Chan, your NTUC Foodfare is benefiting cleaning companies

By: Forever Vagabond
In a blog post yesterday, NTUC secretary-general and Minister in the PMO, Chan Chun Sing, said that NTUC’s social enterprises do not enjoy special privileges from the Government.
“The truth of the matter here is that NTUC’s social enterprises operate on market principles and have to compete for Government spaces and contracts just like any other commercial enterprises,” he said.
“The difference here is the fact that as social enterprises, the majority of our earnings are reinvested to expand our services for the nation.”
NTUC’s social enterprises include its supermarket chain FairPrice, Foodfare foodcourts and others.
NTUC’s social enterprises do enjoy special privileges from Govt
Contrary to what Mr Chan is saying, a search on Internet reveals that NTUC’s social enterprises do enjoy special privileges from the government.
For example, last year, it was reported that NTUC Foodfare “was appointed by the National Environment Agency (NEA) to operate the Bukit Panjang hawker centre” (http://www.channelnewsasia.com/news/singapore/foodfare-to-review-price/2016942.html).
That is to say, NEA did not call for tender for operators to manage the Bukit Panjang hawker centre but appointed NTUC Foodfare directly to operate the hawker centre, presumably, to help lower the rental costs for hawkers.
Indeed, Dr Balakrishnan, when he was the Minister for the Environment and Water Resources, acknowledged that there have “always been questions about (hawker stall) rental rates”, and his ministry has reduced rental costs in various ways (http://www.channelnewsasia.com/news/singapore/rental-costs-a-small/2010142.html).
“They (hawker stalls) are not a way for landlords to make money,” he said. “We did this by removing the practice of assignments and subletting. This removed speculation from hawker rentals.”
“Some stalls have been rented for as low as S$10 a month,” he noted.
In any case, he assured that he has “made it very clear” to NTUC Foodfare that they are not to charge high rents at the new Bukit Panjang hawker centre, with the priority being to have “good, affordable food for my residents in Bukit Panjang”.
NTUC Foodfare forced hawkers to cap their prices
In order to ensure that the hawker food is affordable to Dr Balakrishnan’s residents in Bukit Panjang, NTUC Foodfare resorted to capping food prices for hawkers selling their food in Bukit Panjang hawker centre.
Not surprisingly, hawkers have criticised the move, saying that it would lead to razor-thin profits, if any, for them and dissuade new entrants to the trade (http://www.straitstimes.com/singapore/2-hawker-centres-to-have-price-caps-despite-opposition).
High cleaning fees charged by NTUC Foodfare
An observant blogger who managed to review the tender document provided by NTUC Foodfare for hawkers to tender the stalls at Bt Panjang, noted that things are not as simple as it seems (http://www.theaaronloy.com/the-bukit-panjang-hawker-conundrum-ntuc-saint-or-wolf-in-sheeps-clothing).
Namely, he noted the high cleaning and conservancy charges imposed by NTUC Foodfare on the hawkers:
Blogger Aaron said:
“So here’s the thing, even before you start bidding for rentals, you’ll need to consider the running costs, which are:
$320 – Service & Conservancy Charge
$500 – Table Cleaning Fee
$850 – Dish Washing Fee
Which is a total of $1670, or more accurately, $1786.90, with GST.”
Furthermore, NTUC Foodfare stated in its fine prints that these charges are not fixed and may be changed anytime throughout the tenancy of the stall.
Commenting on Dr Balakrishnan’s remark that the stall rentals can be as low as $10, the blogger said, “So when Dr Vivian Balakrishnan says that some rents are as low as $10, what he meant was that some effective rents are as low as $1786.90 + $10 = $1796.90.”
“Holy moly. I know people who are active hawkers and a couple that have done a short stint before. Even they thought it was a little much,” he added.
Even taking away the conservancy charges, the cleaning fees (table cleaning and dish washing) would amount to $1,444.50 with GST. And the hawkers have no choice but to use the cleaning services provided by NTUC Foodfare.
“Are they (NTUC Foodfare) hiring 1 cleaner per stall? What happened to economy of scale?” the blogger asked. “If not, wouldn’t it be better off if each stall just hired a helper on their own, who could also help with the cleaning?”
“Then you have the fact that the most profitable ventures in this market, which is the drinks and desserts, are being run by NTUC themselves.”
He further added, “I don’t expect things to be free or dirt cheap. While a non-profit project, these places should not be operating at a loss. But, with costs running close to $1800, when you’ve not even added on rent, materials and utilities? I can understand wanting to put a cap on the prices of food, but expecting these hawkers to do so with these charges levied as well?”
“No wonder everybody’s making noise.”
“I cannot help but notice that there is something amiss,” he concluded.
NTUC Foodfare itself does not have any cleaning companies and it is likely that it would outsource the services to “somebody”.
Indeed, something is really amiss…