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AHTC did not overpay by 67% for critical cleaning and conservancy services, senior counsel for WP trio argues

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In the ongoing trial of Aljunied-Hougang Town Council (AHTC), Senior Counsel Chelva Rajah, acting for the Workers’ Party trio – Pritam Singh, Sylvia Lim and Low Thia Khiang –  took issue with PwC’s finding that the town council racked up $400,000 in extra fees in calling a tender for a new conservancy and cleaning provider.

The Straits Times reported on part of the exchange between SC Chelva and PwC partner Goh Thien Phong and said:

“The incumbent provider, Titan Facilities Management, was chosen but, in the new contract, the cleaning rate per dwelling unit rose from $6.30 to $10.55. But the auditor, in calculating the difference, had failed to take into account the number of parking spaces, Mr Rajah noted.

“Mr Goh said none of the documents he had stated the correct number of units. Even factoring in Mr Rajah’s estimated number of spaces, the new contract was still more expensive, he added. To this, Mr Rajah said: “One of the less happy aspects of modern life is that the cost of living does not observe the laws of gravity.””

NCMP Daniel Goh writing in his Facebook said that PwC charged that “AHTC overpaid (for conservancy and cleaning services) by 67%, as the old contract charged $6.30 per unit per month, and the new contract charged $10.55 per unit per month.”

The NCMP went on to explain why the insistence of PwC that AHTC had overpaid by 67 per cent for the critical cleaning and conservancy services may be wrong:

“Goh had used 9,128 units to calculate price-per-unit for the old contract and 8,297 units for the new contract. The 9,128 units to calculate price-per-unit for the old contract comprised 7,146 residential units, some commercial units and 1,929 car park units (3 covered car park lots equal 1 unit).

The problem was with the 8,297 units used to calculate price-per-unit for the new contract. It omitted the car park units. Rajah said that since the number of car parks was 1,929 for the old contract, “unless they disappeared from the face of Punggol East in the course of four years”, the number of units Goh used to calculate price-per-unit for the new contract was “significantly lower” than what it should be.

Goh answered yes, but said that he just based the units “on whatever document” that he had and the new contract didn’t have any number apart from the 8,297 units. He also said no one from the town council pointed out that the PwC Report was wrong on this issue.

Further exchanges followed. Rajah pointed out that PE was a growing town, so he asked Goh whether it was reasonable if the number of residential units had increased from 7,146 to 8,237, then the car parks would be more than 1,929.

Goh replied that it was not anywhere in the new contract so he did not want to venture putting in the number for car parks.

This went on with Rajah asking Goh whether it was reasonable to include a figure for car parks and Goh replying there was no evidence of the number in the new contract.

Finally Goh allowed it, but he said, even if he was to use 1,929 and multiply by the percentage increase in dwelling units and then use it to calculate the price-per-unit in the new contract, it was ”still much higher” than the old contract.

Rajah replied, “Yes, it is one of the less happy aspects of modern life that cost of living does not observe the laws of gravity, keeps going up instead of coming down.”

Led by the Honourable Judge, the Court proceeded to do a quick calculation using 8,297 residential and commercial units in the new contract and 1,929 car park units in the old contract to get an estimate of the actual price-per-unit in the new contract. It came up to $8.56 (36% increase).

Rajah pointed out it should be lower, high $7’s or low $8’s, as the car park units should be higher. Nevertheless, he did not want to go into the actual amount and only wanted the Court to understand it was actually not 67 per cent up.

He concluded, “Of course it is up, but unfortunately prices go up.””

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Posted by Andrew Loh on Wednesday, 10 October 2018

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