Khaw Boon Wan and Sylvia Lim clash in fiery debate over AIM deal

National Development Minister Khaw Boon Wan’s ministerial statement in Parliament on Monday, which touched on town councils and the PAP-owned Action Information Management (AIM), sparked off a charged debate with some of the fiercest arguments coming from Worker’s Party (WP) chairman Sylvia Lim. 
 
In rejecting the Ministry of National Development's (MND) finding that residents’ interests had not been compromised in a deal between PAP town councils and AIM, she questioned aspects of the AIM deal, like the nature of AIM and the one-month termination clause in the event the town council changed hands.
 
For example, she pointed out that the timing for the 2010 sale of the IT software to AIM was questionable.
 
“The timing of the sale to commence a few months before the General Elections (GE) in 2011 also calls for explanation. Was it a pure coincidence? Or was there simply a need to sell the software quickly, so that termination can be effected if political seats were lost?” she said.
 
To this, the Minister replied in his round-up statement, “First, the TCs brought in Deloitte & Touche (D&T) to evaluate their software, not in the year just before the 2011 GE, but as early as June 2009.” He added that the TCs’ software was also obsolete and was scheduled for replacement, with the software maintenance contract with NCS “expiring in October 2010”.
 
Resident’s interests at stake
 
Lim, who is also chairman of the Aljunied-Hougang Town Council, also attacked the reasons given for the one-month termination clause – she said they were “plainly unconvincing” and put residents’ welfare at risk.
 
“First, no attempt was made to explain why a material change in membership of TC should allow unilateral termination by the contractor with one month’s notice,” she said. “The real sting of the termination clause lay in its one-month notice period. Is a one-month termination reasonable for a critical IT system? It is quite clear that time is needed to develop a system of this complexity – in the PAP’s own estimation, 18 to 24 months. Did the PAP TCs not realise that this aspect of the AIM transaction endangered the continuity of public services?  Or perhaps that was the intention in the case of a change in political leadership?”
 
To this, Khaw replied, “There are now, as we have heard repeatedly, two interpretations of what actually happened. AIM insisted that it did not initiate termination and that it was the Aljunied-Hougang TC which gave notice of its intention to use its own software. Only on receipt of that notice did AIM then terminate the contract. The AHTC’s version is that they believed that it would be terminated and so decided to start sourcing for their own IT software system. The Review Team has included the full exchange of letters in their report, and we will let the readers draw their own conclusion.”

Controversy over the AIM deal first erupted last December, when the MND released its town council management report, singling out the AHTC with a “red” rating for the latter’s handling of service and conservancy charge (S&CC) arrears. Lim that month explained that the town council’s audit took longer than expected because of its need to develop a new computer and financial system from scratch after having been informed in 2011 that the existing system would be terminated.
 
Tender truly open?
 
Lim also questioned on Monday the open tender for the software contract – “Was it an open tender in substance,” she asked.
 
“The tender was advertised and five companies picked up the documents. However, a closer look at the Conditions of Contract will reveal that the specifications required each of the directors of the tendering company to have “adequate experience with the operations and functions of a Town Council”. I wonder how many companies in the software business in Singapore can say that all their directors have TC experience – perhaps only AIM?” she said.
 
“The tender period was advertised as 14 days, shorter than the minimum period of three weeks for local tenders required under the TC Financial Rule 74(6). It was then extended by another week to give 3 weeks. Why the initial period advertised was one week less than the minimum was not explained at all in the MND report.”
 
In response, Khaw pointed out that some latitude is given to TC managers and, in the case of the tender, the proper clearances had been sought for the shorter time period. It was something Lim exercised as well, Khaw said.

“The TC Financial Rules also provide latitude to TCs or their Chairmen to waive requirement to call for tender altogether. Ms Sylvia Lim would be familiar with this because she exercised this latitude when her TC waived competition and appointed FM Solutions and Services Pte Ltd (FMSS) as its Managing Agent (MA) in 2011. MND left the appointment to her best judgement and did not object. We have to apply the TCs Act and the TC Financial Rules fairly, evenly and consistently,” he explained.
 
Furthermore, in response to concerns raised that there was a conflict of interest when town councils deal with companies owned by political parties, Mr Khaw pointed out that FMSS is run by a husband-and-wife team who are long-time WP supporters. They, in fact, “acted as assentor and proposer to the WP team of candidates led by Mr Yaw Shin Leong to contest in Ang Mo Kio GRC in the 2006 General Election”, he said. FMSS was set up four days after the WP won Aljunied GRC and it was given a S$5.2 million-a-year contract.
 
Passengers in Cessna
 
In concluding her speech, Lim recalled an interesting episode from the Parliamentary debate in 1988 when the Town Council Bill was first presented for the Second Reading.
 
“At that debate, the then First Deputy Prime Minister Goh Chok Tong justified the introduction of Town Councils as providing political stabilisers to the political system. He said there was a need to protect the public by ensuring that political parties which aspired to be government should first prove that they could run a Town Council for a constituency. He said, ‘If a new party finds itself unexpectedly in government, it would be like an aspiring pilot taking over an SIA jumbo jet in mid-air before he has flown solo in a Cessna. This cannot be in the interest of passengers in the jumbo… TCs are the Cessnas of our political system.’
 
“Is this what this whole AIM episode is about – ensuring that the passengers in the Cessnas have bumpy rides or even crash land?  Does the government even care about the passengers in the Cessnas, or are they simply collateral damage in a bigger political game?”
 
In response, Khaw replied sternly, “Ms Sylvia Lim said that the PAP is not concerned about the passengers sitting in the Cessna getting hurt should it crash land. This is self-righteous, and – pardon me for saying so – arrogant. Many of us in this House have been serving Singaporeans for decades, long before she entered this House. Please, don’t behave as if you are the only patriot in this House.”

Lim, rising to speak right after Khaw’s round-up speech, defended herself, “I have to take issue with his ascribing to me personal motives of pride and arrogance because I think nothing can be further from the truth. 
 
“The reason why we raised this matter for public discussion and debate is because we want to improve things for the future. So I definitely do not accept his ascription of those motives to me personally.”
 

Related links:
Comment: PAP, AIM and the big fat white elephant in the room
MND: No misuse of funds in AIM saga
PM Lee orders review of Town Councils, MND to probe AIM deal