Low Thia Khiang on lift maintenance

Here’s a gist of the exchange between Mr Low and the Senior Minister of State and Minister:

Mr Low: new lifts have high breakdown rate, urge MND to (1) look at quality of new lifts, (2) provide special grant for lift maintenance, (3) regulate for standardised lift design and parts.

Mr Lee: (1) take a look at your Town Council data and find out what the problems are, (2) Town Council should plan their finances ahead and MND is already providing additional assistance schemes, (3) there are over 20 lift brands used and the parts may be very complex.

Mr Low: the problem is more fundamental, do we really have a competitive market or in a situation where we are dependent on the lift companies to set pricing on maintenance?

Mr Lee: “If you think there is an issue, raise it to MND and HDB”, be specific.

Mr Wong: we don’t disagree with Mr Low, our objectives and direction are aligned, we are doing more standardisation, aiming for an even more competitive market, HDB will continue to do more.

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11 April 2016

Mr Low Thia Khiang (Aljunied): Thank you, Sir. The Aljunied-Hougang Town Council currently manages 1,760 lifts in HDB estates, out of which 470 are new lifts installed under the Lift Upgrading Programme (LUP) being turned on from 2012 onwards. Based on the figures gathered for lift breakdown in FY15/16, there were 3,683 breakdowns in total or 7.84 breakdowns per lift on average.

This is a relatively high breakdown rate considering these new lifts are barely three years old. I am not sure whether this happens only in Aljunied-Hougang Town or across the board. I would like to urge MND to take a look at the quality of the LUP lifts.

Next, with the growth in the numbers of lifts contributed by the LUP, the expenditure on lift maintenance for each year is also rising. In the case of Aljunied-Hougang TC, the latest revision in maintenance contracts by the original lift manufacturers will result in a cost increase of between 4.08% and 8.52%. The projected upward revision in maintenance rates beyond 2017 is even higher, estimated to be between 8.66% and 10.72%.

I believe that moving forward, lift maintenance will be a heavy financial burden on all the Town Councils. Hence, I request MND to consider providing a special grant for lift maintenance.

Finally, new lifts are designed by different lift manufacturers with their unique features and parts, especially the motherboard. This gives rise to maintenance issues, as the original manufacturers control the parts and pricing.

I suggest HDB considers a standardised lift design for HDB estates to require manufacturers to produce lifts based on a standard design and make the standardised lift parts, so that both electronic and mechanical parts will be readily available. This will ensure competitive pricing in the manufacture and maintenance of lifts.

Mr Desmond Lee (Senior Minister of State for National Development): … Mr Low Thia Khiang spoke about lift maintenance, lift parts and about lift breakdowns. On the point on lift breakdowns, there is a tele-monitoring system in every lift in HDB, which provides data remotely to the Town Council, so you can establish what the cause of the fault is. So, I would urge the hon Member to take a look at the Town Council data and have a sense as to what the causes of these frequent breakdowns are. Some of it could be the nature of the use of the lift, some of it could be the frequency of Town Council’s maintenance regime or the capability and the competence of the engineers they engage, amongst other reasons. So, I think it is good to drill down and analyse what your problems are.

As for the cost of maintenance which Mr Low said it is high because some original parts are owned by the lift manufacturer, this is something that will depend on the complexity of the part. There are over 20 lift brands used in HDB estates. So, there are a variety of parts, from smaller parts, simpler parts that can be manufactured by others to those that are more specialised and specific to the lift.

Mr Low also talked about the high cost of lift maintenance and replacement. MND is reviewing ways to help Town Councils better manage the lifts and to plan ahead for the lift replacement needs. Given that lift replacement is a major sinking fund expenditure, Town Council should monitor their long term financial sufficiency. MND is also considering ring fencing part of the Town Council’s sinking fund to cater for such expenditure.

Even so, my Ministry has provided Town Councils with additional assistance schemes. For instance, in September 2014, HDB rolled out the Selective Lift Replacement Programme to help Town Councils replace older lifts that lack key features such as energy-efficient motors, infra-red door safety sensors and vision panels found in more modern lifts.

Mr Low Thia Khiang: I want to clarify that the Town Council does have a regular maintenance regime for the lifts. What we found out is that the breakdown or failure of the parts are unusually fast, compared to some other flats. The question then is what is the quality of the LUP lifts? What are the safeguards or specifications that HDB has got, in terms of the tender?

On the issue of lift market, maintenance market, I understand that the new lift being installed with the manufacturing company will come with its own motherboard, which other companies will not be able to maintain. Which means that, going forward, the Town Council’s lift maintenance will be held ransom by this manufacturing company.

The fundamental question is what is the situation of the lift manufacture and maintenance market in Singapore? Is the market competitive or are we in a situation where you have not much of choice, but dependent on these companies? They decide how much they will increase the price in maintenance every year? Of course, probably Opposition Town Councils will at a disadvantage, because we are not given the leeway of discounts, as they give to PAP Town Councils, from what I know.

The Chairman: Senior Minister of State Desmond Lee.

Mr Desmond Lee: Sir, the Member now raises a couple of issues which were mentioned earlier. On the issue of lift breakdowns, he talks about the quality of the LUP. In deciding what lifts are put into a housing estate, including in LUP, we process projects by way of a price quality procurement process where you look not just at price, but also the quality of the lift. So, there are certain specifications that have to be met. As I said earlier, I think we need to really have a proper drill down by the Town Council. If you think there is an issue, raise it to MND and HDB, so that you can assess whether it is an issue of the lift brand, lift model, or is it a specific issue with regards to a particular shaft? Is it a maintenance problem? Is it a usage issue? So, I think beyond speculation, it is better to look at specifics.

The hon Member also speaks about motherboards of lifts, and that therefore, he is concerned about whether there is market competitiveness with regards to maintenance of lifts in HDB estates, which responsibilities then fall on Town Councils across the island. As I said earlier, there are many players in the lift supply market and the lift maintenance market. In HDB estates across Singapore, there are easily at least 20 brands of lifts being used. Equally, many players in the lift maintenance market, including the original lift manufacturers and third-party contractors.

So, Mr Low talked about the manufacturer then having proprietary ownership in the technology of the motherboards, but there are also other parts of the lifts. Each of these lift maintenance companies, whether they are manufacturer or third-party contractor, come in variant profile and capabilities. There may be more complex maintenance issues which may require certain parties with specific competencies, such as the original lift manufacturer to resolve.

HDB upholds a competitive market, and will not allow any particular party to abuse its market power, whether it is a part, or whether it is a maintenance regime. If there are any concerns that he raises, please let us know specifically, whether the motherboard, the type he is concerned about, let us know.

Mr Lawrence Wong (Minister for National Development): Mr Chairman, I just wanted to add in response to Mr Low’s query, as I understand his suggestion is to look at how we can standardise more components within the lifts. We have two objectives. One, to bring down costs, and secondly, so that we will not be held hostage or the Town Councils will not be held hostage by any particular Original Equipment Manufacturers (OEMs).

I agree fully with those suggestions. The objectives that we have are indeed aligned, because we have over the years, been doing more standardisation. That is why in the early days, all the lifts maintenance contracts were done by OEMs entirely. We were in a very difficult situation where we had to pay whatever prices that the OEMs charged.

Now, we have a more competitive market. There are third-party contractors, but Mr Low is right, that not everything can be done by the third-party contractor. Sometimes, for very complex things, for certain parts, you still need to go to the OEM.

We should try and aim for an even more competitive market, so I agree with him. With just one caveat, that we have to study this very carefully, because this is quite complex. If we were to overly prescribe certain standards, and say only these things can be done, we may end up with a situation where we limit our choices that we have to purchase. Fewer OEMs will bid for lift contracts in Singapore, the cost may be higher. So, it is complex and we have to look at this in detail.

I would say that the direction of what he has suggested is something we agree with. HDB has already done this and we would continue to do more of it.
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Source: Parliament of Singapore, http://bit.ly/28NFfjN

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