Monday, 31 August 2015

AHPETC: Observations from a Former Town Council GM

Observations of a Former Town Council GM

ahpetc financial report 2015 former gm tc

Reading the news report today “AHPETC faced losses while agent’s profits jumped 300%” shocked me. Being a former General Manager (GM) of a Town Council myself, it is  quite unbelievable that the APHPETC is running into deficit and yet correspondingly, their Managing Agent, FMSS is making so much profits. In fact, anyone who has ever operated a business will know that it is impossible for services based business to earn an after-tax profit of 36%, let alone an after tax-profit of 36% after paying $1.14 million in director fees. Either the client is downright dumb and is willing to be milked, or the client is complicit. Even the Orh Luak man at the Old Airport Road market cannot earn so much.

The best that my TC ever earned in a year is 10%. But these were few and far between. A typical TC's profit margin is on average 5%. FMSS' profit margins without the benefit of scale is phenomenal by any standard. 

Like many of my friends in this industry, I had smelled a rat. Unfortunately the gang at AHPETC were tight-lipped and nothing ever slipped. Given the cash cow they were sitting-on, I now know why. Afterall, who would want to kill the goose that lay the golden egg? Now that everything is coming to light, I think it is time for me to share my thoughts ...

a. Monthly S&CC. It is impossible for a TC (or any business for that matter) not to know its monthly S&CC arrears. Anyone that can accept that it takes a complicated system to calculate this is obviously blinded to logic. AHPETC's decision to stop submitting their S&CC arrears is clearly a ruse. The form requested by MND is a simple matrix that any 1st year accounting student can fill. We should also not forget, that the Hougang TC and even AHPETC had been submitting it according to the table for several months before it suddenly became impossible for them to do it. My guess, AHPETC wanted to build the perception of Government bullying.

b. AGO Audit. When it became impossible for AHPETC to politically deny an AGO audit into their books, AHPETC switched tactics to one of hiding information. Thus when basic accounting information like starting bank balances were asked for, AHPETC blamed George Yeo. This misdirection was subsequently dismissed when AGO discovered evidence that AHPETC themselves had certified in a handing and taking over documents that all the information was provided. When this happened, AHPETC then began to blame the political environment and how no one wanted to work for AHPETC. In reality, nothing had changed. The same sub-contractors that did work for Ajunied under George Yeo, continued to do work for AHPETC. In fact, almost all of AHPETC's sub-contractors do work for both PAP-run Town Councils and AHPETC. Here, AHPETC continued to build on the perception of Government bullying but also started playing I am a victim of the circumstance card.

Despite what AHPETC or the WP tries to say, one thing is for certain. A mess existed and there is something definitely wrong at AHPETC. Given Sylvia Lim's assurances that FMSS had been providing excellent services to the residents of Aljunied, Hougang and Punggol East, I am surprised that the WP had not renewed FMSS' contract. Also, given the fantastic profits to be made, I am equally surprised that FMSS did not re-tender for the contract. Perhaps all is not well at AHPETC. All that is left for me to say is that now that the WP has decided to take over the role of running the TC themselves, it remains to be seen if Sylvia Lim will be able to sort out the mess.

My only hope is that the residents of Aljunied, Hougang and Punggol East are not made to suffer for Sylvia Lim's incompetency or whatever you want to call it.

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