. Would any Member in this House want to spend $23.8 million of your residents' money to develop a vital piece of software and then offload the IP to a third party company knowing very well that future developments and upgrades of their system may depend on the use of the original IP rights?

The risks of system obsolescence are common problems faced by people or companies who depend a lot on the use of IT in their operations. Thus, everything from software to hardware can be rendered obsolete in a short space of time but the IP would not. The knowledge system that went into developing the IP for the $23.8 million TCMS is valuable and critical. The TCMS may have zero book value but its real operational value is immeasurable. Right at this moment as we debate in this Parliament, the TCMS is keeping almost the entire Singapore humming along, processing payments, managing arrears, handling residents' feedback and facilities booking, keeping the financials in check, keeping the communications flowing and more. The rights to use the TCMS must remain open to a Town Council no matter what or when material changes take place.

In the interest of the public, can the Minister state who will own the IP rights to the $17.6 million third-generation TCMS that is currently being developed by NEC Asia Pacific? Will AIM be holding any IP rights direct or derivative to the new system that is being developed and funded with Town Council money?

The official explanation of the sale of the TCMS to AIM was to consolidate the IP rights under a single entity for ease of management, future development and securing extension of the NCS contract at no extra cost to the PAP Town Council until such time when the current system is replaced. As AIM outsourced its IT services to other vendors, it is basically playing the role of a project manager. And project managers do not need to own the IP rights to the project they manage, especially when those projects are vital to the operation of our towns and developed with public money. It also appears incredulous that the 14 PAP Town Councils would need an external company which is technically a competitor of NCS to help them negotiate and secure extension of the NCS contract at no extra cost to the PAP Town Council even though the Town Council has a long standing working relationship with NCS going back to 2003 when it first awarded the multi-million dollar project to the IT company.

How hard is it for the PAP Town Council to secure extension of the NCS contract at no extra cost based on goodwill? Did the PAP Town Council try to approach NCS directly?

The relationship between the PAP Town Council and AIM is an uneasy one. It was reported that AIM was set up by the PAP in 1991 to specifically support PAP MPs in the running of their TCs and estates. The company does not seek to make profit from its work done for the PAP Town Council and only charges management fee based on cost recovery. Thus, any transaction done between the PAP Town Council and AIM has very little business consideration – mostly political, I presume.

The MND Review has stated that given the political character of the Town Council's leadership and the political implication attached to the management of the Town Council, it is inevitable that the Town Council function is carried out in a competitive, politicised context. The AIM transaction has all the trappings of a high stake political game where the interests of the residents are of the least concern. So, how should MND classify the sale of the TCMS to AIM, and the provision of the one-sided termination clause in this Review? Business or political?

Finally, I believe whatever that was written in black and white in the AIM transaction has been reviewed by the committee. But whatever intention that was written in the hearts of the people that were involved in this transaction will remain hidden for their conscience and their makers to judge.

Mdm Speaker, when I took over Potong Pasir Town Council in 2011, it was not an easy handover. I wish to stress, however, that it is not the fault of the previous MP, a man I continue to respect as a politician. But handovers are seldom easy, especially when a handover involves essentially a change of system, culture and leadership. It is also compounded by the fact that the change has to take place immediately after the elections.

This is not just particular to the change in Town Council management. Ask any company that changes vendors and they will tell you it is never easy. From a change in, say, a cleaning and landscape company in a condominium estate to a change in security guard services in a shopping mall, there are always transition and handover problems despite the best intentions. A Town Council change from one political party to another is far more complicated than the ones I have quoted.

Mdm Speaker, when we knew we won the elections that Sunday morning at 3.00 am in May 2011, our minds were not overwhelmed with victory. Instead, during the car journey from the Counting Centre to Toa Payoh stadium, my branch vice chairman, Chua Kian Meng and I were busy discussing the following important priorities:

First, the need to ensure our Town Council services continue to be available to all Potong Pasir residents with minimal disruption.

Second, the recognition that jobs and livelihoods were involved in the changeover, such as Town Council jobs and jobs of companies rendering services to the Council and residents.

Third, the need to improve and change because, ultimately, that is what the voters who voted us in wanted. After all, voters do not vote in a candidate from a different party from the incumbent one if all they wanted was more of the same with no change or improvement.

Change management is never easy. Our strategy to addressing these three challenges was to stabilise, rationalise and to optimise.

Madam, on the first point of ensuring continuity in the immediate period after the General Elections, we appointed an agent with a lot of experience, EM Services, to be the managing agent of the Town Council. Different people may say different things or have different views as to how to approach this issue but, in retrospect, that was a correct decision as having a professional and experienced agent allowed us to stabilise the situation quickly.

Moving to the second point of jobs, my branch vice chairman, Chua Kian Meng, also spoke to all Town Council staff and vendors to allay their concerns but there was some inevitable turnover. Today, which is two years later, three of the original team are still working with us and one is working in another constituency managed by EM Services. We were able to stabilise the situation quite quickly, because, regardless of one's political leanings, we recognise and we respect the original Town Council staff as people out to make an honest day's living even if expectations do not mutually match up. We can agree to disagree.

I must add that some old staff did ask for compensation up to one month for each year's of work. The contractual terms did not provide for this compensation and due to the financial constraints of the Potong Pasir Town Council, we did not give this compensation in the end.

Madam, admittedly, not everyone got what they wanted but I think we gave everyone respect and a chance to try and continue working. I must confess the handover was, personally, an emotionally tiring experience for me but I felt I did what I had to do, always putting the interests of the residents first. I try my best not to hurt anyone but, as the hon Member for Aljunied, Mr Low Thia Khiang once said, "事情岂能尽如人意，但求无愧于心". I believe politics is about convictions and once you have conviction and belief, you just simply cannot please everyone.

After stabilising the place, we then undertook a review of processes and workflow to see where we can rationalise resources within the Town Council. We are now in the optimize phase. The PAP Potong Pasir Town Council is still very much a work-in-progress even though we have come a long way since 2011.

Mdm Speaker, from my experience in taking over the Potong Pasir Town Council, I learned a few important lessons which I would like to share with the House today:

First, change is tough and even sometimes painful, but sometimes change is necessary.

Second, handover, immediately after the elections, is not an easy objective to achieve when the handover happens between two political parties with different cultures and systems.

Third, the Town Council is an instrument, first and foremost, designed to serve residents.

Fourth, the Town Council is also an organisation with a political dimension. The two are not in conflict, that of having a political dimension and also serving our people.

Fifth, the Town Council is designed to give the MP a managerial role in the running of a constituency so that Singaporeans have more at stake when they vote for someone to be their MP. This is an important aspect that must be emphasised. An MP is not just a person elected to speak in Parliament or grace community events. He directs and oversees the Town Council and its services which, in turn, have great impact on the everyday lives of our residents. The policy intent of this is to give greater significance to the vote we cast at the general elections. This policy intent can be seen to be political but at the same time it is party-blind.

This brings me to the last point. Does the current Town Council framework need fixing? The Town Council framework can certainly be tweaked and improved and the Town Councils Act amended to reflect these improvements. But having lived through and survived a handover, my view is that the Town Council framework is very much functioning as it was designed to be.

Madam, what is important is that Town Councils continue to serve residents and that good regulations and governance frameworks are put in place to safeguard Town Councils from abuse and protect residents' interests.

On the issue of good governance, let me quote from the great legalist philosopher Han Fei Zi (韩非子), who said, “法莫如显”“法莫如一而固, 使民知之”. Loosely translated, this means that the law should be made public so that everyone knows that the law is a fixed standard invariably applied to all relevant parties, and the law should be the only yardstick.

Today, Town Councils are governed by the Town Councils Act which is the yardstick that all Town Councils are measured against. The requirements of the Act are applied uniformly to all Town Councils regardless of political affiliation, and these requirements are made plain for all to see. As long as these regulatory requirements are met and residents are served, there is nothing wrong with having Town Councils that have a political dimension because, ultimately, it means empowering voters to choose a Member of Parliament that can have more impact on their everyday lives. Now, is that not what democracy is all about?

Mdm Speaker, I welcome this debate on the Ministerial Statement on the Town Councils. Given that more than 80% of Singaporeans live in public housing, Town Councils are an integral part of the everyday life of Singaporeans.

The MND Town Council Review Report and this debate in Parliament will probably not change the minds of Singaporeans who take the view that there were obvious conflicts of interests in the PAP Town Councils' sale and leaseback of the Town Council Management System software to Action Information Management Pte Ltd (AIM), a PAP-owned company.

Neither will the Review Report and this debate change the minds of Singaporeans who view the termination of the use by the Aljunied-Hougang Town Council of the AIM-owned software as an attempt by the ruling party to undermine the Workers' Party running of the Town Council.

To my mind, the matter has been unnecessarily politicised, and this debate might even be seen in some quarters as further politicisation of the matter. But I hope this House can lead the way, notwithstanding the robust debates and charges between the PAP and WP MPs, in charting new directions for Town Councils.

I must admit to being discomforted by the allegations laid by the Workers' Party against MND and HDB. I hope that they will be able to provide evidence to substantiate their allegations. There are much bigger issues at stake and the political catfights must not compromise the best interests of residents living in our HDB heartlands, as well as the public standing of our public institutions.

Madam, in this regard, a "strategic and comprehensive review of Town Councils" is timely. What may have worked well in the 1990s and 2000s may not necessarily be the case today.

Even if the strategic review reaffirms the key role of Town Councils and its governance and operational frameworks, it is a valuable process of evaluating whether we can reduce the frailties, primarily born out of politics, and make the institution better and less prone to political contestation. In particular, there is a need to ensure that in the running of Town Councils, public funds are adequately safeguarded and that residents' interests are paramount no matter which political party is running a Town Council.

I remain somewhat disturbed and at the same time amused that the dispute between AIM and the Workers' Party stemmed from, in the words of the MND Review Report, a "different understanding of the execution of the termination clause" in the IT contract for the use of the TCMS. To be sure, the Workers' Party disagrees with this finding.

Until the Prime Minister initiated the MND review of the software sale and leaseback, more heat than light was generated. I fear that even with this debate, there will still be more heat than light.

While this misunderstanding between the incoming and outgoing political parties running a Town Council is not the first nor will it be the last, the real damage has been in the dents to the public confidence in Town Councils.

While the strategic review will seek to take the politics out of Town Councils, it will not take the Town Councils out of politics. I hope the framework that will govern Town Councils will make any political party which seeks to politicise the Town Councils pay a high political price for waging partisan political battles at the expense of residents.

Madam, following the release of the MND Review Report, there is a view that doing away with the Town Councils will consign politics in the day-to-day running of Town Councils to the dustbin of history. If only it were that simple.

We must be careful not to throw the baby out with the bath water. By now, it is clear that I am in favour of Town Councils even as we need to improve its governance framework and breathe new life into this institution of local government. Its full potential remains untapped even after more than two decades.

It is time to recognise that Town Councils are inherently political right from the outset. It would be naive to think otherwise. As a form of local government, Town Council has transformed the role of the elected Member of Parliament from being a mere politician to one that includes administrative responsibilities. Besides representing their voters in Parliament, elected MPs are now directly responsible and accountable to their resident-voters for the day-to-day running, upkeep and upgrading of their HDB estates.

While not solely determinative of the MP's political fortunes, there are political implications to the quality of estate management, given the abiding concern of Singaporeans with the value of their residential properties. As the MND Review Report noted, "it is inevitable that the TC [Town Council] function is carried out in a competitive politicised context". As we are moved towards a more competitive and contested political landscape, it is imperative to ensure that the politicised context that Town Councils operate under does not become excessively politicised.

Should we revert to the pre-1989 situation in which the management and maintenance of public housing estates was HDB's sole responsibility? Politics will be par for the course even if we are to centralise the control, management, maintenance and improvement of HDB estates back to the HDB, as it was the case the pre-1989 days.

Any sign that HDB treats one HDB estate differently from another, whether favourably or prejudicially, will be seen through political lenses. If anything, politics will become magnified, and detrimental to HDB heartlanders in such a scenario since the buck will constantly be passed around.

Is this better than the current system in which for estate management and upkeep matters, the buck stops with the Member of Parliament? Certainly not. In addition to blurred lines of responsibility, there are three other major concerns with the re-centralisation of control with HDB. I raised some of these points earlier in my TODAY commentary last week but I think it is good for me to elaborate on them.

First, it is likely to result in our HDB estates not developing their own distinctive identities. HDB would simply adopt a cookie-cutter approach in estate management to avoid any allegations of preferential or prejudicial treatment. Such a one-size-fits-all approach will mean that the particularities of each estate, whether in terms of history, geography, social demographics, cannot be catered to.

Secondly, the nationalisation of estate management back to the HDB will take away a vital platform for an elected MP to administer and run an estate, including making the immediate living environment better. It will also take away a vital opportunity for the MP to work with Town Councillors and residents in a common effort to create the so-called "kampung spirit" in our HDB heartlands. HDB, as a bureaucracy, will be ill-equipped to be the catalyst to strengthen social and community bonds.

Thirdly, the nationalisation of estate management in a more competitive and contested political landscape will mean that an elected MP's accountability and ability will be reduced at a time when it ought to be of growing importance. This is because any MP can simply lay the shortcomings in estate management and upkeep at the feet of HDB. We should continue to protect and enhance local government. Bringing the state back in would spell the end of local government and the idea of greater ownership of residents in their housing estates.

The elected Members of this House will know better than I do that Town Council management will not take away the need for them to be an effective representative of his/her constituents. Town Council management has added to the centrality of elected MPs in our system of government. It will also add another dimension to the relationship between the elected MPs and the electorate.

Mdm Speaker, as the MND Report identified, the challenge going forward is to ensure that the Town Councils' political DNA does not interfere with the Town Councils' fundamental objective of providing estate management services to residents.

In short, how do we professionalise, not politicise, Town Councils? And given that politics is integral to the operating system of Town Councils, what are the appropriate safeguards that can be put in place to ensure that politics of Town Councils are not exercised at the expense of residents?

Madam, as I see it, the risks of politicisation of Town Council administration are magnified during the following occasions:

One, the handover process of a Town Council from one political party to another following a parliamentary election or by-election;

Two, the practice of tapping on people who share the political affiliation, be it party members, party and personal supporters of an MP, and engaging them as a Town Council paid staff or in the award of contracts; and

Three, during the hustings when a party's Town Council management record is scrutinised or challenged.

Madam, the risks of politicisation, while real, should not be exaggerated in the handover process of a Town Council from one political party to another. Political parties have generally conducted themselves well in handovers. Besides the AIM matter, the handover from the PAP to WP of the Aljunied Town Council was relatively smooth. Notwithstanding teething problems and a lack of trust inherent in any transition, I am not aware of any major disruption of services to residents.

Likewise, there was continuity of services to residents in the handover of Potong Pasir Town Council in 2011, as well as in the handover of Town Council jurisdiction for Punggol East recently after the 2012 by-election, save for the use of the Town Council office space there.

In some respects, we are in new territory given that between 1997 and 2011, there was no handover of Town Councils. Since May 2011, however, we have had three handovers, including one involving a GRC. Context, therefore, matters as well, in light of a more competitive political landscape.

The MND Report provides some suggestions for better management of changeovers. They are worth following up on. While MND's light-touch regulatory approach in Town Council matters should be maintained, MND should take a more prominent role in overseeing any changeover. For instance, MND should administer the handover process and/or be the arbiter in the event of any dispute or disagreement.

New subsidiary legislation may need to be drafted to prescribe the protocols in detail on the handing- and taking-over. This relates to political parties as well as MND. This can reduce political opportunism and ensure that accountability and transparency are given due attention even during transitions. Town Council funds have to be safeguarded, and the handover should not result in public funds being misused. In fact, a robust set of protocols and audits can help ensure that any wilful attempt to politicise the handover will have a blowback effect on the political party in question. This is because residents suffer "collateral damage" when the handover is politicised.

Madam, as for the practice of tapping on people who share the political party affiliation, be it party members, party and personal supporters of the MP, and engaging them as a Town Council paid staff or in the award of contracts, here, while politics may well be at play, the larger concern is really about conflicts of interests and related party transactions. Again, the core concern has to be that of the residents' best interests.

While latitude should continue to be extended to Town Councils and MPs in exercising autonomy in engaging those who share their political agenda or are affiliated to their parties, better controls and safeguards ought to be introduced to ensure probity, accountability and transparency in such transactions.

This is notwithstanding that the Town Councils Act does not prohibit such transactions. But the lack of such a prohibition does not and cannot mean that proper controls and appropriate checks and proper disclosures should be dispensed with. In fact, the autonomy must be properly regulated. This is where the Town Councils Act can be improved upon so that the autonomy given in such matters will not be abused and reduce the scope for politics to creep in.

Madam, I note that all political parties that have run Town Councils have entered into contracts, or employed staff with related parties. Indeed, it would appear that this practice is not uncommon. MND should consider introducing measures to promote transparency and accountability in this regard. There should be a process for the proper disclosure of such transactions, and information pertaining to related-party transactions should be publicly available. The AIM matter attracted a lot of negative publicity and was politically costly to the PAP because there was a presumption that the sale and leaseback of the TCMS could not have been in the interests of the residents, given that AIM is a PAP-owned company.

Madam, a current weakness of the system is that a significant amount of local knowledge of the estate officers is lost when there is a change of Managing Agent or a change of staff as well as Town Councillors. Entire teams, especially executives, could conceivably be replaced. Could the Ministry consider professionalising Town Councils such that there would not be this "clearing of the decks" where Town Council staff are concerned? Why should politics matter in the day-to-day running of Town Councils and in the employment of Town Council staff?

Beyond reducing the level of politicisation of Town Councils, a comprehensive review should also consider the "softer" but equally important aspects of Town Councils, such as how the devolution of control and management of public housing estates can imbue in residents a stronger sense of personal and collective responsibility in the well-being of the estate and fellow residents. This potential of Town Councils has not been fully realised even after two decades.

In this regard, all Town Councillors, in my view, should be residing in the areas in which they serve and be elected by residents, rather than being appointed by MPs, as is the current practice today. This can give impetus to grassroots democracy, enabling more people to serve while also nurturing greater ownership among residents. Thick engagement, through involvement in decision-making on matters that affect a resident's sense of well-being vis-a-vis his estate, are necessary if local government is to be authentic, inclusive and consequential. This helps us to get to the substance of what Town Councils are about. Local government or decentralisation has been very much stunted so far. We should unleash the full potential of Town Councils. The overall development of our public housing heartlands has to be a collaborative partnership of the MPs and the residents.

Madam, the "fundamental tension" between the political and administrative functions of Town Councils can be healthy. Maintaining equilibrium between the two can bring out the best in our Town Councils. If there is no incentive for Town Councils to improve their performance, for example, in developing better Town Council Management System, then I think residents will be worse off because no political party would want to invest funds in such an exercise given that the idea is that all these will eventually be shared across the island.

Politics is a reality in a large public undertaking, such as the leadership and management of Town Councils. To pretend that we can divorce politics from it is not realistic. Town Councils form one platform in our system of government in which political parties compete with one another. But it cannot be about political competition merely for competition's sake. Instead, the competition engendered should motivate political parties to raise their game and deliver on their electoral promises at the national and local level.

The proposed comprehensive review of Town Councils should endeavour to reduce the "fundamental tension" between the political and administrative functions of Town Councils. A more robust set of rules and procedures as well as safeguards can remove unnecessary political catfights. But this should not take away from the fundamental character of Town Councils which is, ultimately, about promoting good governance and improvement of people's lives at the local level.

Mdm Speaker, I wish to share my perspectives as a Town Council (TC) Chairperson who runs one of the 14 PAP Town Councils.

First, on AIM. When Deloitte and Touche Enterprise Risk Services Pte Ltd (D&T) first highlighted that the PAP Town Councils' Town Council Management System (TCMS) software was at risk of becoming obsolete in 2009, my fellow TC chairmen and I were naturally alarmed. It was an old Windows-XP-based system. The maintenance contract was due to expire. D&T had advised the choice of either a service or an ownership model for the next generation of TCMS software.

The first thing on our minds was to find a cost-effective way that would meet our need to redevelop the next TCMS software at the best price possible for our residents. Many of my residents in my ward are from the average low-income group. Factors, such as cash flow, affordability and perhaps reaping economies of scale, were some of our top-of-mind considerations.

All of the 14 PAP TCs then agreed on a sale and leaseback arrangement. This would allow the existing software to be centralised in one entity so that this entity could negotiate with potential vendors on our behalf. It did not seem efficient to have each of the 14 PAP TCs deal or negotiate separately with the vendors. At the same time, because the Town Councils still needed to continue to operate, the current software was still needed and maintenance required. The sale of the existing software and the leaseback arrangement was the most practical solution that could meet all of the needs.

Mayor Teo Ho Pin, our Co-ordinating Chairman, a domain expert and the most experienced amongst us, was leading the efforts; but all of us were fully supportive of his leadership. We acted in good faith and none of us wanted our individual TCs and residents we serve to have to bear any operational or financial risk or burden.

A contract was subsequently drafted and an open tender was called. The successful vendor must be willing to buy the existing almost-obsolete software; lease it back to the PAP Town Councils at no increase in maintenance cost to our residents; and be willing to study our future needs and help us negotiate for the development of the next-generation software. This is a tall order. A contract that is guilty of being biased to the needs and interest of our residents. Whilst several vendors collected the tender documents, only AIM, a PAP-affiliated company, agreed to do the job.

To be honest, the last thing on the minds of my fellow TC chairpersons, our TC councillors and the staff, the last thing was to fix or to trip the Opposition. Accusing us of plotting to sell the TCMS software in 2009 prior to the 2011 General Elections is nothing but a figment of imagination of some parties. GE2011 then was the last thing on our mind. Some of us did not even know if we would be fielded. We were more concerned with the mechanics of the old and the new software. Our conscience was and is clear – including in the face of my Maker, to whom Mr Png Eng Huat referred.

Naturally, we had not expected the spat that started in mid-December 2012 when the hon Member Sylvia Lim and Chairman of the then Aljunied-Hougang Town Council (AHTC) blamed AIM for affecting the Town Council's performance in a MND review. This raised nationwide questions of conflicts of interest and why AIM, a PAP-affiliated company, is allowed to do business with PAP Town Councils.

The MND Review Report helped explain the history and political nature of the Town Councils. The Town Councils Act or the TCs Act was set up to legally empower elected MPs representing their respective political parties to run their towns. The Act allowed not only freedom in appointing Town Councillors and staff; it does not prohibit transactions with persons or entities associated with the respective political parties.

This arrangement is hardly new to even hon Members from the Opposition. When Workers' Party took over the running of the Aljunied GRC, it waived competition to appoint FM Solutions and Services or FMSS as its Managing Agent (MA). FMSS was started in May 2011 and owned by the former General Manager of the then-Hougang TC. Later on, when AHTC finally conducted an open tender, not one but two contracts, for both Managing Agent and essential maintenance services, were awarded to FMSS.

Mdm Speaker, I highlighted these transactions not to draw a parallel between AIM and FMSS; but just to point out that both ruling party and Opposition-run Town Councils and MPs are aware of the current operating model, the political nature of Town Councils and the culture. In fact, TCs from all parties had, at various times, working partnerships with vendors who are politically sympathetic and willing to walk the extra mile for the interests of the residents and the respective MPs' political party.

If this arrangement and operating model is deemed to be less than perfect, then let us support the strategic review recommended by the MND Town Council Review Team. It is not helpful to finger-point at any one specific party. Whatever political party colour we don, let us provide inputs on how to plug the gaps in a less than perfect system and make it even more transparent and clear. Better still, let us also take this opportunity to examine the fundamentals of the current TC operating model and legislation. Let us help Town Councils raise the bar to be not just estate maintenance agents but town managers of the 21st century.

Madam, I would like to next share my thoughts on Town Councils of the Future. One of the key decisions I believe we need to make is the choice of the governance model or the operating model of future Town Councils.

On the pre-1989 Model before Town Councils, Madam, there have been calls to revert to the pre-1989 days when the HDB, a Government agency, is responsible for the maintenance of common areas and public housing estates.

The appeal of the model is this. It is potentially able to tap on a bigger pool of public resources. Government does have more resources in the maintenance and further development of towns, such as in IT systems or related environmental control or road facilities.

One of the effects of reverting completely to Government to run Town Councils is the potential of higher costs of managing towns. There is a popular mindset that Government has a deep, deep pocket and if it is cleaning and maintaining towns, Government should be able to afford and accommodate whatever needs and demands residents might have. This view is common not only in housing matters, but also transport, education, and even in social services. But we know that, ultimately, someone has got to foot the bill.

And under this system, the pre-1989 system, elected MPs will play the role of being the mouthpieces to pressure the appointed Government agency for more, potentially without accountability or calibration of what the optimal level of services should be.

Next, the other alternative, the alternative is the post-1989 Town Council Model. Madam, the appeal of the current Town Council operation model, on the other hand, is that it provides a direct link between public housing residents and their elected MPs, what Minister Khaw calls "the nexus between residents and their elected MPs".

Nothing brings an MP more down-to-earth than getting direct feedback on which corridor is not swept, which rubbish is not picked, which chute is not working or how residents disagree with one another on which colour of paint is the best. It is not glamour work. It is different in nature from researching and making public speeches on pet topics in Parliament. It stretches and shows up the bandwidth and responsiveness of the MPs one elects. Resources are put in the hands of the respective MPs. And how they operate the estate will provide one of the data points from which resident-voters evaluate their MPs. It is a double-edged sword that either shows up the quality, or the lack thereof, of the MPs.

The current Town Council model, however, is not without its down side. The challenges of handing over of TC operations in the event of political change is well detailed in the MND report and covered by the hon Members Zainal Sapari, Sylvia Lim and Sitoh Yih Pin.

In addition, MP-led Town Councils are often wrongly perceived as the body to solve the majority of the towns' issues – the drains, the roads, so forth. In reality, the current scope of the Town Councils is primarily in estate management and facility improvement, subject to fairly stringent funding limits. Town Councils are not meant for problems meant to be solved by the Police, LTA, NEA, SLA and so forth, to name a few.

When MPs run Town Councils, they tend to also be reluctant to increase the S&CC charges, even in the face of inflation, even in the face of increasing costs, such as in utility tariffs. With no guidance in the setting of S&C charges, each review of charges is potentially sensitive, emotional and, of course, unpopular.

Under the current TC model, there is also no differentiation in Government grants provided to Town Councils of estates of different profiles and ages. In the housing estates, for instance, located in the city area that I operate, which is frequented by persons all over the island, our Town Council officers and cleaners have to work doubly hard to clean up after the visitors. When I asked for fences to cordon off residential void decks to provide some privacy for my HDB residents, I was advised to use my limited Town Council funding for such purposes.

Clearly, as the MND Review Report rightly advised, the current model is due for a strategic and comprehensive review. Madam, both the pre-1989 and the current TC model have their appeals and their downsides. What is needed is a more updated model that is more inspiring and more visionary that will raise the role of MPs beyond estate managers, but also lead in sculpting the character of their town and residents.

Madam, in this respect, I would like to give eight suggestions to improve the current model just so the Review Team later on can consider these before the next generation of TCs and the Act. Here are the eight:

Conduct a study of best practices of how municipalities and towns are run in other parts of the world. A quick research, a desktop research I currently conducted on town council in North Carolina's Town of Cary showed an impressive list of A-Z services that we can learn from. I am sure there are many best practices we can learn.

Engage key stakeholders, including resident groups, in developing a realistic vision of what their estates can become; and how they, too, can own part of the process of making their estates cleaner, safer and more gracious. A town, after all, is about both hardware, infrastructure – and also software – its people.

Demarcate responsibilities of Government, Town Councils and Residents, taking into account which deliverables are best performed by these key stakeholders. For instance, we should seriously consider having Government lead in the development of nationwide TCMS software to be leased back to individual Town Councils. Since needs and expectations may be different, we can consider a modular approach for the Town Councils to pick and use the modules they need. Choose an open platform so that modules can be customised and added when required.

Actively use technology to collect and provide data and information so that Town Councils and their residents can proactively manage their own estate matters.

Provide better guidelines in the review of S&CC charges and set more consistent expectations amongst the public so that the revision of such fees is subject to less emotion and less populism.

Provide more education and transparency of Sinking Fund top-ups so that residents and Town Councillors are able to understand the need and purpose of such longer-term funds. Consider a tier system so that Town Councils, which have already had adequate sinking fund stashed aside, can be allowed to put aside less and use the money for operating expenses.

Allow differentiation in the provision of Government grants to cover operational expenditure, especially for estates which are located in city districts prone to dis-amenities brought about by visitors from the rest of Singapore. I am specifically referring to, of course, my wards, such as Little India – my GRC – my Little India, my Little Thailand and Waterloo Street, and possibly also Dr Lily Neo's Chinatown.

Lastly, consider how the same objective of engaging MPs with public housing residents, how this objective can also be furthered and applied in private estates, which are equally important.

In conclusion, Madam, the decision in 1989 by the then-Prime Minister Goh Chok Tong to make elected MPs accountable for maintenance of the housing estates they are voted into, is not unsound. However, it is now 2013. Twenty-four years have passed. The political and social landscapes have shifted and the Town Councils Acts and practices are in need of updates.

It is time to move on to envision the Town Councils of the 21st century. It is time to update our methods of engagement with the use of technology. It is time to further engage and give more power, more support, and ownership to both MPs and their residents to create more distinctive town characters.

I support the Minister's statement. I seek Minister's favourable considerations of the points I have raised and look forward to the implementation of the recommendations of the MND Town Council Review Report.

Ms Sylvia Lim, do you have a clarification?

Thank you, Madam. I have just one clarification for the Member. Earlier, she mentioned that when the 14 PAP Town Council chairmen were discussing this transaction with AIM, they did not know whether they would be fielded in the next General Elections and so on. I would like her to confirm if I am looking at the correct document, because the agreement for sale is actually dated 3 January 2011. So, is that the correct date?

The contract must have been covered later but when the discussions about the status of the software, the TCMS software, about the fact that it was at risk of being obsolete, about needing to think about different models for the next generation – these started from 2009. And the discussion of whether the General Elections, or who to fix or trip, was never in our mindset throughout the discussions.

May I speak in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech on Pg xxxx.] Mdm Speaker, when the Town Councils and AIM incident surfaced, I asked my grassroots leaders, residents and some friends what they were most concerned about in this incident. I have heard from many and I can summarise their worries into two categories: first, was the transaction between AIM and Town Councils legal; was there misuse of public funds? Two, was there any conflict of interest in this transaction?

This country has always prided itself on being free of corruption and able to rule by law. For me, personally, what I am most concerned about is whether or not this cherished reputation and the trust that we have built up over the years would be impacted negatively by unfair and untruthful accusations. Although I firmly believe that PAP Town Councils would not engage in any illegal dealings or hurt the interest of the residents, I still look forward to MND's Review Report so that I can understand their views and conclusions based on fact and evidence. I felt that this was the most sensible and mature way of dealing with this matter and to avoid any biases.

The problem is that when such a controversy occurs, especially when it involves two political parties and the handover process of the Town Councils after the General Elections, it is almost as if a perfect storm is waiting to happen. It is very important that we should view this issue objectively and calmly to understand the truth and fact of the matter.

Town Councils are themselves a very unique organisation. They are a body formed under the Town Councils Act. Town Councils do not belong to any Government organisations. They are not a company under the purview of corporate laws either.

From what I can see, MND's Review Report has reflected some very important points. It has also clarified some doubts and concerns that we had.

First, the residents and Town Councils' interests were not compromised. Second, the company did not receive any unwarranted profit from this transaction. On the contrary, it was stated in the Report that the company even suffered some losses. Third, the Town Councils and AIM transaction was legal as well as reasonable.

In terms of conflict of interests, the Report has also stated that we should consider why Town Councils were formed in the first place and their political nature. This is also why Town Councils have certain latitude to manoeuvre and they can engage the service of party-affiliated persons or companies. The key is whether these transactions were conducted through an open and transparent tender process and whether it was in the interest of the residents as well as the Town Councils. The purpose of the transaction must also be to protect the interests of the residents.

According to this Report, be it the People's Action Party or other parties, they all have similar commercial transactions. Some Town Councils also employed party-affiliated people as the key Town Council personnel.

The Report also pointed out that the purpose of the AIM transaction was to resolve the problem brought forth by the ageing software system which was close to its end of life, therefore, the Town Councils accepted one of the recommendations by Deloitte & Touche Enterprise Risk Services, a risk management company, and called for a tender to sell the IP right of the software and then lease back from the company. D&T is a very well-known, reputable, international company. It is unlikely that D&T would have any political agenda.

Of course, I believe that there is room to improve, especially on the handover process of Town Councils after an election to prevent services of Town Councils being disrupted. From what I can see, this controversy occurred because there was a lack of statutory handover process. Therefore, I welcome what the Minister said in his Ministerial Statement earlier that Senior Minister of State Lee Yi Shyan would lead a deeper review on how to improve the Town Council mechanism, including how to better manage the handover process.

I also agree that we should carry out an overall strategic review of Town Councils and we should be realistic that Town Councils are basically political in nature. Just like the city councils of other countries, they are also political in nature.

Town Councils were established in 1989 with the original intention of allowing the MPs to manage the Town Councils and have a say in how Town Councils are run. They will have a certain degree of autonomy to improve the living environment of the residents.

The Town Council system also allows for political accountability so that the performance of the Town Councils and the ability of the MPs can be linked.

In fact, the creation and implementation of the Town Council system means that our politics have evolved to become more accountable and more in sync with people's lives. Therefore, I agree with what the Minister said earlier that we should learn from the experiences derived from the 20 years of running the Town Councils and try to improve the existing structure and operations. Whether it is the PAP or other political parties, we cannot forget that our mission is to serve the people of Singapore. We must do this with a clear conscience. I can speak without any hesitation that PAP MPs are serving the people exactly with this mission in mind.

Mdm Speaker, I support the suggestions in the Ministerial Statement.

Minister Khaw Boon Wan. I see that Dr Teo has raised his hand. Are you seeking to make a clarification before the Minister makes his reply?

Mdm Speaker, I wish to clarify several points made by the hon Members Ms Sylvia Lim and Mr Png Eng Huat.

First, she asked why risk the sale of an essential service asset for $8,000 savings? I have given the reasons. This is a recommendation by our consultant Deloitte and Touche that by doing that, we are able to have the flexibility to explore the various development options so that the Town Councils can get better value for money for its new TCMS. And also, although the development of a new software may take 12-18 months, but if it is a service model, it will take a much shorter period.

Secondly, the PAP Town Councils had actually taken adequate safeguards to make sure that there is no disruption of services to our residents and that is the reason why the tender specifications are very stringent that all Directors of the firm must have IT and TC experience. And also there are provisions in the TCMS for the extension of contract with NCS. When we opened the tender, we received one bid and we are very confident that AIM, which is fully backed up by the PAP, can deliver.