Low Thia Khiang does not deny that Aljunied-Hougang-Punggol East Town Council (AHPETC) is poorly run and is in financial difficulty!
Commenting on the recently released Town Council Management Report for 2013, where his AHPETC received red bands for the management of service and conservancy charges (S&CC) arrears and corporate governance, Worker's Party chief Low Thia Khiang assured his residents that even with as much as 30% of residents not paying their S&CC, there would be no impact on theor Town Councils operations and services.
The Town Council Management Report, released on Tuesday, showed that at end-April last year, AHPETC’s S&CC arrears rate was at 29.4%. What this means is that 39,000 households in AHPETC were effectively subsidizing 16,000 households who could not, or would not, pay their S&CC.
What is surprising to observers is the fact that Mr Low, did not deny the figures but instead focused on reassuring residents that AHPETC operations would not be affected. Mr Low is in effect telling his residents that the Town Council run by the Worker’s Party does not need money to operate.
Publicly available financial statements show that the Hougang Town Council, which had an S&CC arrears rate of 7.8 per cent in FY 2010, was in financial deficit (they had a net operating deficit of about S$92,000). The Hougang Town Council only managed to avoid cash flow problems after it merged with the Aljunied Town Council after General Election 2011. Before the merger, the Aljunied Town Council had an operating surplus of S$3.3 million, but since the merger, the merged AHPETC’s financial position has deteriorated rapidly and now had an operating deficit of S$734,000 in FY2012.
Observers are now waiting to see how much longer the AHPETC can operate without paying their vendors, contractors and suppliers. Using past expenditure as a projection, the AHPETC is likely in debt to the tune of no less than $4.73 million and that is assuming the lower rate of S&CC arrears of less than 10%. The actual amount is likely to be much more.