WP: $3.5m not part of ex-agent's fees
A DISPUTED sum of $3.5 million that the Workers' Party (WP) town council is said to owe its former managing agent will not affect the town council's bottom line, party chairman Sylvia Lim said yesterday, ahead of Nomination Day, which is today.
In fact, she said the Aljunied-Hougang-Punggol East Town Council (AHPETC) had already made a substantial amount of payments to FM Solutions & Services (FMSS).
Ms Lim was responding to questions about a report in The New Paper yesterday that said FMSS had sent a letter of demand to AHPETC in July, over $3.5 million that the town council is said to owe the company.
This comes amid assertions by the Ministry of National Development (MND) that the town council has overpaid its managing agent.
FMSS was incorporated in 2011 soon after WP won the Aljunied Group Representation Constituency in the 2011 General Election.
The company was the managing agent for the town council between July 15, 2011 and July 14 this year.
The relationship between the two parties soured following the Auditor-General's Office (AGO) report in March, The New Paper reported.
Six days after WP did not renew FMSS' contract, the company demanded to be paid monies owed between April and July 14.
Town council staff reportedly said that AHPETC and FMSS had been locked in talks over financial matters for several months.
Speaking to reporters at her party's headquarters during the WP's last round of candidate introductions yesterday, Ms Lim said the claims are for town council projects handled by FMSS in its capacity as project manager.
She said FMSS had been authorised to act as a project manager for the town council under its managing agent agreement. When the company handles projects, it is allowed to claim a percentage of the project value as additional fees, and this is on top of the managing agent fees, she added.
The $3.5 million amount, thus, had "nothing to do" with managing agent fees, and are related to sinking fund expenditure, said Ms Lim.
"They do not actually affect the bottom line in terms of surplus and deficit of the accounts."
Ms Lim also said the town council received the letter of demand in July, after its contract with FMSS ended. AHPETC then did its own due diligence checks and has since paid a substantial amount of the money.
But some payments have been withheld as the town council "has some questions about those claims".
"So the letter is old news because it has been overtaken by events," she said.
Ms Lim declined to provide details about the projects or the amount still in dispute, saying the information is confidential as both parties will be going for mediation next month.
When asked why her party did not make public the matter when it was asked about its managing agent, she said it was an issue between the two parties. She added that the town council was bound by confidentiality clauses in its contract with FMSS.
"We are actually going for mediation in October in good faith and exercising due diligence, and we believe that's the best way forward at this point in time," she said.