“So did the town councils as public institutions do the right thing, selling to a company owned by a political party with its own agenda?” - Dr. Tan Cheng Bock
“(Town councils) certainly are political organisations.It does not, however, follow that they are not public institutions just because they are politically constituted.” – Cheng Shoong Tat
The latest incident unveiled around Dec 2012 is quite mind boggling to say the least. The controversy had arisen earlier this month when a town council management review gave the opposition-controlled Aljunied Town Council the lowest banding for arrears management and subsequently sparked off a war of words between the two political parties and some dirty linens being spilled out in the open. Some glaring questions to be answered by the Government to the people are:
- Why the IT system developed by Government (town councils are technically a Government machinery but is strangely “outsourced” to political parties to manage) are transferred to a PAP subsidiary?
- Why the PAP town councils sold the IT system at a low cost of $140,000 and then leased it back at $785/month (source) for each council? As there are 15 GRC and 12 Single ward town councils, if you minus the two opposition wards then, the sum would work out to $235,500 per year!!! Not bad to buy a business with a payback in much less than one year plus opportunities for other upgrades and potential business, what a profitable proposition and I am surprised there was only one bidder! [Updated 3 Jan 2012: In the latest clarification, Teo revealed that between November 2010 and October 2011, it works out to a total outlay of S$131,880 for the 14 PAP town councils and AIM was also paid about S$33,150 during a contract extension for November 2011 to April this year. A back-of-the-envelope calculation by shows that AIM made about S$25,000 from the contracts. (source) and this does not include profits earned by AIM after Oct 2011.]
- Why no tender to spin it off to a neutral private commercial company through a open and thorough process [Updated 4Jan2012: indeed there was one and the picture can be found here]? And most important of all… to a $2 company? If there is only one bidder, and worse from one that has conflict of interests, common sense dictates that the sale must be called off by those who makes decision on behalf of the residents. Where is the integrity and accountability in this case? How does a $2 company that AIM Pte Ltd is, which doesn’t even have a corporate website, meets the tender requirement of an ‘Experienced and reputable Company with relevant track record’?
- Is it in the best interest of the public for the Town Councils to sell the system to a private company and then rent it back? Is it true as claimed by the opposition that “(AIM) could exercise rights of termination if there was a ‘material change’ in the composition of a town council”? it is then fair for WP to believe that the system could have been terminated at short notice by AIM and that each party can try to create some special software or hardware to hold the other party at the neck using public monies?
- Why AIM’s bid was allowed after it submitted its tender one week after the official closing date ( the tender closed on July 14 2010, the bid was submitted on July 20 2010)?
Let’s be crystal clear about this saga: It is not about the management fee arrears, it is not about the the IT system, it is not whether AIM is a PAP subsidiary, it is about the messy state of someone is confusing and refusing to separate the state from the party as if they will be the one that will rule Singapore forever, it is about public’s confidence of PAP in its business dealings and that is the crux of the problem!
[Updated 3 Jan 2012] With latest reply from PAP’s Teo Ho Pin, more questions raised than answered:
- “The PAP town councils sold the management software to a third party because it was “cumbersome and inefficient” to have 14 individual town councils hold intellectual property rights to the software….The vendor would have to deal with all the 14 town councils when reviewing or revising the system. It would be better for the 14 town councils to consolidate their software rights in a single party which would manage them on behalf of all the town councils, and also source vendors to improve the system and address the deficiencies (source)” – Why not handover back to a HDB’s subsidary rather than a PAP’s subsidary?
- “the idea to have a third party own the computer system with the councils paying a service fee was not uncommon and that the deal ultimately yielded savings of around $8,000 for the town councils. (source)” – Is the $8000 (between November 2010 and October 2011) saving worth the risk of the backlash? Any other hidden cost such as manpower not accounted for?
- “the town councils were advised by Deloitte and Touche Enterprise Risk Services (D&T) that the software was “obsolete and unmaintainable” – which could explain why no other company wanted to bid for the tender (Source)” - First Teo still did not reveal how much public money has been spent to develop this piece of obsolete and unmaintable junk, NCS is my no-mean cheap software vendor (in fact they are damn Ex),ASkmelah is surprised to hear that what crap software NCS have come up with that are not maintainable and upgradable. If it is such a junk, why “D&T also suggested the option of having a third party own the computer system, including the software, with the town councils paying a service fee for regular maintenance”?
- “The sum involved in the transactions are modest. But as a PAP company we wanted to be helpful to the PAP town councils. So we were ready to take on the task and submitted a proposal to help the PAP town councils achieve their goals. The objective of the company with the town councils is not to make profit. (Source)” – Is PAP confused with its role? The ruling party may not be there forever but the civil service (aka Government) will be there regardless of which party are voted in?
- “The PAP declined to comment on the number of companies it owns. A check with the Workers’ Party, the Reform Party, the Singapore Democratic Party, the National Solidarity Party and the Singapore People’s Party showed that none of them own any companies (Source).” – Where is the much-acclaimed integrity and the much touted nothing-to-hide by the men-in-white?
[Updated 9 Jan2013: PM Lee asks MND to review AIM computer systems deal, Askmelah has a few big question marks…. Who order the review? PM Lee who is the PAP Chief; Who to be investigated? Coordinating chairman of PAP town councils Teo Ho Pin, A current PAP MP, AIM’s chairman, Chandra Das, a PAP person and an ex-PAP MP; Who will be investigating? The Deputy Secretary of MND who is reporting to Khaw Boon Wan who is a PAP minister. So much for maintaining public trust and transparency, looks more like wayang to me.]
- The AIM-AHPETC Saga Re-Visited
Action Information Management timeline (Source)
In 2003, PAP town councils wanted to “harmonise” their computer systems and jointly called an open tender for a computer system based on a common platform.
NCS was chosen to provide this system from Aug 1, 2003 to Oct 31, 2010, with an option to extend the contract for one year.
In 2010, PAP town councils jointly appointed Deloitte and Touche Enterprise Risk Services (D&T) to advise on the review of the computer system.
After a comprehensive review, D&T identified various deficiencies and gaps in the system which was becoming “obsolete and unmaintainable”.
D&T suggested the option of having a third party own the computer system, including the software, with the town councils paying a service fee for regular maintenance.
After serious consideration, the PAP town councils decided to call for a tender under which only the intellectual property in the old software would be sold. The ownership of the physical computer systems remained with the PAP town councils.
On June 30, 2010, PAP town councils advertised the tender in the Straits Times. Five companies collected the tender documents: CSC Technologies Services, Hutcabb Consulting, NCS, NEC Asia and Action Information Management (AIM).
On July 20, 2010, AIM submitted a bid which was the only one received by the town councils.
After assessing that AIM’s proposal was in the PAP town councils’ best interests, the tender was awarded to AIM.
The following articles extracted from http://ifonlysingaporeans.blogspot.sg.
PAP, WP in war of words over IT firm
AN ARGUMENT over the termination of an IT contract for an opposition-run town council continued yesterday, with officials from the People’s Action Party (PAP) and Workers’ Party (WP) exchanging more accusations over the issue.
The coordinating chairman of PAP-run town councils, Dr Teo Ho Pin, took Aljunied-Hougang Town Council (AHTC) chairman Sylvia Lim to task, asking why the council had “suppressed” the fact that it had wanted to develop its own software even before the IT firm, Action Information Management (AIM), ended the contract last year.
The town council had told AIM that it wanted to do this on June 10 last year, he said. “Thereafter the contract was terminated with mutual agreement on Sept 9, 2011, after two extensions had been given at AHTC’s request. AHTC thanked AIM for the extensions.”
Ms Lim, however, said that in June, the town council was “acutely aware” of the possible termination by the PAP-owned firm. AIM yesterday released an exchange of letters between the town council and the firm leading to the termination.
The controversy had arisen earlier this month when a town council management review gave AHTC the lowest banding for arrears management and did not rate its corporate governance, as its auditor’s management letter had not been submitted in time.
Ms Lim blamed the poor showing on the need to replicate new computer and financial systems after AIM ended the lease of AHTC’s computer and financial systems. She said the first extension to the contract with AIM until Aug 31 last year had to be “fought for”.
But AIM’s chairman, Mr Chandra Das, refuted this claim on Monday, saying that AHTC had said it wanted to develop its own system after the WP took over the town council last year, following its victory in Aljunied GRC at the general election.
AIM readily gave it the two extensions that it sought – to Aug 31 and then Sept 9 – and AHTC even thanked AIM for the extensions, he said.
In her latest statement yesterday, Ms Lim said WP MPs were “acutely aware of the possible termination of computing and financial systems at short notice by AIM, hanging over AHTC like the proverbial Sword of Damocles”.
She said the new management at AHTC requested an additional month, from Aug 1 to 31, mainly to do parallel testing of the front-end of the system, “which AIM agreed to after intercession”.
After Aug 31, the former system was no longer operational at AHTC, she said.
Meanwhile, AHTC worked overtime to scale up the WP-run Hougang town council’s system.
But Dr Teo last night criticised Ms Lim for not answering the “key question” on the termination.
“Ms Lim should come clean on the facts,” he said in his statement. “Why state that AIM wanted to terminate, while suppressing the fact that AHTC had on June 10, 2011, written to say that it wanted to develop its own software? The question has not been answered by her.”
Exchange of letters
JUNE 10, 2011
“We would like to inform you that Aljunied-Hougang Town Council is in the process of developing a Town Council Management System to support its operations effectively.
We would like to thank AIM for the assistance rendered to us in preparing the migration of database to the new system.
The new system is targeted to go live on 1 August 2011. While the new system goes live, we are planning to have the AIMS-TCMS (Financial Module) running concurrently till 31 August 2011, so as to ascertain the reliability of the new system.
As such, we would like to put up a request to continue to use the AIMS-TCMS till 31 August 2011, for your favourable consideration please.”
AUG 29, 2011
“We… would like to inform that the auditors is auditing the TC’s accounts up to 31 July 2011 would require to review the data in the system. As such, we would like to request the TCMS to be made available till 9September 2011 for review purposes only. “We appreciate your assistance to render the above at no cost.”
AUG 31, 2011
“We refer to your letter dated 29 August 2011 to request for the TCMS to be made available till 9September 2011 for audit review purposes.
We are pleased to inform you that the request is granted, subject to Aljunied- Hougang Town Council agreeing to the one-off payment below…
Total Amount Due: $419.98
Separately, please be informed that the provision for parallel run of the TCMS will be terminated wef 1 September 2011.”
SEPT 2, 2011
“We agree and accept to your one-off charge of $419.98 and would appreciate your kind assistance in facilitating the process.”
By Andrea Ong, The Straits Times, 29 Dec 2012
WORKERS’ Party chairman Sylvia Lim yesterday accused the PAP town councils and the IT company which bought the councils’ computer system of side-stepping a key question in the ongoing saga.
The question: How was public interest served in the deal the two signed?
She was referring to the sale and subsequent lease back to Action Information Management (AIM) of the computer and financial systems co-owned and developed by the PAP town councils.
As she did in an interview last week, Ms Lim, who is also chairman of Aljunied-Hougang Town Council, again sought to draw attention yesterday to a clause in the contract which she said allows AIM to terminate the lease of the software if there is a “material change” in the composition of a town council.
PAP town councils’ coordinating chairman Teo Ho Pin and AIM chairman S. Chandra Das had on Monday defended the contract, saying it was in line with financial regulations and the law.
However, Ms Lim yesterday asked for a public interest explanation: “What justification was there for the town councils to relinquish ownership and leave the continuity of town council operations at the mercy of a third party?”
She also took issue with the confirmation on Monday that AIM is “fully owned” by the People’s Action Party. “In other words, the PAP-managed town councils saw fit to sell away their ownership of the systems, developed with public funds, to a political party, which presumably could act in its own interests when exercising its rights to terminate the contracts,” she said.
She questioned whether there are arrangements at PAP town councils to cater for subsequent changes in composition.
Responding last night, Dr Teo said he would go through Ms Lim’s “latest allegations” of conflict of interest and “deal with them openly, in a further statement over the next few days”.