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Surbana Jurong made no profit by developing COVID-19 care facilities, say MOH and MND

The ministries said that Surbana Jurong and the other Temasek portfolio companies involved in the project only charged for direct expenditure at cost

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The Ministry of Health (MOH) and the Ministry of National Development (MND) have backed Surbana Jurong Private Limited in the controversy over the development of the Government’s COVID-19 community care facilities.

Surbana Jurong is an urban and infrastructure consultancy which started out as the Housing Development Board’s Building and Development Division in the 1960s. Earlier this year, Singapore sovereign wealth fund Temasek – which owns a 100 per cent stake in Surbana Jurong – asked the firm to provide expertise to Government projects aimed at managing the COVID-19 pandemic.

The company began providing technical services to various government bodies on a “cost-recovery basis” and helped develop the community care facility for COVID-19 patients at the Singapore EXPO. The facility was completed in a mere four weeks using just 50 workers, despite the team only having a week to discuss the project.

Surbana Jurong’s feat was marred by allegations of corruption and profiteering made in several Facebook posts that highlighted that the firm’s CEO (International) is Josephine Teo’s husband and that Surbana Jurong’s board of directors includes ruling party Members of Parliament Desmond Choo and Yaacob Ibrahim.

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In a joint statement released on Wednesday (20 May), the MOH and MND said that Surbana Jurong made no profit by developing the Government’s community care facility.

Explaining that it enlisted Temasek to help set up the care facility since Temasek had the necessary resources to do so at short notice through its portfolio companies, the Government ministries said that Temasek and its subsidiaries did the work on a cost recovery basis or even below cost:

“Temasek agreed to assist, and also agreed that the work done by Temasek and its linked companies, would be done at cost recovery basis, and in some cases, below cost. There will be no profit made by Temasek and its linked companies for the work done.”

Asserting that the Manpower Minister was not involved in selecting Surbana Jurong for the job, MOH and MND said that Temasek roped in Surbana Jurong, PSA International, Singapore Technologies Engineering and Sheares Healthcare to assist and chose the Singapore EXPO as the premise for the care facility.

The statement said that MOH worked with Temasek and its portfolio companies on the care facility’s healthcare needs while MND liaised with the entities on payments, like it did with the parties involved in setting up other facilities, such as the dedicated Stay-Home Notice (SHN) facilities.

Revealing that Temasek did not charge management fees for the work and only invoiced MND for expenses paid to third parties, the ministries said that Surbana Jurong and the other Temasek portfolio companies involved in the project only charged for direct expenditure at cost.

Some aspects were even charged below cost, like the capital expenditure cost for the usage of Singapore EXPO. MND and MOH said that SingEx Venues Pte Ltd, which manages Singapore Expo, did not charge the full cost “since the Expo was not being used for normal business anyway”.

Referring to questions about the selection process of firms involved in Government projects that have arisen as a result of the controversy involving Surbana Jurong, MOH and MND said: “The Government accepts that legitimate questions can be raised about the spending, and is fully prepared to explain why and how money was spent.

“However the Government will respond firmly and appropriately to any scurrilous allegation of corruption.”

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